Tag Archive: Australia

Hope Springs Eternal in China

2022-11-30

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2022-11-30

Overview: Hope that the recent events in China are cathartic continues to lift risk appetites. Led by Hong Kong and mainland shares that trade there, the large bourses in the Asia Pacific region rallied. Japan, where macro data continues to disappoint, was the notable exception. Europe’s Stoxx 600 is snapping a three-day down draft and is up about 0.6% in late morning turnover. US futures are trading with a slightly firmer bias.

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China Shakes Markets, Euro Shakes it Off

2022-11-28

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2022-11-28

Overview: The surging Covid cases in China and the protests in several cities seemed to set the tone for today’s session. Equities are lower. China, Hong Kong, Taiwan, and South Korea were marked down the most. Of the large bourses, only India escaped unscathed. Europe’s Stoxx 600 is off more than 0.8% and US futures are poised to gap lower. Bond markets are quieter. The 10-year US Treasury yield is off a little more than one basis point to around...

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US Jobs and Eurozone CPI Highlight the Week Ahead

2022-11-26

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2022-11-26

Two high-frequency economic reports stand out in the week ahead:  The US November employment report and the preliminary eurozone CPI. The Federal Reserve has deftly distanced itself from any one employment report. As a result, it would take a significant miss of the median forecast (Bloomberg survey) to alter market expectations for a 50 bp hike when the FOMC meeting concludes on December 14.Economists are looking for around a 200k increase in US...

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Calm Markets with Japan on Holiday Today and the US Tomorrow

2022-11-23

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2022-11-23

Overview: The capital markets are quiet today with Japan on holiday and the US on holiday tomorrow. Asia Pacific equities were mostly firmer after yesterday’s rally on Wall Street. Europe’s Stoxx 600 is about 0.25% higher and at its best level in three months. US futures are steady to slightly higher. Benchmark 10-year yields are little changed. The dollar is narrowly mixed against the major currencies, with Scandis leading the way. Sweden is...

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Macro and Prices: Data and Psychology in the Week Ahead

2022-11-19

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2022-11-19

The week ahead has a relatively light economic schedule, punctuated by the US Thanksgiving Day holiday on November 24. Nevertheless, the data highlights include the preliminary November PMIs, Tokyo's November CPI, and the FOMC minutes from this month's meeting.

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The Dollar Comes Back Better Bid

2022-11-17

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2022-11-17

Animal spirits are retreating today. Asia Pacific and European equities are lower, and US futures are narrowly mixed. US 2- and 10-year yields are edging higher, while European benchmark 10-year yields are mostly softer.  Italy and the UK are notable exceptions.

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Capital Flows Outstrip Trade Flows and that is Where to Look for Drivers of FX

2022-11-12

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2022-11-12

Policymakers have often said that exchange rates should reflect fundamentals. What does that really mean? Can they do anything but that? It begs the question of which fundamental factors they should reflect.

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The Dollar Returns from the Weekend Bid

2022-10-31

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2022-10-31

The dollar has come back from the weekend bid. After the ECB and BOJ meetings last week, the focus has shifted back to the US where the FOMC meeting concludes in the middle of the week and the October employment report is out ahead of the weekend. Sterling and the yen are the weakest performers among the G10 currencies and are off 0.45%-0.50%. The Antipodeans are performing best and are straddling little changed levels.

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Dollar Slumps, Yuan Rallies by Most this Year amid Intervention Talk

2022-10-26

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2022-10-26

Overview: The US dollar is having one of toughest days of the year. It has been sold across the board and taken out key levels like parity in the euro, $1.15 in sterling, and CAD1.36. The Chinese yuan surged over 1%. Chinese officials promised healthy bond and stock markets.

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BOJ Injects More Volatility, while UK’s Tory Party Leadership Contest may be Over Today

2022-10-24

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2022-10-24

Overview:  Japanese efforts to curb the weakness of the yen provided drama today. What many suspect was intervention before the weekend was wearing off and officials may have sold dollars again today in front of JPY150.

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Currency and Bond Markets Challenge the Bank of Japan

2022-10-19

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2022-10-19

Asia Pacific equities were mixed as the China, Hong Kong, Taiwan, and South Korean markets, among the large markets were unable to gain in the wake of a solid performance in the US. Europe is also struggling to maintain the upside momentum that has lifted the Stoxx 600 for the past four sessions.

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Volatility Snaps Near-Term Conviction

2022-10-06

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2022-10-06

Overview:  The markets seem to lack conviction today. Stocks in the Asian Pacific region advanced. Europe’s Stoxx 600 is giving up its earlier advance, and US futures are heavier. Australian and New Zealand bonds played catch-up after the rise in the US and Europe yesterday.

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Monday Blues

2022-10-03

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2022-10-03

The markets begin October with some trepidation.  Rumors continue to circulate about the health of a large European bank, cross currency swaps are elevated, suggest dollars are more difficult to access. 

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Calmer Capital Markets…for the Moment

2022-09-15

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2022-09-15

Overview: The capital markets are quiet today. Equity markets and bond yields have a slight upside bias, while the dollar is little changed. Despite reports that the lockdown in Chengdu is easing, Chinese equities underperformed in the Asia Pacific region.

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Markets Remain on Edge

2022-09-14

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2022-09-14

Overview: The firmer than expected US CPI set off a major reversal of the recent price action. It is a two-prong issue. The first is about inflation and the squeeze on the cost-of-living.

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ECB: Coping with Conflict, Covid, and Climate

2022-09-08

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2022-09-08

Overview: Heightened warnings from Japanese officials has helped the dollar steady against the yen, while the euro hugs parity ahead of the outcome of the ECB meeting, where a 75 bp hike is anticipated. Most Asian equity markets rallied in the wake of yesterday’s gains in the US.

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What Happened Monday

2022-09-05

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2022-09-05

The US and Canada may have been on holiday on September 5, but the world waits for no one and there were several significant developments. First, Gazprom's decision to indefinitely suspend gas shipments through the Nord Stream 1 pipeline announced before the weekend saw the European natgas benchmark soar 23.7.

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New Lockdown in China and the First Drop in South Korea’s Chip Exports in 2 years Euthanizes Animal Spirits

2022-09-01

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2022-09-01

Overview: The precipitous fall in equities continues while the dollar remains buoyant. Nvidia’s warnings about US curbs on sales to China and the first drop in South Korea’s chip exports in two years, coupled with the largest lockdown in China since Shanghai encouraged investors to move to the sidelines.

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Turn Around Tuesday Began Yesterday, Likely Ends before Wednesday

2022-08-30

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2022-08-30

Corrective pressures were evident yesterday and they extended today in Asia and Europe but seem to be running their course now. Market participants should view these developments as countertrend and be wary of waning risk appetites in North America today.

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