Category Archive: 4) FX Trends

Main Author Marc Chandler
Marc Chandler
He has been covering the global capital markets in one fashion or another for more than 30 years, working at economic consulting firms and global investment banks. After 14 years as the global head of currency strategy for Brown Brothers Harriman, Chandler joined Bannockburn Global Forex, as a managing partner and chief markets strategist as of October 1, 2018.
My articlesMy offerMy siteAbout meMy books
Follow on:LinkedINTwitterSeeking AlphaAmazon
Filter archive by: Show All Show only Articles Show only Videos

Concerns Over US Banks Rival Today’s Jobs Report

2023-03-10

by

2023-03-10

Overview: The unexpectedly large rise in US weekly jobless claims, the largest since the end of last September and concerns about the impact of the sharp rise in interest rates on the liquidity and value of assets (bonds) owned by small and medium-sized banks saw the market unwind the effect of Fed Chair Powell's comments. The yield on the US two-year note slumped almost 20 bp to 4.87% yesterday and fell to 4.75% today before stabilizing (~4.82%)....

Read More »

Yen Jumps Despite Poor GDP Ahead of Tomorrow’s BOJ Outcome

2023-03-09

by

2023-03-09

Overview: Seeing the drama he inspired on Tuesday, the Fed chair tried soft-pedaling the idea that he was signaling a 50 bp hike in March. The market did not buy it. And the odds, discounted by the Fed funds futures rose a little above 70% from about 62% at Tuesday's close. The two-year note yield solidified its foothold above the 5% mark. With the Bank of Canada confirming its pause, the Reserve Bank of Australia does not seem that far behind, and...

Read More »

Powell Sends the Two-Year Yield above 5% and Ignites Powerful Dollar Rally

2023-03-08

by

2023-03-08

Overview:  Federal Reserve Chair Powell's comments to the Senate Banking Committee were seen as hawkish by the market, even though it has been clear to most observers that the 5.10% median terminal rate that the Fed projected in December would be increased. Also, it seemed well appreciated a few Fed officials support a 50 bp hike at the February 1 FOMC meeting, two days before a "hot" jobs report that showed over 500k jobs were filled. It...

Read More »

While the focus was on Powell Tuesday there were also remarks from the ECB and SNB

2023-03-08

by

2023-03-08

Swiss National Bank Chair Jordan threatened FX intervention! A couple of posts from Tuesday ICYMI while Powell was hogging the spotlight: ECB Knot: ECB can be expected to keep raising rates for quite some time after March ECB can be expected to keep raising rates for quite some time after March And, SNB Chairman: We cannot rule out that we will have to tighten monetary policy again We can use interest rates but also sell foreign...

Read More »

US Dollar is Better Bid Ahead of Powell, while Aussie Sells Off on Dovish Hike by the RBA

2023-03-07

by

2023-03-07

Overview: The US dollar is trading with a firmer bias against nearly all the G10 currencies ahead of Federal Reserve Chairman Powell's semi-annual testimony before Congress. Speaking for the Federal Reserve, the Chair is likely to stay on message which is higher rates are necessary to cool the overheating economy. This comes on the heels of the Reserve Bank of Australia's 25 bp hike and indication that it is not pre-committing to an April hike. The...

Read More »

Yields Pull Back to Start the New Week

2023-03-06

by

2023-03-06

Overview: The modest economic goals announced as China's National People's Congress starts was seen as a cautionary sign after growth disappointed last year. It seemed to weigh on Chinese stocks, though others large bourses in the region advanced, led by Japan's Nikkei and South Korea with gains of more than 1%. Europe's Stoxx 600 is little changed after rising for the past two sessions. US index futures are slightly softer. Strong gains were seen...

Read More »

US Jobs, Kuroda’s Last BOJ Meeting, and Powell’s Congressional Testimony Highlight the Week Ahead

2023-03-04

by

2023-03-04

The dollar peaked last September/October and trended lower until the January jobs report and strong service ISM on February 3. These reports and firm inflation readings, owing, at least in part, to benchmark and methodological changes, helped spur the greenback's recovery. However, we learned last week that auto sales and the service ISM prices paid decelerated in February, and this week, we will learn that job growth has slowed considerably. If...

Read More »

Tumbling Tokyo Prices Gives Ueda Breathing Space

2023-03-03

by

2023-03-03

Overview: Talk from two Fed officials yesterday, which seemed to validate market expectations eased the upward pressure on the dollar and helped equities launch a dramatic recovery. The market is pricing in a terminal rate near 5.50%, a little higher than the median dot in December. The S&P 500 posted a dramatic recover and posted a potential bullish key reversal. Its 0.75% closing gain was the largest advance in nearly three weeks. A large...

Read More »

Higher for Longer Helps the Dollar while Weighs on Equities

2023-03-02

by

2023-03-02

Overview: The jump in prices paid in yesterday's US ISM manufacturing coupled with the stronger eurozone inflation, with a new cyclical high reported in the core rate, underscores the market theme of higher-for-longer. This is seen as dollar supportive but also negative for risk-assets, including and especially equities. European benchmark 10-year yields are up another couple of basis points today and the 10-year US Treasury yield is pushing above...

