Tag Archive: #USD

The Dollar Slips Ahead of CPI

 The US dollar is trading with a lower bias ahead of the September CPI report due early in the North American session.  Long-term yields softened yesterday and slipped further today, leaving the US 10-year yield near 1.56%.  European benchmark yields are 3-4 bp lower.  The shorter-end of the US coupon curve, the two-year yield is firmer.

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The Euro Remains Within Last Wednesday’s Range

Overview:  A weak close in US equity trading yesterday and the widening of China's "cultural revolution" for a two-month investigation of the financial sector stopped a three-day advance in the MSCI Asia Pacific Index.  China, South Korea, and Taiwan saw more than a 1% decline in their major indices. 

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FX Daily, October 11: Rate Expectation Adjustment Continues

Overview:  Equities are softer and yields higher to start the new week.  The dollar is mixed.  Oil and industrial metals are higher. There are several developments over the weekend, but the focus seems to be on central bank action, inflation reports by the US and China, and the start of the Q3 earnings season. 

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The Market Likes the Dollar and the Loonie even More

US rates and the dollar hardly responded to the disappointing jobs report.  The 194k rise in the nonfarm payrolls was the least this year, but of course, it is subject to revisions the way the August series was revised by more than 50% to 366k.

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Hope Springs Eternal, or at least enough to Lift Risk Taking Today

Overview:  The animal spirits have been reanimated today.  Encouraged by the dramatic reversal in oil and gas prices, a deal in the US that pushes off the debt ceiling for a few weeks and talk of a new bond-buying facility in the euro area spurred further risk-taking today, ahead of tomorrow's US employment report. 

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Dollar Rallies as Energy Surge Quashes Animal Spirits

Overview: Investors worry that surging energy prices will sap economic activity and boost prices.  It is sparking a sharp drop in equities and bonds while lifting the dollar.  The Nikkei fell for the eighth consecutive session, and today's 1% drop brings the cumulative decline to 9%.  South Korea's Kospi also fell by more than 1%. 

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Is the Dollar’s Rally since the Disappointing August Employment Report Over?

The dollar's strong upside momentum, which accelerated after the FOMC meeting, stalled in recent days.  If interest rate considerations were the key driver, the Fed funds futures strip appears to have made the necessary adjustment. 

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Hard to Be Sterling

Overview: Energy prices pulled back late yesterday, but it offered little reprieve to the bond market where the 10-year benchmark yields in the US, UK, Sweden, and Switzerland reached new three-month highs.  November WTI traded to almost $76.70 before reversing lower and leaving a potentially bearish shooting star candlestick in its wake. 

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Soaring Energy Prices Lift Yields, Weigh on Equities and the Greenback Pops

Overview: Rising energy prices and yields are helping lift the US dollar and weighing on equities.  November WTI has pushed above $76, while Brent traded above $80, and natural gas is up for the fourth consecutive session, during which time it has risen by about 25%. 

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FX Price Action in the Context of Global Macro Developments

The dollar was lifted at the start of the last week by safe-haven demand as China's Evergrande multi-month collapse triggered a sort of panic attack by global markets.  The dollar strengthened after the initial drop following the FOMC meeting.  The Fed's confirmed tapering announcement is likely at the next meeting (Nov), but this has been well tipped.  The market also expected that a few more officials would see a hike next year as appropriate ...

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Taper, No Tantrum

Overview:  The market's reaction to the FOMC statement was going according to our script, with the dollar backing off on a buy rumor sell the fact type of activity until Powell provided an end date for the tapering (mid-2022) before providing a start date (maybe next month).  This spurred a dollar rally. 

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What to Expect When You are Expecting

Overview: The markets have stabilized since Monday's panic attack but have not made much headway.  China and Taiwan returned from the extended holiday weekend.  Mainland shares were mixed. Shanghai rose by about 0.4%, while Shenzhen fell by around 0.25%.

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Ever Grand

Overview: Coming into yesterday's session, the S&P 500 had fallen in eight of the past ten sessions.  It closed on its lows before the weekend and gapped.  Nearly the stories in the press blamed China and the likely failure of one of its largest property developers, Evergrande. 

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Risk Appetites Didn’t Return from the Weekend

Overview: Investors' mood did not improve over the weekend, and the lack of risk appetites are rippling through the capital markets today.  Equities have tumbled, yields have backed off, and the dollar is well bid.  Hong Kong and Australia led the sell-off in the Asia Pacific region, off 3.3% and 2.1%, respectively. 

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The Dollar is Aided by Speculation of a Hawkish Fed, Will It Sell-off on the Fact or Disappointment?

The US dollar continued to trend higher last week, helped by the unexpectedly strong retail sales report.  Despite disappointing August jobs growth and the moderation in consumer prices, the Fed has no compelling reason not to move forward with plans to taper before the end of the year.

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FX Daily, September 15: China Disappoints, but the Yuan Remains Strong

The sixth decline of the S&P 500 in the past seven sessions set a negative tone for equity trading in the Asia Pacific region, and the poor Chinese data did not help matters.  News that China's troubled Evergrande would miss next week's interest payment weighed on sentiment too.

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Is it Really all about US CPI?

Overview:  The markets are in a wait-and-see mode, it appears, ahead of the US CPI figures, as it absorbs bond supply from Europe and monitors the potential restructuring of China's Evergrande.  A new storm may hit US oil and gas in the Gulf before recovering from the past storm and helping to underpin prices.

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How (Not) to Win Friends and Influence People

Overview:  There are two big themes in the capital markets today.  The first is the ongoing push of the Chinese state into what was the private sector.  Today's actions involve breaking Ant's lending arms into separate entities, with the state taking a stake.  This weighed on Chinese shares and Hong Kong, where many are lists. On the other hand, Japanese markets extended their recent gains.

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Don’t Resist the Dollar’s Pull Ahead of the FOMC Meeting

The US dollar enjoyed a firmer bias last week despite the disappointing jobs growth reported on September 3.  The Norwegian krone was the only major currency that gained against the greenback.  Brent was less than a quarter of a dollar firmer, so the likelihood of the central bank raising rates later this month offers a more compelling explanation. 

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Don’t Make a Fetish Out of What may be a Minor Change in the Pace of ECB Bond Buying

Overview: Yesterday's retreat in US indices was part of and helped further this bout of profit-taking. The MSCI Asia Pacific Index ended an eight-day advance yesterday and fell further today. Japanese indices, which had set multiyear highs, fell for the first time in nine sessions. Hong Kong led the regional slide with a 2.3% decline as China's crackdown on the gaming industry continued. 

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