Tag Archive: Brazil

Weekly Market Pulse: A Fatal Conceit

2023-01-24

by

2023-01-24

Inflation* in the US is falling rapidly with the CPI rising just 0.9% in the second half of 2022 versus 5.4% in the first six months. Existing home sales are down 14.6% in the last 3 months and 34% over the last year. Housing starts are down 22% and permits are down 30% year-over-year. Orders for durable goods are down 1.2%, exports are down 3.8%, and imports are down 4.3% over the last 3 months.

Read More »

Greenback Consolidates Near Recent Lows Ahead of Tomorrow’s US CPI

2023-01-11

by

2023-01-11

Overview: Fed Chair Powell did not push against the easing of US financial conditions when he ostensibly had an opportunity yesterday. This coupled with expectations of another decline in the US CPI, which will be reported tomorrow, has kept the greenback mostly consolidating the losses seen last Friday and Monday.

Read More »

Consolidative Tone in FX

2023-01-10

by

2023-01-10

Overview: After sharp losses yesterday, the US dollar has stabilized today arguably ahead of Fed Chair Powell's speech at the Riksbank symposium. Yesterday's Fed speakers stuck to the hawkish rhetoric, and this seemed to help reverse the equity market gains, though the greenback remained soft.

Read More »

Greenback’s Sell-off may Stall Ahead of Powell Tomorrow

2023-01-09

by

2023-01-09

Overview: Don't fight the Fed went the manta as the market took the US two-year yield back up to 4.50% in the aftermath of the FOMC minutes last week, the highest in over a month. The minutes warned of a premature easing of financial conditions. And then bam, softer than expected hourly earnings and a weak service PMI and bonds and stocks rallied, and the dollar was sold. This is a key part of the backdrop for this week, for which several Fed...

Read More »

Yesterday’s Gains Unwound may Make the Greenback a Better Buy Ahead of FOMC Minutes

2023-01-04

by

2023-01-04

Overview:  Yesterday's greenback gains have been mostly reversed today. New efforts by China in its property market and anticipation of more stimulus helped rekindle the animal spirits today. Asia and Europe shrugged off yesterday's losses on Wall Street and the rally in bonds continued. The 8-12 bp decline in European benchmark 10-year yields comes even though the final composite PMI was better than expected fanning hopes of a short and shallow...

Read More »

European Rates Continue to Surge, Sending Stocks Spiraling Lower

2022-12-16

by

2022-12-16

Overview: Seven of the G10 central banks pumped the brakes between last week and this week as they purposely seek to push demand back into line with supply. And there are more signs that they are succeeding in weakening growth impulses. The dramatic surge in European bond yields continues today with 10-year rates mostly rising another 13-15 bp.

Read More »

Markets Await Central Banks and Data

2022-12-12

by

2022-12-12

Overview: There are two themes today. First, there has been a modest bout of profit-taking on Chinese stocks (and yuan) after last week’s surge. Second, the ahead of the five G10 central bank meeting this week a series of market-sensitive economic reports, a consolidative tone is seen in most of the capital markets. Most of the large bourses in the Asia Pacific region fell, led by a 2.2% loss in Hong Kong and 3% loss in its index of mainland shares.

Read More »

Chinese Stocks Extend Rally Even Though Covid Infections Appear to be Spreading

2022-12-09

by

2022-12-09

Overview: The easing of vaccination, quarantine, and some travel protocols related to Covid in China (and Hong Kong) continues to draw funds back into Chinese stocks, wherever they trade. The Hang Seng rose 2.3% today to close the week with a nearly 6.6% advance. The index of mainland companies that trade there rose 2.5% on the day for a7.3% weekly gain. The CSI 300 of mainland shares rose 1% today and almost 3.3% for the week. Japan’s 1% gain...

Read More »

Political Developments Overshadow Economics

2022-12-08

by

2022-12-08

Overview: There is nervous calm in the capital markets today.  The weakness of US shares yesterday is taking a toll today. An exception in the Asia Pacific region is the Hang Seng and the index of mainland shares that trade there, which up around 3.5% today on thUe easing of some Covid protocols.  Europe’s Stoxx 600 is off for a fifth day, its longest losing streak in nearly two months. US futures are posting minor gains. Benchmark 10-year yields...

