Tag Archive: PMI

Dollar Eases, Stocks and Bonds Advance

2023-08-22

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2023-08-22

Overview: For the first time in more than a week, North American dealers will take to their posts with the dollar softer against all the G10 and most of the emerging market currencies. Despite stepped up efforts by Chinese officials and a firmer yen, the yuan remains on the defensive and is one of the handful of emerging market currencies softer on the day. Stocks and bonds are mostly higher too. The yuan might not be benefitting from a softer...

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RBA Holds Fire, Greenback Rebounds

2023-08-01

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2023-08-01

Overview: The dollar has come back bid. It is rising against all the major currencies today. The Reserve Bank of Australia left rates steady and the poor Chinese Caixin PMI is weighing on the Australian dollar, which is off about 1.25% today. Sterling is the best G10 performer, off about 0.1%. Perhaps, the BOE's meeting on Thursday is helping to deflect some of the selling pressure. Emerging market currencies are also nearly all lower, led by the...

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Greenback Jumps on Weak Flash PMIs

2023-06-23

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2023-06-23

Overview: As the market reluctantly edges toward the Fed's guidance, the disappointing PMIs from Europe (but also Japan and Australia) helped boost the greenback. The Dollar Index is trading at seven-day highs above 103 after briefly dipping below 102 to set a new low since mid-May yesterday. The unwinding of cross positions is helping the yen hold its own today as it consolidates near its worst level of the year. The surging dollar and risk-off...

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Dollar Gains Extended, Oil Steadies at Higher Levels after Saudi’s Cut, US Bill Deluge Begins Today

2023-06-05

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2023-06-05

Overview:  The US dollar has extended its post-employment gains today, helped by firmer rates and several countries seeing downward revisions from the preliminary May PMI. The greenback is trading with a firmer bias against all the G10 currencies and most of the emerging market currencies, including Turkey, India, and China. July WTI gapped higher after the Saudi Arabia announced a voluntary and unilateral cut of one million barrels a day in output...

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US Debt Ceiling Drama Ends with a Whimper, Focus on US Jobs and Fed

2023-06-02

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2023-06-02

Overview: Another bizarre US debt-ceiling episode is over. President Biden will sign the bill that was approved by the Senate late yesterday. It is a bit anticlimactic for the market, for which the US jobs data is the key focus now. Outside of the fiscal drama, the Federal Reserve leadership has effectively push against market expectations for a hike later this month. The odds were around 70% earlier this week, and ahead of the jobs report, is...

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Yen Recovers from New 2023 Low, while Sterling Sets a New Low for the Month

2023-05-23

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2023-05-23

Overview:  The dollar is bid. Only the Japanese yen is holding its own against the greenback but only after it fell to new lows for the year. The Scandis and Antipodeans are the heaviest among the G10 currencies, while sterling has fallen to a new low for the month. The prospect of a rate hike tomorrow has not protected the New Zealand dollar much and it is off nearly 0.5%. Emerging market currencies are more mixed. Outside of the Russian rouble,...

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OPEC+ Surprises while Manufacturing Remains Challenged

2023-04-03

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2023-04-03

Overview: News of OPEC+ unexpected output cuts saw May WTI gap sharply higher and helped lift bond yields. May WTI settled near three-week highs before the weekend near $75.65 and opened today near $80. It reached almost $81.70 before stabilizing and is straddling the $80 area before the North American session. The high for the year was set in the second half of January around $83. Benchmark 10-year yields are up 2-5 bp points. The 10-year US...

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Tumbling Tokyo Prices Gives Ueda Breathing Space

2023-03-03

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2023-03-03

Overview: Talk from two Fed officials yesterday, which seemed to validate market expectations eased the upward pressure on the dollar and helped equities launch a dramatic recovery. The market is pricing in a terminal rate near 5.50%, a little higher than the median dot in December. The S&P 500 posted a dramatic recover and posted a potential bullish key reversal. Its 0.75% closing gain was the largest advance in nearly three weeks. A large...

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The Dollar Pares Yesterday’s Gains but Near-term Change in Sentiment may be at Hand

2023-02-03

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2023-02-03

Overview: The dollar remained firm yesterday, even after the ECB's hawkish stance, reaffirming its intention to hike rates by another 50 bp next month. We had expected the greenback to have been sold in North America yesterday. That this did not materialize warns that despite its pullback in Asia and especially Europe today, that near-term sentiment may be changing with the Fed and ECB meetings over and die cast for next month, where the Fed is...

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Will What the Fed Says be More Important than What it Does?

