Tag Archive: Turkey

The Dollar Reverses Early Gains

2023-05-30

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2023-05-30

Overview:  The debt ceiling drama is not over. The agreement between the negotiating teams of President Biden and House Speaker McCarthy sets the stage for the next act in the drama: each side must deliver the votes. A preliminary vote today in the House of Representatives is likely today ahead of floor vote tomorrow. Still, the market is optimistic, and risk is favored. Asia Pacific bourses were mixed today. We note that the chip sector helped...

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Markets Catch Breath as Politics Trumps Economics

2023-05-15

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2023-05-15

Overview: The dollar is mostly consolidating last week's gains. The big news has been on the political front. Thailand's opposition parties dealt the military-led government a powerful blow. But in Turkey, Erdogan staved off a serious challenge and a run-off later this month looks likely, while his party maintained its parliamentary majority. Tensions over arms shipments to Russia have eased between the US and South Africa, giving the rand a boost....

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Limited Follow-Through Dollar Buying After Yesterday’s Gains

2023-05-12

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2023-05-12

Overview: The dollar sprang higher yesterday but follow-through buying today has been limited. The little more than 0.5% gain in the Dollar Index was among the largest since mid-March. And yet, the debt ceiling anxiety and weak US bank shares persist. Today's talks at the White House have been postponed until early next week. Both sides are incentivized to bring it to the brink to demonstrate to their constituencies that they got the best deal...

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The Greenback Firms to Start the New Week, Stocks Slide

2022-09-19

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2022-09-19

Overview:  The busy week is off to a slow start as Japan is on holiday and the UK and Canadian markets are closed to honor Queen (Australia will commemorate with a holiday on Thursday). Nevertheless, the sell-off in equities continues and the US dollar is firm. Most of the large markets in Asia fell. India is a notable exception. Its benchmark rose for the first time in four sessions, helped by bank shares and Infosys. Europe’s Stoxx 600 is off for...

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The Dollar is on Fire

2022-08-19

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2022-08-19

The dollar is on fire. It is rising against all the major currencies and cutting through key technical levels like a hot knife in butter. The Canadian dollar is the strongest of the majors this week, which often outperforms on the crosses in a strong US dollar environment. It is off 1.5% this week.

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China Disappoints and Surprises with Rate Cut

2022-08-15

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2022-08-15

Overview: Equities were mostly higher in the Asia Pacific region, though Chinese and Hong Kong markets eased, and South Korea and India were closed for national holidays. Despite new Chinese exercises off the coast of Taiwan following another US congressional visit, Taiwan’s Taiex gained almost 0.85%. Europe’s Stoxx 600 is advancing for the fourth consecutive session, while US futures are paring the pre-weekend rally. Following disappointing data...

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Spanish Inflation Shocks

2022-06-29

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2022-06-29

Overview: The sharp sell-off in US equities yesterday, led by tech, is weighing on today’s activity. Most of the large Asia Pacific markets excluding Japan and India lost more than 1% today.

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Short Covering in the US Treasury Market Extends the Yield Pullback

2022-04-14

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2022-04-14

Overview: What appears to be a powerful short-covering rally in the US debt market has helped steady equities and weighed on the dollar.  Singapore and South Korea joined New Zealand and Canada in tightening monetary policy.  Attention turns to the ECB now on the eve of a long-holiday weekend for many members.  The tech-sector led the US equity recovery yesterday, snapping a three-day decline.  Most of the major markets in Asia Pacific advanced but...

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European Currencies Continue to Bear the Brunt

2022-03-03

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2022-03-03

Overview: Russia's invasion of Ukraine and the global response is a game-changer, as Fed Chair Powell told Congress yesterday.  The UK-based research group NISER estimated that world output will be cut by 1% next year or $1 trillion, and global inflation will be boosted by three percentage points this year and two next. 

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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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Central Bank Fest

2021-12-11

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2021-12-11

Next week is the last big week of the year, and what a week it will be:  Five major central banks meet and at least nine from emerging market countries.  Norway's Norges Bank is the most likely major central bank to hike its key (deposit) rate (December 16).  It would be the second hike of the year.  The economy is enjoying a solid recovery, and headline inflation rose to 4.6% in November, its fastest pace since 2008.  The underlying rate, which...

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Turkey gets a Reprieve before US Thanksgiving, but Capital Strike may not be Over

2021-11-24

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2021-11-24

Overview:  The dramatic collapse of the Turkish lira was like an accident one could not help look at, but it was not an accident, but the result of a disregard for the exchange rate and compromised institutions.  The lira was off around 15% at its worst yesterday, before settling 11.2% lower.  After falling for 11 sessions, it has steadied today (~2.7%)  but the capital strike may not be over.  On the other hand, the Reserve Bank of New Zealand...

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Euro Bounces Back, but the Turkish Lira Remains Unloved

2021-11-18

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2021-11-18

Overview:  The US dollar's sharp upside momentum stalled yesterday near JPY115 and after the euro met (and surpassed) a key retracement level slightly below $1.1300.  Led by the Antipodean currencies today, the greenback is mostly trading with a heavier bias.  Among the majors, helped by a steadying of US yields, the yen is soft.  In the emerging market space, the Turkish lira continues its headlong plunge while the yuan softened and the Mexican...

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US Retail Sales and Industrial Output to Accelerate; China not so Much

2021-11-13

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2021-11-13

At the halfway point of Q4, the markets' focus is on three things:  inflation, growth, and central banks' response. With US and Chinese October inflation readings behind us, the focus shifts to the real economy's performance, the world's two largest economies reporting retail sales and industrial production figures.   Helped by stronger auto sales, the first increase in six months, US retail sales likely turned in another solid showing of around...

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What Might it Take for the Fed to Deliver a Hawkish Tapering Announcement?

2021-11-03

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2021-11-03

Overview: With the FOMC's decision several hours away, the dollar is trading lower against nearly all the major currencies.  The Antipodeans and Norwegian krone are leading.  The euro, yen, and sterling are posting minor gains (less than 0.1%).  Most of the freely liquid and accessible emerging market currencies are also firmer.  The Turkish lira is a notable exception.  The decline in the core inflation and a smaller than expected rise in the...

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Strong Earnings and Easing of (Some) Political Tensions Bolster Sentiment

2021-10-26

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2021-10-26

Overview:  Helped by new record highs in the S&P 500 and Dow Industrials, constructive earnings, and an easing of political tensions, risk appetites are robust today.  The MSCI Asia Pacific Index recouped yesterday's losses plus more as the large equity markets in the region, but China and Hong Kong rose, led by a more than 1% gain in Tokyo.  European shares are rallying, and the Stoxx 600 is posting gains for the ninth session in the last 11...

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Dollar Slumps

2021-10-19

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2021-10-19

Overview:  While equities and bonds are firmer, it is the dollar's sell-off that stands out today.  The greenback has retreated broadly.   

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Markets Look for Direction, Currencies in Narrow Ranges

2021-08-12

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2021-08-12

Overview: The global capital markets are subdued today as investors wrestle with the rising virus, the shifting stance of several central banks, and a more tense geopolitical backdrop.  Equity markets are struggling today. 

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FX Daily, May 20: Market Stabilize after Yesterday’s Tumultuous Session

2021-05-20

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2021-05-20

US equity indices finished lower, but the real story was their recovery. Asia Pacific equities were mixed, with Australia's 1.5% rally leading the recovery in some markets, including Tokyo and Singapore. Europe's Dow Jones Stoxx 600 is up a little more than 0.5% near mid-session, led by information technology and industrials, while energy and financials lagged with small gains.

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