Tag Archive: EMU

CSI 300 Drops 7%, Oil Steadies, and the US Dollar Remains Firm

2024-10-09

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2024-10-09

Overview: We suspect the market overreacted to the US jobs data, which was tainted by the lowest "establishment" response in over two decades and seasonal adjustments were likely thrown off by Hurricane Helene and the 33k strike at Boeing. We think Fed officials, and more speak today, have confirmed that it was not the game changer than many market participants think, which was likely influenced by positioning. It did help facilitate the...

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US Rates Extend Gains to Fray 4 percent

2024-10-07

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2024-10-07

The stronger than expected US jobs report triggered a 20 bp jump in the US two-year yield and sent the greenback broadly higher. The market slashed the probability that the Fed would cut by 75 bp in Q4.

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Bailey Weighs on Sterling

2024-10-03

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2024-10-03

Overview: The dollar enjoys a firmer tone today. The escalating conflict in the Middle East is keeping the market on edge. And then there is tomorrow's US employment report. Among the G10 currencies, sterling has been the hardest hit. It is off around 1% after Bank of England Governor Bailey seemed to signal that after pausing last month, the central bank may turn more aggressive here in Q4. Nearly all the emerging market currencies are...

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Patient BOJ Weighs on the Yen, Hong Kong Re-Opens with a Bang, Middle East War Underpins Crude, while the Dollar Consolidates

2024-10-02

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2024-10-02

Overview:  The US dollar is mostly little changed today. Comments from the new Japanese government and BOJ Governor Ueda reinforce the sense driven by the softness in the September Tokyo CPI and larger-than-expected decline in August industrial output that there is no urgency for another rate hike. The yen is the weakest of the G10 currencies today. The Norwegian krone leads the major currencies higher after underperforming yesterday. Outside of...

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Powell’s Lack of Urgency Helps the Dollar Correct Higher

2024-10-01

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2024-10-01

Overview:   Japan will go to polls a little ahead of the US. And the US election still looks too close to call. Canada may be forced into snap elections if the Bloc Quebecois abandon's negotiating with the minority Liberal government as it has threatened to do at the end of the month. The UK's new Labour government is putting together its first budget to be delivered at the end of the month. Among the first tasks of the new French prime minister is...

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Mortgage Relief Lifts China’s CSI 300 by more than 8% Ahead of the Golden Week Holiday

2024-09-30

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2024-09-30

Overview: The US dollar is narrowly mixed on the last trading day of Q3 24. The Australian dollar, the G10 proxy for China, is leading the major currencies higher and reached its best level since February 2023 (~$0.6940). The yen and Swiss franc continue to trade heavily and are off 0.2%-0.25%. The euro firm and traded above $1.12 for the fifth time since late August but has failed to settle above there once. The soft inflation readings have...

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Yen Surges After New LDP Leader Picked, while the Greenback Consolidates

2024-09-27

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2024-09-27

Overview:  Japan's LDP leadership selection has not been the dragged-out affair that many thought likely with a record nine candidate vying for the post. It turns out that the economy may have been less important than foreign affairs and the threat posed by China. Shigeru Ishiba is strong nationalist, who reports indicate own shares in Nippon Steel, whose bid for US steel has faced domestic opposition in the US on seemingly nationalist, rather than...

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China’s Politburo Validates and Extends Pivot while the US Dollar Sees Yesterday’s Gains Pared

2024-09-26

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2024-09-26

Overview: After its recent losses were extended, the dollar reversed higher in North America yesterday. Technically, this looks to have ended the sharp drop over the last couple of weeks, but there has been no follow-through gains today and a consolidative tone emerged. G10 currencies are firmer today, led by the recovery in the Antipodeans. The Swiss National Bank delivered the expected 25 bp rate cut, but the Swiss franc is up about 0.25%....

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The Dollar is Bid but Ueda Lends Support to the Yen

2024-09-03

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2024-09-03

The dollar is bid as the upside correction that began last week continues today. The greenback is trading above last week's highs against most of the G10 currencies. The yen is the notable exception.

