Tag Archive: Trade

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

2022-03-05

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2022-03-05

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

2022-03-04

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2022-03-04

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

2021-10-13

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2021-10-13

 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

2021-10-06

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2021-10-06

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

2021-09-13

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2021-09-13

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

2021-07-13

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2021-07-13

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

2021-04-08

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2021-04-08

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

2021-02-17

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2021-02-17

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

2021-02-05

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2021-02-05

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

2021-01-21

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2021-01-21

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

2021-01-14

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2021-01-14

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

2020-11-23

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2020-11-23

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

2020-11-18

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2020-11-18

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

2020-11-10

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2020-11-10

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

2020-10-14

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2020-10-14

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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FX Daily, October 08: Markets Catch Collective Breath

2020-10-08

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2020-10-08

The S&P 500 and NASDAQ closed at their highest levels in around a month yesterday, recouping Tuesday's presidential tweet-driven drop. We thought the market overreacted to the end of the fiscal talks as many had already recognized that a stimulus agreement was unlikely before the election, but the near round-trip seen in stocks and bonds was surprising.

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FX Daily, October 6: The Dollar Tests Key Supports and Pauses

2020-10-06

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2020-10-06

Market moves have stalled.  The MSCI Asia Pacific Index did manage to extend Monday's gains, but other markets are heavier.  Europe's Dow Jones Stoxx 600 is snapping a three-day advance.  The communications sector is the sole standout, though financials and energy are little changed.

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FX Daily, September 16: Dollar Eases Ahead of the FOMC

2020-09-16

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2020-09-16

Overview:  The dollar has been sold against nearly all the world's currencies ahead of what is expected to be a dovish Federal Reserve, even if no fresh action is taken. The Scandis and Antipodean currencies are leading the majors. 

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FX Daily, September 8: US Threats to Decouple from China and the Greenback Strengthens

2020-09-08

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2020-09-08

The markets remain on edge. US-China tensions are escalating. Strained Brexit talks are set to resume today. Profit-taking in the tech space has continued. The ECB meeting is around the corner. The MSCI Asia Pacific Index snapped a three-day slide today with most markets moving higher, led by a 1% gain in Australia. 

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Cool Video: TD Ameritrade with Ben Lichtenstein

2020-08-20

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2020-08-20

With the dollar continuing to trend lower, it was time to check again with Ben Lichtenstein at TD Ameritrade.  It was a privilege to join him today to discuss the drivers. I sketched out my views that the greenback's two legs, growth and interest rate differentials have been knocked from under it.

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