Tag Archive: Canada

Capital Markets are Calm though Anxiety Continues to Run High

2023-10-16

by

2023-10-16

Overview: The risk that the war in Israel spreads remains palatable, and several observers have warned of the greatest risks of a world war in a generation. Still, the capital markets remain relatively calm. The US dollar is softer after closing last week firmly. The only G10 currency unable to post corrective upticks today is the Swiss franc. Among emerging market currencies, the Polish zloty has been boosted by the pro-EU election results, and...

Read More »

War in Israel Spurs Flight to Dollars, Yen and Gold, While Driving up the Price of Oil

2023-10-09

by

2023-10-09

Overview: There are three main developments. First, the market is digesting the implication of the US employment data, where the optics were strong (336k increase in nonfarm payrolls compared with 170k median forecast in Bloomberg and Dow Jones surveys) but some details were disappointing (like the third consecutive decline in full-time posts, seasonally adjusted). Second, Chinese mainland market re-opened after a six-day holiday). Chinese stocks...

Read More »

US Employment Data to Determine Whether the Greenback’s Rally since mid-July is Over…Maybe

2023-10-06

by

2023-10-06

Overview: One key issue for market participants is if the dollar's pullback is the beginning of something important or is largely position adjusting ahead of today's US jobs report. We suspect that the dollar's rally that began in mid-July is over, though a strong employment report that boosts the chances of a Fed hike before year-end could quickly demonstrate the folly of making claims ahead of what is still one of the most important reports in...

Read More »

Markets Continue to Struggle

2023-10-05

by

2023-10-05

Overview:  The markets remain unsettled. Follow-through dollar selling has been limited today after yesterday's pullback. Narrow ranges are prevailing, but the Norwegian krone and Canadian dollar, the weakest G10 currencies in recent days, are heavier again today. Although it seems that the BOJ did not intervene earlier this week, but the dollar bulls has been chastened just the same and the greenback is holdings below yesterday's high...

Read More »

US Yields and Dollar Rise After US Government Closure Averted

2023-10-02

by

2023-10-02

Overview: The US avoided a government shutdown, barely, and this eased one of the headwinds that were anticipated. In turn, this is spurring new gains in US interest rates and helping underpin the dollar at the start of the new quarter. The 10-year Treasury is holding above 4.60% and nearing last week's high (4.68%). The two-year yield gapped higher and is near 5.10%. The high from September 21 was almost 5.20%. The Swiss franc is the only G10...

Read More »

Dollar Sets Back into Month- and Quarter-End Ahead of likely US Government Shutdown

2023-09-29

by

2023-09-29

Overview: The dollar's surge stalled yesterday, and follow-through selling has pressed it lower against all the G10 currencies today. The dollar-bloc and Scandis are leading the move. Month-end, quarter-end pressures, coupled with a likely partial shutdown of the government beginning Monday, and after key chart levels were approached or violated earlier this week, serving as a bit a cathartic event. The Swiss franc snapped a 12-day losing streak...

Read More »

Yen Drops After BOJ Does Nothing and Says Little

2023-09-22

by

2023-09-22

Overview:  The BOJ's failure to do anything or further ideas that an exit of the negative target rate, despite the firm CPI report helped the dollar recover the ground lost yesterday against the yen. The focus has returned to "intervention watch" and the market continues to press for the official pain threshold. Sterling is the weakest of the G10 currencies, off another 0.5% today following the BOE's decision not to hike yesterday. The...

Read More »

Softer UK CPI Weighs on Sterling and Lifts Gilts, while Yen Slumps to New Low for the Year, Ahead of the FOMC

2023-09-20

by

2023-09-20

Overview: Softer than expected UK CPI has drawn attention ahead of the key event of the day, the FOMC meeting. The UK's CPI has spurred a dramatic rally in Gilts and saw sterling initially extend its recent losses, falling to new four-month lows before stabilizing. The swaps market sees less than a 50% chance of a hike by the Bank of England tomorrow. Meanwhile, even though US Treasury Secretary Yellen suggested conditions in which intervention by...

Read More »

The Canadian Dollar Shines in a Mostly Consolidative FX Market Ahead of the Flurry of Central Bank Meetings

2023-09-19

by

2023-09-19

Overview: Ahead of the flurry of central bank meetings, starting with the Federal Reserve and Brazil tomorrow, the dollar is largely consolidating in narrow ranges. The euro, sterling, and yen are trading slightly heavier, while the dollar bloc and Scandis enjoy a firmer bias. The Canadian dollar stands out as is trades at its best level since mid-August ahead of its CPI report and despite a diplomatic dispute with India and the failure of...

Read More »

Calm Before the Storm: Greenback Confined to Narrow Ranges

2023-09-18

by

2023-09-18

Overview:  With many central bank meetings in the days ahead, the dollar has begun the new week on a quietly and mostly in tight ranges, helped by a holiday in Tokyo. G10 currencies, outside of the Scandis are slightly firmer in European turnover. Emerging market currencies are narrowly mixed, but of note the 0.25% decline makes the Chinese yuan the weakest. The Mexican peso is extending its recovery into the seventh consecutive session. While...

