Tag Archive: Trade

FX Daily, December 11: Sterling Holds Firm Despite Tighter Poll

Overview: The capital markets continue to tread water as investors await this week's key events. The first, the FOMC meeting concludes later today. Tomorrow features the UK election, where the race appears to have tightened, and Lagarde's first ECB meeting at the helm. Global equities continue consolidating the recent gains. Asia Pacific equity markets were mostly higher.

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FX Daily, December 09: China’s Steps-Up Import Substitution Strategy while USMCA Comes Down to the Wire

The important week is off to a slow start. While the MSCI Asia Pacific benchmark extended its gains for a third session, European and US shares are struggling. The Dow Jones Stoxx 600 is consolidating its pre-weekend 1%+ rally, while US shares are trading heavier after rallying for the last three sessions.

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FX Daily, December 4: Hope Springs Eternal

Overview: The prospect of not just the failure of the US and China to resolve its trade dispute but a new escalation has sapped the confidence that had lifted equity benchmarks and the greenback. Led by more than a 1% decline in Tokyo (Nikkei), Hong Kong, and Australia, all the major markets in the Asia Pacific region fell. European shares, perhaps encouraged by an upward revision to the flash composite PMI, are snapping a four-day 2.75% slide.

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FX Daily, December 3: US Brandishes Tariff Weapon and Weakens Animal Spirits

Asia Pacific equities mostly declined in sympathy with yesterday's large sell-off in the US and Europe. China and Taiwan were the notable exceptions, while Australia's 2.2% decline, following the central bank meeting that resulted in what many are seeing as a hawkish hold, led the move lower. Europe's Dow Jones Stoxx 600 fell 1.6% yesterday, the largest loss in two months, and is extending the losses for a third session today.

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FX Daily, November 26: Some Are More Equal Than Others

Overview: Neither optimistic comments from Federal Reserve Chairman, that the economic glass is more than half full, nor a seemingly positive spin on the weekend fall calendar between Chinese and US officials have succeeded in deterring some profit-taking today.

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FX Weekly Preview: Is Conventional Wisdom Too Optimistic?

There have been three general issues that the macro-fundamental picture has revolved around this year: trade, growth, and Brexit. On all three counts, conventional wisdom seems unduly optimistic, and this may have helped dampen volatility. A series of signals suggest that the US and China remain far apart in trade negotiations.

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FX Daily, November 22: Europe’s Flash PMI Disappoints and Hong Kong Shares Advance Ahead of Sunday’s Election

Overview: Equities in the Asia Pacific managed to mostly shrug off the drag of the losses in US equities yesterday. China and India could not escape the pull, but most other bourses were higher, led by Singapore and Hong Kong. It was the second consecutive week that the MSCI Asia Pacific Index fell. The US and European benchmarks are paring this week's small losses.

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FX Daily, November 21: Markets Hear What it Wants from China’s Chief Negotiator, but HK maybe New Obstacle

Overview: The strongest signs to date that even phase one of a US-China trade deal is proving elusive helped spur the risk-off mood that had already been emerging. The S&P 500 fell by the most in a month (~-0.40%) yesterday, closing the gap from last week we had noted was the risk, and follow-through selling was seen in Asia Pacific and Europe.

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FX Daily, November 14: Unexpected German Growth Fails to Buoy the Euro

Overview: Rising trade anxiety and disappointing economic reports from the Asia Pacific region helped unpin the profit-taking mood in equities, while bond yields continued to pullback. The MSCI Asia Pacific Index and the Dow Jones Stoxx 600 are in the red for the fourth time in the last five sessions. Germany reported a surprise 0.1% expansion in Q3, but it has done little for the DAX or the euro.

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FX Weekly Preview: Caution: Prices Diverging from Macro Drivers

Sometimes the news drives the markets and but now it seems that the markets are driving the news.  The dramatic swing in market sentiment from fearing a repeat of Q4 18 and the pessimism of World Bank/IMF forecasts have been cast aside for a few data points and a tease from the world's two largest economies that an agreement to begin a de-escalation process not just extending the third tariff truce.