2023-02-01

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2023-02-01

Overview:  The focus is squarely on the Federal Reserve today. There is nearly universal agreement that it will lift the target by 25 bp. The market is inclined to see the shift as a sign that the Fed is nearing the end of its tightening cycle, and sees, at most, one more quarter-point hike. Despite the Fed's warnings, including in the December FOMC minutes, about the premature easing of financial conditions, the market has done precisely that.

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No Follow-Through Euro Buying while S&P Holds Yesterday’s Breakout

2023-01-24

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2023-01-24

Overview:  A quiet consolidative session has been recorded so far today as North American leadership is awaited. The preliminary PMI readings are mixed. Japan and the eurozone look somewhat better, but Australia and the UK disappointed.  The dollar is trading with a mostly firmer bias, but largely confined to yesterday's ranges.  The markets seem to be looked ahead toward next week's Fed, ECB, and BOE meetings, and the return of China from this...

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European Rates Continue to Surge, Sending Stocks Spiraling Lower

2022-12-16

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2022-12-16

Overview: Seven of the G10 central banks pumped the brakes between last week and this week as they purposely seek to push demand back into line with supply. And there are more signs that they are succeeding in weakening growth impulses. The dramatic surge in European bond yields continues today with 10-year rates mostly rising another 13-15 bp.

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Macro and Prices: Data and Psychology in the Week Ahead

2022-11-19

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2022-11-19

The week ahead has a relatively light economic schedule, punctuated by the US Thanksgiving Day holiday on November 24. Nevertheless, the data highlights include the preliminary November PMIs, Tokyo's November CPI, and the FOMC minutes from this month's meeting.

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US Dollar Offered Ahead of the Employment Report

2022-11-04

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2022-11-04

Overview: Risk appetites have returned but may be tested by the US jobs report. News of progress with US auditors in China helped lift Hong Kong and Chinese equities. Most of the large bourses in the region also rose. Europe’s Stoxx 600 is up a little more than 1% near midday after shedding 1.3% over the past two sessions. US futures also are trading with an upside bias. Benchmark 10-year yields are mostly a little softer today. The 10-year US...

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Fed’s Hawkishness Roils the Capital Markets

2022-11-03

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2022-11-03

Overview: The Fed delivered the expected 75 bp rate hike, and although it says it will take into account the cumulative effect of past hikes and their lagged impact, the takeaway has been a hawkish message. Risk appetites have evaporated. The dollar is stronger, while stocks and bonds have been sold. Japan’s markets were spared due to the national holiday, but the other large markets in the area were sold, lead by the 3% decline in the Hang Seng....

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Dollar Slump Halted as Stocks and Bonds Retreat

2022-10-05

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2022-10-05

Overview: Hopes that the global tightening cycle is entering its last phase supplied the fodder for a continued dramatic rally in equities and bonds. The euro traded at par for the first time in two weeks, while sterling reached almost $1.1490, its highest since September 15.

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Weekly Market Pulse: The Dog That Didn’t Bark

2022-08-29

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2022-08-29

Gregory (Scotland Yard detective): “Is there any other point to which you would wish to draw my attention?” Sherlock Holmes: “To the curious incident of the dog in the night-time.” Gregory: “The dog did nothing in the night-time.” Sherlock Holmes: “That was the curious incident.” From Silver Blaze by Arthur Conan Doyle, 1892

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The Week Ahead: Dollar Bulls Still in Charge

2022-08-27

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2022-08-27

The poor preliminary PMI readings, the ongoing European energy crisis, and the recognized commitment of most major central banks to rein in prices through tighter financial conditions are risking a broad recession. These considerations are weighing on sentiment and shaping the investment climate. Most high-frequency data due in the days ahead will not change this, even if they pose some headline risk.  

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Surging Energy Prices Pushing Europe Closer to Recession

2022-08-23

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2022-08-23

The poor eurozone PMI underscores likely recession and weighs on the single currency, which was sold to a new 20-year low.  Rather than a "Turn Around Tuesday"  a broadly consolidative session is unfolding. Asian and European equities are weaker, while US futures are positive but little changed.  Benchmark 10-year bond yields are mostly firmer and the premium offered by Europe's periphery is edging higher.  The US 10-year is little changed near...

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Flash PMI, Jackson Hole, and the Price Action

2022-08-20

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2022-08-20

For many, this will be the last week of the summer. However, in an unusual twist of the calendar, the US August employment report will be released on September 2, the end of the following week, rather than after the US Labor Day holiday (September 5). 

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