Tag Archive: Currency Movement

Dollar Jumps, while Surge in Covid Cases Raise Questions about China’s Pivot

2022-11-21

by

2022-11-21

Overview: Surging Covid cases in China and Hong Kong are undermining hopes of a Covid-pivot and the US dollar is broadly higher. Equities are under pressure to start the week. Most of the large bourses in the Asia Pacific but Japan, fell earlier today. Europe’s Stoxx 600 is paring last week’s minor gain, which was the fifth consecutive weekly rise. US stock futures are lower, while the 10-year US Treasury yield is flat near 3.83%. European yields...

Read More »

Higher Japanese CPI Won’t Change the BOJ’s Stance

2022-11-18

by

2022-11-18

Overview: The capital markets are heading into the weekend mostly quietly in a consolidative fashion.  Ambiguous signals from yesterday’s US equities saw a narrowly mixed performance among the large Asia Pacific bourses, but of note, Hong and China markets saw this week’s gains trimmed. Europe’s Stoxx 600 is up around 1% near midday and is slightly above last week’s close.  US equity futures are trading with a firmer bias ahead of a large...

Read More »

The Dollar Comes Back Better Bid

2022-11-17

by

2022-11-17

Animal spirits are retreating today. Asia Pacific and European equities are lower, and US futures are narrowly mixed. US 2- and 10-year yields are edging higher, while European benchmark 10-year yields are mostly softer.  Italy and the UK are notable exceptions.

Read More »

Markets are Less on Edge as the Darkest Scenarios seem Less Likely

2022-11-16

by

2022-11-16

The situation in central Europe is still intense but it appears top US, European and Polish officials are more reluctant than some market participants to attribute the darkest of intentions and paint extreme narratives.

Read More »

Poor Chinese and Japanese Data Are Not Deterring Euphoria

2022-11-15

by

2022-11-15

Overview: Recent developments have spurred a euphoria that is exciting the animal spirits. Greater confidence that US inflation has peaked, and new initiatives from China, and yesterday’s Biden-Xi meeting are all feeding this narrative. The dollar, which slumped last week, is sliding anew today. Strategically, we anticipated the turn, but tactically, we thought last week’s move had stretched the near-term technical condition.  The dollar is...

Read More »

The Dollar Posts Corrective Upticks, while the Market Digests China’s Initiatives

2022-11-14

by

2022-11-14

Overview: China’s new initiatives to support the property sector helped lift the Hang Seng. And while the China’s CSI 300 edged higher both the Shanghai and Shenzhen composites fell. Most Asia Pacific markets fell, while Europe’s Stoxx 600 is posting a small gain.

Read More »

High Anxiety: China’s Covid and US Inflation

2022-11-10

by

2022-11-10

Overview: Anxiety is running high. Rather than ease its Covid restrictions, a surge in cases is seeing more areas in China come under restrictions. The US reports CPI and of the ten reports this year, seven of them have been stronger than expected.

Read More »

Markets Consolidate After US Election

2022-11-09

by

2022-11-09

Overview: It is difficult to see the impact of the US midterm election in the immediate aftermath. The dollar is stronger against all the major currencies, but this seems to be mostly position adjusting ahead of tomorrow’s CPI report after a pullback in recent days.

Read More »

The Dollar Edges Higher

2022-11-08

by

2022-11-08

Overview: After selling off amid speculation that China’s Covid policy was going to ease, we expected the greenback to recover and consolidate ahead of Thursday’s CPI. This did not materialize yesterday, but the dollar has come back better bid today. Equity markets are mostly firmer, but nearly all the large markets, but China/Hong Kong, rising in the Asia Pacific region. Europe’s Stoxx 600 is posting small gains. It is the third session in a row...

Read More »

Risk Appetites Survive China Keeping Zero Covid Policy

2022-11-07

by

2022-11-07

Overview: Chinese officials denied plans to end the zero-Covid policy and after a brief wobble, risk assets have traded better. Asia Pacific equities rallied, led by Hong Kong and mainland stocks that trade in Hong Kong. Europe’s Stoxx 600 opened lower but recovered and is around 0.5% higher after the 1.8% gain before the weekend. US futures are firm. Benchmark 10-year yields are mostly 2-4 bp softer in Europe and the US. The dollar is mixed. The...

