Tag Archive: US

Poor Flash PMI from Japan and Eurozone

2023-10-24

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2023-10-24

Overview: Bonds and stocks are higher today, and the dollar is mixed. A weak PMI reading seemed to weigh on the euro, but the market shrugged the weak Australian PMI off and the Australian dollar is the G10 currencies while the euro is among the weakest. Yesterday, the North American session showed an appetite for foreign currencies and with some of their intraday momentum stretched to the downside, the stage is set for a possible repeat today. The...

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JPY150 Pierced but Market is Not Done

2023-10-23

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2023-10-23

Overview:  News that Israel's ground assault on Gaza is being delayed while hostage negotiations continue saw gold and oil ease, but tensions continue to run high. Gold peaked near $1997 before the weekend and pulled back to about $1964 today before steadying. December WTI peaked in front of $90 a barrel at the end of last week, and fell to about $86.85 today, but has also steadied. The dollar is firmer against the G10 currencies, with the Scandis...

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The Dollar Continues to Press Against JPY150; Risk Off Ahead of the Weekend

2023-10-20

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2023-10-20

Overview: True to the market's penchant, it heard a dovish Fed Chair Powell yesterday. He seemed to suggest that the bar to another hike was high. This helped cap the 10-year yield just in front of 5.00% and allowed foreign currencies to recover against the dollar. The US two-year yield reversed lower after rising above 5.25%. It is now around 5.15%. Still, Powell appeared to cover similar ground as several other officials, including Fed governors...

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Greenback Remains Bid and the Market has not Given Up on JPY150

2023-10-19

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2023-10-19

Overview:  The greenback did not strengthen yesterday in Asian and European turnover despite the deteriorating conditions in the Middle East, but it did rally as North American participants entered the fray. Indeed, the Dollar Index rose from a marginal new four-day low to a marginally new four-day high. The safe haven bid seen in gold and oil, was reflected in the foreign exchange market by the strength of the Swiss franc, the only G10 currency to...

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Geopolitical Tensions Lift Oil and Gold, but little Sign of Haven Buying in FX

2023-10-18

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2023-10-18

Overview: US economic data surprised to the upside yesterday, and although interest rates rose as one would expect, the dollar's initial gains were pared, and the Dollar Index finished slightly lower on the day. This seemed, in some respects, to echo how the greenback reacted to the recent jobs report. However, then, interest rates softened, but the inability to rally on seemingly good news is notable. The heightened tensions in the Middle East...

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Markets Remain on Edge

2023-10-17

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2023-10-17

Overview:  The markets remain on edge. The press reports US President Biden is planning an imminent trip to Israel while Iran warns of "multiple fronts" against Israel if the attacks on Gaza continued. The dollar, which was offered yesterday, is better bid today. Still, the capital markets are relatively quiet. Even the Swiss franc, which was the strongest G10 currency last week (~0.9%) is slightly heavier today. Among emerging market...

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Capital Markets are Calm though Anxiety Continues to Run High

2023-10-16

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2023-10-16

Overview: The risk that the war in Israel spreads remains palatable, and several observers have warned of the greatest risks of a world war in a generation. Still, the capital markets remain relatively calm. The US dollar is softer after closing last week firmly. The only G10 currency unable to post corrective upticks today is the Swiss franc. Among emerging market currencies, the Polish zloty has been boosted by the pro-EU election results, and...

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Greenback Consolidates Ahead of September CPI

2023-10-12

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2023-10-12

Overview: The dollar is mixed against the G10 currencies. It is confined to narrow ranges ahead of today's CPI report. The Russian ruble is the strongest of the emerging market currencies following the imposition of new capital controls, forcing many exporters to repatriate their foreign earnings. After posting a key upside reversal at the end of last week, gold continues to recover. It nearly $1883 so far today, the best level in more than two...

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Bonds Extend Recovery

2023-10-11

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2023-10-11

Overview: Broadly speaking, the dollar's recent pullback was extended today but the momentum appears to be slowing, perhaps ahead of tomorrow's US CPI report. The Dollar Index slipped to its lowest level since September 25 before steadying. The greenback is mixed as the North American market is set to open. The dollar bloc and Swedish krona are the underperformers. The Swiss franc is the best, up about 0.2%, while the yen and euro are little...

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Sharp Fall in US Yields ahead of Large Supply

2023-10-10

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2023-10-10

Overview: The market continues to monitor developments in Israel and the Middle East. The economic calendar is light today and the market is showing a strong appetite for risk. Except for China and South Korea, large bourses in the Asia Pacific rallied. Japan's indices jumped more than 2% and Australia by 1% to lead the region. Europe's Stoxx 600 is up 1.5% near midday, which, if sustained would be the largest in nearly a month. US index futures...

