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Tag Archive: #GBP

FX Daily, February 28: It Takes Powell to Convince the Market that Yellen was Right

2018-02-28

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2018-02-28

Many market participants think they heard Fed Chair Powell give a fairly strong signal that he favored a more aggressive course. The implied yield on the December Eurodollar futures rose five basis points to 1.535%. The December Fed funds futures contract rose three basis points.

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FX Daily, February 27: Markets Tread Water; Powell is Awaited

2018-02-27

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2018-02-27

The capital markets seem unusually subdued. The US dollar is mostly slightly firmer, except against the euro and Swiss franc among the majors. The MSCI Asia Pacific Index managed to eke out a small gain (0.2%), for a third advancing session, without the help of China, Taiwan, Korea or India. It was really a Japanese story. The Nikkei rallied 1.1%, while excluding Japan the MSCI benchmark was off 0.25%.

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FX Daily, February 26: Dollar Slides as Equities Extend Recovery

2018-02-26

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2018-02-26

The US dollar has begun the new week on heavy footing. It is being sold against virtually all the currencies, major and emerging market currencies. There is one exception, and although the local market is not open, the Mexican peso is under some pressure that could be linked to a dispute between the President of Mexico and the US that prompted the former to cancel a visit to the latter.

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FX Weekly Preview: Three Drivers in the Week Ahead: Data, Speeches, Politics

2018-02-26

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2018-02-26

There are three distinct classes of drivers in the week ahead. The first is high frequency data. The most important of the economic reports include the preliminary estimate of the February inflation in the euro area, the US January income, and consumption data alongside the Fed's preferred inflation measure, the core PCE deflator, and Japanese retail sales and industrial production figures.

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FX Daily, February 23: Dollar Firms; VIX Set to Close Lower for Second Week

2018-02-23

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2018-02-23

A light economic schedule in North America may help the markets close the week on a quiet note. Perhaps if there is one number that captures this sense, it may be the VIX. It is soft and barring a new disruption today, it is poised to close lower for the second consecutive week, for the first time this year. The US dollar is steady to higher today and barring a reversal, will close stronger on the week against the major currencies.

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FX Daily, February 21: Markets Mark Time

2018-02-21

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2018-02-21

The economic data stream is picking up, but there is an uneasy calm in the markets. It is almost as if the dramatic drop in stocks has left many with a sense of incompleteness, like waiting for another shoe to drop. The price action has not clarified the situation very much. The equity markets are stalling in front of important chart points as are yields and the dollar.

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FX Daily, February 20: Dollar Trades Higher, but Stocks Challenged at Key Chart Point

2018-02-20

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2018-02-20

The dollar is finding better traction today, building on the upside reversal seen before the weekend. The news stream has been light and it seems like primarily an issue of positioning rather than a change in sentiment or the consensus narrative. The focus has shifted from monetary policy and idea that the ECB and BOJ are exiting their extraordinary monetary policy to return of the twin deficit problem in the US.

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FX Daily, February 19: Monday Market Update

2018-02-19

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2018-02-19

The US dollar is narrowly mixed in uneventful turnover. Of note, the dollar selling seen in Asia last week slacken today and the greenback moved above the pre-weekend highs seen in the US. It is the first time in eight sessions, the dollar has risen above the previous day’s high against the yen. Europe seems to be losing interest though, with the dollar near JPY106.60.

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FX Daily, February 16: Worst Week for the Dollar since 2015-2016, While Stocks Continue to Recover

2018-02-16

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2018-02-16

Nearly all the major currencies have risen at least two percent against the US dollar this week. The Canadian dollar is an exception. It has risen one percent this week ahead of today's local session. Sterling is becoming another exception after disappointing retail sales. It is up just shy of two percent. The Dollar Index is off 2.3% on the week, which would be the biggest weekly loss since 2015.

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FX Daily, February 15: Stocks Jump, Bonds Dump, and the Dollar Slumps

2018-02-15

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2018-02-15

The significant development this week has been the recovery of equities after last week's neck-breaking drop, while yields have continued to rise. The dollar has taken is cues from the risk-on impulse from the equity market and the sales of US bonds more than the resulting higher yields. Asia followed US equities higher.

