Tag Archive: China
Dollar Steadies after Yesterday’s Surge, Oil Jumps Ahead of the Weekend while Yields Soften
Overview: The capital markets seemed to have an
exaggerated response to the US CPI, where the headline rate, flattered by the
rise in energy, rose by 0.1% in September than forecast. Rather than decline,
the headline year-over-year rate was unchanged at 3.7%. The core rate was as
expected slowing to 4.1% from 4.3%. Next week's US data, including retail
sales, industrial production, existing home sales, and the index of leading
economic indicators...
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Greenback Consolidates Ahead of September CPI
Overview: The dollar is mixed against the G10
currencies. It is confined to narrow ranges ahead of today's CPI report. The
Russian ruble is the strongest of the emerging market currencies following the
imposition of new capital controls, forcing many exporters to repatriate their
foreign earnings. After posting a key upside reversal at the end of last week,
gold continues to recover. It nearly $1883 so far today, the best level in more
than two...
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Bonds Extend Recovery
Overview: Broadly speaking, the dollar's
recent pullback was extended today but the momentum appears to be slowing,
perhaps ahead of tomorrow's US CPI report. The Dollar Index slipped to its
lowest level since September 25 before steadying. The greenback is mixed as the
North American market is set to open. The dollar bloc and Swedish krona are the
underperformers. The Swiss franc is the best, up about 0.2%, while the yen and euro are little...
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War in Israel Spurs Flight to Dollars, Yen and Gold, While Driving up the Price of Oil
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...
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US Yields and Dollar Rise After US Government Closure Averted
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...
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Dollar Sets Back into Month- and Quarter-End Ahead of likely US Government Shutdown
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...
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Firmer Bonds and Stocks, but the Dollar Presses Ahead
Overview: The S&P 500 hit three-month lows
yesterday, while the Conference Board's measure of consumer confidence fell to
a four-month low. New home sales fell to their lowest level in five years. The
US federal government appears headed for a partial shutdown on October 1. Still,
the greenback rides high. It is extending its gains against several G10
currencies, including the euro and sterling. The Swiss franc is moving lower
for the 12th...
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Softer UK CPI Weighs on Sterling and Lifts Gilts, while Yen Slumps to New Low for the Year, Ahead of the FOMC
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...
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The Canadian Dollar Shines in a Mostly Consolidative FX Market Ahead of the Flurry of Central Bank Meetings
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...
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Calm Before the Storm: Greenback Confined to Narrow Ranges
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...
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Heightened Speculation of an ECB Hike Tomorrow Fails to Lend the Euro Support
Overview: The US dollar is trading with a
firmer bias against all the G10 currencies ahead today's August US CPI report. Even
increased speculation that the ECB will hike rates tomorrow has failed to lift
the euro, while a larger than expected contraction in the UK's July GDP pushed
sterling briefly through last week's lows. The dollar rose to a marginal new
high for the week against the Japanese yen, as the market seemed uninspired by
the cabinet...
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In Uncoordinated Steps, Japan and China Help Slow Greenback’s Rally
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...
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Yuan Sulks in to the Weekend, While Finishing Touches are Put on the Dollar Index’s Eighth Consecutive Weekly Gain
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...
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US Dollar Punches Higher
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...
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China’s Measures Begin to Find Traction, US Employment Report on Tap
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...
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Position Squaring Ahead of US Data Helps the Dollar Recoup Some Recent Losses
Overview: Position-squaring ahead of today's US
personal consumption data and perhaps tomorrow's jobs report is giving the
dollar a firmer profile against most G10 and emerging market currencies. The
Scandis have been the hit hardest and are off 0.75%-0.85%. The euro and
sterling about 0.35%-0.45% lower. The yen is the only G10 currency that is
slightly firmer. The dollar-bloc is nursing small losses (0.10%-0.15%). Despite
the firmer than expected...
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Market Awaits US Data and Leadership
Overview: The dollar staged a major technical
reversal yesterday, in a dramatic reaction to a considerably weaker JOLTs
report than expected, spurring a large drop in US interest rates. And this is
despite press reports that the participation rate in the survey is half of what
was three years ago. We suspect the price action said as much about market
positioning as it did about the data. The path to the US jobs data on Friday
goes through...
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Still No Follow-Through Dollar Buying After Last Week’s Surge
Overview: The dollar was threatening to break higher
at the end of last week, and the euro and sterling closed below key supports. However,
so far this week, the greenback is consolidating and has not seen
follow-through buying. The key data this week, US consumption and jobs, and the
eurozone's CPI still lay ahead. The Antipodeans and Norwegian krone enjoy a
firmer today. A 0.8% contraction in Sweden's Q2 GDP was not as deep as had been
feared,...
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Dollar Consolidates as Market Considers Breakout and Rebuffs Beijing’s Latest Efforts
Overview: Many market participants sense an
inflection point is near. The dollar settled last week beyond key levels
against several major currencies, bolstered by higher short-term US rates. The
market is aware that the Bank of Japan could intervene in the foreign exchange
market with the trading near its best levels of the year, and the 10-year JGB
yield grinding higher. Beijing cut the tax on equity transactions, will
restrict IPOs, and urged...
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Dollar Bid and Rates Firm Ahead of Powell
Overview: The euro and sterling took
out important chart levels near $1.08 and $1.26, respectively. They have
steadied in the European morning but remain fragile ahead of Fed Chair Powell's
speech at Jackson Hole. A couple of ECB officials sounded a bit hawkish and a
less hawkish comment by ECB President Lagarde could renew the pressure on the
euro. The market appears to be going into Powell's speech with a hawkish bias
and the odds of a hike next...
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