Category Archive: 4) FX Trends
The Euro Continues to Stuggle to Sustain Even Modest Upticks, but Specs Still Long in the Futures
Overview: The US dollar begins the new week on a firm note ahead of the mid-week conclusion of the FOMC meeting. Many centers are closed for the May Day holiday, making for thinner market conditions. Equities are mostly lower in the markets that traded today. This includes Japan, South Korea, Australia, and India in the Asia Pacific.
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May 2022 Monthly
The general contours of the business and investment climate are being shaped by three forces. First, Russia's invasion of Ukraine and the sanctions boost price pressures and slow growth.
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Did China’s Politburo Throw Markets a Lifeline?
Overview: Speculation that a midday statement by China's Politburo signals new efforts to support the economy ahead of next week's holiday appears to have stirred the animal spirits.
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Central banks have taken off the gloves in the fight against inflation
Central banks have taken off the gloves in the fight against inflation. They’ll win but global growth will lose out.
The market is no longer convinced that global central banks can tame inflation without a major hit to growth. Maybe that's not a recession but it's a much slower growth paradigm than assumed.
We’re now pricing in terminal rates at the highest levels since before the financial crisis and the risks from there remain to the upside....
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China’s Covid Sends Commodities Lower and helps the Dollar Extend Gains
Overview: Fears that the Chinese lockdowns to fight Covid, which have extended for four weeks in Shanghai, are not working, and may be extended to Beijing has whacked equity markets, arrested the increase in bond yields, and lifted the dollar.
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Taking A Deep Dive Into Forex & World Currencies With Marc Chandler
Economist Danielle DiMartino Booth sits down with Marc Chandler.
About the guest: Marc Chandler is a foreign exchange market analyst, writer, speaker, and professor. On August 19, 2009, Bloomberg L.P. published Chandler's first book, Making Sense of the Dollar. Marc has been covering the global capital markets for more than 30 years, including stints as the global head of currency strategy for both HSBC and Brown Brothers Harriman. Chandler...
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The Yen Bounces after 13-Day Slide and BOJ Defends Yield Cap
Overview: The record-long yen slide has stalled just shy of JPY129.50, even though the Bank of Japan defended its Yield-Curve Control cap on the 10-year bond and will continue to do so for the next four sessions. The greenback fell to almost JPY128 before steadying. China again defied expectations for lower rates (loan prime rate), the yuan's sell-off accelerated and slide to its lowest level since last October.
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Yen Blues
Benchmark 10-year bonds yields in the US and Europe are at new highs for the year. The US yield is approaching 2.90%, while European rates are mostly 5-8 bp higher. The 10-year UK Gilt yield is up nine basis points to push near 1.98%. The higher yields are seeing the yen's losing streak extend, and the greenback has jumped 1% to around JPY128.45 The dollar is trading lower against the other major currencies but the Swiss franc.
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Greenback Starts New Week on Firm Note
Overview: With many financial centers, especially in Europe, closed for the long holiday weekend, risk-appetites remain in check. Most Asia Pacific markets fell, and poor earnings from Infosys and Tata Consultancy, saw India pace the decline with a 2% drop. US futures are also trading with a heavier bias.
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Rising US Rates Sends the Yen Lower, but 50 bp Hikes Didn’t Deter Kiwi and Loonie Selling
The dollar rose against the major currencies last week, but the British pound, which eked out a small gain in the holiday-shortened week. The weakest was the Japanese yen, where rising US yields exerts an irresistible tug lifting the dollar to new 20-year highs.
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Central Banks on a Preset Course Reduces Significance of High-Frequency Data
Arguably the most important data next week is the flash PMI. It is not available for all countries, but for those generally large G10 economies, the preliminary estimate is often sufficiently close to the final reading to steal its thunder.
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PBOC Trim Reserve Requirements: Delilvers Wet Noodle after Earlier Disappointment
After posting the daily analysis, the PBOC announced a 25 bp cut in required reserves. This is said to free up around CNY530 bln or around $83 bln. It may help explain the failure to cut the benchmark Medium-Term Lending Facility. Some rural banks may see a 50 bp cut in reserve requirements.
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Good Friday
Overview: Most centers are closed for the holidays today. The Asia Pacific equity markets were open and moved lower following the losses on Wall Street yesterday. The weakness of the yen failed to underpin Japanese shares.
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FED Tightening, Commodities Prices and Emerging Markets Breakdown w/ Marc Chandler.
In this video with Marc Chandler we talked about the macro-economic outlook for the coming moths. We started out by adressing the US enemployement report then we talked about the FED policy of raising rates. Later we talked about the effects of the conflict on economies and commodities prices, expecially oil and natural gas. Later we talked about how these commodities prices are having an influence in emerging markets. In the end we talked about...
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Short Covering in the US Treasury Market Extends the Yield Pullback
Overview: What appears to be a powerful short-covering rally in the US debt market has helped steady equities and weighed on the dollar. Singapore and South Korea joined New Zealand and Canada in tightening monetary policy. Attention turns to the ECB now on the eve of a long-holiday weekend for many members. The tech-sector led the US equity recovery yesterday, snapping a three-day decline. Most of the major markets in Asia Pacific advanced but...
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New Day, Same as the Old Day
Overview: It is a new day, but with the continued rise in interest rates and weaker equities, it feels like yesterday. Only China and Hong Kong among the major markets in Asia Pacific resisted the pull lower. Europe's Stoxx 600 is off by more than 0.5% led by health care and real estate. It is the fourth loss in five sessions and brings the benchmark to its lowest level since March 18. US futures are flattish.
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Russian currency Rouble rebounds, no longer ‘in rubble’
After the Russian invasion of Ukraine, the Russian currency Rouble was at an all-time low, it shared 45 per cent of its value against the dollar. The collapse was an indication of Russia's economic isolation
#Russia #Rouble #WION
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Equities Finding a Bid in Europe After Sliding in Asia Pacific
Overview: The capital markets are calmer today. The market is digesting the FOMC minutes, where officials tipped an aggressive path to shrink the balance sheet and confirmed an "expeditious" campaign to lift the Fed funds rate to neutrality. Benchmark 10-year yields are softer, with the US off a couple basis points to 2.58%. European yields are 1-3 bp lower.
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RBA Drops “patience” to Send the Aussie Higher
Overview: The Reserve Bank of Australia hinted that it was getting closer to a rate hike. The Australian dollar was bid to its best level since the middle of last year. Australian stocks advanced in a mixed regional session while China and Hong Kong markets were closed for the local holiday. BOJ Kuroda called the yen's recent moves "rapid." The yen is sidelined today as the dollar weakens against other major currencies, led by the...
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The Greenback has Struggled even as Rate Expectations Rise
The effectiveness of the Federal Reserve's communication seems clear. The market has nearly 90 bp of tightening discounted here in Q2. This means that after a 25 bp hike to initiate the tightening cycle, the labor market's strength will allow the central bank to accelerate the pace.
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