Tag Archive: Japan

Greenback Consolidates

2024-10-22

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2024-10-22

Overview:  US interest rates remain firm and the dollar is mostly consolidating against the G10 currencies, in a muted "Turn Around Tuesday." The greenback is straddling the JPY151 area, its best level since the end of July. Despite bearish price action yesterday, the euro, sterling, and Australian dollar have seen limited follow-through selling and modest …

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The Dollar and Gold Firm

2024-10-21

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2024-10-21

Overview: The US dollar is firm to start the new week. The Japanese yen and Australian dollar are the heaviest with in the G10 (~0.30%). The euro and sterling are trading heavier but inside the pre-weekend range. The market anticipates the Bank of Canada to deliver a 50 bp rate cut in the middle of the week, and the Canadian dollar is threatening to extend its losses for the fourth consecutive week. China's prime lending rates were cut by 25 bp,...

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Weekly Market Pulse: Questions

2024-10-14

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2024-10-14

As we enter the final quarter of 2024, there are a lot of questions facing investors. There are, of course, always a lot of questions because investors are always dealing with the future, but today’s environment does seems to have more than usual.

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Tomorrow’s China Briefing Did Not Prevent the Continued Slide in Chinese Stocks Today

2024-10-11

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2024-10-11

Overview: The combination of the firmer than expected US CPI and larger than expected rise in initial and continuing jobless claims saw short-term US rates fall, and the odds of a quarter-point cut by the Fed rose from about 83% to about 93%. The Fed funds futures market boosted the odds of another quarter-point cut in December (~90% vs.78%). The dollar initially weakened but recovered, though the key levels held, such as $1.09 in the euro, $1.30...

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Soft US Headline CPI is Unlikely to Be Sufficient to Reanimate Expectations of another Large Fed Cut

2024-10-10

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2024-10-10

Overview: The US dollar is mostly softer ahead of the September CPI. The euro and Canadian dollar have recorded new lows for the move. The greenback extended its gains against the yen to JPY149.55 but has fallen to new session lows in the European morning near JPY148.85. Given the pushback against Fed Chair Powell's 50 bp cut last month revealed in the FOMC minutes, it will take more than a soft headline CPI today to renew speculation of another...

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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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Today’s Employment Report is Important, but Fed Sees Another Before the Next FOMC Meeting

2024-10-04

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2024-10-04

Overview:  The stronger than expected ISM services, which the market has seemed particularly sensitive this year lifted the two-year yield to about 3.71%, its highest level since the last employment report. The 10-year yield, which had been toying with 3.80%, finally settled above it for the first time in a month. The Dollar Index extended its advance to four sessions, matching the longest in six months. The focus is on the US employment report....

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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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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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China Goes Big, and Market (Initially) Gives it the Benefit of the Doubt

2024-09-24

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2024-09-24

Overview: News of China's multifaceted support measures have bolstered risk appetites today. The dollar is mostly softer and only the yen and Swiss franc among the G10 currencies have been unable to find traction against the greenback. Most emerging market currencies are also trading with a firmer bias. China's measures include measures to support the stock and housing markets. The seven-day repo rate was cut by 20 bp (to 1.50%) and reserve...

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European Currencies Start Week Softer, while the Dollar Bloc is Firm

2024-09-23

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2024-09-23

European currencies are trading with a softer bias to begin the new week. Soft preliminary PMIs appeared to be the main culprit but Australia's PMI disappointed ahead of tomorrow central bank meeting, and the Australian dollar's small gain leads the G10 currencies today.

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Heightened Speculation that Fed may Cut 50 bp Next Week Sends the Dollar Lower

2024-09-13

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2024-09-13

Overview: The US dollar is falling against nearly all the world's currencies today amid heightened speculation that a 50 bp cut is still on the table for next week's FOMC meeting. In the derivatives market, the odds are the highest in several weeks. The ostensible trigger was apparently a news wire story by a reporter thought to be used by some Fed officials to foster communication. A few former Fed officials also seemed to endorse a half-point...

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The ECB and the $1.10 level in the Euro

2024-09-12

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2024-09-12

Overview:  The US dollar is narrowly mixed against the G10 currencies. The dollar bloc, Japanese yen, and Swiss franc are sporting slightly softer profiles, while the European currencies enjoy a firmer today. There is more than 3 bln euro in options struck at $1.10 that expire today that still seem to be in play. And there is a large option at GBP1.30 that expires Monday. The ECB's rate decision and President Lagarde's press conference are the...

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S&P 500 – A Bullish And Bearish Analysis

2024-09-10

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2024-09-10

The S&P 500 index is a critical benchmark for the U.S. equity market, and its performance often dictates investor sentiment and decision-making. Between November 1, 2022, and September 6, 2024, the S&P 500 experienced a significant rally but not without volatility. Currently, investors have very mixed views about where markets are heading next as concerns of a recession linger or what changes to monetary policy will cause. However, as...

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US Dollar Returns Bid on the Back of Firmer Rates

2024-09-09

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2024-09-09

Overview:  After falling following the US jobs report before the weekend, US interest rates have come back firmer, helping the give the dollar a boost. A downward revision to Japan's Q2 GDP, reflecting weaker consumption, business investment, and a little more inflation, have heled the greenback retrace the pre-weekend losses against the yen. Softer than expected price gauges, the setback of the yen, and the rise in US rates has seen the offshore...

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The Market Discounts around a 40% Chance of not One but Two 50 bp Cuts in last Three FOMC Meetings of the Year Ahead of Jobs Report

2024-09-06

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2024-09-06

Overview: The US jobs report is front and center. The market is going into the report with about a 40% chance of a 50 bp Fed rate cut later this month. The Dollar Index is trading lower for the third consecutive session. Helped by the fifth consecutive decline in US 10-year yields, the yen approached last month's high but without the turmoil seen in July and August. Still, equity markets are under pressure. Most large markets in the Asia Pacific...

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