Tag Archive: Trade

FX Daily, July 01: Trade Optimism Meet Reality of Disappointing PMI

2019-07-01

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2019-07-01

Overview: A new tariff truce between the US and China, coupled with the North Korean diplomacy and Russia-Saudi tentative agreement boosted investor confidence and sharp equity rallies. Japanese and Chinese equities rallied 2-3%. Most markets rallied in Asia-Pacific except for South Korea's Kospi and Hong Kong markets were closed as the handover was commemorated.

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FX Weekly Preview: Cutting to the Quick

2019-06-24

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2019-06-24

Central banks are prepared to take fresh measures to strengthen and extend the business cycle primarily because price pressures are below what their predecessors thought would be acceptable levels. Draghi, speaking for the ECB, the Federal Reserve, and the Bank of Japan ratcheted up their concerns, which, even without new initiatives, were sufficient to drive interest rates lower.

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FX Daily, June 21: Markets Pause Ahead of the Weekend

2019-06-21

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2019-06-21

The global capital markets are trading quietly ahead of the weekend. Equity markets are mostly narrowly mixed. Chinese shares extended their run, and the major benchmarks were up 4%+ on the week. Japan, Australia, South Korea, and India saw gains pared.

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FX Weekly Preview: FOMC, EMU PMI, and Pre-G20 Positioning: Crossroads and Crosswinds

2019-06-15

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2019-06-15

The week ahead is likely to provide some clarification for investors on three fronts that have been a source of uncertainty.  The FOMC meeting, with updated forecasts, is center stage.  The credit markets are pushing the Fed to be aggressive but can be disappointed.  In the eurozone, the preliminary PMI may confirm a modest, even if uneven recovery. 

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FX Daily, June 12: Anxiety Ticks Up, Risks Pared

2019-06-12

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2019-06-12

Overview: The S&P 500 snapped a five-day advance yesterday and set the heavier tone for equities today.  Continued protests in Hong Kong were not shrugged off as they have been in the last couple of sessions.  The Hang Seng's nearly 1.9% decline was the largest in a month and led the region lower. 

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FX Daily, June 11: Markets Take Another Small Step Away from the Edge

2019-06-11

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2019-06-11

Overview: The recovery in equities continues today in light news day.  Nearly all the bourses in the Asia Pacific region rose, led by a 2.6% gain of the Shanghai Composite. The MSCI Asia Pacific Index rose for a third session. European equity benchmarks are rising for the sixth time in the past seven sessions.

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FX Daily, June 05: Dollar Remains on Back Foot

2019-06-05

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2019-06-05

Overview: The Federal Reserve's patience never excluded a rate cut should conditions warrant. The acknowledgment of this without signaling a change its stance is being seized upon to justify aggressive pricing of rates. At the same time, there has some tempering of trade anxiety on the margin that is also constructive. Asia and European equities were pulled higher after the strongest rally in several months in the US. 

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FX Daily, June 04: Nervous Calm Settles Over Markets

2019-06-04

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2019-06-04

The global capital markets are stabilizing today after taking a body blow of broadening the use of US tariffs (in migration dispute with Mexico), threatening the ratification of NAFTA 2.0, and still escalating hostile rhetoric between the US and China, and the threat of anti-trust action against the largest digital platforms.

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FX Daily, June 03: US Penchant for Tariffs Keeps Investors on Edge

2019-06-03

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2019-06-03

Overview:  The weekend failed to break the grip of investor worries that is driving stocks and yields lower.  The US Administration's penchant for tariffs is not simply aimed at China, where there is some sympathy, but the move against Mexico, dropping special privileges for India, and apparently, had considered tariffs on Australia.  At the same time, the threat of 25% tariff on auto imports.

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FX Weekly Preview: Curiouser and Curiouser

2019-06-03

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2019-06-03

The first week of June features the Reserve Bank of Australia meeting, an ECB meeting, and the US employment data.  The RBA is expected to deliver its first rate cut in three years.  The market appears to have discounted not only a second cut in H2 but has priced nearly half of a third cut as well.