Read More »

US Dollar Offered Ahead of the Employment Report

2022-11-04

by

2022-11-04

Overview: Risk appetites have returned but may be tested by the US jobs report. News of progress with US auditors in China helped lift Hong Kong and Chinese equities. Most of the large bourses in the region also rose. Europe’s Stoxx 600 is up a little more than 1% near midday after shedding 1.3% over the past two sessions. US futures also are trading with an upside bias. Benchmark 10-year yields are mostly a little softer today. The 10-year US...

Read More »

Fed’s Hawkishness Roils the Capital Markets

2022-11-03

by

2022-11-03

Overview: The Fed delivered the expected 75 bp rate hike, and although it says it will take into account the cumulative effect of past hikes and their lagged impact, the takeaway has been a hawkish message. Risk appetites have evaporated. The dollar is stronger, while stocks and bonds have been sold. Japan’s markets were spared due to the national holiday, but the other large markets in the area were sold, lead by the 3% decline in the Hang Seng....

Read More »

It is not So Much about the Fed’s hike Today but the Forward Guidance

2022-11-02

by

2022-11-02

Overview: A consolidative tone has emerged ahead of the outcome of the FOMC meeting later today. The focus is not so much on the 75 bp rate hike, but on its forward guidance. Many expect the Fed to signal it will return to a 50 bp move next month, but we are not convinced that it will go beyond indicating that 50 bp or 75 bp will be debated in December, depending on the data. The market has a 5% terminal rate discounted. The Fed does not need to...

Read More »

RBA Hikes by 25 bp, Chinese Stocks Surge, and the Greenback Trades Heavier

2022-11-01

by

2022-11-01

Overview: Risk appetites have returned today. Bonds and stocks are advancing, while the dollar is better offered. Unsourced claims that Beijing has formed a committee to assess how to exit the zero-Covid policy sent Chinese shares sharply higher. An index of mainland companies list in Hong Kong jumped nearly 7% and closed up almost 5.5%. The Hang Seng surged 5.2%, while all the large markets in the region advanced. Europe’s Stoxx 600 recovered...

Read More »

The Dollar Returns from the Weekend Bid

2022-10-31

by

2022-10-31

The dollar has come back from the weekend bid. After the ECB and BOJ meetings last week, the focus has shifted back to the US where the FOMC meeting concludes in the middle of the week and the October employment report is out ahead of the weekend. Sterling and the yen are the weakest performers among the G10 currencies and are off 0.45%-0.50%. The Antipodeans are performing best and are straddling little changed levels.

Read More »

BOJ Doesn’t Surprise, but EMU does with October CPI and Q3 Growth

2022-10-28

by

2022-10-28

Bonds and stocks are being sold ahead of the weekend.  Poor corporate earnings and higher inflation in Japan and Europe are weighing on sentiment.  The dollar is mostly higher. Hong Kong and mainland China led large Asia Pacific markets lower.  India and Singapore were notable exceptions.

Read More »

Dollar Slump Stalls Ahead of ECB Meeting

2022-10-27

by

2022-10-27

The dollar’s recent losses have left it stretched on a near-term basis after today’s ECB meeting, the focus will shift to the Federal Reserve, next week’s meeting, and the employment report. The greenback is trading with a firmer bias against the G10 currencies, while the emerging market currencies are more mixed.

Read More »

Dollar Slumps, Yuan Rallies by Most this Year amid Intervention Talk

2022-10-26

by

2022-10-26

Overview: The US dollar is having one of toughest days of the year. It has been sold across the board and taken out key levels like parity in the euro, $1.15 in sterling, and CAD1.36. The Chinese yuan surged over 1%. Chinese officials promised healthy bond and stock markets.

Read More »

Consolidative Tuesday

2022-10-25

by

2022-10-25

Overview: The yen and sterling are trading quietly after the recent drama, but with the Party Congress ending, the Chinese yuan has been permitted to fall faster. It approached the 2% band today and its loss of about 0.65% today makes it the weakest among the emerging market currencies.

Read More »

BOJ Injects More Volatility, while UK’s Tory Party Leadership Contest may be Over Today

2022-10-24

by

2022-10-24

Overview:  Japanese efforts to curb the weakness of the yen provided drama today. What many suspect was intervention before the weekend was wearing off and officials may have sold dollars again today in front of JPY150.

Read More »