Tag Archive: CPI
BOJ Delivers, Sending Greenback to Almost JPY150; Now Over to the Federal Reserve
Overview: A 15 bp hike by the BOJ and plans to halve its bond purchases by the end of FY25 (in March 2026), coupled with a hawkish press conference by Governor Ueda sent the dollar to nearly JPY150, its lowest level in four months. A soft-core inflation reading in Australia send the Aussie lower and is the weakest of the G10 currencies. The others are little changed. The focus is now on the Federal Reserve, which is expected to signal that its...
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Market Boosts Odds of a BOE Rate Cut this Week
Overview: The US dollar is mostly firmer today ahead of what promises to be an eventful week. Sterling is bearing the brunt today, off a little less than half-of-a-cent as expectations creep up of a rate cut this week and Chancellor of the Exchequer Reeves plays up the poor state of public finances left by the Conservative government. Sterling (and the euro's) five- and 20-day moving averages have crossed. The yen is mostly within the pre-weekend...
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Is the Dramatic Yen Short Squeeze Over?
Overview: The powerful yen short squeeze that has roiled the capital market this week has stalled today. It is the first day this week that the dollar has not fallen below the previous day's low and has risen, though slightly, above previous session's high. The Antipodeans and Scandis are trading with a firmer bias. The yen and Swiss franc are the only two G10 currencies that are not stronger today. The stability of the yen appears to have removed...
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Dollar Consolidation is Morphing into Correction
Jury duty assignment prevents a more comprehensive note, but here is a snapshot. Overview: The failure of computer systems has disrupted airlines, banks, media companies, and the London Stock Exchange, ostensibly stemming from an update from a third-party software update, according to Microsoft. The dollar is trading with a firmer bias. The consolidation, we anticipated, appears to be morphing into a correction. Weaker than expected retail sales...
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Dollar Crushed, Stocks Slump
Jury duty assignment prevents a more comprehensive note, but here is a snapshot. Overview: The dollar is broadly lower, and stocks are under pressure. Comments by a Japanese official, which did not appear to break new ground, coupled with Trump's interview in BusinessWeek, where he was critical that Japan was benefiting from a weak yen, despite having apparently spent some $80 bln this year trying to stop it from falling, may have been the trigger....
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Euro is Little Changed, while the Yen is Softer to Start the New Week
Overview: The dollar is narrowly mixed against the G10 and emerging market currencies today. The euro is little changed, holding on to last week's gains, after the surprising French election results, where the focus shifts finding a prime minister that can carry a majority of the new and closely divided National Assembly. Despite firm underlying wage data, the Japanese yen has given back its initial gains, and the dollar is pushing back above...
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No Turn Around Tuesday as Greenback Remains Firm
Taking the next few days off. Will be back with week ahead commentary on July 6. Overview: The sharp jump in US long-term interest rates has helped lift the greenback in recent sessions and it remains firm against most of the G10 currencies today. The Canadian dollar is the best performer, and it is nearly flat. The intraday momentum indicators warn that after a mostly consolidative Asia Pacific and European morning, the greenback may probe...
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Will the PCE Deflator Really Contain New Information?
Overview: The US dollar is narrowly mixed as North American participants prepare to return for the last session of the first half. Despite firmer than expected Tokyo CPI and stronger than expected industrial output, the market lifted the greenback around JPY161.25 before profit-taking pressures bought it back toward session lows near JPY160.65 in Europe. President Biden is thought to have lost last night's debate with Trump, but it does not appear...
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Double Whammy: US CPI and Federal Reserve
Overview: Position adjustments ahead of today's US CPI and FOMC
meeting are giving the dollar a modestly heavier tone today. Each of these
events are typically a source of volatility in their own right and together
they promise an eventful North American session. The yen is the only exception
among the G10 currencies, but even there, the dollar is holding below
yesterday's highs. Even sterling's relative resilience this week was unmarred
by the...
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The Greenback is Mostly Softer
Overview: The dollar initially extended its
pre-weekend and yesterday's heavier tone before finding a better bid in the
European morning. Still, as North American dealers return to their posts the
dollar is still mostly softer against the G10 currencies, but it is little
changed to slightly firmer against the Japanese yen. Most emerging market
currencies are firmer, but the South African rand is softer ahead of their
election, the Mexican peso is...
