Tag Archive: China

FX Daily, May 19: Optimism Burns Eternal

2020-05-19

by

2020-05-19

Overview: Hopes for a vaccine and a German-French proposal to break the logjam at the EU for a joint recovery effort helped propel equities higher yesterday. There was strong follow-through in the Asia Pacific region, where most markets advanced by more than 1% today. However,  the bloom came off the rose, so to speak, in Europe. After a higher opening, markets reversed lower, and the Dow Jones Stoxx 600 is off about 0.75% in late morning turnover.

Read More »

FX Daily, May 12: Markets Tread Water, Looking for New Focus

2020-05-12

by

2020-05-12

Overview: Investors seem to be in want of new drivers, leaving the capital markets with little fresh direction. While Japanese and China equities were little changed, several markets in the region, including Australia, Hong Kong, Taiwan, and India, were off more than 1%. European bourses are mostly higher after the Dow Jones Stoxx 600 slipped 0.4% yesterday.

Read More »

FX Daily, May 11: Quiet Start to New Week

2020-05-11

by

2020-05-11

Overview: The new week begins slowly in the capital markets. Many markets in the Asia Pacific region, including Japan, Hong Kong, and Australia, gained over 1%, but European and US shares are heavier. Benchmarks off all three regions rallied by 3.4%-3.5% over the past two weeks. Bond markets are also little changed, with the US 10-year benchmark just below 70 bp ahead of this week's record refunding.

Read More »

FX Daily, May 8: Jobs and Negative Fed Funds Futures

2020-05-08

by

2020-05-08

Overview: The S&P 500 closed near its session lows for the third day running yesterday but failed to deter the bulls in Asia-Pacific, where most markets rose by more than 1%.  Taiwan, Korea, and Australia lagged a bit though closed higher. Europe's Dow Jones Stoxx 600 is firm, and the modest gains (~0.5%) would be enough to ensure a higher weekly close if it can be maintained. 

Read More »

FX Daily, May 7: China Reports an Unexpected Jump in Exports, While Norway Surprises with a Rate Cut

2020-05-07

by

2020-05-07

Overview: There is a sense of indecision in the air today.  There have been several developments, but investors seem mostly reluctant to extend positions. China reported a surge in exports in April and an increase in the value of reserves.  Australia reported a rise in exports in March.  The Bank of England left policy steady, but clearly signaled it was prepared to boost its asset purchases. 

Read More »

FX Daily, May 4: Monday Blues

2020-05-04

by

2020-05-04

Overview:  The constructive mood among investors in April has given way to new concerns as May gets underway.  Japan and China are still on holiday, but most of the other markets in Asia fell, led by 4.5%-5.5% declines in Hong Kong and India, and more than 2% in most other local markets.  Australia bucked the trend a gained 1.4% after shedding 5% before the weekend. 

Read More »

FX Daily, April 30: ECB Takes Center Stage

2020-04-30

by

2020-04-30

Overview: Equities continue to recover even as deep economic contractions are reported. Yesterday, the US said Q1 GDP contracted at an annualized pace of 4.8%, while the eurozone reported today that output fell 3.8% quarter-over-quarter in Q1.  Hong Kong and South Korea were closed, but the rest of the Asia Pacific bourses rallied strongly with several, including Australia and India, rising more than 2%.

Read More »

An International Puppet Show

2020-04-23

by

2020-04-23

Federal Reserve: H.10 Foreign Exchange Rates, 2006-2020
It’s actually pretty easy to see why the IMF is in a hurry to secure more resources. I’m not talking about potential bailout candidates banging down the doors; that’s already happened. The fund itself is doing two contradictory things simultaneously: telling the world, repeatedly, that it has a highly encouraging $1 trillion in bailout capacity at the same time it goes begging to vastly increase that amount.

Read More »

FX Daily, April 15: Dollar Rises as Equities Slump

2020-04-15

by

2020-04-15

Overview:  The recovery in equities stalled, and the risk-off mood has helped lift the US dollar, which had been trending lower. Taiwan and Malaysia were notable exceptions in the Asia Pacific regions to the heavier equity tone. The Nikkei gave back almost 0.5% after surging more than 3% on Tuesday. Europe's Dow Jones Stoxx 600 is ending a five-day rally. 

