Tag Archive: China
Consolidative Session Marked by Weak Chinese Imports and White House Debt Ceiling Talks
Overview: The market sentiment remains fragile.
Equities are mostly lower. Japan was a notable exception, and concerns about
China's economy after a sharp decline in imports took mainland and Hong Kong
listed companies sharply lower. Europe's Stoxx 600 is giving back yesterday's
0.35% gain plus more. Bank shares are off 0.65% after rallying 4.20% over the
past two sessions. US equity futures are heavier. Benchmark 10-year yields are
mostly a couple...
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The Greenback Continues to Struggle
Overview: There is a nervousness that hangs over the capital markets.
Although US banks shares recovered at the end of last week, many continue to
see the sector’s challenges as the harbinger of a dramatic reversal in the Fed’s
stance. America’s debt ceiling looms large and could be a few weeks away. China
led Asia Pacific bourses higher, and, ironically, its bank shares extended their
rally. Japan, returning from last week’s holiday was notable...
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The Greenback Remains Heavy Ahead of the Employment Report
Overview: The US dollar is weaker against all the
G10 currencies today but the Swiss franc. The backdrop seems fragile even
though a few regional bank shares have done better in after-hours trading and
Apple's earnings were received well by the markets. Due to seasonal factors and
other considerations, many are warning about a US jobs report, even though
ADP's estimate surprised to the upside earlier this week. Equities were mixed
in the Asia...
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The Euro Stalled Near Its Best Level since April 2022 Ahead of ECB’s Decision
Overview: Without making
a commitment, the Federal Reserve opened the door to a pause in its tightening
cycle and the market has concluded it is over. The dollar slumped to new lows
for the move against sterling (and the Mexican peso), while euro stalled as it
approached last week's high, which was the best level since April 2022. The
dollar remains soft against most of the G10 currencies, today. The Norwegian
krone is leading after the 25 bp hike...
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Dollar Comes Back Bid, as First Republic Taken Over (Mostly) by JP Morgan
Overview: Most markets are closed for the May Day
holiday. News that JP Morgan will acquire most of First Republic assets will be
a relief for the markets. US equity futures are slightly firmer, and the
10-year Treasury yield is around three basis points higher, slightly above
3.45%. Recall that before the weekend, it has fallen from almost 3.55% to 3.42%.
The market has more than a 90% chance of a quarter-point hike discounted for
Wednesday. The...
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Bank Stress Hobbles the Dollar, while Dissents Make the 50 bp Hike by Sweden less than Hawkish
Overview: The re-emergence of bank stress
reverberated through the US markets yesterday, downgrading the perceived
chances of a Fed hike next week and sending the US 2-year yield sharply lower. The
yield settled 13 bp lower, the largest drop in three weeks. The risk-off sent
the US dollar higher against most of the major and emerging market currencies. Follow-through
US dollar gains today has been mostly limited to the Australian dollar, where...
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Risk-Off Mood Dominates
Overview: Perhaps it was the extent of First Republic
Bank's loss of deposits that were reported with earnings yesterday, but risk
appetites dried up today. Asia Pacific equities were trounced outside Japan
today. Hong Kong and mainland shares that trade there set the tone today
falling 1.7%-1.9%. China's CSI 300 fell for the fifth consecutive session. Taiwan
and South Korean markets fell more 1.4%-1.6%. Europe's Stoxx 600 is off almost
0.5%,...
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The Dollar Begins New Week mostly Softer
Overview: The dollar is mostly lower, led by the Swiss
franc and euro. However, despite softer US rates and a victory for the LDP in
local Japanese elections, the yen is trading with a softer bias. Japanese
stocks recovered from the pre-weekend profit-taking seen after the Nikkei make
new highs for the year. Most other large bourses in the region except Taiwan
and India also moved lower. Note that China's CSI 300 fell for the fourth
consecutive...
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Dollar Pares Gains but is Poised to Recover in North America
Overview: A rise in US yields, with the
two-year Treasury closing yesterday at its best level in more than three weeks
help fuel follow-through dollar buying yesterday after an upside reversal at
the end of last week. Key levels were approached, like $1.09 in the euro,
$1.2345 in sterling, and JPY135 held, and the dollar has consolidated in Asia
and Europe. The euro and sterling recouped around half of the losses seen from
the Friday's high to...
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Firm US Dollar as Market is Feeling More Comfortable with May Hike
Overview: The dollar fell most of last week
but reversed higher before the weekend. It has seen some follow-through gains,
albeit limited against most of the G10 currencies today. Despite some seemingly
dovish comments by a few Fed officials last week, the Fed funds futures is
pricing in the greatest chance for a hike at the early May meeting since the
banking stress erupted last month. The greenback is also trading with a firmer
bias against most...
