Tag Archive: Trade

The Greenback Bounces Back

Overview: After modest US equity gains yesterday, the weaker yen and Beijing’s approval of 60 new video games helped lift most of the large markets in the Asia Pacific region.

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Reserve Bank of Australia Surprises, but Aussie Struggles

Overview: The jump in US interest rates helped lift the greenback to new 20-year highs against the Japanese yen and pushed the euro back below $1.07. US equities saw initially strong gains pared and this set the tone for today’s activity.

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The Week Ahead: US CPI and PPI Set to Soften

The Fed's 50 bp rate hike is behind us.  Another 50 bp hike is expected next month. The April employment report will do little to calm the anxiety about the "too tight" labor market. 

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Central Banks on a Preset Course Reduces Significance of High-Frequency Data

Arguably the most important data next week is the flash PMI.   It is not available for all countries, but for those generally large G10 economies, the preliminary estimate is often sufficiently close to the final reading to steal its thunder.

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RBA Drops “patience” to Send the Aussie Higher

Overview: The Reserve Bank of Australia hinted that it was getting closer to a rate hike.  The Australian dollar was bid to its best level since the middle of last year.  Australian stocks advanced in a mixed regional session while China and Hong Kong markets were closed for the local holiday.  BOJ Kuroda called the yen's recent moves "rapid."  The yen is sidelined today as the dollar weakens against other major currencies, led by the...

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ECB Meeting and US and China’s CPI are the Macro Highlights in the Week Ahead

One of the most significant market responses to Russia's attack on Ukraine is in the expectations for the trajectory of monetary policy in many of the high-income countries, including the US, eurozone, UK and Canada.  The market has abandoned speculation of a 50 bp hike in mid-March by the FOMC and the Bank of England.  It has also scaled back the ECB's move to 20 bp this year from 50 bp.

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Capital and Commodity Markets Strain

Overview:  The capital and commodity markets are becoming less orderly.  The scramble for dollars is pressuring the cross-currency basis swaps.  Volatility is racing higher in bond and stock markets.  The industrial metals and other supplies, and foodstuffs that Russia and Ukraine are important providers have skyrocketed.  Large Asia Pacific equity markets, including Japan, Hong Kong, China, and Taiwan fell by 1%-2%, while South Korea, Australia,...

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The Dollar Slips Ahead of CPI

 The US dollar is trading with a lower bias ahead of the September CPI report due early in the North American session.  Long-term yields softened yesterday and slipped further today, leaving the US 10-year yield near 1.56%.  European benchmark yields are 3-4 bp lower.  The shorter-end of the US coupon curve, the two-year yield is firmer.

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Dollar Rallies as Energy Surge Quashes Animal Spirits

Overview: Investors worry that surging energy prices will sap economic activity and boost prices.  It is sparking a sharp drop in equities and bonds while lifting the dollar.  The Nikkei fell for the eighth consecutive session, and today's 1% drop brings the cumulative decline to 9%.  South Korea's Kospi also fell by more than 1%. 

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How (Not) to Win Friends and Influence People

Overview:  There are two big themes in the capital markets today.  The first is the ongoing push of the Chinese state into what was the private sector.  Today's actions involve breaking Ant's lending arms into separate entities, with the state taking a stake.  This weighed on Chinese shares and Hong Kong, where many are lists. On the other hand, Japanese markets extended their recent gains.

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FX Daily, July 13: Headline US CPI may Decline for the First Time in a Year

New record highs in the US S&P 500 and NASDAQ coupled with China allowing Tencent to acquire a search engine helped lift Asia Pacific equities. It is the first back-to-back by MSCI's regional index for more than two weeks. Australia's market was a notable exception.

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FX Daily, April 8: Calm Capital Markets See the Dollar Drift

Overview:  Global stocks are moving higher today.  Fears of a new lockdown in Tokyo amid rising covid cases weighed on Japanese stocks, a notable exception as the MSCI Asia Pacific Index rose for its fifth session of the past six.  Europe's Dow Jones Stoxx 600 is edging to new record highs today and is advancing for its fifth session of the past seven. 

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FX Daily, February 17: Follow-Through Dollar Buying after Yesterday’s Reversal Tests the Bears

Overview:  After reversing higher yesterday, the US dollar sees follow-through gains today, leaving the euro around a cent lower from yesterday's highs. Sterling's surge is also being tempered. Most emerging market currencies are lower as well. 

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FX Daily, February 05: Position Squaring Weighs on the Dollar Ahead of the Jobs Report

Overview:  While equities continue to march higher, the dollar is softer amid position squaring ahead of the US jobs data.  Gold has stabilized after yesterday's shellacking.  Estimates for US nonfarm payrolls appear to have been creeping higher, encouraged by the ADP, PMI, and weekly initial jobless claims.

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FX Daily, January 21: It is the ECB’s Turn but Little New to be Said or Done

Overview:  The S&P 500 and NASDAQ gapped higher yesterday to record-levels, and the reflation theme lifted Asia Pacific shares for the third session today.  South Korea, Taiwan, and China led the advance. 

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FX Daily, January 14: Markets are Subdued Despite Impeachment and Record Chinese Trade Surplus

Overview:  The capital markets are becalmed today. There does not appear to be much reaction to the news that the House of Representatives impeached President Trump an unprecedented second time with greater bipartisan support than previously (10 GOP voted with the Democratic majority). 

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FX Daily, November 23: Markets Look Past Near-Term Challenges

Overview:  News that the AstraZeneca vaccine was 70% effective but could be enhanced by changing dosage is lifting spirits and boosting equities.  Japan's markets were closed for a national holiday, but all the equity markets in the region advanced and many by more than 1%. 

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FX Daily, November 18: Balancing Pandemic Surge with Optimism about Vaccine

News that Tokyo will go to its highest alert as it faces a rising contagion snapped a 12-day rally in the Nikkei, but most bourses in the Asia Pacific region excluding Japan advanced, though Chinese equities were mixed. European equities are narrowly mixed as the Dow Jones Stoxx 600 continues to gyrate within Monday's range.

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FX Daily, November 10: Markets Remain Unsettled

Overview: Pfizer's vaccine announcement eclipsed the US election as the key market driver. It spurred the unwinding of Covid trades in terms of sectors and yields.  Emerging market currencies and the majors that benefit from world growth outperformed the perceived safe-havens, like the yen and the Swiss franc.

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FX Daily, October 14: UK Blinks on Threat to Walk Away on Eve of EU Summit

Overview: Turn around Tuesday saw the dollar bounce, particularly against the Australian dollar and European currencies, among the majors.  Sterling pared earlier losses on reports that the UK would not walk away from the talks just yet, while the euro remains on its back foot.

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