Tag Archive: Bank of England

FX Daily, June 22: Dollar Begins Week on Back Foot

2020-06-22

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2020-06-22

Overview: Investors begin the new week, perhaps slowed a bit by the weekend developments and the growth of new infections. Equities are mixed. The MSCI Asia Pacific Index snapped a four-day advance, though India bucked the regional trend and gained 1%. Europe's Dow Jones Stoxx 600 is recovering from an early dip to four-day lows. US shares are trading higher after the S&P 500 closed below 3100 ahead of the weekend after reaching 3155.

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FX Daily, June 16: Correction Scenario Tested

2020-06-16

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2020-06-16

Overview: Shortly after the US stock market opened sharply lower, the Federal Reserve announced that it's Main Street facility was up and running. US stocks never looked back. After the S&P 500 recouped its full decline, the Fed announced it would begin buying corporate bonds. Up until now, it had been buying representative ETFs. Stocks rallied further on the news before pulling back into the close. The rally in risk assets carried into Asia.

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FX Daily, June 12: Licking Yesterday’s Wounds Today

2020-06-12

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2020-06-12

Overview:  The nearly three-month rally in risk assets ended with high drama with a stomach-churning almost 6% slide in the S&P 500 yesterday. Follow-through selling was seen in the Asia Pacific region, but most markets recovered from their lows, and although losses were still recorded, the downside momentum seemed broken. The same holds true for Europe. Bourses opened lower but by mid-morning had moved higher (~1.4%) and US shares are trading...

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FX Daily, May 18: Yuan Slumps as US-Chinese Tensions Rise

2020-05-18

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2020-05-18

Overview: Despite somber warnings that the US economic recovery can stretch to the end of next year, investors have begun the new week by taking on new risks. Most equity markets in the Asia Pacific region rose, with Australia leading the large bourses with a 1% gain. India was an outlier, suffering a 2.4% loss, and Taiwan's semiconductor sector was hit, and the Taiex fell 0.6%.

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FX Daily, May 14: Risk Appetites Wane

2020-05-14

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2020-05-14

Overview: Risk appetites have been gradually waning this week. US equity losses mounted yesterday after Tuesday's late sell-off. Asia Pacific equities were off, with many seeing at least 1.5% drops. Europe's Dow Jones Stoxx 600 is off a little more to double this week's decline and leaves it in a position to be the biggest drop since panicked days in mid-March.

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FX Daily, April 10: Eight Things to Know about Global Capital Markets on Good Friday

2020-04-10

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2020-04-10

Most of the financial centers in Europe and North America are closed today for the Good Friday holiday.  Many markets in Europe will also be closed on Monday. Here is a summary of key developments.

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FX Daily, April 9: Three Deals Needed ahead of Holiday Weekend

2020-04-09

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2020-04-09

Overview: Three deals need to be struck. First, the Eurogroup of finance ministers needs to reach an agreement of proposals for joint action to the heads of state. Second, oil producers need to cut output if prices are to stabilize. Third, the US Congress needs to strike a deal to provide more funding. Investor seems hopeful, and risk appetites are have lifted equities.

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FX Daily, March 26: Rumor Bought, Fact Sold

2020-03-26

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2020-03-26

Overview: Speculation that the US Senate would pass the large stimulus bill worth around 10% of US GDP is thought to have fueled a bounce in equities in recent days. The bill was approved and will now go to the House, where a vote is expected tomorrow. If the rumor was bought, the fact has been sold. The first to crack was the Asia Pacific region.

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FX Daily, March 11: US Over-Promises and Under-Delivers, while BOE Steps Up with 50 bp Rate Cut

2020-03-11

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2020-03-11

Overview: The S&P 500 and Dow Jones Industrials sold off after the higher open and briefly traded below yesterday's lows. Investors seemed disappointed that the Trump Administration was not ready with specific policies after Monday's tease that had initially helped lift Asia Pacific and European markets earlier on Tuesday. This sparked a sharp decline in Europe into the close.

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FX Daily, March 5: The Capital Markets YoYo Continues

2020-03-05

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2020-03-05

Overview: The 4.2% rally in the S&P 500 yesterday helped lift Asia Pacific markets earlier today, and the five basis point backing up of the US 10-year yield pushed regional yields higher. However, the coattails proved short, and Europe's Dow Jones Stoxx 600 is snapping a three-day advance and is off about 1.3% in late morning turnover to give back yesterday's gains.

