Tag Archive: Currency Movement

FX Daily, February 26: Dramatic Investor Adjustment Continues

2020-02-26

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2020-02-26

Overview: The warning by the US Center for Disease Control and Prevention that Americans should prepare for an outbreak of Covid-19 sent the S&P 500 tumbling to an 11-week low and the 10-year Treasury yield to a record low near 1.30%. The volatility of the S&P (VIX) jumped to its highest level since 2018. The sell-off in global equities continues unabated.

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FX Daily, February 25: Capital Markets Remain Fragile after Yesterday’s Bloodletting

2020-02-25

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2020-02-25

Overview: Yesterday's bloodletting in global equities has calmed, but investors remain on edge. Despite all the concerns that the markets were under-appreciating the implications of the new coronavirus, there is a sense that yesterday's moves were in excess. Japanese markets, which were closed on Monday, played catch-up today, and the Nikkei shed 3.3%.

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FX Daily, February 24: Stocks Slammed and Yields Drop as Virus Containment Fails

2020-02-24

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2020-02-24

Overview: The ring of containment of Covid-19 has grown from China. The new frontline is Japan, South Korea, Italy, and Iran. A lockdown of around 50k people near Milan and Austria blocking trains from Italy is scaring investors. Asian markets fell, but South Korea bore the brunt with a nearly 4% decline. The national holiday in Japan spared local equities.

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FX Daily, February 21: Covid-19 Contagion Outside China Keeps Investors on the Defensive

2020-02-21

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2020-02-21

Overview:  The spread of Covid-19 outside of China and early signs of the economic consequences again emerged to weigh on investor sentiment.  Poor Japanese and Australian preliminary February PMI reports and some trade indications from South Korea saw most Asia Pacific equities sell-off.  China was an exception.  The small gain (0.3%), lifted the Shanghai Composite 4.2% on the week.

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FX Daily, February 20: Covid-19 Hits Yen and Korean Won

2020-02-20

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2020-02-20

The increase of Covid-19 cases in South Korea and Japan, coupled with China's changing reverting back to its previous methodology of calculation, dropping clinically-diagnosed cases have again weakened risk appetites and sent the dollar broadly higher. Fears of a Japanese recession are sapping the yen's role as a safe haven, and this helps explain why Japanese equities did react as positively to the weaker yen than is often the case.

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FX Daily, February 18: Apple’s Warning Weighs on Sentiment

2020-02-18

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2020-02-18

Overview: Apple's warning that it will miss Q1 revenue due to the knock-on effects of the coronavirus seemed to be a modest wake-up call to investors, who, judging from the equity market, were looking beyond. Equities have fallen, and bonds have rallied. Japan, Hong Kong, and South Korean stocks fell by more than 1%, and only China and Indonesia were able to post gains.

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FX Daily, February 17: Dismal Q4 Japanese GDP Fails to Spur Yen Movement

2020-02-17

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2020-02-17

Overview: It is only a US holiday today, but the global capital markets are subdued. In the Asia-Pacific region, equities traded lower with China and Hong Kong, the main advancers. The MSCI Asia Pacific Index has fallen in only two weeks since the end of last November, and that was during the last two weeks of January. Europe's Dow Jones Stoxx 600 slipped in the previous two sessions but is recouping the losses fully today.

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FX Daily, February 14: Investors Continue to Look Past the Coronavirus

2020-02-14

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2020-02-14

Overview: The capital markets are heading into the weekend, still trying to look past the coronavirus despite the new cases in Hubei. Tokyo was a notable exception in the Asia Pacific region, as the other major equity markets, like in Hong Kong, China, Taiwan, South Korea, and Australia, advanced. The MSCI Asia Pacific Index rose for the second week.

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FX Daily, February 13: Surprise? China Undercounts Afflictions and Fatalities, Curbs Risk Taking

2020-02-13

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2020-02-13

Overview: There is one overriding driver today, and that is the incorporation of CAT scan diagnoses of the virus in Hubei, ground-zero. This follows the arrival of WHO officials into China a couple days ago. Not only have the cases jumped, but so did the number of deaths. It plays on fears that China's figures are not reliable. But it is not just China.