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US Dollar Slumps and China Surprises with Twice the Expected Trade Surplus
Overview: The market took US short-term rates and
the dollar lower after the CPI data, which was largely in line with
expectations. On the one hand, the odds of a quarter-point hike next month
increased slightly (73.6% vs. 71.6%) to 5.25%, but it reinforced that sense
that it is last hike and that the Fed will unwind this hike and more before the
end of the year. The year-end implied policy rate fell by about six basis points to
4.33%. The dollar...
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Greenback Pares Yesterday’s Gains
Overview: As the long-holiday ends, risk appetites
have returned. Equities and yields are mostly higher. The dollar is seeing
yesterday's gains pared. Yesterday's setback in the yen helped lift Japanese
stocks, with the Nikkei advancing 1%. Several other markets in the region also
gained more than 1%, including Australia and South Korea. China's CSI was an
exception. It slipped fractionally. Europe's Stoxx 600 is up nearly 0.6%
through the European...
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The Extended Holiday Makes for Subdued Price Action
Overview: The holiday continues. In the Asia Pacific
region, Hong Kong, Australia, and New Zealand, and the Philippines markets were
closed. The regional bourses advanced but China. European markets remain
closed. US equity futures are narrowly mixed. The 10-year US Treasury yield is
off nearly three basis points to about 3.36%. The dollar is trading quietly
mostly within ranges seen before the weekend. It is slightly softer against
most of the...
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Good Friday
Overview: Activity throughout the capital markets remains
light as most financial centers in Europe are closed for the Easter celebration.
Hong Kong, Australia, New Zealand, and Indian markets were closed as well. Still,
most of the equity markets in Asia Pacific advanced, led by South Korea's
Kospi's nearly 1.3% advance. The market responded favorably to news that
Samsung would cut its production of memory chips and shrugged off its smaller
than...
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Fragile Calm Casts a Pall over the Capital Markets
Overview: There is a fragile calm in the capital
markets today ahead of the long holiday weekend for many. The poor US economic
data yesterday and third consecutive decline in the KBW bank index weighed on
risk sentiment. Most of the large bourses in the Asia Pacific region fell, with
Hong Kong and India notable exceptions. In Japan, the Topix bank index fell
1.1% after a 1.9% decline yesterday and is now lower on the week. Europe's
Stoxx 600 is...
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OPEC+ Surprises while Manufacturing Remains Challenged
Overview: News of OPEC+ unexpected output cuts saw May WTI gap
sharply higher and helped lift bond yields. May WTI settled near three-week
highs before the weekend near $75.65 and opened today near $80. It reached
almost $81.70 before stabilizing and is straddling the $80 area before the
North American session. The high for the year was set in the second half of
January around $83. Benchmark 10-year yields are up 2-5 bp points. The 10-year
US...
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March: Going Out like A Lamb after Wrestling with a Lion
Overview: The banking stress that roiled the markets
this month has eased. However, the emergency lending by the Federal Reserve,
vias the discount window and new Bank Term Funding Program hardly slowed in the
past week ($152.6 bln vs. $163.9 bln). Money markets took in more funds. Almost
$305 bln has flowed to them over the past three weeks. The US KBW bank index is
up 3.75% this week coming into day (after pulling back 1.2% yesterday). Europe's...
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Dollar Soft but Stretched
Overview: While bank stress seems to continue
to ease, the dollar languishes against most of the major currencies. The
Japanese yen is the notable exception. It is off about 1.5% this week. The
Dollar Index has given back the gains scored at the end of last week but
remains inside the range set last Thursday and Friday (~101.90-102.35). Perhaps
the participants are waiting for Friday. In addition to month-, quarter, and
fiscal-year ends, it is...
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Firmer Rates and Higher Bank Stocks Give the Greenback Little Help
Overview: Financial strains eased yesterday, and
short-term yields jumped. The two-year US yield jumped 25 bp to pierce 4%. Yet,
the dollar fell against most of the major currencies yesterday and is mostly
softer today. Banking stress is ebbing. The Topix bank index snapped a
three-day decline and jumped nearly 2% today to recoup the lion's share of its
three-day decline. The Stoxx 600 index of EMU banks is extending yesterday's
1,7% advance. The...
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Calmer Markets to Start the New Week
Overview: There did not appear to be any negative
surprises over the weekend, and this is helping calm investors' nerves at the
start of the new week. Deutsche Bank shares have recovered most of the
pre-weekend loss in the German market, and Stoxx bank index is posting a gain
for the first time in four sessions. The AT1 ETF is slightly softer. In Japan,
the Topix bank index slipped around 0.5%, its fourth decline in the past five
sessions. Asia...
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