Tag Archive: Italy

Dollar Jumps

2024-02-28

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2024-02-28

Overview: A less hawkish Reserve Bank of New Zealand and a slightly softer than expected January CPI from Australia appears to have sparked a broad US dollar rally.

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The Greenback is in Narrow Ranges to Start the Week

2024-02-12

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2024-02-12

Overview: The foreign exchange market is quiet. The Lunar New Year holiday shut most Asian markets. That, coupled with the light news in Europe, have served to keep the dollar in narrow ranges against the G10 currencies. The Swedish krona, Norwegian krone, and Japanese yen are posting minor gains against the greenback. The New Zealand dollar, which was strongest major currency last week (1.4%) is off by almost 0.5% today, making it the weakest...

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Dollar Retreat Extended, but Turn Around Tuesday may have Already Begun

2023-11-20

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2023-11-20

Overview:  Last week's dollar losses have been extended today. The yen is leading the move, encouraged by talk of a buying by a large US real money fund. The Dollar Index is off about 0.35% after sliding 1.8% last week. It is below the 200-day moving average for the first time since late August. As was the case last week, the Canadian dollar is the laggard. Emerging market currencies are also mostly higher. The Chinese yuan's 0.67% rise is the most...

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Dollar Consolidates Amid Rate Volatility

2023-11-16

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2023-11-16

Overview: The dollar is consolidating its recent moves as interest rate swings continue. The US two-year yield has traded in a nearly 28 bp range in the first two sessions this week, and near 4.88% now, it is 18 bp lower since last Friday's close. The 10-year yield is slipping below 4.50%. It reached almost 4.70% on Monday and had fallen to almost 4.40% yesterday. Part of this reflects the shift in overnight rate expectations. The implied yield of...

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The Dollar Continues to Press Against JPY150; Risk Off Ahead of the Weekend

2023-10-20

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2023-10-20

Overview: True to the market's penchant, it heard a dovish Fed Chair Powell yesterday. He seemed to suggest that the bar to another hike was high. This helped cap the 10-year yield just in front of 5.00% and allowed foreign currencies to recover against the dollar. The US two-year yield reversed lower after rising above 5.25%. It is now around 5.15%. Still, Powell appeared to cover similar ground as several other officials, including Fed governors...

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Sharp Fall in US Yields ahead of Large Supply

2023-10-10

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2023-10-10

Overview: The market continues to monitor developments in Israel and the Middle East. The economic calendar is light today and the market is showing a strong appetite for risk. Except for China and South Korea, large bourses in the Asia Pacific rallied. Japan's indices jumped more than 2% and Australia by 1% to lead the region. Europe's Stoxx 600 is up 1.5% near midday, which, if sustained would be the largest in nearly a month. US index futures...

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The Greenback is Softer Ahead of CPI but Key Chart Points Remain Intact

2023-08-10

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2023-08-10

Overview: The deluge of Treasury supply is nearly over for this week. On tap today are 4- and 8-week T-bills and $23 bln 30-year bonds to finish the quarterly refunding. The sales will come after the July CPI print that is expected to see the first year-over-year increase since last June. The market is going into the report with about a 15% chance of a Fed hike next month discounted. Meanwhile, September crude oil extended its recover from $80 seen...

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Fitch Roils Markets

2023-08-02

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2023-08-02

Overview: Late yesterday, on the eve of the quarterly refunding announcement, Fitch cut the US rating to AA+ from AAA, citing project fiscal deterioration over the next few years and "the erosion of governance". S&P also has the US as an AA+ credit. Ironically, many observers who have been critical of the US monetary and fiscal policies, like former Treasury Secretary Summers and El-Erian, were also critical of Fitch's decision. The...

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The Dollar Regains Composure

2023-06-28

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2023-06-28

Overview: The dollar is better bid today. It is rising against nearly all the G10 currencies, with the Antipodeans bearing the brunt, after a softer than expected Australian inflation report. The yen has steadied after extending its losses to new lows for the year. Emerging market currencies are also mostly lower, though the Mexican peso is edging higher for the fourth consecutive session. The large Asia Pacific bourses rallied with the exception...

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PBOC Sends Signal in Lower Dollar Fix, while the Canadian Dollar makes a 9-Month High

2023-06-27

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2023-06-27

Overview: Hawkish comments by ECB President Lagarde at the central bank symposium in Sintra and the PBOC's weaker dollar fix have weighed on the greenback today. It is lower against most of the G10 currencies, but the Japanese yen and Norwegian krone. It also slipped to a new nine-month low against the Canadian dollar. Emerging market currencies are also mostly firmer, with the notable exceptions of the Russian rouble and beleaguered Turkish lira....

