Tag Archive: #USD

FX Daily, April 19: Holiday Note

Many financial centers are closed today. These include Australia, India, most European markets, and the US. In Asia, equity markets that were open moved higher. The Nikkei, which gapped higher on Monday, rose 0.5% today for a 1.5% gain on the week. China's Shanghai Composite rose 0.6%, lifting the weekly increase to 2.6%.

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FX Daily, April 18: EMU Disappointment Lifts the Dollar

Overview: A bout of profit-taking in equities began in the US yesterday and has carried through Asia and Europe today. The MSCI Asia Pacific Index fell for the first time in five days, while the Dow Jones Stoxx 600 is snapping a six-day advance.  The Nikkei gapped higher to start the week and a gap low tomorrow would undermine the technical outlook.

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FX Daily, April 17: Veracity of Chinese Data Questioned, but Lifts Sentiment Nevertheless

The veracity of Chinese data will be questioned by economists, but today's upbeat reports round out a picture that began with stronger exports and a surge in lending. Chinese officials, we argue, had a "Draghi moment" and decided to do "whatever it takes" to strengthen the economy in the face of US tariffs and during the 70th anniversary of the Revolution.

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FX Daily, April 16: The Dollar and Stocks Catch a Bid

Amid light news, global equities are moving higher In Asia, the Nikkei rose to a new high since early December, while the Shanghai Composite rose 2.3% and posted its highest close since March 2018. European equities are solid, with the Dow Jones Stoxx 600 moving higher for the fifth consecutive session.

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FX Daily, April 15: Redemption Monday

The holiday-shortened week is off to a slow, tentative start. The surge of the S&P 500 before the weekend failed to inspire today. Asia markets were mostly firmer, led by Japan, while China, Hong Kong, and Singapore moved lower.

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FX Weekly Preview: Dollar Super Cycle Revisited

In the big picture, we argue that the dollar’s appreciation is part of the third significant dollar rally since the end of Bretton Woods. The first was the Reagan-Volcker dollar rally, spurred by a policy mix of tight monetary and loose fiscal policies.

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FX Daily, April 12: Euro Bid Above $1.13 for the First Time this Month

Overview:  The consolidative week in the capital markets is drawing to a close.  Equity markets are narrowly mixed.  In Asia, most indices outside of the greater China (China, Taiwan, and Hong Kong) edged higher, leaving the MSCI Asia Pacific Index slightly lower on the week.  The MSCI Emerging Markets Index snapped a ten-day rally yesterday and is little changed so far today. 

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FX Daily, April 11: Market Yawns at Latest Brexit Extension

The S&P 500 closed higher yesterday for the ninth session in the past ten, but the coattails are short and global equities are trading with a heavier bias today. A firm CPI reading in China took a toll local shares with the Shanghai Composite, shedding 1.6%, the most in more than two weeks. European bourses are mostly in the red.

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FX Daily, April 05: Trade Talk and German Industrial Output Lifts Sentiment

Overview:  Comments by Chinese President Xi, recognizing substantial progress in trade, helped boost sentiment after the US-China negotiators failed to set a date for the meeting between the two presidents.  Although we have argued that the German economy may be past the worst, the sharp drop in factory orders spooked investors.

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FX Daily, April 04: Limited Price Action Does not Do Justice to Macro Developments

Overview: The global capital markets are subdued despite several macro developments.  The US and China may announce as early as today when the two presidents will meet to ostensibly sign a trade deal, while House of Commons effort to block a no-deal exit goes to the House of Lords today.  India cut interest rates by 25 bp, the second consecutive cut. 

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FX Daily, April 03: Optimism Sweeps Through the Capital Markets

Overview: Japan announced the name of the new era that begins May 1 and a new emperor.  The connotation is of beautiful harmony.  And investors have taken the bit and run with it.  Optimism that the US and China near reaching an agreement on trade. China and Europe have reported better than expected PMIs today. 

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FX Daily, April 02: Herding Cats

After surging yesterday, equities are struggling to maintain the momentum that carried that S&P 500 to its best level since last October. Most Asia Pacific equity markets advanced. Japan's small losses were a notable exception. The Dow Jones Stoxx 600 has advanced in four of the last five sessions and is little changed, while US shares are trading with a heavier bias.

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April Monthly Currency Outlook

Poor economic data and soft inflation saw several central banks, including the Federal Reserve and European Central Bank, take a dovish turn in March. Contrary to expectations that interest rates would rise as the G3 central banks were no longer adding to their balance sheets on a combined basis.

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FX Daily, April 01: China Reanimates the Animal Spirits, While Europe Finds New Ways to Disappoint

Overview:  Better than expected German retail sales ad employments reports at the end of last week has been followed by gains in China's official PMI  and Caixin's manufacturing reading. However, the spillover from China was limited in Asia.  Japan's Tankan survey and outlook disappointed and South Korea's exports and imports were weaker than expected. 

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FX Daily, March 29: Equities Bounce While Bonds Pullback to End Q1

The global growth scare may be subsiding. It had been fanned by the ECB and Fed statements and projections. Poor US jobs growth reported in early March and the poor flash EMU PMI late in the month contributed.  The slowdown in China and the flurry of measures to combat it also had a role.

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FX Daily, March 28: Brexit Uncertainty Deepens as Parliament is Divided, while Turkey’s Short Squeeze Falters

The lurch lower in global interest rates continue. The US 10-year yield is at new 15-month lows, five basis points through the average effective Fed funds rate. Late yesterday, it appeared that 10-year German Bund yields slipped below similar Japanese government bond yields for the first time since Q4 16, but when the JGB market opened, it the 10-year JGB yield fell a couple more basis points to minus 10, the most negative since August 2016.

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FX Daily, March 27: Global Bond Rally Continues, Greenback Remains Firm

Overview: The US 10-year yield is trading below the Fed funds target. The two-year yield is trading below the lower end of the Fed funds target range. A warning by New Zealand that the next rate move could be a cut sent New Zealand and Australian yields to new record lows. In Japan, the 10-year yield slipped below the overnight unsecured call rate.

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FX Daily, March 26: Semblance of Stability Re-Emerging

Overview:  The sell-off in equities seemed to peak yesterday, and US indices were narrowly mixed. Traders found comfort in that performance, even though the S&P 500 finished a little below 2800, and took the markets in the Asia-Pacific region higher, except in China, where the Shanghai Composite fell 1.5%. 

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FOMC: Above Trend Growth Requires Continued Monetary Support

The Federal Reserve sounded more dovish than many expected and this prompted a 5-7 bp drop in US rates, and the dollar fell to new lows for the week against many of the major currencies.  The median Fed forecast now anticipates no hike this year but one next year.  The Fed will also taper the roll-off of its balance sheet and completing it by the end of September.

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FX Daily, March 22: Dreadful EMU PMI and US Machinations Rival Brexit for Attention

Overview:  The S&P 500 recovered from the post-FOMC reversal to close a new 5-month high yesterday, led by technology.  Financials were the only main sector to retreat.  The large equity markets in Asia, Japan, China, Australia, South Korea, and Taiwan all advanced.  Europe's Dow Jones Stoxx 600 reversed its initial gains and is nursing a small loss on the week.

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