Tag Archive: Italy

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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BOJ Doesn’t Surprise, but EMU does with October CPI and Q3 Growth

2022-10-28

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2022-10-28

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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Dollar Slumps, Yuan Rallies by Most this Year amid Intervention Talk

2022-10-26

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2022-10-26

Overview: The US dollar is having one of toughest days of the year. It has been sold across the board and taken out key levels like parity in the euro, $1.15 in sterling, and CAD1.36. The Chinese yuan surged over 1%. Chinese officials promised healthy bond and stock markets.

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Can We Look Past US CPI ?

2022-10-13

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2022-10-13

Overview: There seems to be a nervous calm today ahead of the US CPI. The dollar is hovering near JPY147 but the risk of BOJ intervention in the North American session seems slim. The BOE’s emergency Gilt buying operation ends tomorrow and UK bonds yields have tumbled. While equities in the Asia Pacific region lost ground, Europe’s Stoxx 600 is trying to snap a six-day decline.

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No Rest for the Weary: The Week Ahead

2022-10-08

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2022-10-08

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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Semblance of Calm Returns

2022-09-27

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2022-09-27

(Business travel will prevent me from updating the blog for the next couple of days.  Thank you for your patience.  Good luck.)Overview: After extending last week’s moves yesterday, the capital markets are mostly calmer today. Sterling is firmer, as are UK Gilts.

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Sterling Continues to be Pounded

2022-09-26

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2022-09-26

Overview: Sterling’s pounding continued in Asia where it was driven to $1.0350, a new record low before stabilizing. UK rates also continued to rise sharply after the new government promised more tax cuts next year. The right-wing victory in Italy was not surprising but it kept pressure on Italian bonds.

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The Greenback Firms to Start the New Week, Stocks Slide

2022-09-19

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2022-09-19

Overview:  The busy week is off to a slow start as Japan is on holiday and the UK and Canadian markets are closed to honor Queen (Australia will commemorate with a holiday on Thursday). Nevertheless, the sell-off in equities continues and the US dollar is firm. Most of the large markets in Asia fell. India is a notable exception. Its benchmark rose for the first time in four sessions, helped by bank shares and Infosys. Europe’s Stoxx 600 is off for...

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New Recession Worry Stalls Dollar Express but Doesn’t Derail It

2022-08-24

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2022-08-24

A simply dreadful flash US PMI stopped the dollar's four-day rally in its tracks. It followed news that the eurozone, Japan, and Australia's composite PMIs are below the 50 boom/bust level. However, the dollar recovered, even if not fully as the market seemed unconvinced that the data could change Fed Chair Powell's message at Jackson Hole on Friday. A consolidative tone is evident today. Asia Pacific equities were mixed.

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The Dollar is on Fire

2022-08-19

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2022-08-19

The dollar is on fire. It is rising against all the major currencies and cutting through key technical levels like a hot knife in butter. The Canadian dollar is the strongest of the majors this week, which often outperforms on the crosses in a strong US dollar environment. It is off 1.5% this week.

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Is it All Really about Today’s US CPI Print?

2022-08-10

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2022-08-10

Overview: The US dollar is trading with a heavier bias ahead of the July CPI report. The intraday momentum indicators are overextended, and this could set the stage for the dollar to recover in North America.

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