Tag Archive: Japan

Euro Bounces Back, but the Turkish Lira Remains Unloved

2021-11-18

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2021-11-18

Overview:  The US dollar's sharp upside momentum stalled yesterday near JPY115 and after the euro met (and surpassed) a key retracement level slightly below $1.1300.  Led by the Antipodean currencies today, the greenback is mostly trading with a heavier bias.  Among the majors, helped by a steadying of US yields, the yen is soft.  In the emerging market space, the Turkish lira continues its headlong plunge while the yuan softened and the Mexican...

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European Gas Jumps, while the Euro and Yen Slump

2021-11-17

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2021-11-17

Overview: The prospects that the 6.2% CPI will prompt the Fed to move quicker continue to underpin the dollar.  The euro fell to about $1.1265, its lowest level since last September, and the Japanese yen slumped to a fresh four-year low.  The JP Morgan Emerging Market Currency Index tumbled 1% yesterday, the largest decline since February.  A more stable tone is evident in Europe, as the euro has recovered above $1.13, and the JP Morgan Index is...

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The Greenback Slips to Start the New Week

2021-11-15

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2021-11-15

Overview:  While the Belarus-Poland border remains an intense standoff, there have been a couple other diplomatic developments that may be exciting risk appetites today.  First, Biden and Xi will talk by phone later today.  Second, reports suggest the UK has toned down its rhetoric making progress on talks on the implementation of the Northern Ireland Protocol.

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US Retail Sales and Industrial Output to Accelerate; China not so Much

2021-11-13

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2021-11-13

At the halfway point of Q4, the markets' focus is on three things:  inflation, growth, and central banks' response. With US and Chinese October inflation readings behind us, the focus shifts to the real economy's performance, the world's two largest economies reporting retail sales and industrial production figures.   Helped by stronger auto sales, the first increase in six months, US retail sales likely turned in another solid showing of around...

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Euro and Sterling Record New Lows for the Year

2021-11-12

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2021-11-12

Overview: The capital markets remain unsettled.  The US CPI with a 6%-handle has lifted bond market volatility, disrupted rallies in stocks, and extended the dollar's rally.   Small gains in the US S&P 500 and NASDAQ yesterday and a better news stream from China helped lift Asia Pacific equities today.  Benchmarks in Japan, South Korea, and India rose more than 1%.  Europe's Stoxx 600 is struggling as energy, health care, and utilities are...

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Half a Dozen Things You Should Know about FX

2021-11-11

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2021-11-11

1.  The market is still digesting the implications of Wednesday's CPI shock.  The dollar has strengthened, yields have risen, the stock market wobbled after a long advancing streak, and in any event, stabilized in light trading during the US and Canadian holidays. However, given the low year-ago reading, there is a significant risk that inflation (including the core rate) will accelerate over the next few months. As a result, the Federal Reserve...

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FX Daily, November 9: Falling Yields Give the Yen a Boost

2021-11-09

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2021-11-09

Overview: Reports that the Fed's Brainard was interviewed for the Chair helped soften yields a bit, not that they needed extra pressure, on ideas she is more dovish than Powell.  In turn, the lower yields saw the yen rise to its best level in nearly a month and led the major currencies higher against the dollar. 

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Markets Await Fresh Developments

2021-11-08

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2021-11-08

Overview: Last week's bond market rally has stalled.  Benchmark 10-year yields are up 1-3 bp in Europe, and the three bp increase in the US puts the yield slightly below 1.50%.  Equities were mixed in the Asia Pacific region. 

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Isn’t the Labor Shortage Transitory?

2021-11-05

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2021-11-05

Overview:  The major central banks have successfully pushed back against the aggressive tightening the market had discounted.  The Bank of England's decision not to raise rates after key officials seemed to suggest one was imminent. On the heels of what we argued was a dovish tapering announcement by the Fed, it spurred a dramatic decline in short and long-term interest rates. The drop in UK rates--21 bp in the 2-year and nearly 14 bp in the...