Read More »

In Uncoordinated Steps, Japan and China Help Slow Greenback’s Rally

2023-09-11

by

2023-09-11

Overview: The Bank of Japan Governor Ueda hinted the world's third-largest economy may exit negative interest rates before the end of the year. This sparked the strongest gain in the yen in a couple of months and lifted the 10-year yield to nearly 0.70%. In an uncoordinated fashion, Chinese officials stepped their rhetoric and indicated that corporate orders to sell $50 mln or more will need authorization. This helped arrest the yuan's slide. The...

Read More »

Yuan Sulks in to the Weekend, While Finishing Touches are Put on the Dollar Index’s Eighth Consecutive Weekly Gain

2023-09-08

by

2023-09-08

Overview: The greenback is lower against most currencies today as it consolidates ahead of the weekend. The Dollar Index's eight-week advance is the longest since a 12-week rally 2014. The Chinese yuan is an exception. Its losses were extended today. Against the offshore yuan, the dollar traded above the onshore band, which is most often respected. Equities ae extending this week's slump. All the large bourses in the Asia Pacific region but India...

Read More »

The Dollar and Oil Steady After Yesterday’s Advance

2023-09-06

by

2023-09-06

Overview: Bonds and stocks are mostly heavier today and the dollar has turned mixed. Oil prices are consolidating after soaring to new highs since late last year on the longer than expected extension of Saudi Arabia's extra cut of one million barrels a day. Since July, it has been extending it by one month at a time. Yesterday, it extended it through Q4. Russia, who had previously indicated intentions on reducing its exports by 500k barrels,...

Read More »

US Dollar Punches Higher

2023-09-05

by

2023-09-05

Overview:  Disappointing data in Asia and Europe has sent the greenback broadly higher. The strong gains posted before the weekend were mostly consolidated yesterday when the US and Canadian markets were on holiday. The rally resumed today. The Antipodeans and Scandis have been hit the hardest (-0.7% to -1.25%) but all the G10 currencies are down. The Swiss franc and yen are off the least (-0.35%-0.45%), and the euro and sterling have taken out...

Read More »

China’s Measures Begin to Find Traction, US Employment Report on Tap

2023-09-01

by

2023-09-01

Overview: Beijing's seemingly steady stream of measures to support the economy and steady the yuan are beginning to produce the desired effect. The yuan is snapping a four-week decline and the CSI 300 halted a three-week drop. Some economists estimate that the bevy of measures may be worth as much as 1% for GDP. The dollar is narrowly mixed ahead of the US employment data, which is expected to see the pace of job growth slow to around 170k. Of...

Read More »

Dollar Bulls Still in Control

2023-08-18

by

2023-08-18

Overview: What may have been hoped to be a quiet August has turned into a feeding frenzy for dollar bulls as the contrasting economic performance has spurred persistent buying of the greenback. Even shallow dips have been bought. Today, it is mostly trading inside yesterday's ranges against the G10 currencies. The PBOC set the dollar's reference rate at what appears to be a record gap below the Bloomberg average survey, and the dollar was scooped...

Read More »

Aussie Recovers from Poor Jobs Data, but Nokkie is Weaker Despite Rate Hike

2023-08-17

by

2023-08-17

Overview: Encouraged by the continued stream of US data, which suggests that the world's largest economy is accelerating, the US 10-year yield is approaching last year's 4.33% high, and the dollar's run has lifted it to new highs for the year against the Japanese yen, Chinese yuan, and the Australian and New Zealand dollars. Even a rate hike by Norway did not stop the dollar from rising against the krone. The greenback is firmer against most of the...

Read More »

Dollar’s Rally Pauses Near Key Levels

2023-08-16

by

2023-08-16

Overview: The US dollar is trading with a slightly heavier tone in the European morning. It has stalled in front of JPY145.90, where the BOJ intervened last September and ahead of CNY7.30, which some observers think Chinese officials are defending. We are less convinced that either central bank has drawn a line at a particular level and suspect it is too early to be confident that the greenback has peaked against either. On the back of yesterday's...

Read More »

Surprise-Packed Tuesday: China Cut Rates, Japan’s Q2 GDP Rises Twice as Fast as Expected, and UK Wages Accelerate

2023-08-15

by

2023-08-15

Overview: Today's highlights include a surprise rate cut from China after another series of disappointing data and much stronger than expected Japanese Q2 GDP (6% annualized pace). The UK reported an unexpected sharp jump in average weekly earnings, which were sufficient to get renew speculation of a 50 bp hike by the Bank of England next month. The US dollar is mixed. The Swedish krona and dollar-bloc currencies are struggling, while the Swiss...

Read More »

Risk Appetites Squashed by Weak Chinese Imports/Exports and Moody’s Downgrade of 10 US Banks

2023-08-08

by

2023-08-08

Overview: The combination of falling Chinese imports and exports, Moody's downgrade of ten US small and medium-sized banks is serving to squash risk appetites. Equities are weak, but bond markets are strong despite the surprise tax on Italian banks announced yesterday and the kick-off of the US $103 bln refunding today. Outside of Japan and Australia, Asia Pacific equity markets were lower led by a 1.8% drop in the Hang Seng and a nearly 2.2% loss...

Read More »