Tag Archive: US

Sterling and Gilts Pressed Lower by Firmer CPI

2024-11-20

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2024-11-20

US dollar and rates are firmer today. All the G10 currencies are lower, led by the Japanese yen. The UK reported firmer than expected CPI and this may have deflected some of the selling pressure away from sterling, which is off less than 0.2% to put it atop the pack ahead of the US open.

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Geopolitics Roil Capital Markets

2024-11-19

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2024-11-19

Within hours of the US giving permission to Ukraine to use US weapons to strike Russian territory, which it did, Moscow announced a change it is nuclear doctrine that allow for the use of nuclear weapons against a conventionally armed adversary that is backed by nuclear powers.

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Fragile and Consolidative Tone Starts the Week in FX

2024-11-18

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2024-11-18

Overview: The US dollar has begun the new week consolidating in a mixed fashion against the G10 currencies. Bank of Japan Governor Ueda remains circumspect and did not provide guidance about next month's central bank meeting. Without positive guidance, the market sold the yen, but the swaps market shows about 13 bp of tightening has been discounted, up a couple of basis points from a week ago. Leave aside the New Zealand dollar, which is also under...

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FX and Rates Unwind Yesterday’s Powell Effect, US Index Futures Slide

2024-11-15

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2024-11-15

Overview:  The dollar bounced, and US rates rose yesterday afternoon in response to comments by Fed Chair Powell. But he did little more that reiterate what he had said at the recent press conference. Powell expressed a lack of urgency to move after having led the central bank in delivering a 50 bp cut to start the easing in September while indicating that direction of travel will be to a less restrictive rate. The dollar has come back lower today...

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The Dollar’s Surge Continues

2024-11-14

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2024-11-14

Overview: The dollar's surge continues. Most G10 currencies are off 0.45%-0.65%. The US dollar is trading above CAD1.40 for the first time since the pandemic, but the Canadian dollar is faring the best of the G10 today (~-0.15%). Since US election, it is the only major currency not to have fallen by at least 2%. All the emerging market currencies are lower today, as well. The greenback is being underpinned by the continued rise in US rates and...

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Dollar Bulls Catch Breath

2024-11-13

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2024-11-13

Overview: Surging US yields helped send the dollar higher but wobbled the stock market yesterday. A fragile consolidative tone has emerged today for the foreign currencies. The greenback remains mostly within yesterday's ranges. All but a few emerging market currencies are trading with a firmer bias. Beijing's weaker dollar fix may have been the first protest of the yuan's weakness since the election. The highlight of the North American session is...

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Higher Yields Help Extend the Dollar’s Gains

2024-11-12

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2024-11-12

Overview: The dollar continues to ride high. It is up 0.20%-0.50% today against the G10 currencies. Most pairs have extended last week's moves. The Dollar Index, which was near 100 in late September is approaching 106.00. Emerging market currencies are all weaker, as well. The dollar is being helped by higher US yields. After yesterday's holiday, the US 10-year yield is up five basis points to near 4.36%. The two-year yield also is five basis...

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Serenity Now

2024-11-07

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2024-11-07

Overview:  The markets are calmer after yesterday's post-US election drama. A consolidative tone has emerged in the foreign exchange market, and the dollar is softer against all the G10 currencies, led the 1% gain in the Norwegian krone, after the central bank left rates on hold. Sweden's Riksbank delivered the expected half-point cut and the krona is up 0.5%. Japanese officials warned against excessive moves, and the PBOC set the dollar's...

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US Dollar Soars and US Rates Jump

2024-11-06

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2024-11-06

Overview: Shortly after the North American markets closed, before any results were known, the market jumped back into the "Trump trade," which it had pared on Tuesday. The dollar and US interest rates soared. The euro is the hardest hit among the G10 currencies today, off about 1.6% and the Canadian dollar, the best performer … Continue...

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Nervous Calm Hangs over the Markets

2024-11-05

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2024-11-05

Overview: A nervous calm hangs over the markets as the US goes to the polls. The proximity of the presidential contest warns that the results may not been known as soon as people hope. Indeed, many fear the voting simply begins the next phase of the contest, with premature declarations of victory and disputes over votes. The dollar is in mostly narrow ranges today, but the Antipodeans and Scandis are the strongest, and the Reserve Bank of Australia...

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US Polls Spur Position Adjusting Ahead of Tomorrow’s Election

2024-11-04

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2024-11-04

Overview: Weekend polls in the US made it seem that the Trump victory, which many large pools of capital, had discounted, was not so inevitable after all. The most dramatic market response was taking US yields and the dollar lower. The US 10-year yield is off about nine basis points to straddle 4.30% and the two-year yield down four basis points to around 4.16%. The greenback is also against all the G10 currencies. Most emerging market currencies...

