Tag Archive: Bank of Canada

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

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.

Read More »

Macro and Prices: The Week Ahead

There are five macro highlights in the week ahead. After providing a thumbnail sketch of them, we will look more closely at the price action of the leading dollar-pairs. We suspect that the dollar is in the process of carving out a top amid ideas that a 5.0% terminal Fed funds rate is discounted.

Read More »

Greenback Holds Above JPY150, while BOJ goes MIA

Overview: The continued surge in US rates and inability of the equity market to sustain gains saw the post-Truss sterling rally unwind amid a broader recovery of the dollar. Sterling has been sold to new lows for the week.

Read More »

Currency and Bond Markets Challenge the Bank of Japan

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.

Read More »

Turn Around Tuesday Aside, is the Dollar Topping?

Global equities moved higher in the wake of the strong gains in the US yesterday. US futures point to the possibility of a gap higher opening today. Most of the large Asia Pacific bourses rallied 1%-2%, with China’s CSI a notable exception, slipping fractionally.

Read More »

Sterling and UK Debt Market Respond Favorably to the Return of Orthodoxy

Overview: The markets have returned from the weekend with a greater appetite for risk. Equities and bonds are rallying, and the dollar is better offered. China, Hong Kong, South Korea, and Indian bourses advanced. Mainland shares edged higher even though Zhengzhou, a city of one million people, near an iPhone manufacturing hub was locked down due to Covid. Europe’s Stoxx 600 is up nearly 0.5% to extend its recovery into a third session.

Read More »

We Didn’t Print Money… Honest We Didn’t And More Baseless ClapTrap from Central Banks

One of the reasons people choose to invest in gold bullion or to buy silver coins is because they are simple and they are finite; basically the opposite of fiat currency. The complexity of fiat-driven markets and infinite possibilities to create money works to the advantage of central banks.

Read More »

The Yen and Yuan Continue to Weaken

While the US dollar appears to be consolidating its recent gains, the Japanese yen and Chinese yuan remain under pressure. Officials seem more concerned about the pace of the move than the level it has reached. New and large fiscal initiatives that the new UK government has floated has failed to change sentiment toward sterling, which is the second weakest major currency today after the Japanese yen.

Read More »

RBA, BOC, and ECB Meetings and more in the Week Ahead

All three major central banks that meet in the coming days will hike rates. The question is by how much. The Reserve Bank of Australia makes its announcement early Tuesday, September 6. One of the challenges for policymakers and investors is that Australia reports inflation quarterly. The Q2 estimate was released on July 27. It showed prices accelerating to 6.1% year-over-year from 5.1% in Q1. The trimmed mean rose to 4.9% from 3.7%, and the...

Read More »

Market Prices in More Aggressive Fed AND is more Confident of Rate Cuts by the End 2023

Overview: The higher-than-expected US CPI and the strong expectation of a 100 bp hike by the Fed in two weeks is propelling the dollar higher.

Read More »

Euro Parity Holds ahead of US CPI

Overview: The US dollar is consolidating with a slight downside bias ahead of the June CPI report. The euro held above $1.00 but is still pinned in the trough. The rate hike by the Reserve Bank of New Zealand failed to have much impact.

Read More »

Dollar Gains Pared

Asia Pacific equities were mostly lower.  China and India bucked the trend.  Europe’s Stoxx 600 is steady with no follow through selling after yesterday reversal. US index futures are posting modest gains and are trying to snap a two-day drop. 

Read More »

Bank of Canada’s Turn

Overview: The recent equity rally is stalling. Asia Pacific equities were mixed, with Japan, South Korea, and Australia, among the major bourses posting gains. Europe’s Dow Jones Stoxx 500 is slipping lower for the second consecutive session, ending a four-day bounce. US equity futures are little changed.

Read More »

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...

Read More »

European Currencies Continue to Bear the Brunt

Overview: Russia's invasion of Ukraine and the global response is a game-changer, as Fed Chair Powell told Congress yesterday.  The UK-based research group NISER estimated that world output will be cut by 1% next year or $1 trillion, and global inflation will be boosted by three percentage points this year and two next. 

Read More »

FX Daily, January 26: Federal Reserve and Bank of Canada Meet as Risk Appetites Stabilize

After a slow and mixed start in Asia, where Australia and India are on holiday, equity markets have turned higher.  Europe's Stoxx 600 is up around 1.9% near midday in Europe, which if sustained would be the biggest gain of the year.  US futures are snapping backing too, with the S&P 500 popping more than  1% and NASDAQ by 2%. 

Read More »

FX Daily, January 17: PBOC Eases, but the Yuan Firms

Overview: Russia is thought to be behind the cyber-attack on Ukraine at the end of last week, but a military attack over the weekend may be underpinning risk appetites today.  The dollar's pre-weekend gains are being pared slightly.  Led by the Canadian dollar and Norwegian krone, the greenback is lower against most major currencies, with the yen being the notable exception, which is off about 0.2%.

Read More »

Yuan Rises Despite China’s Move and the Fed’s Course is Set Regardless of Today’s CPI

Overview:  After US equity indices posted their first loss of the week,  Asia Pacific and European equities fell.  While the MSCI Asia Pacific Index fell for the first time since Monday, Europe's Stoxx 600 is posting its third consecutive decline.  US futures are trading slightly firmer.  The US 10-year Treasury yield is up about 1.5 bp to 1.51%, which is about eight basis points higher than it settled last week when the sharp drop in equities saw...

Read More »

Markets Calmer, Awaiting Fresh Incentives

Overview:  The capital markets are calmer today, and the fear that was evident at the end of last week remains mostly scar tissue. Led by gains in Japan, China, Australia, New Zealand, and India, the MSCI Asia Pacific Index extended yesterday's gains.  Europe's Stoxx and US futures are firm.  The US 10-year yield is softer, around 1.43%, while European yields are mostly 1-2 bp lower.  The Norwegian krone and euro lead major currencies higher...

Read More »

Eyes Turn to the ECB and the First Look at Q3 US GDP

Overview:  The market awaits the ECB meeting and the first look at the US Q3 GDP.  The pullback in US shares yesterday was a drag on the Asia Pacific equities.  It is the first back-to-back loss of the MSCI Asia Pacific in a few weeks.  Europe's Stoxx 600 is recovering from early weakness and US future indices are firm.  The US 10-year yield is flat, around 1.55%, after falling around 15 bp over the past four sessions.  European bonds are paring...

Read More »