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The Dollar Consolidates after Powell Sapped its Mojo

2023-05-22

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2023-05-22

Overview:  Federal Reserve Chair Powell's offered a stronger case for a pause in the monetary tightening before the weekend and this sapped the dollar's mojo. The greenback is mostly consolidating through the European morning in quiet turnover. The JP Morgan Emerging Market Currency Index is trying to snap a four-day decline. The South African rand is recovering from its recent slide and is up nearly 1%. The South Korea won is benefitting from...

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Narrow Ranges in FX: Calm before the Storm?

2023-05-10

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2023-05-10

Overview: Equity markets are mostly weaker, and benchmark 10-year yields are a little softer. The foreign exchange market is subdued ahead of today’s US CPI. The large bourses in Asia Pacific region with the exception of India worked lower and Europe’s Stoxx 600 is off for the second consecutive session. US futures have a heavier bias. Yesterday the US bank share indices filled the gap created at the end of last week but recovered. Today’s price...

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Dollar Comes Back Bid, as First Republic Taken Over (Mostly) by JP Morgan

2023-05-01

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2023-05-01

Overview: Most markets are closed for the May Day holiday. News that JP Morgan will acquire most of First Republic assets will be a relief for the markets. US equity futures are slightly firmer, and the 10-year Treasury yield is around three basis points higher, slightly above 3.45%. Recall that before the weekend, it has fallen from almost 3.55% to 3.42%. The market has more than a 90% chance of a quarter-point hike discounted for Wednesday. The...

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Financial Stress Continues to Recede

2023-03-29

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2023-03-29

Overview: Financial stress continues to recede. The Topix bank index is up for the second consecutive session and the Stoxx 600 bank index is recovering for the third session. The AT1 ETF is trying to snap a four-day decline. The KBW US bank index rose for the third consecutive session yesterday. More broadly equity markets are rallying. The advance in the Asia Pacific was led by tech companies following Alibaba's re-organization announcement. The...

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Investors Shaken by Rising Rates

2023-02-22

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2023-02-22

Overview: The surge in US interest rates and sharp losses in US stocks sent the dollar broadly higher in North America yesterday. The $42 bln of two-year notes auctioned by the US Treasury saw the highest yield in more than a quarter-of-a-century (4.67%) and it still produced a small tail. Sterling, helped by its own surprisingly strong data, was the only G10 currency to have gained against the surging dollar. Still, no important technical levels...

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Markets Catch Collective Breath

2023-02-16

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2023-02-16

Overview:  On the heels of a dramatic jump in US job creation and firmer than expected year-over-year CPI, the US reported a larger than expected jump in retail sales and a strong recovery in manufacturing output. Few think that economic momentum that the recent data implies can be repeated, the "no landing" camp has gained adherents. We suspect that says more about psychology than the economy. The US two-year note is threatening to snap...

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Yen Retreats Ahead of Formal BOJ Announcement Tomorrow and US CPI

2023-02-13

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2023-02-13

Overview: A consolidative tone is mostly the theme of the day. The revisions to the US CPI announced before the weekend add to the uncertainty and focus on tomorrow's report. At the same time, investors watch ongoing air space activity that has led to a few objects being shot down over the US and Canadian airspace.

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Euro Closed above $1.09 but Follow-Through Buying Limited

2023-01-26

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2023-01-26

Overview: After some intraday penetration, the euro finally settled above $1.09 yesterday. However, follow-through buying has been limited and technical and option-related resistance is seen in the $1.0940-50 area. The dollar is more broadly mixed today, with the dollar-bloc and Norwegian krone leading the advancers. The euro, yen, and sterling are nursing small losses near midday in Europe. The recovery of US equity indices yesterday after gap...

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Risk Appetites Survive China Keeping Zero Covid Policy

2022-11-07

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2022-11-07

Overview: Chinese officials denied plans to end the zero-Covid policy and after a brief wobble, risk assets have traded better. Asia Pacific equities rallied, led by Hong Kong and mainland stocks that trade in Hong Kong. Europe’s Stoxx 600 opened lower but recovered and is around 0.5% higher after the 1.8% gain before the weekend. US futures are firm. Benchmark 10-year yields are mostly 2-4 bp softer in Europe and the US. The dollar is mixed. The...

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RBA Hikes by 25 bp, Chinese Stocks Surge, and the Greenback Trades Heavier

2022-11-01

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2022-11-01

Overview: Risk appetites have returned today. Bonds and stocks are advancing, while the dollar is better offered. Unsourced claims that Beijing has formed a committee to assess how to exit the zero-Covid policy sent Chinese shares sharply higher. An index of mainland companies list in Hong Kong jumped nearly 7% and closed up almost 5.5%. The Hang Seng surged 5.2%, while all the large markets in the region advanced. Europe’s Stoxx 600 recovered...

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