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UK CPI Disappoints
Overview: A hawkish hold by the Reserve Bank
of New Zealand and a firmer than expected UK CPI reading have allowed the New
Zealand dollar and sterling to show resilience in the face of the US dollar's
broadly firmer tone. And even there, the Kiwi and pound have seen their early
gains pared. The Swiss franc is the weakest of the G10 currencies today and has
fallen to a new 12-month low against the euro. Emerging market currencies are
mixed. Central...
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Will USD be Bought on the Fact after Being Sold on Expectations of a Softer CPI?
Overview: The
dollar is trading heavily against the G10 currencies and most of the currencies
from emerging markets. The market expects softer US CPI (and retail sales)
today. Any decline in the year-over-year core rate would put it at its lowest
level since April 2021. Still, this has been anticipated, and the market seems
vulnerable to "sell the rumor, buy the fact" type of activity. After
all, the Fed will see another employment and...
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Dollar Consolidates Softer Ahead of Tomorrow’s CPI
Overview: The dollar is trading with
a softer bias in mostly narrow ranges against the G10 currencies. It did not
rally much ahead of the US jobs data, and it was not able to sustain the upside
momentum afterwards, despite the jump in US yields. Former St. Louis Fed President
Bullard, who still has a strong reputation in the market, told Bloomberg TV
yesterday that three cuts were his base case this year. The Scandis and
Antipodeans are the...
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Ueda’s Comments Weigh on Yen as the Market Awaits US CPI
Overview: The US CPI has become one of the most important high-frequency economic reports for the capital markets. The dollar is going into the report narrowly mixed against the G10 currencies. Comments by BOJ Governor Ueda about the weakness in consumption of non-durable goods was seen by some as reducing the likelihood of a change in policy next week.
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Ueda’s Comments Knock the Yen Back, while the Euro Flirts with $1.08
Overview: The US dollar is mixed today. The dollar-bloc currencies and the Scandis are enjoying a slightly firmer tone, while the euro and sterling are edging higher in European turnover.
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Soft US CPI Today Paves Way for Fed Pivot Tomorrow
Overview: The US dollar is trading softer against all the
G10 currencies ahead of what is expected to be a soft November CPI report,
which paves the way for a pivot by the FOMC tomorrow. It is expected to signal
that policy may be sufficiently restrictive and anticipate being able to cut
rates next year more than it thought in September, even if not as much as is
priced into the market. Among emerging market currencies, central European
currencies...
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Dollar Recovers After Losses Extended in Asia
Overview: On the back of lower interest rates, the greenback's
slide was extended in early Asia Pacific turnover, but it has recovered. As
North American trading begins, the dollar is firmer against all the G10
currencies but the New Zealand dollar, which has been aided by the hawkish hold
of the central bank, and an immaterial gain in the Swiss franc. Emerging market
currencies are mixed. Central European currencies and the Mexican peso are...
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Corrective Forces Help the Dollar Stabilize
Overview: Corrective
forces helped the dollar stabilize yesterday and it enjoys a firmer today. The
euro has slipped below $1.09, and the dollar has resurfaced above JPY149.00. The
FOMC minutes seem dated by the more than 30 bp decline in the US 10-year yield,
the 7% rally in the S&P 500 and roughly 3% drop in the Dollar Index. The
implied year-end 2024 Fed funds rate has fallen by 10 bp to 4.51% (5.33%
currently). The Japanese government...
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Is the Market Putting on Risk Ahead of the Weekend?
Overview: The US dollar is trading with a softer
bias. Among the G10- currencies, only the euro and Swiss franc are the laggards
and are nearly flat. In shifting expectations, the market sees the Reserve Bank
of Australia as the most likely to hike rates again, while the swaps market
appears to be bringing forward cuts by the European Central Bank and the Bank
of Canada. The Australian dollar is the strongest G10 currency today and this
week. After...
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Macro: Sep CPI stuck at 3.7% YOY
The most anticipated release of the week came in … “Unchanged” or sticky stuck from the August at 3.7% yoy. But it’s worth mentioning as we will discuss below that this is up from June CPI which was 3.09% yoy. Core CPI which excludes food and energy because of their volatility sits at 4.13% yoy down from 4.39% last month.
Let’s look under the hood a bit because headlines will mention “sticky” CPI and there are some reasons that CPI will indeed...
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