Tag Archive: South Korea

Tough Fed Decisions

2023-03-22

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2023-03-22

Overview: The market has concluded that the Fed will hike rates today. The US two-year yield has risen from about 3.63% at Monday's lows almost 4.20% yesterday. It needs to rise to 4.35% to recover half of its decline since March 8 but has come back softer today. Meanwhile, the banking crisis continues to ease, and Europe's Stoxx 600 bank index is up 1.5%, its third consecutive advance. The US KBW bank index rallied almost 5% yesterday. Still,...

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Fed Tightening Seen Extending into Q3

2023-02-23

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2023-02-23

Overview:  The prospect that the Federal Reserve tightening cycle continues into early Q3 is underpinning the greenback today against most of the G10 currencies. The dollar bloc is the notable exception, and they are posting minor gains, perhaps encouraged by the firmer equity markets. The minutes of this month’s FOMC meeting appear to show wide support for quarter point hikes going forward and there did not seem to be much discussion of the...

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What Did Powell Say?

2022-12-01

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2022-12-01

Overview:  Asia Pacific stocks rallied on the heels of the surge in US equities. China’s CSI 300 led the large bourses higher with a 1% advance. Europe’s Stoxx 600 is matching yesterday’s gain of a little more than 0.6%, while US futures are a touch softer. European yields are 9-13 bp lower, with the peripheral premiums shrinking.

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Dollar Jumps, while Surge in Covid Cases Raise Questions about China’s Pivot

2022-11-21

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2022-11-21

Overview: Surging Covid cases in China and Hong Kong are undermining hopes of a Covid-pivot and the US dollar is broadly higher. Equities are under pressure to start the week. Most of the large bourses in the Asia Pacific but Japan, fell earlier today. Europe’s Stoxx 600 is paring last week’s minor gain, which was the fifth consecutive weekly rise. US stock futures are lower, while the 10-year US Treasury yield is flat near 3.83%. European yields...

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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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The Tragedy of the Commons

2022-10-12

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2022-10-12

Overview: The dramatic moves spurred by the BOE maintaining the end of the week deadline for its Gilt purchases, which have been quite modest given its wherewithal, have calmed. Sterling is firmer on the day, though long-end Gilt yields are higher. The dollar has pushed above JPY145.90, where the BOJ intervened last month.

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Monday Blues

2022-10-03

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2022-10-03

The markets begin October with some trepidation.  Rumors continue to circulate about the health of a large European bank, cross currency swaps are elevated, suggest dollars are more difficult to access. 

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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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Putin and Powell Lift Dollar

2022-09-21

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2022-09-21

Overview: Between Putin’s mobilization of 300k Russian troops and Fed Chair Powell expected to lead the central bank to its third consecutive 75 bp hike later today, the dollar rides high. It has recorded new two-year highs against the dollar bloc and Chinese yuan, while sterling was sent to new lows since 1985. Asia Pacific bourses were a sea of red for the sixth decline in the regional benchmark in the past seven sessions. Surprisingly, Europe’s...

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The Dollar Heads into the Weekend Well Bid

2022-09-16

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2022-09-16

Overview:  The dollar is well bid. It has risen to new two-year highs against the dollar bloc and Chinese yuan. Aided by worse than expected retail sales, sterling, on its anniversary of leaving the European Exchange Rate Mechanism fell to its lowest level since 1985. This fits into the broader risk-off move. The S&P 500 fell to new two-month lows yesterday, and FedEx warnings after the bell yesterday add to the string of worrisome comments...

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New Lockdown in China and the First Drop in South Korea’s Chip Exports in 2 years Euthanizes Animal Spirits

2022-09-01

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2022-09-01

Overview: The precipitous fall in equities continues while the dollar remains buoyant. Nvidia’s warnings about US curbs on sales to China and the first drop in South Korea’s chip exports in two years, coupled with the largest lockdown in China since Shanghai encouraged investors to move to the sidelines.

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US Dollar Soft while Consolidating Yesterday’s Drop

2022-08-11

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2022-08-11

Overview: The US dollar is consolidating yesterday’s losses but is still trading with a heavier bias against the major currencies and most emerging market currencies. The US 10-year yield is soft below 2.77%, while European yields are mostly 2-4 bp higher.

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Euro Parity Holds ahead of US CPI

2022-07-13

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2022-07-13

Overview: The US dollar is consolidating with a slight downside bias ahead of the June CPI report. The euro held above $1.00 but is still pinned in the trough. The rate hike by the Reserve Bank of New Zealand failed to have much impact.

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Over to the ECB

2022-06-09

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2022-06-09

Overview: Equity markets in Asia Pacific and Europe are weaker.  The main exception in Asia Pacific was India, where the market rose by about 0.75%. 

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Greenback Starts New Week on Firm Note

2022-04-18

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2022-04-18

Overview: With many financial centers, especially in Europe, closed for the long holiday weekend, risk-appetites remain in check. Most Asia Pacific markets fell, and poor earnings from Infosys and Tata Consultancy, saw India pace the decline with a 2% drop. US futures are also trading with a heavier bias. 

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Cautious Markets after China Disappoints

2022-03-21

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2022-03-21

Overview: Ukraine's Mariupol refuses to surrender as the war is turning more brutal according to reports.  Iran-backed rebels in Yemen struck half of a dozen sites in Saudi Arabia, driving oil prices higher.  China’s prime lending rates were unchanged.  The MSCI Asia Pacific Index, which rallied more than 4% last week, traded heavily today though China and Taiwan's markets managed to post small gains.  Tokyo was closed for the spring equinox.

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Vladimir Nogoodnik Roils Markets

2022-03-07

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2022-03-07

Overview:  The economic disruption seen since the US warning of an imminent Russian attack on February 11 continue to ripple through the capital and commodity markets.  Equities are being slammed.  Most Asia Pacific bourses were off 2-3% today. Europe's Stoxx 600 gapped lower ad has approached February 2021 levels, orr about 2.6% today.  US futures are around 1.5% lower.

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Dollar Starts the Week Bid ahead of the FOMC

2021-12-13

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2021-12-13

Overview: Equities, bonds, and the dollar begin the new week on a firm note.  Japanese, Chinese, Australian, and New Zealand equities advanced in the Asia Pacific region.  Europe's Stoxx 600 is snapping a three-day decline, and US futures are 0.25%-0.35% higher.  The US 10-year yield is a little softer at 1.48%. European benchmark yields are mostly 1-2 bp lower, and near 0.71%, the UK Gilt's yield is at a three-month low.  The dollar is rising...

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FX Daily, December 02: Calm Surface Masks Lack of Conviction

2021-12-02

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2021-12-02

The downside reversal in US stocks yesterday seemed to accelerate after the first case of the Omicron variant was found in the US.  In itself, it should not be surprising, but perhaps, what was especially disheartening is that the person had been fully vaccinated. 

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Fragile Calm Returns and Powell’s Anti-Inflation Rhetoric Ratchets Up

2021-12-01

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2021-12-01

Overview:  Into the uncertainty over the implications of Omicron, the Federal Reserve Chairman injected a particularly hawkish signal into the mix in his testimony before the Senate.  These are the two forces that are shaping market developments.  Travel restrictions are being tightened, though the new variant is being found in more countries, and it appears to be like closing the proverbial barn door after the horses have bolted. Equities are...

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