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FX Daily, January 30: Contagion Impact not Peaked, Weighs on Risk Appetites

2020-01-30

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2020-01-30

Overview: The ongoing concerns about the geometric progression of the new coronavirus continues to swamp other considerations for investors. Risk continues to be unwound, as the World Health Organization meets to decide if this is indeed a global health emergency. Several large equity markets in Asia were hit particularly hard.

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FX Daily, January 29: Escaped from a Crocodile’s Mouth, Entered a Tiger’s Mouth

2020-01-29

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2020-01-29

Overview: This colorful Malay saying captures the spirit of the animal spirits. Narrowly escaping an escalation of a trade war between the world's two largest economies, the outbreak of a deadly virus has spurred moves, especially the sell-off in stocks and rally in bonds, for which many investors seemed ill-prepared. Even though the virus contagion has not peaked, the recovery in US equities yesterday points to a break the fear and anxiety.

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FX Weekly Preview: The Week Ahead and Why the FOMC Meeting may not be the Most Interesting

2020-01-27

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2020-01-27

The week ahead is arguably the most important here at the start of 2020.  The Federal Reserve and the Bank of England meet. The US and the eurozone report initial estimates of Q4 19 GDP.  The eurozone also reports its preliminary estimate of January CPI.  China returns from the extended Lunar New Year celebration and reports its official PMI.  Japan will report December retail sales and industrial production. 

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FX Daily, January 24: Coronavirus Hits Asia Hardest, Europe and the US Resilient

2020-01-24

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2020-01-24

Overview: The new coronavirus in China has moved into the vacuum left by the US-China trade agreement and clear indications that the Bank of Japan, the European Central Bank, and the Federal Reserve are on hold as investors searched for new drivers. The World Health Organization refrained from calling it a public health emergency even though China has dramatically stepped up its efforts to contain the new virus.

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FX Daily, January 20: Stocks Stall while the Dollar Remains Bid

2020-01-20

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2020-01-20

Overview: The new week is off to a quiet start as the US celebrates Martin Luther King's birthday, and investors look for a fresh focus. Hong Kong and Indian markets were suffered modest declines while most of the other large Asia Pacific markets edged higher. European stocks are trading a little lower, and the Dow Jones Stoxx 600 is threatening to end a four-session advance. Most benchmark bond yields around half a basis point in one direction or...

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FX Daily, January 13: Dismal Data Undercuts Sterling and Boosts Chances of a Rate Cut

2020-01-13

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2020-01-13

Overview: There are two big stories today. The first is the large scale protests in Iran after the government admits to accidentally shooting down the commercial airliner amid the fog of war. The market impact seems minimal but fueling speculation that this, coupled with the economic hardship related to the US embargo, could topple the regime. Second, the UK reported that the economy unexpectedly contracted in November.

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FX Weekly Preview: Back to Macro?

2020-01-13

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2020-01-13

The US-China trade conflict and then US-Iran confrontation distracted investors from the macroeconomic drivers of the capital markets. It is not that there is really much closure with the exogenous issues, but they are in a less challenging place, at least on the surface. 

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FX Daily, December 19: Whiff of Inflation in the Air

2019-12-19

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2019-12-19

It is risky to read too much into the price action in holiday-thin markets, but inflation fears are beginning to surface. The price of January WTI is around $61, having tested $50 a barrel in Q3. The CRB Index made new highs for the year yesterday and is up almost 9% for the year. The US yield curve (2-10 year) has been steepening after being inverted for a few days in August, and now at nearly 29 bp, also is new highs for the year.

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FX Weekly Preview: Central Bank Meetings and Flash PMI Reports, but its Over except for the Shouting

2019-12-16

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2019-12-16

After last week's flurry of events, market activity is set to slow over the next three weeks. But what a flurry of events it was. A new NAFTA apparently has been agreed, and it is set to be approved by the US House of Representatives next week and the Senate early next year.  The US and China struck an agreement that will get rid of the immediate tariff threat and unwind half of the punitive tariffs in exchange for a commitment to buy twice the...

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