Tag Archive: Currency Movement

Stocks and Bonds Extend Rally

2022-10-04

by

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.

Read More »

Monday Blues

2022-10-03

by

2022-10-03

The markets begin October with some trepidation.  Rumors continue to circulate about the health of a large European bank, cross currency swaps are elevated, suggest dollars are more difficult to access. 

Read More »

Wake Me Up When September Ends

2022-09-30

by

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.

Read More »

Semblance of Calm Returns

2022-09-27

by

2022-09-27

(Business travel will prevent me from updating the blog for the next couple of days.  Thank you for your patience.  Good luck.)Overview: After extending last week’s moves yesterday, the capital markets are mostly calmer today. Sterling is firmer, as are UK Gilts.

Read More »

Sterling Continues to be Pounded

2022-09-26

by

2022-09-26

Overview: Sterling’s pounding continued in Asia where it was driven to $1.0350, a new record low before stabilizing. UK rates also continued to rise sharply after the new government promised more tax cuts next year. The right-wing victory in Italy was not surprising but it kept pressure on Italian bonds.

Read More »

Macro: Tell Us Something We Don’t Already Know

2022-09-24

by

2022-09-24

As September winds down, three sets of economic reports will draw the most attention. We will review them and then offer a snapshot of the emerging market central bank meetings.

Read More »

Putin and Powell Lift Dollar

2022-09-21

by

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...

Read More »

The Greenback Firms to Start the New Week, Stocks Slide

2022-09-19

by

2022-09-19

Overview:  The busy week is off to a slow start as Japan is on holiday and the UK and Canadian markets are closed to honor Queen (Australia will commemorate with a holiday on Thursday). Nevertheless, the sell-off in equities continues and the US dollar is firm. Most of the large markets in Asia fell. India is a notable exception. Its benchmark rose for the first time in four sessions, helped by bank shares and Infosys. Europe’s Stoxx 600 is off for...

Read More »

The Dollar Heads into the Weekend Well Bid

2022-09-16

by

2022-09-16

Overview:  The dollar is well bid. It has risen to new two-year highs against the dollar bloc and Chinese yuan. Aided by worse than expected retail sales, sterling, on its anniversary of leaving the European Exchange Rate Mechanism fell to its lowest level since 1985. This fits into the broader risk-off move. The S&P 500 fell to new two-month lows yesterday, and FedEx warnings after the bell yesterday add to the string of worrisome comments...

Read More »

Calmer Capital Markets…for the Moment

2022-09-15

by

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.

Read More »

Markets Remain on Edge

2022-09-14

by

2022-09-14

Overview: The firmer than expected US CPI set off a major reversal of the recent price action. It is a two-prong issue. The first is about inflation and the squeeze on the cost-of-living.

Read More »

Will the Dollar Recover After CPI?

2022-09-13

by

2022-09-13

Overview: The US dollar remains offered ahead of today’s CPI report. Most European currencies are outperforming the dollar bloc, and the greenback is holding inside yesterday’s range against the yen. Most emerging market currencies are firmer, as well.

Read More »

Careful about Chasing the Dollar Lower in North America Today

2022-09-12

by

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.

Read More »

Sharp Dollar Setback may offer Bulls a Bargain

2022-09-09

by

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.

Read More »

ECB: Coping with Conflict, Covid, and Climate

2022-09-08

by

2022-09-08

Overview: Heightened warnings from Japanese officials has helped the dollar steady against the yen, while the euro hugs parity ahead of the outcome of the ECB meeting, where a 75 bp hike is anticipated. Most Asian equity markets rallied in the wake of yesterday’s gains in the US.

Read More »

The Yen and Yuan Continue to Weaken

2022-09-07

by

2022-09-07

While the US dollar appears to be consolidating its recent gains, the Japanese yen and Chinese yuan remain under pressure. Officials seem more concerned about the pace of the move than the level it has reached. New and large fiscal initiatives that the new UK government has floated has failed to change sentiment toward sterling, which is the second weakest major currency today after the Japanese yen.

Read More »

Aussie Sells Off After RBA Hikes 50 bp while Sterling Bounces on UK New Initiative

2022-09-06

by

2022-09-06

Overview: A GBP130 bln initiative by the new UK government to protect households from the surge in power costs helped lift sterling from 2.5-year lows. The Reserve Bank of Australia delivered the expected 50 bp rate hike, but the prospect of smaller moves going forward saw the Australian dollar sold through yesterday’s lows.

Read More »

Can the US Employment Report be Anti-Climactic Ahead of Long North American Weekend?

2022-09-02

by

2022-09-02

Overview:  Nothing is decisive, but the recent string of data pushes the needle a little more to a soft landing for the US economy and gave the US dollar another leg up. The risk is that some of the buying drained some of the interest that may materialize after today's US jobs report. The greenback is softer against the major currencies except the Japanese yen. The dollar is extending its rally against the yen for the sixth consecutive session and...

Read More »

New Lockdown in China and the First Drop in South Korea’s Chip Exports in 2 years Euthanizes Animal Spirits

2022-09-01

by

2022-09-01

Overview: The precipitous fall in equities continues while the dollar remains buoyant. Nvidia’s warnings about US curbs on sales to China and the first drop in South Korea’s chip exports in two years, coupled with the largest lockdown in China since Shanghai encouraged investors to move to the sidelines.

Read More »