Tag Archive: EMU
It is not So Much about the Fed’s hike Today but the Forward Guidance
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...
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RBA, FOMC, BOE Meetings Featured while the Greenback’s Recovery can be Extended
The week ahead is important from a macro perspective. The data highlights include China's PMI, eurozone preliminary October CPI and Q3 GDP, and the US (and Canadian) employment reports. In
addition, the Federal Reserve meeting on November 2 is sandwiched between the Reserve Bank of Australia meeting and the Bank of England meeting.
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BOJ Doesn’t Surprise, but EMU does with October CPI and Q3 Growth
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.
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BOJ Injects More Volatility, while UK’s Tory Party Leadership Contest may be Over Today
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.
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Dollar Recovers from Yesterday’s Stunning Reversal, but has Sentiment Turned in North America?
There has been little follow-through dollar selling so far today after yesterday’s dramatic downside reversal after the initial flurry of buying in response to the stronger than expected US CPI.
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No Rest for the Weary: The Week Ahead
In Volcker's days, when he used money supply to justify tightening monetary policy despite high unemployment, the money supply was released while markets were open, and it was The report. Later, by the mid-1980s, leading up to the Plaza Agreement, the deterioration of the US monthly trade balance was critical.
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Stocks and Bonds Extend Rally
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.
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Monday Blues
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.
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Macro: Tell Us Something We Don’t Already Know
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.
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What Happened Monday
The US and Canada may have been on holiday on September 5, but the world waits for no one and there were several significant developments. First, Gazprom's decision to indefinitely suspend gas shipments through the Nord Stream 1 pipeline announced before the weekend saw the European natgas benchmark soar 23.7.
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New Lockdown in China and the First Drop in South Korea’s Chip Exports in 2 years Euthanizes Animal Spirits
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.
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EMU August CPI at 9.1%, while the Core Rate Jumps to 4.3%
Overview: The rise in global interest rates continues. The US 10-year yield is a few basis points near 3.15% and European benchmarks are mostly 5-6 bp higher. Of note, the sharp sell-off in UK Gilts has being extended. Yesterday’s 10 bp rise has been followed by another 14 bp surge today. Italian bonds are also getting hit. The 10-year yield is up a little more than 10 bp.
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Heading into the Weekend, Dollar’s Downside Momentum Stalls
Overview: The markets are putting the finishing
touches on this week’s activity. Japan, returning from yesterday’s holiday
bought equities, and its major indices jumped more than 2%. China, South Korea,
and Australia struggled. Europe’s Stoxx 600 is firmer for the third consecutive
session. It is up about 1.3% this week. US futures are also firmer after reversing
earlier gains yesterday to close lower on the day. The US 10-year yield is flat
near...
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Downside Risks to the US Employment Report?
Overview: The US dollar enjoys a firmer bias against
the major currencies ahead of the July employment data. Emerging market
currencies are mixed. Asian currencies are generally firm while central Europe is a bit softer. Some detect a relaxation in tensions around Taiwan, though
China’s aerial harassment continues. Taiwanese shares jumped 2.25% to lead the
region that saw China’s CSI 300 rally over 1%. Europe’s Stoxx 600 is giving
back yesterday’s...
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Market Takes China’s Response in Stride, Risk Appetites Recover
Overview: The market is
judging China's response to Speaker Pelosi's visit in a mild way and risk
appetites returned. Equity markets are higher, even though Chinese shares
weakened. Europe's Stoxx 600 is edging higher after two days of small loses,
and US futures enjoy a firmer bias. The surge in US rates yesterday has calmed.
The US 10-year yield is firm near 2.76% and the 2-year yield is up a
couple of basis points near 3.07%. European yields are...
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Yen Squeeze Continues
The US dollar begins the new month better offered. It is softer against all the major currencies. Short yen positions continue to get unwound, which is leading the move, followed by the Antipodeans, where the Reserve Bank of Australia is expected to hike rates tomorrow.
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EMU GDP Surprises, while the Yen’s Short Squeeze Continues
Overview: The month-end and slew of data is making for a
volatile foreign exchange session, while the rash of earnings has generally
been seen as favorable though weakness was seen among the semiconductor chip
fabricators. China, Hong Kong, and Japanese equities fell but the other large
markets in the region rose.
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Fed Day
Overview: Better US news from the likes of Google, Microsoft, and Texas Instruments has helped lift sentiment today and is encouraging a more risk-on mood ahead of the FOMC meeting. News that US President Biden and China’s Xi will talk tomorrow for the second time this year may be notable but does not appear to be impactful in the capital markets.
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Dismal EMU Flash PMI on Heels of First ECB Rate Hike since 2011
Overview: The euro is over a cent lower from yesterday’s peak, pressured by
the drop in the flash PMI composite below 50 for the first time since early
last year. More generally, the flash PMIs have shown the global economic
momentum is waning, and the bond markets have responded accordingly. The US
10-year yield is flirting with 2.80%, its lowest level in more than two weeks. European
yields are 15-20 bp lower and the spread between Italian and...
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The Greenback Bounces Back
Overview: After modest US equity gains yesterday, the weaker yen and Beijing’s approval of 60 new video games helped lift most of the large markets in the Asia Pacific region.
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