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FX Daily, May 31: US Struggles to Build Physical Wall, Tries Tariff Wall on Mexico

2019-05-31

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2019-05-31

Overview: The US announcement to lay a 5% tariff on all goods coming from Mexico (starting June 10) until it stops the flow of "illegal migrants" spurred sharp losses in the Mexican peso and general risk-off move that strengthened the yen. The tariffs are set to rise every month until reaching 25%. This is a significant surprise and especially given that the Trump Administration is preparing to formally submit the USMCA to Congress.

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FX Daily, May 30: Kill Bull: Intermission

2019-05-30

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2019-05-30

Overview:  After significant moves in equities and interest rates, investors are taking a collective breath, waiting for fresh developments.  A nervous calm has settled over the capital market.  China, Japan, and Australian equities leaked lower, but other bourses in the region, including Korea and Taiwan posted modest gains, while Indonesian equities are still responding positively to the recent election.

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FX Daily, May 29: Equity Slump Deepens while Yields Plunge

2019-05-29

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2019-05-29

Overview:  The slump in equities continues after the poor showing in the US yesterday.  Nearly all bourses in Asia Pacific and Europe are lower.  Indonesia is the notable exception as domestic operators re-position after the election.  Foreign investors have been notable sellers of Korean and Taiwanese shares this month (in excess of $6.2 bln). Europe's Dow Jones Stoxx 600 is testing its lowest levels since March, and the S&P 500 is poised to gap...

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FX Daily, May 28: Risk Appetites Curbed, US Leadership Awaited in FX

2019-05-28

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2019-05-28

Overview:  The euro initially reacted positively to the EU Parliament elections.  The populists did not do quite as well as many expected.  The two main groupings failed to secure a majority, but with the help of the Liberals, and possibly the Greens, that did well throughout Europe, a new European Commission will be forged.  The heads of state meet later today, but no real decisions are likely.  The horse trading will likely take most of the next...

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FX Weekly Preview: The Evolution of Three Issues are Key in the Week Ahead

2019-05-27

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2019-05-27

As May winds down, the light economic calendar will allow investors to take their cues from the evolution of three disruptive forces--trade, Brexit and the US economy. With actions against Huawei and possibly a handful of Chinese surveillance equipment producers, the US raised the stakes. The retaliatory tariffs are effective on June 1, but Beijing has not formally responded to the moves against Chinese companies.

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FX Daily, May 23: Trade, Brexit, and Disappointing Flash PMIs Weigh on Global Markets

2019-05-23

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2019-05-23

Overview:  The deterioration of the investment climate is spurring the sales of stocks and the buying of bonds. The dollar is firm.  China and the US appear to be digging as if the trade tensions will remain for some time and the breech is beginning to look too big for Trump and Xi to pull another rabbit out of the hat like they did at the end of last year when the tariff truce was struck.   The move against Huawei and possible a number of...

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FX Daily, May 22: Sterling Can’t Get Out of Its Own Way

2019-05-22

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2019-05-22

Overview:   There is a nervous calm in the capital markets.  Yesterday's rally in US shares failed to excite global investors.  China, Hong Kong, and Taiwan markets fell, while Japan was mixed. Foreign investors continued to sell Korean shares, but the Kospi rose.  European shares narrowly mixed, leaving the Dow Jones Stoxx 600 little changed.

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Rare Earths may Provide Leverage

2019-05-22

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2019-05-22

Many American observers argue that the trade imbalance gives the US an advantage in a trade war with China. The US enjoys escalation dominance in tariffs because Chinese imports of US goods are so much less than the US imports of Chinese goods.  However, the focus on quantities may be misleading.

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FX Weekly Preview: The Week Ahead featuring the Battle for 7.0

2019-05-20

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2019-05-20

The strategic objective is to integrate China into the world economy. The liberal international solution was trade, investment flows, and cultural exchanges. The rise of nationalism and China's own willingness to flaunt the international rules are defeating the strategy.

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FX Daily, May 17: China Questions US Sincerity

2019-05-17

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2019-05-17

Since the presidential tweets on May 3, the US had the initiative in the negotiations with China, but today, China has pushed back. It is cool to the idea promoted by the US that trade talks will resume shortly. Now it may take the Trump-Xi meeting at the end of next month to restart talks. This, coupled with US sanctions on Huawei banning imports from it and sales to it, threatens to disrupt business and this took a toll on Chinese, Taiwanese and...

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