Tag Archive: Canada

Consolidative Session, even if Not Turn Around Tuesday

2022-11-22

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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...

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The Dollar Comes Back Better Bid

2022-11-17

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2022-11-17

Animal spirits are retreating today. Asia Pacific and European equities are lower, and US futures are narrowly mixed. US 2- and 10-year yields are edging higher, while European benchmark 10-year yields are mostly softer.  Italy and the UK are notable exceptions.

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Markets are Less on Edge as the Darkest Scenarios seem Less Likely

2022-11-16

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2022-11-16

The situation in central Europe is still intense but it appears top US, European and Polish officials are more reluctant than some market participants to attribute the darkest of intentions and paint extreme narratives.

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Poor Chinese and Japanese Data Are Not Deterring Euphoria

2022-11-15

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2022-11-15

Overview: Recent developments have spurred a euphoria that is exciting the animal spirits. Greater confidence that US inflation has peaked, and new initiatives from China, and yesterday’s Biden-Xi meeting are all feeding this narrative. The dollar, which slumped last week, is sliding anew today. Strategically, we anticipated the turn, but tactically, we thought last week’s move had stretched the near-term technical condition.  The dollar is...

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Capital Flows Outstrip Trade Flows and that is Where to Look for Drivers of FX

2022-11-12

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2022-11-12

Policymakers have often said that exchange rates should reflect fundamentals. What does that really mean? Can they do anything but that? It begs the question of which fundamental factors they should reflect.

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Risk Appetites Survive China Keeping Zero Covid Policy

2022-11-07

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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...

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US Dollar Offered Ahead of the Employment Report

2022-11-04

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2022-11-04

Overview: Risk appetites have returned but may be tested by the US jobs report. News of progress with US auditors in China helped lift Hong Kong and Chinese equities. Most of the large bourses in the region also rose. Europe’s Stoxx 600 is up a little more than 1% near midday after shedding 1.3% over the past two sessions. US futures also are trading with an upside bias. Benchmark 10-year yields are mostly a little softer today. The 10-year US...

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BOJ Injects More Volatility, while UK’s Tory Party Leadership Contest may be Over Today

2022-10-24

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2022-10-24

Overview:  Japanese efforts to curb the weakness of the yen provided drama today. What many suspect was intervention before the weekend was wearing off and officials may have sold dollars again today in front of JPY150.

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Greenback Holds Above JPY150, while BOJ goes MIA

2022-10-21

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2022-10-21

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.

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Week Ahead: Focus Shifts away from the US after Robust Jobs Data and Stronger than Expected Inflation

2022-10-15

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2022-10-15

The latest US employment and inflation figures are passed. The market is confident of a 75 bp rate hike next month. While a 50 bp in December is still the odds-on favorite, the market has a slight chance (~15%) of a 100 bp move instead after the robust jobs report and stronger-than-expected September CPI.

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Intraday Momentum Indicators Point to a Dollar Recovery After the Employment Report

2022-10-07

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2022-10-07

Asia Pacific bourses followed yesterday’s US loss, but after opening lower Europe’s Stoxx 600 has steadied. US futures are narrowly mixed ahead of the US jobs report. Benchmark 10-year yields are higher across the board.

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Dollar Slump Halted as Stocks and Bonds Retreat

2022-10-05

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2022-10-05

Overview: Hopes that the global tightening cycle is entering its last phase supplied the fodder for a continued dramatic rally in equities and bonds. The euro traded at par for the first time in two weeks, while sterling reached almost $1.1490, its highest since September 15.

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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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Putin and Powell Lift Dollar

2022-09-21

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2022-09-21

Overview: Between Putin’s mobilization of 300k Russian troops and Fed Chair Powell expected to lead the central bank to its third consecutive 75 bp hike later today, the dollar rides high. It has recorded new two-year highs against the dollar bloc and Chinese yuan, while sterling was sent to new lows since 1985. Asia Pacific bourses were a sea of red for the sixth decline in the regional benchmark in the past seven sessions. Surprisingly, Europe’s...

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No One Wants a Recession, but Central Banks are willing to Take the Risk to Demonstrate Anti-Inflation Resolve

2022-09-17

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2022-09-17

The week ahead is busy. Three G7 central banks meet, the Federal Reserve, the Bank of Japan, and the Bank of England. In addition, Japan and Canada report their latest CPI readings, and the flash September PMI are released.  There are three elements of the Fed's meeting that are worth previewing. First is the interest rate decision itself and the accompanying statement. Ironically, this seems to be the most straightforward. Even before the August...

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Calmer Capital Markets…for the Moment

2022-09-15

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2022-09-15

Overview: The capital markets are quiet today. Equity markets and bond yields have a slight upside bias, while the dollar is little changed. Despite reports that the lockdown in Chengdu is easing, Chinese equities underperformed in the Asia Pacific region.

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Careful about Chasing the Dollar Lower in North America Today

2022-09-12

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2022-09-12

The bout of profit-taking on long dollar positions begun last week has carried into the start of this week. Despite the escalating rhetoric, the yen is not participating today and is trading within the pre-weekend ranges. The greenback’s lows have been set in the European morning and have stretched the intraday momentum indicators, suggesting that North American dealers may not follow suit.

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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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