Tag Archive: #USD

FX Daily, July 19: Dollar Pares Losses as Market Partly Corrects Confusion of Magntiude and Timing of Fed

Overview: Comments underscoring the importance of acting preemptively by two Fed officials sent the dollar reeling and helped lift equities after the S&P fell to a two and a half week low. The decline in rates and the US shooting down of an Iranian drone in the Gulf helped spur gold to new six-year highs. There was some attempt to clarify the (NY Fed's) comments and the dollar has pared yesterday's losses.

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FX Daily, July 18: Dollar on Back Foot as Equities Slide

Overview:  Profit-taking continues to weigh on global equities earnings concerns saw the biggest drop in the S&P 500 in three weeks.  The MSCI Asia Pacific Index fell for the fourth consecutive session.  The Nikkei gapped lower for the second straight session and has now retraced half of the gains scored since early June.  The Shanghai Composite is at its lowest level in a month.

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FX Daily, July 17: Back to the Well Again

Overview:  After slapping punitive tariffs on structural from China and Mexico last week, US President Trump threatened to end the tariff truce with China because it is not stepped up its purchases of US agriculture products.  Trump said the tariff freeze was in exchange for ag purchases, but at the time it seemed as if granting licenses to US companies to sell to Huawei was the quid pro quo.

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FX Daily, July 16: Sterling Weakness Punctures Subdued Session

Overview: Summer in the northern hemisphere contributing to the subdued activity in the global capital markets. The MSCI Asia Pacific index stalled after a four-day advance, with Japanese, Chinese, and Australian equities offsetting gains in Taiwan, South Korea, and India.  Europe's Dow Jones Stoxx 600 is flattish, struggling to extend its three-day rally.

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FX Daily, July 15: Marking Time on Monday

Overview: The new record highs in US equities ahead of the weekend coupled with Chinese data that suggested the economy was gaining some traction as Q2 wound down is helping underpin risk appetites to start the week. Japanese markets were closed today, but equities were mostly firmer in the Asia Pacific regions, markets in China, Hong Kong, Taiwan, and India firmed. 

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FX Daily, July 12: Greenback Limps into the Weekend

Overview:  Higher than expected US CPI and the second tepid reception to a US bond auction this week pushed US yields higher and helped stall the equity momentum. Asia Pacific yields, especially in Australia and New Zealand jumped 8-10 bp in response, and Spanish and Portuguese bonds bore the burden in Europe. 

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FX Daily, July 11: Powell Spurs Equity and Bond Market Rally, While the Greenback Falls Out of Favor

Overview:  Fed's Powell confirmed a Fed rate cut at the end of this month by warning that uncertainties since the June FOMC had "dimmed the outlook" and that muted price pressures may be more persistent.  It ignited an equity and bond market rally (bullish steepening) while the dollar was sold.

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FX Daily, July 10: North American Focus: Poloz and Powell

Overview: The US Treasury market is retreating for the fourth consecutive session ahead of Fed Chairman Powell's testimony before Congress. It is the longest losing streak in six months, and the 10-year yield has risen 15 bp over the run. This is helping drag up global yields, and today Asia Pacific yields mostly rose 2-3 basis points while core European bond yields are 5-7 bp higher and peripheral yields up a little less.

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FX Daily, July 9: No Turn Around Tuesday, as Equities Extend Losses and the Greenback Remains Firm

Overview:  Global equity benchmarks are headed for their third consecutive loss today as caution prevails at the start of Q3 after a strong first half.  Ten-year benchmark yields are edging higher after a soft start in Asia.  Italian bonds continue to outperform.  Greek bonds have been set back as the new government reiterated its commitment to ease fiscal commitments as if Tsipras did not try, and got a similar rebuff.

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FX Daily, July 8: Macro Monday

Overview: The capital markets have begun the week in a mixed note. Asia Pacific equities tumbled, led by 2%+ losses in China and South Korea, but European shares are edging higher, and a positive close would be the seventh in the past eight sessions. The S&P is little changed. Asia Pacific bond yields moved higher, as anticipated after the jump in US yields after the jobs data.

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FX Daily, July 05: Dollar is Bid Ahead of Jobs Report

Overview: The dovish response to news that Lagarde was nominated to replace Draghi was extended by the dismal German factory order report that has pushed the euro to new two-week lows and kept bond yields near record lows. The focus ahead of the weekend is squarely on the US employment data, where a second consecutive poor report will fan expectations for a large Fed cut to initiate an easing cycle.

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FX Daily, July 03: Yields Extend Decline

Overview: Interest rates are lurching lower.  The US 10-year yield is at new two-year lows, but the driver is European bonds where peripheral yields are 6-7 bp lower,  though Italy's benchmark is off 12 bp, while core yields are down 2-3 bp to new record lows.  The German benchmark is almost minus 40 bp, while the Swiss 10-year is beyond minus 100 bp.  Italy's two-year is breaking more convincingly below zero.

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FX Daily, July 2: Post-G20 Euphoria Fades, Stuck with Same Reality

Overview: The euphoria that greeted the resumption of US-China and US-North Korea talks has subsided. Global equities have turned mixed after yesterday's surge. Hong Kong played catch-up, and despite ongoing demonstrations, the Hang Seng rallied over one percent, and the Hong Kong Dollar strengthened beyond its band midpoint for the first time in nine months.

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

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: Macro Update: Melodrama Subsides but Capriciousness Remains

Since President Trump declared the end of the tariff truce with China in early May, an important focus for investors was the G20 meeting. It was only as it drew near was a meeting between the two heads of state confirmed. What was billed as an extraordinary meeting reportedly lasted less than 90 minutes, and the results were broadly as expected.

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FX Daily, June 28: The World may Look Different Come Monday

Overview: Quarter-end positioning seems to dominate today's activity. The outcome of bilateral talks at the G20 gathering partly reflects the influence of the US President who eschews multilateral efforts as a hindrance to its sovereignty.  Equities in Asia Pacific slipped today but held on to modest gains for the week.

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FX Daily, June 27: Ready. Set. Wait.

Overview: The approaching month/quarter-end and the G20 meeting dominate considerations. Although the S&P 500 closed on its lows for the third consecutive session yesterday, Asia Pacific equities liked the apparent increase in the prospect of a tariff freeze between the US and China and the pullback in the Japanese yen.

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FX Daily, June 26: Biggest Drop in the S&P 500 in June Weighs on Global Equities

The S&P 500 fell nearly one percent yesterday, its steepest fall this month and this was a weight on Asia Pacific and European activity. Most markets have eased, though not as much as the US did. Hong Kong, India, and Singapore were notable exceptions in Asia, where the MSCI benchmark slipped for a second day.

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Cool Video: Sketch of Bullish Case for Gold

I know some people who are always bullish gold. I am not. In fact, I often think I can find higher returning assets. However, I have recently have turned bullish gold, and while in Toronto on business, I was invited to the set of Bloomberg to discuss my change of heart.

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FX Daily, June 25: Heightened Political Risks Weigh on Sentiment

Overview: It is far from clear that the US sanctions against nine Iranian officials, with the foreign minister to be added later brings negotiations any closer. At the same time, US officials trying to keep expectations low for the weekend meeting between Trump and Xi. The heightened political anxiety will have to make room for Fed Chairman Powell's talk in NY.

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