Read More »

FX Daily, April 14: Equities are Firm but New Developments Needed or Risk Appetites may Become Satiated

2020-04-14

by

2020-04-14

Overview: Risk appetites have returned today after taking yesterday off. The MSCI Asia Pacific Index advanced every day last week, slipped yesterday, and jumped back today. Most of the national benchmark advanced at least 1.5%, and the Nikkei led the way with a 3% rally to reach its best level since mid-March.

Read More »

China’s Back!

2020-04-01

by

2020-04-01

China PMI, 2005-2020
The Washington Post began this week by noting how the US economy seems to have lost its purported zip just when it needed that vitality the most. Never missing a chance to take a partisan swipe, of course, still there’s quite a lot of truth behind the charge. An actual economic boom produces cushion, enough of one that President Trump and his administration may have been counting on it when opting for full-blown shutdown.

Read More »

FX Daily, March 31: March Ends like a Lion, No Lamb in Sight

2020-03-31

by

2020-03-31

Overview: The coronavirus plague upended the world in March. Equities are finishing the month on a firm note. Strong gains in the US yesterday and an unexpectedly strong Chinese PMI (yes, to be taken with the proverbial grain of salt) helped lift most Asia Pacific and European markets today. Japan and Australia are exceptions to the generalization.

Read More »

FX Daily, February 26: Dramatic Investor Adjustment Continues

2020-02-26

by

2020-02-26

Overview: The warning by the US Center for Disease Control and Prevention that Americans should prepare for an outbreak of Covid-19 sent the S&P 500 tumbling to an 11-week low and the 10-year Treasury yield to a record low near 1.30%. The volatility of the S&P (VIX) jumped to its highest level since 2018. The sell-off in global equities continues unabated.

Read More »

FX Daily, February 25: Capital Markets Remain Fragile after Yesterday’s Bloodletting

2020-02-25

by

2020-02-25

Overview: Yesterday's bloodletting in global equities has calmed, but investors remain on edge. Despite all the concerns that the markets were under-appreciating the implications of the new coronavirus, there is a sense that yesterday's moves were in excess. Japanese markets, which were closed on Monday, played catch-up today, and the Nikkei shed 3.3%.

Read More »

FX Daily, February 24: Stocks Slammed and Yields Drop as Virus Containment Fails

2020-02-24

by

2020-02-24

Overview: The ring of containment of Covid-19 has grown from China. The new frontline is Japan, South Korea, Italy, and Iran. A lockdown of around 50k people near Milan and Austria blocking trains from Italy is scaring investors. Asian markets fell, but South Korea bore the brunt with a nearly 4% decline. The national holiday in Japan spared local equities.

Read More »

FX Weekly Preview: Sources of Imbalance and the Pushback Against New Divergence

2020-02-24

by

2020-02-24

The US dollar's surge alongside gold has eclipsed the equity market rally as the key development in the capital markets. Even the traditional seemingly safe-haven yen was no match for the greenback.  The dollar appeared to have been rolling over in Q4 19, as the sentiment surveys in Europe improved, Japanese officials seemingly thought the economy could withstand a sales tax increase, and data suggested the Chinese economy was gaining some...

Read More »

Time Again For Triple Digit Dollar

2020-02-23

by

2020-02-23

Argentina Official Reserve Assets, 1998-2018
Being a member of the institutional “elite” means never having to say you’re sorry; or even admit that you have no idea what you are doing. For Christine Lagarde, Mario Draghi’s retirement from the European Central Bank could not have come at a more opportune moment. Fresh off the Argentina debacle, she failed herself upward to an even better gig.

Read More »

FX Daily, February 18: Apple’s Warning Weighs on Sentiment

2020-02-18

by

2020-02-18

Overview: Apple's warning that it will miss Q1 revenue due to the knock-on effects of the coronavirus seemed to be a modest wake-up call to investors, who, judging from the equity market, were looking beyond. Equities have fallen, and bonds have rallied. Japan, Hong Kong, and South Korean stocks fell by more than 1%, and only China and Indonesia were able to post gains.

Read More »