Tag Archive: EMU

FX Weekly Preview: The Week Ahead Excluding Brexit

I feel a bit like the proverbial guy that asks, "Besides that, Mrs. Lincoln, how did you like the play?" in trying to discuss the week ahead without knowing the results of the UK Parliament's decision on the new deal negotiated between Prime Minister Johnson and the EU.   I will write a separate note about Brexit before the Asian open. However, there are several other developments next week that will help shape the investment climate.

Read More »

FX Daily, October 1: Dollar Jumps to Start New Quarter

Overview: The US dollar is rising against nearly every currency today as global growth concerns deepen. Japan's Tankan Survey showed large manufacturers confidence is a six-year low. The Reserve Bank of Australia cut 25 bp as widely expected and kept the door open for more. The final EMU PMI ticked up from the flash, but it is still at a seven-year low.

Read More »

FX Daily, September 04: HK Concession and Better EMU PMI Overshadows Self-Inflicted Trade and Brexit Woes

Risk appetites have been bolstered by three developments. The UK appears to have taken a tentative step away from leaving the EU without a deal. Hong Kong's Chief Executive Lam has agreed to formally withdraw the controversial extradition measure that had been suspended.

Read More »

FX Weekly Preview: Macro Deterioration

The US-China tensions remain the dominant driver of investor risk appetites. President Trump has repeatedly accused China of manipulating its currency on twitter, and finally Treasury Secretary Mnuchiin acquiesced after China failed to prevent the dollar from rising above CNY7.0.

Read More »

FX Daily, July 31: Sterling Steadies, Attention Shifts to FOMC

Overview: After a shellacking in recent days, sterling has stabilized though there is not much of a bounce to speak of, suggesting the adjustment to the risk of a no-deal Brexit may not be complete. After the S&P 500 posted back-to-back declines, Asia Pacific equities struggled. Hong Kong shares led the regional decline.

Read More »

FX Daily, July 24: Poor PMI Weighs on Euro Ahead of ECB

Overview:  Disappointing flash PMI pushed an already offered euro lower ahead of tomorrow's ECB meeting. European bonds rallied and equities, amid a rash of earnings, is trying to extend the advance for a fourth consecutive session.  Italian and Spanish 10-year benchmark yields are off four-six basis points, while core bond yields are off two-three basis points.

Read More »

FX Weekly Preview: FOMC, EMU PMI, and Pre-G20 Positioning: Crossroads and Crosswinds

The week ahead is likely to provide some clarification for investors on three fronts that have been a source of uncertainty.  The FOMC meeting, with updated forecasts, is center stage.  The credit markets are pushing the Fed to be aggressive but can be disappointed.  In the eurozone, the preliminary PMI may confirm a modest, even if uneven recovery. 

Read More »

FX Daily, May 29: Equity Slump Deepens while Yields Plunge

Overview:  The slump in equities continues after the poor showing in the US yesterday.  Nearly all bourses in Asia Pacific and Europe are lower.  Indonesia is the notable exception as domestic operators re-position after the election.  Foreign investors have been notable sellers of Korean and Taiwanese shares this month (in excess of $6.2 bln). Europe's Dow Jones Stoxx 600 is testing its lowest levels since March, and the S&P 500 is poised to gap...

Read More »

FX Daily, May 23: Trade, Brexit, and Disappointing Flash PMIs Weigh on Global Markets

Overview:  The deterioration of the investment climate is spurring the sales of stocks and the buying of bonds. The dollar is firm.  China and the US appear to be digging as if the trade tensions will remain for some time and the breech is beginning to look too big for Trump and Xi to pull another rabbit out of the hat like they did at the end of last year when the tariff truce was struck.   The move against Huawei and possible a number of...

Read More »

FX Daily, April 30: Dollar Pares more Gains as EMU GDP Surprise

Overview: The S&P 500 set a new record high and close yesterday, but the lift to global markets was not strong enough to overcome the disappointing Chinese PMI.  Although Chinese equities traded higher on ideas that the news will spur additional stimulative measures, other Asian markets were mixed. 

Read More »

FX Daily, April 01: China Reanimates the Animal Spirits, While Europe Finds New Ways to Disappoint

Overview:  Better than expected German retail sales ad employments reports at the end of last week has been followed by gains in China's official PMI  and Caixin's manufacturing reading. However, the spillover from China was limited in Asia.  Japan's Tankan survey and outlook disappointed and South Korea's exports and imports were weaker than expected. 

Read More »

FX Weekly Preview: Three Highlights in the Week Ahead

Three events next week will shape the investment climate. The Federal Reserve meets and will update its forecasts and guidance. The British House of Commons may vote for a third time on the Withdrawal Bill before Prime Minister May heads of the EU Summit to ask for an extension of the UK leaving the EU. The eurozone sees the flash March PMI, with great hope that the green shoots of spring will be evident.

Read More »

FX Weekly Preview: Little Resolution in the Week Ahead

According to legend, the person who unraveled the Gordian Knot would rule the world. No one succeeded until Alexandar the Great took his mighty sword and sliced the knot in half. A young boy saw him afterward, crying on the steps of the Temple of Apollo. "Why are you crying?" the boy asked, "you just conquered the world. "Yes'" Alexander wept, " now there is nothing else for me to do."

Read More »

Great Graphic: EMU Inflation Not Making it Easy for ECB

The Reserve Bank of New Zealand is credited with being the first central bank to adopt a formal inflation target. Following last year's election, the central bank's mandate has been modified to include full employment. To be sure this was a political decision, and one that initially saw the New Zealand dollar retreat.

Read More »

FX Weekly Preview: The Investment Climate

The investment meme of a synchronized global upturn has been undermined by the recent string of US and European economic data. The flash March eurozone composite reading fell to 55.3, the lowest reading since January 2017. Although Q4 17 US GDP may be revised higher (toward 2.8% from 2.5%) mostly due to greater inventory accumulation, the curse of weak Q1 GDP appears to be showing its hand again, with forecasts now coming in below 2%.

Read More »

FX Weekly Preview: Politics may Continue to Overshadow Economics

The new monthly cycle of high frequency economic data has begun. The manufacturing PMI shows the synchronized global recovery is continuing. The service sector and composite PMI will be reported in the week ahead. They are unlikely altering the general expectation for robust growth in Q4.

Read More »

FX Weekly Preview: Events + Market = Potential for Combustible Price action

There are a number of events and economic reports in the week ahead that will help shape the investment climate in the weeks and months ahead. In recognition of the importance of initial conditions, let's briefly summarize the performance of the dollar and main asset markets.

Read More »

US Political Anxiety Stems Bond Sell-Off

Bond yields have been rising in the US and Europe since the summer. There are some country-specific considerations and some generalized factors. Anxiety over US politics has helped bonds recover some lost ground.

Read More »

Great Graphic: Consumer Inflation: US, UK, EMU

CPI UK CPI US, CPI Eurozone
Price pressures appear to have bottomed for the US, UK, and to a lesser extent, EMU. Rise in prices cannot be reduced solely to the increase of oil. Core prices are also rising.

Read More »
Page 112