Tag Archive: Brazil

Bank of England Steps in to Buy Inflation-Linked Bonds for the First Time

2022-10-11

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2022-10-11

Overview:  The dollar continues to ride high. It reached its highest level against the yen since the recent intervention. The Canadian dollar has fallen to its lowest level in two-and-a-half years and the New Zealand dollar is approaching the 2020 extreme.

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Weekly Market Pulse: The Real Reason The Fed Should Pause

2022-10-11

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2022-10-11

The Federal Reserve has been on a mission lately to make sure everyone knows they are serious about killing the inflation they created. Over the last two weeks, Federal Reserve officials delivered 37 speeches, all of the speakers competing to see who could be the most hawkish.

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Stocks and Bonds Extend Rally

2022-10-04

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2022-10-04

The big bond and stock market seen yesterday has continued today. The Reserve Bank of Australia’s reversion to a quarter-point hike stokes hope that the aggressive tightening cycle more broadly is set to slow.

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Wake Me Up When September Ends

2022-09-30

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2022-09-30

Benchmark 10-year yields are off 6-8 basis points in Europe and the United States. The panic seen at the start of the week in the UK has subsided considerably, as sterling recovered to almost where it was a week ago, while BOE’s hand has help steady the Gilt market. Equities in Asia Pacific suffered after the losses in the US yesterday. Hong Kong and India were notable exceptions.

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Sterling Continues to be Pounded

2022-09-26

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2022-09-26

Overview: Sterling’s pounding continued in Asia where it was driven to $1.0350, a new record low before stabilizing. UK rates also continued to rise sharply after the new government promised more tax cuts next year. The right-wing victory in Italy was not surprising but it kept pressure on Italian bonds.

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The Greenback Firms to Start the New Week, Stocks Slide

2022-09-19

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2022-09-19

Overview:  The busy week is off to a slow start as Japan is on holiday and the UK and Canadian markets are closed to honor Queen (Australia will commemorate with a holiday on Thursday). Nevertheless, the sell-off in equities continues and the US dollar is firm. Most of the large markets in Asia fell. India is a notable exception. Its benchmark rose for the first time in four sessions, helped by bank shares and Infosys. Europe’s Stoxx 600 is off for...

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Sharp Dollar Setback may offer Bulls a Bargain

2022-09-09

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2022-09-09

The dollar is having one of the largest setbacks in recent weeks. We expected the dollar to soften ahead of next week’s CPI, which may fan ideas/hopes of a peak in US price pressures, but the magnitude and speed of the move is surprising, and likely speaks to the extreme positioning.

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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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Dollar Longs Pared as Jackson Hole Gathering is set to Start

2022-08-25

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2022-08-25

Overview: It seems that many market participants had the same thing in mind, cut dollar longs before the Jackson Hole gathering. The Antipodeans lead the majors move, encouraged perhaps by China’s new economic measures, with around a 1% gain. The euro and sterling are up about 0.35% and are the laggards. Emerging market currencies are higher as well, with the notable exception of India and Turkey, which are nursing small losses. Equities are having...

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Fed Minutes were Not as Dovish as Initially Read

2022-08-18

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2022-08-18

Overview: The sell-off in European bonds continues today. The 10-year German Bund yield is around four basis points higher to bring the three-day increase to about 22 bp. The Italian premium over Germany has risen by almost 18 bp over these three sessions. 

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US Dollar Offered but Stretched Intraday

2022-08-09

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2022-08-09

The US dollar is trading heavily against all the major currencies, led by the Norwegian krone and euro. Emerging market currencies are also firmer. However, risk-appetites seem subdued. Even though most large bourses in Asia Pacific advanced but Japan and Hong Kong, European markets are nursing small losses and US futures are little changed. 

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Dog Days

2022-08-08

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2022-08-08

The dog days of August for the Northern Hemisphere are here and the capital markets are relatively subdued. Equities are firmer. The notable exceptions in Asia was China, Hong Kong, and Taiwan. The MSCI Asia Pacific Index has advanced for the last three weeks.

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Yen Squeeze Continues

2022-08-01

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2022-08-01

The US dollar begins the new month better offered. It is softer against all the major currencies. Short yen positions continue to get unwound, which is leading the move, followed  by the Antipodeans, where the Reserve Bank of Australia is expected to hike rates tomorrow.

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Fed Day

2022-07-27

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2022-07-27

Overview: Better US news from the likes of Google, Microsoft, and Texas Instruments has helped lift sentiment today and is encouraging a more risk-on mood ahead of the FOMC meeting. News that US President Biden and China’s Xi will talk tomorrow for the second time this year may be notable but does not appear to be impactful in the capital markets.

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Greenback Jumps Back

2022-07-26

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2022-07-26

Overview: With the exception of Japan, Taiwan, and India, the large equity markets in the Asia Pacific region traded higher today. The Hang Seng led the move (1.65%) amid reports that Alibaba will seek its primary listing there. Europe’s Stoxx 600 is edging higher today. If it can hold on to the gains, it will be the fourth consecutive rise, the longest advance since May. US futures are slightly under water. Benchmark 10-year yields are mostly...

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Spanish Inflation Shocks

2022-06-29

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2022-06-29

Overview: The sharp sell-off in US equities yesterday, led by tech, is weighing on today’s activity. Most of the large Asia Pacific markets excluding Japan and India lost more than 1% today.

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Is a 0.3% Miss on Headline CPI Really Worth a 77 bp Rise in the December Fed Funds Yield?

2022-06-15

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2022-06-15

Overview: Better than expected Chinese data and an unscheduled ECB meeting are the highlights ahead of the North American session that features the May US retail sales report and other high frequency data before the outcome of the FOMC meeting.

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Dollar Jumps, Stocks and Bonds Slide

2022-06-13

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2022-06-13

The prospect of a more aggressive Federal Reserve policy has spurred a sharp sell-off in global equities and bonds and sent the dollar sharply higher. The large Asia Pacific bourses were off mostly 2%-4%.

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Greenback Softens Ahead of CPI

2022-05-11

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2022-05-11

Overview: It appears that investors have become more concerned about growth prospects and less about inflation in recent days. The US 10-year yield that had flirted with 3.20% at the start of the week is now around 2.93%.

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Euro$ #5 in Goods

2022-04-27

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2022-04-27

Last Friday, S&P Global (the merged successor to IHS Markit) reported that its PMI for German manufacturing fell to 54.1. It hadn’t been that low for more than a year and a half. Worse than that, the index for New Orders dropped below 50 for the first time since the middle of 2020. The excuses are plentiful, as there’s COVID, supply problems, Russia, a drop in demand. Wait, what was that last one?

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