Tag Archive: $JPY

Great Graphic: Views Distill to Short Sterling Long Yen Opportunity

We have argued that the road to an orderly Brexit remains arduous and that sterling had entered an important technical area ($1.2500-$1.2530).  At the same time, see the dollar as having approached the upper end of its broad trading range against the yen.  One of the important drivers lifting the dollar was the dramatic rise in US yields. 

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FX Daily, August 13: Investors Remain on Edge

Overview:  The confrontation in Hong Kong and the fallout from the Argentine primary over the weekend join concerns the conflict between the two largest economies and slower growth to force the animal spirits into hibernation.  Global equities remain under pressure.  Japan's Topix joined several other markets in the region to have given up its year-to-date gain. 

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FX Weekly Preview: The FOMC and US Jobs Headline the Week Ahead

There is little doubt that the Federal Reserve will ease monetary policy at the conclusion of the FOMC meeting on July 31. We never thought the chances of a 50 bp move were anything but negligible, though even at this late stage, the market appears to be pricing in about a one-in-five chance.

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April Monthly Currency Outlook

Poor economic data and soft inflation saw several central banks, including the Federal Reserve and European Central Bank, take a dovish turn in March. Contrary to expectations that interest rates would rise as the G3 central banks were no longer adding to their balance sheets on a combined basis.

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FX Daily, March 29: Equities Bounce While Bonds Pullback to End Q1

The global growth scare may be subsiding. It had been fanned by the ECB and Fed statements and projections. Poor US jobs growth reported in early March and the poor flash EMU PMI late in the month contributed.  The slowdown in China and the flurry of measures to combat it also had a role.

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FX Daily, March 28: Brexit Uncertainty Deepens as Parliament is Divided, while Turkey’s Short Squeeze Falters

The lurch lower in global interest rates continue. The US 10-year yield is at new 15-month lows, five basis points through the average effective Fed funds rate. Late yesterday, it appeared that 10-year German Bund yields slipped below similar Japanese government bond yields for the first time since Q4 16, but when the JGB market opened, it the 10-year JGB yield fell a couple more basis points to minus 10, the most negative since August 2016.

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FX Daily, March 27: Global Bond Rally Continues, Greenback Remains Firm

Overview: The US 10-year yield is trading below the Fed funds target. The two-year yield is trading below the lower end of the Fed funds target range. A warning by New Zealand that the next rate move could be a cut sent New Zealand and Australian yields to new record lows. In Japan, the 10-year yield slipped below the overnight unsecured call rate.

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FX Daily, March 26: Semblance of Stability Re-Emerging

Overview:  The sell-off in equities seemed to peak yesterday, and US indices were narrowly mixed. Traders found comfort in that performance, even though the S&P 500 finished a little below 2800, and took the markets in the Asia-Pacific region higher, except in China, where the Shanghai Composite fell 1.5%. 

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FX Daily, March 25: Monday Blues: Equities Pare Quarterly Gains

Overview:  Global equities have soured after the US shares dropped the most since very early in the year before the weekend.  Asia's sell-off was led by the 3% decline in Nikkei, while Malaysia fared among the best, surrendering 1%.  Europe's Dow Jones Stoxx 600 is off for a fourth session. It lost 1.2% at the end of last week and gapped lower today but stabilizing after the better than expected German IFO survey.

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FOMC: Above Trend Growth Requires Continued Monetary Support

The Federal Reserve sounded more dovish than many expected and this prompted a 5-7 bp drop in US rates, and the dollar fell to new lows for the week against many of the major currencies.  The median Fed forecast now anticipates no hike this year but one next year.  The Fed will also taper the roll-off of its balance sheet and completing it by the end of September.

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FX Daily, March 22: Dreadful EMU PMI and US Machinations Rival Brexit for Attention

Overview:  The S&P 500 recovered from the post-FOMC reversal to close a new 5-month high yesterday, led by technology.  Financials were the only main sector to retreat.  The large equity markets in Asia, Japan, China, Australia, South Korea, and Taiwan all advanced.  Europe's Dow Jones Stoxx 600 reversed its initial gains and is nursing a small loss on the week.

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FX Daily, March 21: Dovish Fed Sends Global Yields Lower, but Little Succor for Stocks

The dovishness of the Federal Reserve sent ripples through the capital markets. US equities reversed initial gains, but Asia Pacific equities edged higher, though Japanese markets were closed for a national holiday. European shares are struggling, as financials and consumer discretionary lead the 0.3% push lower. US shares are also trading with a heavier bias.

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FX Daily, March 20: Brexit Drama Continues but Fed Moves to Center Stage

Overview: US stocks were not able to hold onto early gains yesterday, and this has helped set the stage for today's heavier bias. Asia Pacific markets were narrowly mixed, with Japan and Korea eking out small gains while China and Taiwan slipped a little. Europe's Dow Jones Stoxx 600 is threatening to snap a five-day advance as materials, healthcare, and energy leads the profit-taking while communication and real estate are proving a bit more...

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FX Daily, March 19: Third Vote on Withdrawal Bill Scuppered Until after EU Summit

Overview:  The capital markets remain subdued.  Many Asian equity markets eased after a strong two-day advance.  European equities are slightly firmer.  The S&P 500 closed at new five-month highs yesterday.  Benchmark 10-year yields are mostly a little softer.  Australian 10-year bond yield fell five basis points, and the discount to the US widened to a new high since the early 1980s. 

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FX Daily, March 18: Equities Advance, Dollar Slips, Key Events Awaited

The eventful week has begun off slowly. After Wall Street's best week in four months underpinned Asian' equities, where all the markets but Thailand, advanced, led by the nearly 2.5% rally in Shanghai. Note that New Zealand's S&P/NZX 50 rose to new record highs.

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FX Daily, March 15: Euro and Yen Volatility Slips to New Five-Year Lows on the Ides of March

Overview: The capital markets are calm ahead of the weekend.  Outside of Australia and Thailand, Asia Pacific equities advanced, while European shares are mostly little changed. The regional benchmarks, like the S&P 500 have recouped last week's losses.  Benchmark 10-year yields are little changed on the day, leaving the US 10-year yield virtually unchanged on the week near 2.62%.

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FX Daily, March 13: Still Waiting for Brexit Climax

The Brexit drama continues to command attention. A vote on leaving without an agreement will be held today, and if that fails, there will be a vote tomorrow on an extension. Meanwhile, the first increase in headline US CPI in four months failed to impress as the year-over-year pace fell to 18-month lows.

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FX Daily, March 12: Wave of Optimism Sweeps through the Capital Markets

Last minutes statements meant to clarify what many MPs find to be the most odious part of the Withdrawal Bill, the backstop for the Irish border is goosed global equity markets even though it does not seem as if the Withdrawal Bill has changed one iota. And after the big rally in US shares yesterday, there might have been follow-through buying in any case today. Asian markets did not disappoint.

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FX Daily, March 11: Greenback Starts New Week Decidedly Mixed, with Brexit Anxiety Weighing on Sterling

Overview:  Asian shares recovered from opening losses to finish mostly higher, with the Shanghai Composite up nearly 2% and India tacking on 1% after the election was called, starting April 11.  European markets, led by energy, communication, and materials sectors, is up about 0.5% through midday. The S&P 500, which closed lower every day last week is looking a little firmer. 

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FX Daily, March 08: Equities Slump on Growth Concerns ahead of US Jobs

Overview: A weak economic assessment in the Beige Book and an ECB that slashed growth forecasts have been followed by news of a nearly 21% slump in China's exports have marked the end of the dramatic equity rally that was seen in the first part of 2019 after the sharp losses late last year. 

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