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FX Daily, February 12: The Greenback Slips in Subdued Activity

2020-02-12

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2020-02-12

Investors appear to be increasingly looking past the latest coronavirus from China as new afflictions slow. Despite the soggy close of US equities yesterday, Asia Pacific bourses are nearly all higher, led by more than 1% gains in Singapore and Thailand. The Dow Jones Stoxx 600 is at new record highs, led by consumer discretionary and materials sectors.

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FX Daily, February 11: New Calm in the Capital Markets Continues, Powell Moves to Center Stage

2020-02-11

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2020-02-11

Overview: Investors are taking solace from reports indicating that the increase in the new coronavirus at ground zero (Hubei) is slowing. After the S&P 500 reversed early losses yesterday to close at new record highs helped keep the bullish sentiment intact. Benchmarks in Hong Kong, South Korea, Australia, and China rose for the sixth session.

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FX Daily, February 10: Quiet Start to the New Week in which Politics may Dominate

2020-02-10

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2020-02-10

Overview: The global capital markets have begun the new week on a cautious tone as investors seek to assess the latest news on the new coronavirus. Nearly all the markets in Asia fell but China. European bourses are lower as well, with the Dow Jones Stoxx 600 off about 0.3%. US shares are soft but little changed.

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FX Daily, February 7: Dollar Rides High as Eurozone Disappoints, and Caution Sets In

2020-02-07

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2020-02-07

Overview: A more cautious tone is evident today in the markets, which seem to have run well ahead of macro developments and evidence that the new coronavirus is not yet contained. After a roughly 3.5% advance in the past three sessions, the MSCI Asia Pacific index pulled back with nearly the markets in the region slipping.

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FX Daily, February 6: Stocks Push Higher but more Cautious Tone may be Emerging

2020-02-06

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2020-02-06

Overview:  The bullish enthusiasm that carried the S&P 500 to new closing highs yesterday is helping Asia Pacific and European shares today.  The MSCI Asia Pacific Index rose for the third session with Tokyo, Hong Kong, and Korea jumping two percent.  Europe's Dow Jones Stoxx 600 gapped to new record highs before stabilizing in mid-morning turnover.  US shares are mostly firmer. 

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FX Daily, February 5: Markets Extend Recovery, but Look for a Pause

2020-02-05

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2020-02-05

Overview: The S&P 500 gapped higher and surged 1.5% yesterday, the most since in six months, helping set the stage for a continued recovery in global equities, and stoked risk appetites more broadly. An experimental antiviral treatment is to begin clinical testing. All of the markets in the Asia Pacific region advanced, with Japan, China, and Singapore gaining more than 1%.

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FX Daily, February 4: Relief Rally Fueled by Liquidity not Peak in Coronavirus

2020-02-04

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2020-02-04

Overview: The combination of the rally in US shares yesterday and the continued efforts of China to inject liquidity helped lift sentiment today. The MSCI Asia Pacific Index snapped an eight-day slide, and many markets jumped more than 1%. Led by energy and materials, Europe's Dow Jones Stoxx 600 is posting broad gains and is up over 1% in late morning turnover.

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FX Daily, February 3: Inauspicious Start to the Year of the (Flying) Rat

2020-02-03

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2020-02-03

Overview: The Year of the Rat is off to an inauspicious start as apparently a fly rat (a bat) virus has jumped to humans. China's markets re-opening amid much fanfare, and the Shanghai Composite dropped 7.7%, which is about what the futures in Singapore had anticipated. Several other markets in the region (Japan's Nikkei, Australia, Singapore, Taiwan, and Thailand) fell by more than 1%.

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FX Daily, January 30: Contagion Impact not Peaked, Weighs on Risk Appetites

2020-01-30

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2020-01-30

Overview: The ongoing concerns about the geometric progression of the new coronavirus continues to swamp other considerations for investors. Risk continues to be unwound, as the World Health Organization meets to decide if this is indeed a global health emergency. Several large equity markets in Asia were hit particularly hard.

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FX Daily, January 23: ECB’s Strategic Review and the Coronavirus Command Investors’ Attention

2020-01-23

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2020-01-23

The spread of the coronavirus and the lockdown in the epicenter in China has again sapped the risk-taking appetite in the capital markets. Asia is bearing the brunt of the adjustment. Tomorrow starts China's week-long Lunar New Year celebration when markets will be closed, which may have also spurred today's drama that aw the Shanghai Composite tumbled 2.75%, bringing the week's loss to 3.2%, the most in five months.

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