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War in Israel Spurs Flight to Dollars, Yen and Gold, While Driving up the Price of Oil

2023-10-09

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2023-10-09

Overview: There are three main developments. First, the market is digesting the implication of the US employment data, where the optics were strong (336k increase in nonfarm payrolls compared with 170k median forecast in Bloomberg and Dow Jones surveys) but some details were disappointing (like the third consecutive decline in full-time posts, seasonally adjusted). Second, Chinese mainland market re-opened after a six-day holiday). Chinese stocks...

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US Employment Data to Determine Whether the Greenback’s Rally since mid-July is Over…Maybe

2023-10-06

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2023-10-06

Overview: One key issue for market participants is if the dollar's pullback is the beginning of something important or is largely position adjusting ahead of today's US jobs report. We suspect that the dollar's rally that began in mid-July is over, though a strong employment report that boosts the chances of a Fed hike before year-end could quickly demonstrate the folly of making claims ahead of what is still one of the most important reports in...

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Markets Continue to Struggle

2023-10-05

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2023-10-05

Overview:  The markets remain unsettled. Follow-through dollar selling has been limited today after yesterday's pullback. Narrow ranges are prevailing, but the Norwegian krone and Canadian dollar, the weakest G10 currencies in recent days, are heavier again today. Although it seems that the BOJ did not intervene earlier this week, but the dollar bulls has been chastened just the same and the greenback is holdings below yesterday's high...

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Strategic Ambiguity Leaves Intervention Question Unanswered, but US Dollar has Steadied

2023-10-04

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2023-10-04

Overview: Dramatic yen price action around the JOLTS report yesterday after the dollar pierced the JPY150 level spurred speculation of BOJ intervention. Although there has been no confirmation, the strategic ambiguity is helping steady the yen and the dollar more broadly today, even though US yields remain firm. Final PMI readings were a better than the flash estimates and this may also be facilitating the consolidative tone. Most promising, from a...

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Dollar Stabilizes After Extending Gains

2023-10-03

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2023-10-03

Overview: The dollar's gains were initially extended before a consolidative tone emerged. The euro has been sold to $1.0460 and has returned to almost $1.05. Sterling fell to nearly $1.2060 and has recovered though has stopped short of $1.2100. The dollar edged closed to JPY150 but stalled near JPY149.95 and has held above JPY149.65. The Australian dollar near $0.6300 and the greenback rose to CAD1.3725. Benchmark 10-year yields are firm, though...

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US Yields and Dollar Rise After US Government Closure Averted

2023-10-02

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2023-10-02

Overview: The US avoided a government shutdown, barely, and this eased one of the headwinds that were anticipated. In turn, this is spurring new gains in US interest rates and helping underpin the dollar at the start of the new quarter. The 10-year Treasury is holding above 4.60% and nearing last week's high (4.68%). The two-year yield gapped higher and is near 5.10%. The high from September 21 was almost 5.20%. The Swiss franc is the only G10...

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Dollar Sets Back into Month- and Quarter-End Ahead of likely US Government Shutdown

2023-09-29

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2023-09-29

Overview: The dollar's surge stalled yesterday, and follow-through selling has pressed it lower against all the G10 currencies today. The dollar-bloc and Scandis are leading the move. Month-end, quarter-end pressures, coupled with a likely partial shutdown of the government beginning Monday, and after key chart levels were approached or violated earlier this week, serving as a bit a cathartic event. The Swiss franc snapped a 12-day losing streak...

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Looming US Government Shutdown Stems the Dollar’s Surge

2023-09-28

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2023-09-28

Overview: The increasingly likely partial US federal government shutdown has spurred a bout of liquidation of long dollar positions. The psychologically important JPY150 level was approached, and the euro was sold through $1.05 yesterday, and the greenback has come back better offered today. It is lower against all the G10 currencies. It is mixed against the emerging market currency complex, with central European currencies and South African rand...

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Firmer Bonds and Stocks, but the Dollar Presses Ahead

2023-09-27

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2023-09-27

Overview: The S&P 500 hit three-month lows yesterday, while the Conference Board's measure of consumer confidence fell to a four-month low. New home sales fell to their lowest level in five years. The US federal government appears headed for a partial shutdown on October 1. Still, the greenback rides high. It is extending its gains against several G10 currencies, including the euro and sterling. The Swiss franc is moving lower for the 12th...

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Neither the Threat of Intervention Nor a Possible US Government Shutdown is Derailing the Greenback

2023-09-26

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2023-09-26

Overview: The US dollar is stabilizing a bit but only after extending its gains initially It reached almost JPY149.20, while the euro slipped to $1.0570 before recovering to straddle $1.06 in the European morning. Sterling sank a little through $1.2170 but stabilized to return to almost $1.2200. The Australian dollar tested last week's low slightly below $0.6390 before resurfacing above $0.6400. The US dollar toyed with CAD1.3500, where there is a...

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