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Corrective Forces Weigh on G10 Currencies, with the Euro Threatening its Largest Loss in Two Months

2024-08-28

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2024-08-28

Business travel prevents the commentary for the next two days.  It will return with the September monthly on August 31.  Overview: Corrective forces are helping lift the dollar against all the G10 currencies. The euro's 0.5% pullback is the largest in nearly two months. Sterling's 0.3% loss is the most in nearly three weeks. The dollar-bloc currencies are the most resilient and are off less than 0.2% today. Emerging market currencies are more...

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Sterling Shines

2024-08-27

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2024-08-27

Overview: The US dollar is softer against all the G10 currencies but the Japanese yen. Sterling is leading the advance and is at new two-year highs, knocking on $1.3250. More generally, the dollar's consolidative tone remains intact, but it looks like a pause rather than a reversal, especially against the dollar-bloc currencies. The weaker yen is a headwind for most of the regional currencies, including the yuan. Most central European currencies...

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USD is Trading Mostly Firmer, but Yen and Swiss Franc Show Resilience

2024-08-26

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2024-08-26

Overview: The US dollar is mostly firmer, though consolidating against most of the G10 currencies. The Japanese yen and Swiss franc are the strongest, while the Scandis and Antipodean currencies are the heaviest. Among emerging market currencies, a handful of Asian currencies, including the Chinese yuan are higher, but central European currencies, the South African rand, and the Mexican peso are softer.The news stream is light but the threat of the...

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The Dollar Softens into the Weekend

2024-08-16

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2024-08-16

Overview: The US dollar is weaker against all the G10 currencies today. The New Zealand dollar is the strongest, which might fit into the narrative that the carry trades are making a comeback, but the yen and Swiss franc are the next strongest in the G10. And for the second consecutive week, Japanese investors were net buyers of foreign bonds. Rather than new carry trades, we suspect that it is a dollar move. The euro is trading near $1.10, and...

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BOJ Delivers, Sending Greenback to Almost JPY150; Now Over to the Federal Reserve

2024-07-31

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2024-07-31

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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Yen Slumps, Germany Contracts, and the Week’s Key Events Still Lie Ahead

2024-07-30

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2024-07-30

Overview: An unexpected decline in Japan's unemployment did not prevent a retreat in the yen to a four-day low ahead of tomorrow's data and conclusion of the BOJ meeting. The dollar has probed the JPY155 area where nearly $3.5 bln options expire today. An unexpected contraction Germany's Q2 GDP was offset in the aggregate by better French, and especially Spanish figures, leaving the euro consolidating in a narrow range (~$1.0815-$1.0835). The...

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Is the Dramatic Yen Short Squeeze Over?

2024-07-26

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2024-07-26

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 Consolidates to Start the New Week

2024-07-15

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2024-07-15

Overview: The assassination attempt on former President Trump has injected a new dynamic as his chances of being re-elected appear to have risen. There are a few trades that seem to benefit from a second term:  steepening yield curve, weaker Mexican peso, and stronger crypto. The dollar initially strengthened as the market's initially responded, while Tokyo markets were closed for Marine Day. As North American activity is about to begin, the dollar...

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No Turn Around Tuesday as Greenback Remains Firm

2024-07-02

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2024-07-02

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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Calmer Markets to Start the New Week

2024-06-17

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2024-06-17

Overview: The US dollar is firmer against most G10 currencies to start the new week. The euro is a notable exception. It is only slightly higher but confined to a narrow range around $1.07. On the other hand, most emerging market currencies are firmer, but for a few Asia-Pacific currencies, including those of China, South Korea, and Taiwan. The Mexican peso is consolidating but it is also lower on the day. The tone is largely...

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Dollar Comes Back Bid

2024-06-13

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2024-06-13

Overview: The dollar fell alongside US rates yesterday after the softer than expected CPI. The move on both rates and the dollar were pared after the FOMC meeting which held rates steady as widely expected, but the median dot now anticipated one cut this year rather than three. The dollar has recovered more ground today and is trading with a slightly firmer bias G10 currencies. However, trading is quiet and mostly narrow ranges have dominated....

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