Read More »

March 2023

2023-03-01

by

2023-03-01

Price pressures remain elevated, and labor markets are strong, giving most policymakers in the G10 the incentive to continue raising interest interests. There are two exceptions: Japan, the only country still with a negative policy rate (-0.10%), and Canada, where the central bank has indicated it would pause. While half-point hikes or larger were common in the second half of last year, the major central banks have slowed or will slow the pace to...

Read More »

Doubt Chinese Data, but Its Stronger-than-Expected PMI Lifts Risk Assets

2023-03-01

by

2023-03-01

Overview: Many investors may be skeptical of the accuracy of Chinese data, but its stronger than expected February PMI animated the animal spirits and bolstered risk-taking appetites. Asia Pacific equities jumped, led by the 4.2% rally in Hong Kong and a 5% surge in the index that tracks mainland shares. Among the long bourses Australia and Singapore slipped, and South Korean markets were closed for a national holiday. Europe's Stoxx 600 is posting...

Read More »

Potential Brexit Breakthrough Helps Sterling, while France and Spain Report Stronger Price Pressures

2023-02-28

by

2023-02-28

Overview: There are two important developments. First, the stronger than expected February inflation reports from France and Spain have sparked a jump in European interest rates and the swaps market is beginning to price in a 4% terminal rate by the European Central Bank. The deposit rate is now at 2.50% and is widely expected to rise to 3.0% in the middle of next month. Second, a tentative agreement to resolve the dispute over the Northern Ireland...

Read More »

Markets Catch Collective Breath

2023-02-27

by

2023-02-27

Overview: After last week's flurry of activity that saw the US dollar extend its recovery, it has begun off the new week largely consolidating in relatively narrow ranges. The Australian and New Zealand dollar's remains softer, and the Swiss franc is virtually flat, but the other G10 currencies, led by sterling are posting small gains. A break-through on the Northern Ireland protocol, which has been rumored for a more than a week may be announced...

Read More »

Which brokerage account is best for beginners in Singapore?

2023-02-27

by

2023-02-27

Money
Are you looking to invest in Singapore but feeling overwhelmed by all the different options? Finding the correct brokerage account can be challenging, especially if you are not an experienced investor. That's why we've broken down some of the top-rated brokers in Singapore, explaining the pros and cons each offers so you can choose which online trading platform is best for your needs.

Read More »

Week Ahead: February ISM Services and Auto Sales to Show January US Data were Exaggerated

2023-02-25

by

2023-02-25

A key issue facing businesses and investors is whether the US January data reflects a reacceleration of the world's largest economy or whether it was mostly a payback for extremely poor November and December 2022 data and seasonal adjustments and methodological distortions. Given the centrality of the US economy and rates, it is not simply a question for America, the Federal Reserve, and investors, but the implications are much broader. The issue...

Read More »

Ueda Day

2023-02-24

by

2023-02-24

Overview:  Rising rates and falling stocks provided the backdrop for the foreign exchange market this week. The dollar appreciated against all the G10 currencies but the Swedish krona, which is still correcting higher after the hawkish pivot by the central bank. The market looks for a later and higher peak in the Fed funds rate. This coupled with the risk-off sentiment helped the dollar extend its recovery after falling since last...

Read More »

Fed Tightening Seen Extending into Q3

2023-02-23

by

2023-02-23

Overview:  The prospect that the Federal Reserve tightening cycle continues into early Q3 is underpinning the greenback today against most of the G10 currencies. The dollar bloc is the notable exception, and they are posting minor gains, perhaps encouraged by the firmer equity markets. The minutes of this month’s FOMC meeting appear to show wide support for quarter point hikes going forward and there did not seem to be much discussion of the...

Read More »

Investors Shaken by Rising Rates

2023-02-22

by

2023-02-22

Overview: The surge in US interest rates and sharp losses in US stocks sent the dollar broadly higher in North America yesterday. The $42 bln of two-year notes auctioned by the US Treasury saw the highest yield in more than a quarter-of-a-century (4.67%) and it still produced a small tail. Sterling, helped by its own surprisingly strong data, was the only G10 currency to have gained against the surging dollar. Still, no important technical levels...

Read More »

Upside Surprise in UK’s Flash PMI and Better-than-Expected January Public Finances Lift Sterling

2023-02-21

by

2023-02-21

Overview: Rising interest rates are weighing on risk appetites and the dollar is broadly stronger. Sterling is a notable exception after a stronger than expected flash PMI and better than expected public finances. The correlation between higher US rates and a weaker yen is increasing and the greenback looks poised to rechallenge the JPY135 area. A slightly better than expected preliminary PMI and hawkish minutes from the recent RBA meeting has done...

Read More »

Monday: A Short Note while US is on Holiday

2023-02-20

by

2023-02-20

The dollar is mostly softer, but turnover is mostly quiet.  The Swedish krona leads the move after higher-than-expected underlying inflation.  It is a mild risk-on day with equities moving higher too.  In the Asia Pacific region, China stood with the CSI 300 up almost 2.5%.  Europe’s Stoxx 600 is up fractionally to recoup most of the pre-weekend decline.  US equity futures are narrowly mixed.  European bond yields are little changed, with a couple...

Read More »