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And the Dollar Bounces Back, While BOE is in Focus

2021-11-04

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2021-11-04

Overview:  The Federal Reserve announced tapering and, like the Reserve Bank of Australia earlier in the week, did not validate expectations for an aggressive rate hike.  Now the focus is on the Bank of England, where several officials seemed to goad the market into lifting short-term rates. The S&P 500 and NASDAQ rallied to new record highs yesterday and helped raise global shares today.  Among the large markets in the Asia Pacific region,...

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US-EU Rapprochement, Can France and UK Do the Same?

2021-11-01

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2021-11-01

Overview:  It is mostly a quiet start to the new month.  Most of Europe is closed for the All -Saints holiday and the week's key events start tomorrow with the Reserve Bank of Australia meeting.  News that the Liberal Democrats retained a majority in the lower chamber of the Diet helped lift Japanese indices by 2%.  Most of the large regional markets gained, though China and Hong Kong markets fell. US index futures are trading with a higher bias...

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Rate Adjustment Continues and the Greenback Pares the Week’s Losses

2021-10-29

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2021-10-29

Overview:  Disappointing Apple and Amazon earnings news after the NASDAQ set a record high set the stage of a weaker bias in the Asia Pacific region today.  China and Japan still posted gains, while local developments, like an unexpected drop in South Korea's industrial output, and Australia struggling to exit its yield-curve control, saw equities lose more than 1%.  Europe's Stoxx 600 is paring this week's gains but is holding on to some for the...

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Eyes Turn to the ECB and the First Look at Q3 US GDP

2021-10-28

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2021-10-28

Overview:  The market awaits the ECB meeting and the first look at the US Q3 GDP.  The pullback in US shares yesterday was a drag on the Asia Pacific equities.  It is the first back-to-back loss of the MSCI Asia Pacific in a few weeks.  Europe's Stoxx 600 is recovering from early weakness and US future indices are firm.  The US 10-year yield is flat, around 1.55%, after falling around 15 bp over the past four sessions.  European bonds are paring...

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An Anti-Inflation Trio From Three Years Ago

2021-10-26

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2021-10-26

Do the similarities outweigh the differences? We better hope not. There is a lot about 2021 that is shaping up in the same way as 2018 had (with a splash of 2013 thrown in for disgust). Guaranteed inflation, interest rates have nowhere to go but up, and a certified rocking recovery restoring worldwide potential.

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Big Week Begins Slowly

2021-10-25

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2021-10-25

Overview:  The global capital markets give little indication of the important economic and earnings data that lie ahead this week.  There is an eerie calm. Equities in Asia were mixed.  Japan and Hong Kong, and most small bourses were lower.  Last week, the MSCI Asia Pacific Index gained almost 0.9%. Europe's Stoxx 600 is little changed after rising about 0.5% last week. US futures are firm.  The S&P 500 and Dow Jones Industrials reached...

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You Don’t Have To Take My Word For It About Eliminating QE

2021-10-24

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2021-10-24

You don’t have to take my word for it. QE doesn’t work and it never has. That’s not just my assessment, pull out any chart of interest rates for wherever gets the misfortune of having been wasted with one of these LSAP’s.

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The Euro and Sterling Remain within Tuesday’s Ranges

2021-10-22

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2021-10-22

Overview: A new record high in the S&P 500 yesterday and news that Evergrande had made an interest rate payment failed to lift most Asia Pacific bourses, though Japan and Hong Kong, among the large markets, posted modest gains.  The Dow Jones Stoxx 600 is pushing higher in the European morning to put its finishing touches on its third consecutive weekly gain.  US tech is trading off, and this is weighing on the NASDAQ futures while the S&P...

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Markets Turn Cautious

2021-10-21

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2021-10-21

Overview: After a couple of sessions of taking on more risk, investors are taking a break today.  Equities are mostly lower today after the S&P 500's six-day advance took it almost to its record high, while the NASDAQ's streak was halted at five sessions.

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Consolidative Session as Markets Await Fresh Incentives

2021-10-20

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2021-10-20

Overview: The markets lack a clear direction today and await fresh incentives.  After gaining almost 1% yesterday, the MSCI Asia Pacific Index slipped.  Japan, Hong Kong, and Australia are among the few equity markets that rose.

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Dollar Slumps

2021-10-19

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2021-10-19

Overview:  While equities and bonds are firmer, it is the dollar's sell-off that stands out today.  The greenback has retreated broadly.   

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