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FX Daily, February 14: Investors Remain Uneasy even as Equities Stabilize

2018-02-14

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2018-02-14

There is an unease that continues to hang over the market. It is as if a shoe fell last week, and most investors seem to be waiting for the other shoe to drop. It is hard to imagine the kind of body blow that the equities took last week without some kind of follow through and knock-on effects. Moreover, the focus today on US CPI may prove for nought.

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FX Daily, February 13: Tuesday’s Two Developments

2018-02-13

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2018-02-13

There are two important developments today. First, the recovery in the global equity markets is being challenged. Second, the yen has strengthened across the board, and is now at its best levels against the dollar since last September's low. The MSCI Asia Pacific Index extended Monday's recovery with another 0.5% gain. However, looking closer, the momentum faltered.

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FX Daily, February 12: Equity Markets Find Firmer Footing, Dollar Softens

2018-02-12

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2018-02-12

The most important development today has been the stability in the equity markets after last week's meltdown. The recovery from new lows in the US before the weekend set the tone for today's moves. Tokyo markets were on holiday, and the MSCI Asia Pacific Index excluding Japan snapped a seven-day slide with a nearly 0.6% gain.

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Great Graphic: FX Vol Elevated, but Still Modest

2018-02-09

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2018-02-09

With the substantial swings in the volatility of equities that have captured the imagination of journalists and punished investors who bought financial derivatives that profited from the low vol environment, we thought it would be helped to look at the implied volatility of the leading currencies against the US dollar. The Great Graphic looks at the three-month implied volatility for the euro (white line), the yen (yellow line), and sterling (green...

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Great Graphic: Major Currencies Year-to-Date

2018-02-08

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2018-02-08

This Great Graphic was created on Bloomberg. It shows five major currencies against the US dollar this year. To avoid giving a misleading impression, the currencies are index to start this year at 100 and all the currencies are quoted in the European style of how many dollars the currency purchases. These kinds of charts are not so much for trading, but they help illustrate the relative moves that can be masked by nominal price changes.

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FX Daily, February 07: Guns and Butter May Resolve US Legislative Logjam

2018-02-07

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2018-02-07

After a volatile session in North America, the major equity indices closed higher. In fact, the 1.75% rise in the S&P 500 was the best since November 2016. Asian equities stabilized, and the MSCI Asia Pacific Index was able to eke out a small gain. The European markets are moving higher is also posting early gains and the Dow Jones Stoxx 600 is about 0.45%, which threatens to snap the seven-day slide. However, the main challenge now is that the S&P...

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Cool Video: Bloomberg Double Feature–BOE Meeting and the Yield Curve

2018-02-07

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2018-02-07

Chandler
The Bank of England meets tomorrow. Although no one expects a move, it has little to do with the recent market volatility. The FTSE 100 is poised to snap a six-day 7%+ slide. The FTSE 250 fell for seven consecutive sessions through yesterday, shedding 5.75% in the process. The UK's 2-year yield slipped about seven basis points from last week's close to58 bp before recovering to 63 bp today, around the middle of this week's range.

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FX Daily, February 05: Dollar Consolidates while Equity Rout may be Ebbing

2018-02-05

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2018-02-05

Asian equity markets were weighed down by losses in the US markets ahead of the weekend. The MSCI Asia Pacific Index was off 1.4% after the 1.0% pre-weekend loss. The Nikkei gapped lower and shed 2.5% and has fallen in eight of the past nine sessions. The notable exception in Asia was the Shanghai Composite. The 0.75% was led by the financial sector amid talk that a report later this week will show a strong jump in yuan lending from banks, which...

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Did Mnuchin Signal a Policy Shift Today?

2018-01-27

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2018-01-27

Did US Treasury Secretary Mnuchin signal a change in the US dollar policy? Probably not. As Mnuchin and President Trump have done before, a distinction was drawn between short- and longer-term perspectives. In the short-term, a weaker dollar says Mnuchin, is good for US trade and "other opportunities". In the longer-term, Mnuchin explicitly acknowledged, "the strength of the dollar is a reflection of the strength of the US economy."

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