Read More »

Risk Appetites Challenged after US Equities Tumble

2022-12-07

by

2022-12-07

Overview: The sharp sell-off of US stocks yesterday as sapped the risk appetite today. Equities are being sold. Hong Kong and the index of mainland shares that are listed there led the regional decline with 3.2%-3.3% losses. Europe’s Stoxx 600 is off about 0.65% in late morning turnover, the fourth day of losses. US futures are trading with a lower bias as well. European 10-year bonds are mostly 1-2 bp firmer. The US 10-year Treasury is practically...

Read More »

Chinese Yuan Jumps While the Dollar recovers After Losses were Extended Against the Euro and Sterling

2022-12-05

by

2022-12-05

Overview: The markets remain hopeful about a re-opening in China and continue to pour into Chinese stocks on the mainland and in Hong Kong. The index of Chinese companies that trade in the US rose nearly 22.4% last week. Large bourses in the Asia Pacific region were mixed, but China and Hong Kong stand out. Europe’s Stoxx 600 is nursing a small loss for the second consecutive session. US equity futures have a slightly heavier bias. European 10-year...

Read More »

China Shakes Markets, Euro Shakes it Off

2022-11-28

by

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...

Read More »

Consolidative Session, even if Not Turn Around Tuesday

2022-11-22

by

2022-11-22

Overview: The US dollar is trading with a somewhat heavier bias after bouncing higher yesterday. All the G10 currencies are higher, led by the New Zealand dollar, where the central bank is expected to hike first thing tomorrow. Most emerging market currencies are also firmer. Those that are not, like the South Korean won and Mexican peso, are nursing minor losses. The surge in Covid cases weighed on Chinese shares that trade in Hong Kong, while the...

Read More »

Higher Japanese CPI Won’t Change the BOJ’s Stance

2022-11-18

by

2022-11-18

Overview: The capital markets are heading into the weekend mostly quietly in a consolidative fashion.  Ambiguous signals from yesterday’s US equities saw a narrowly mixed performance among the large Asia Pacific bourses, but of note, Hong and China markets saw this week’s gains trimmed. Europe’s Stoxx 600 is up around 1% near midday and is slightly above last week’s close.  US equity futures are trading with a firmer bias ahead of a large...

Read More »

The Dollar Posts Corrective Upticks, while the Market Digests China’s Initiatives

2022-11-14

by

2022-11-14

Overview: China’s new initiatives to support the property sector helped lift the Hang Seng. And while the China’s CSI 300 edged higher both the Shanghai and Shenzhen composites fell. Most Asia Pacific markets fell, while Europe’s Stoxx 600 is posting a small gain.

Read More »

Caution Advised in Chasing FX, but Wow!

2022-11-11

by

2022-11-11

Overview:  The softer than expected US inflation figures unleashed significant market adjustment that continue to ripple through the capital markets. The modification of some of China’s Covid stance may have also fanned some optimism, but we suggest that measures are modest tweaks, and the surge in infections will prevent the end of disruptive restrictions.

Read More »

High Anxiety: China’s Covid and US Inflation

2022-11-10

by

2022-11-10

Overview: Anxiety is running high. Rather than ease its Covid restrictions, a surge in cases is seeing more areas in China come under restrictions. The US reports CPI and of the ten reports this year, seven of them have been stronger than expected.

Read More »

Markets Consolidate After US Election

2022-11-09

by

2022-11-09

Overview: It is difficult to see the impact of the US midterm election in the immediate aftermath. The dollar is stronger against all the major currencies, but this seems to be mostly position adjusting ahead of tomorrow’s CPI report after a pullback in recent days.

Read More »

The Dollar Edges Higher

2022-11-08

by

2022-11-08

Overview: After selling off amid speculation that China’s Covid policy was going to ease, we expected the greenback to recover and consolidate ahead of Thursday’s CPI. This did not materialize yesterday, but the dollar has come back better bid today. Equity markets are mostly firmer, but nearly all the large markets, but China/Hong Kong, rising in the Asia Pacific region. Europe’s Stoxx 600 is posting small gains. It is the third session in a row...

Read More »

Risk Appetites Survive China Keeping Zero Covid Policy

2022-11-07

by

2022-11-07

Overview: Chinese officials denied plans to end the zero-Covid policy and after a brief wobble, risk assets have traded better. Asia Pacific equities rallied, led by Hong Kong and mainland stocks that trade in Hong Kong. Europe’s Stoxx 600 opened lower but recovered and is around 0.5% higher after the 1.8% gain before the weekend. US futures are firm. Benchmark 10-year yields are mostly 2-4 bp softer in Europe and the US. The dollar is mixed. The...

Read More »