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US Job Report may Offer Little Relief ahead of Next Week’s US Election and Meetings by Half of the G10 Central Banks

2024-11-01

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2024-11-01

Overview: The first of what promises to be two tumultuous weeks is winding down. The US jobs data is the last big event. It is widely recognized that it will be skewed to the downside because of hurricanes and some mostly temporary factors. Anticipating the market’s reaction is also complicated by the weekend, and reports that Iran may strike back at Israel (through bases in Iraq?), and next Tuesday's US election, and five G10 central bank meetings...

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Ueda Lifts Yen, Stocks Slump, Gilts Under Pressure Post-Budget

2024-10-31

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2024-10-31

Overview: The main move in the foreign exchange market today is the recovery of the yen following what was seen as hawkish comments by BOJ Governor Ueda. Otherwise, the tone is one of consolidation. The equity market sell-off today may be weighing on the Scandis and dollar-bloc currencies amid risk-off impulses. Emerging market currencies are mixed. The Mexican peso, which fell to a new low for the year yesterday, is stabilizing today and is among...

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Consolidative Tone in FX Ahead of Key Events and Data

2024-10-29

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2024-10-29

Overview: A consolidative tone is emerging in the foreign exchange market as the week's key events begin tomorrow:  UK budget, eurozone and US Q3 GDP, and the US ADP private sector jobs estimate, and quarterly refunding. Outside of the Norwegian krone, which is up nearly 0.5%, the other G10 currencies are largely +/- 0.1%. The yen, Swiss franc, and antipodeans are trading with a slightly heavier bias. Among emerging market currencies, most from the...

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Japan’s LDP Loses Majority, Sending Yen Lower, and Oil Gaps Lower on Middle East Developments

2024-10-28

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2024-10-28

Overview: The next couple of weeks in the capital markets are likely to be tumultuous, and the loss of the LDP majority in Japan get it started. The yen gapped lower amid the immediate uncertainty. The yen is off about 0.5% toward the middle of today's range. Leaving aside the Scandis, where are mixed, the other G10 currencies are little changed, +/- 0.15%. The euro has recovered above $1.08, where options for 2.3 bln euros expire tomorrow....

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FX Becalmed Ahead of the Weekend and Next Week’s Big Events

2024-10-25

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2024-10-25

Overview: The dollar is trading quietly, with a slightly firmer today. There has been little follow-through selling after yesterday's setback. The Canadian dollar and sterling are faring best. The yen is a little softer after Tokyo's CPI came in lower as expected due to the government's energy subsidy. The election for the lower house of the Diet is held Sunday. Emerging market currencies are also mostly softer. The JP Morgan Emerging Market...

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Greenback Consolidates

2024-10-22

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2024-10-22

Overview:  US interest rates remain firm and the dollar is mostly consolidating against the G10 currencies, in a muted "Turn Around Tuesday." The greenback is straddling the JPY151 area, its best level since the end of July. Despite bearish price action yesterday, the euro, sterling, and Australian dollar have seen limited follow-through selling and modest …

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The Dollar and Gold Firm

2024-10-21

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2024-10-21

Overview: The US dollar is firm to start the new week. The Japanese yen and Australian dollar are the heaviest with in the G10 (~0.30%). The euro and sterling are trading heavier but inside the pre-weekend range. The market anticipates the Bank of Canada to deliver a 50 bp rate cut in the middle of the week, and the Canadian dollar is threatening to extend its losses for the fourth consecutive week. China's prime lending rates were cut by 25 bp,...

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Dollar Firm, China Briefing Light on Details, and Its Data Remain Poor

2024-10-14

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2024-10-14

Business travel will prevent the updating of the blog in the coming days. It resumes October 19 with the Week Ahead. The lack of details from China's fiscal briefing, the soft CPI (and deeper PPI deflation), and a smaller than expected trade surplus did not prevent Chinese equities from advancing (CSI 300 +1.9%).

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Tomorrow’s China Briefing Did Not Prevent the Continued Slide in Chinese Stocks Today

2024-10-11

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2024-10-11

Overview: The combination of the firmer than expected US CPI and larger than expected rise in initial and continuing jobless claims saw short-term US rates fall, and the odds of a quarter-point cut by the Fed rose from about 83% to about 93%. The Fed funds futures market boosted the odds of another quarter-point cut in December (~90% vs.78%). The dollar initially weakened but recovered, though the key levels held, such as $1.09 in the euro, $1.30...

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