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FX Daily, November 8: Risk Appetites Satiated Ahead of the Weekend

The capital markets are consolidating the recent moves ahead of the weekend. Equities are paring this week's gains, though the Nikkei, which was closed on Monday, extended its advance for the fourth consecutive session. Despite the profit-taking today, the MSCI Asia Pacific Index rose for the fifth week. Europe's Dow Jones Stoxx 600 is snapping a five-day rally, but it is closing in on the fifth consecutive weekly advance.

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FX Daily, November 7: Trade Optimism Boosts Sentiment but Weighs on the Dollar

Indications that a phase one agreement between the US and China would include rolling back some existing tariffs is boosting risking appetites, sending stocks higher, and pushing up yields. However, this appears to be simply a restating of China's views rather than a new breakthrough. The dollar is paring its recent gains. The MSCI Asia Pacific Index rose for the fifth time in six sessions to reach its best level since August 2018.

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FX Daily, October 16: Fickle Market Tempers Enthusiasm

Overview: Fading hopes that a Brexit agreement can be struck is seeing sterling trade broadly lower, while China's demand that US tariffs be rescinded in exchange for a commitment to buy $40-$50 bln of US agriculture goods over two years, makes the handshake agreement less secure. At the same time, Hong Kong is becoming another front in the US-Sino confrontation.

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FX Daily, October 14: Optimism Took the Weekend Off

Overview: Japanese and Canadian markets are on holiday today. While the US bond market is closed, equities maintain their regular hours today. Asia Pacific equities rallied, led by 1% of more gains in China, Taiwan, South Korea, and Thailand. The buying did not continue in Europe, and after a 2.3% rally before the weekend, the Dow Jones Stoxx 600 is about 0.75% lower in the European morning.

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FX Weekly Preview: Same Three Drivers in the Week Ahead but Changing Tones

Three themes have dominated the investment climate:  US-China tensions, Brexit, and the policy response to the disinflationary forces.  None have been resolved, which contributes to the uncertainty for businesses, households, and investors.  However, the negativity that has prevailed is receding a little. 

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Monthly Macro Monitor: Doom & Gloom, Good Grief

When I first got in this business oh so many years ago, my mentor told me that I shouldn’t waste my time worrying about the things everyone else was worrying about. As I’ve related in these missives before, he called those things “well worried”. His point was that once everyone was aware of something it was priced into the market and not worth your time.

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FX Daily, October 11: Nothing Like Approaching the Edge to Focus the Minds

Overview: As the edge of the abyss is approached in three distinct areas, there is hope that victory can be snatched from the jaws of defeat. US-China trade talks continue today, and there is hope of a small deal that could lead to the US not hiking tariffs next week. A shift in the UK toward a free-trade agreement with the EU seems to have opened fertile ground in negotiations that could still avoid a no-deal Brexit.

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FX Daily, October 10: Setback for the Greenback

Conflicting headlines about US-China trade whipsawed the markets in Asia, but when things settled down, perhaps, like the partial deal that has been hinted, net-net little has changed. Asian equities were mixed, with the Nikkei, China's indices, and HK gaining, while most of the others slipped lower. The 0.9% gain in the S&P 500 yesterday failed to lift European stocks, and the Dow Jones Stoxx 600 is near the week's lows.

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FX Daily, October 9: Hope is Trying to Supplant Pessimism Today

Overview: The 1.5% drop in the S&P 500 and the deterioration of US-China relations and the prospects of a no-deal Brexit failed did not carry over much into today's activity. Asia Pacific equities were mostly a little lower, though China and India bucked the regional trend, while Korea was closed for a national holiday. Taiwan led the losses amid a sell-off in semiconductor stocks.

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