Tag Archive: #USD

Aussie Hit with Profit-Taking after RBA Hikes 50 bp

2022-08-02

by

2022-08-02

Speaker Pelosi's visit to Taiwan has added to the risk-off mood of the capital markets today. Most of the large Asia Pacific equities sold off, with Australia and India being notable exceptions. Europe's Stoxx 600 is off for the second consecutive session, and by the most (~0.60%) since mid-July. US futures are also weaker. Benchmark 10-year rates are lower.

Read More »

Yen Squeeze Continues

2022-08-01

by

2022-08-01

The US dollar begins the new month better offered. It is softer against all the major currencies. Short yen positions continue to get unwound, which is leading the move, followed  by the Antipodeans, where the Reserve Bank of Australia is expected to hike rates tomorrow.

Read More »

Macro and Prices

2022-07-31

by

2022-07-31

Next week, there are three big events:  the US jobs report, the Reserve Bank of Australia meeting, and the Bank of England's meeting. That said, the final PMI readings may be more helpful this time than we often see because of how quickly it appears activity has stalled.

Read More »

EMU GDP Surprises, while the Yen’s Short Squeeze Continues

2022-07-29

by

2022-07-29

Overview: The month-end and slew of data is making for a volatile foreign exchange session, while the rash of earnings has generally been seen as favorable though weakness was seen among the semiconductor chip fabricators. China, Hong Kong, and Japanese equities fell but the other large markets in the region rose.

Read More »

Attention Turns to US GDP, Ahead of Tomorrow’s EMU GDP and CPI

2022-07-28

by

2022-07-28

Overview: The Federal Reserve delivered its second consecutive 75 bp rate hike, and Chair Powell left the door open for another large hike at the next meeting in September. Yet, the market took away a dovish message and the dollar suffered, rates slipped, and equities rallied.

Read More »

Fed Day

2022-07-27

by

2022-07-27

Overview: Better US news from the likes of Google, Microsoft, and Texas Instruments has helped lift sentiment today and is encouraging a more risk-on mood ahead of the FOMC meeting. News that US President Biden and China’s Xi will talk tomorrow for the second time this year may be notable but does not appear to be impactful in the capital markets.

Read More »

Greenback Jumps Back

2022-07-26

by

2022-07-26

Overview: With the exception of Japan, Taiwan, and India, the large equity markets in the Asia Pacific region traded higher today. The Hang Seng led the move (1.65%) amid reports that Alibaba will seek its primary listing there. Europe’s Stoxx 600 is edging higher today. If it can hold on to the gains, it will be the fourth consecutive rise, the longest advance since May. US futures are slightly under water. Benchmark 10-year yields are mostly...

Read More »

Greenback Softens, but Think Twice about Chasing It

2022-07-25

by

2022-07-25

Overview: Aside from political economic risks, three other challenges are emerging. First, the new sub-variant of Covid is spreading rapidly. BA5 reportedly is accounting for around 80% of the new cases. It is better able to evade antibodies from vaccines and earlier infections. Hospitalization rates are also climbing. Dining, retail, and travel may be impacted. Second, the World Health Organization declared monkeypox a global emergency. The US...

Read More »

Momentum Indicators Warn of Further Dollar Weakness, but will Sellers Emerge ahead of the FOMC?

2022-07-24

by

2022-07-24

The dollar fell against all the major currencies last week but pared the losses ahead of the weekend. The sub-50 EMU flash composite PMI unwound the half-cent gain the euro recorded after the ECB delivered a 50 bp hike to kick off its first tightening since 2011.  

Read More »

The Fed and GDP: Week Ahead

2022-07-23

by

2022-07-23

The outcome of the Federal Reserve Open Market Committee meeting on July 27 is the most important event in the last week of July. After a brief flirtation with a 100 bp hike after the June CPI accelerated, the market has settled back to a 75 bp move. The Fed funds futures are pricing about a 10% chance of a 100 bp hike. The market anticipates that after the second 75 bp hike, the Fed will most likely return to a 50 bp hike in September.  Fed...

Read More »

Dismal EMU Flash PMI on Heels of First ECB Rate Hike since 2011

2022-07-22

by

2022-07-22

Overview:  The euro is over a cent lower from yesterday’s peak, pressured by the drop in the flash PMI composite below 50 for the first time since early last year. More generally, the flash PMIs have shown the global economic momentum is waning, and the bond markets have responded accordingly. The US 10-year yield is flirting with 2.80%, its lowest level in more than two weeks. European yields are 15-20 bp lower and the spread between Italian and...

Read More »

Italian Politics Complicate the ECB’s Task

2022-07-21

by

2022-07-21

The appetite for risk seen earlier this week is fading. Yesterday’s US equity gains helped lift most of the large markets in the Asia Pacific region, but China’s CSI 300 fell 1.1%, giving back most of this week’s gains as credit issues from the property sector haunt sentiment.

Read More »

Calm before the Storm?

2022-07-20

by

2022-07-20

The biggest rally in the S&P 500 in three weeks helped lift global equities today. The MSCI Asia Pacific index rose for the third consecutive session, the longest streak this month. Europe’s Stoxx 600 is up for a fourth day and is at its best level since mid-June.

Read More »

The Dollar is on its Back Foot

2022-07-19

by

2022-07-19

The dollar’s downside correction continues today, helped by hawkish signals from the Reserve Bank of Australia and unnamed sources who have played up the chances of a 50 bp hike by the European Central Bank on Thursday.

Read More »

Is the Dollar Tired? Did Fed Frenzy Peak? A Look at the FX Price Action

2022-07-17

by

2022-07-17

The price exchange in the foreign exchange market was a story separate from the macro developments. The euro traded below parity for the first time since 2002. The yen fell to its lowest level against the dollar in 22 years.

Read More »

Market Prices in More Aggressive Fed AND is more Confident of Rate Cuts by the End 2023

2022-07-14

by

2022-07-14

Overview: The higher-than-expected US CPI and the strong expectation of a 100 bp hike by the Fed in two weeks is propelling the dollar higher.

Read More »

Euro Parity Holds ahead of US CPI

2022-07-13

by

2022-07-13

Overview: The US dollar is consolidating with a slight downside bias ahead of the June CPI report. The euro held above $1.00 but is still pinned in the trough. The rate hike by the Reserve Bank of New Zealand failed to have much impact.

Read More »

Euro Tests Parity

2022-07-12

by

2022-07-12

Equities remain under pressure as investors contemplate tighter financial conditions and the risks of recession. Most of the large equity markets in the Asia Pacific region sold-off, led by a 2.7% drop in Taiwan.

Read More »

Monday Blues

2022-07-11

by

2022-07-11

Overview:  The US dollar is bid against most currencies today, encouraged not just by good news in the US and poor news out of China, where Covid is flaring up and new social restrictions are fared, while Macau has been lockdown for a week.

Read More »

Pendulum of Sentiment Swings Back against Imminent Recession Fears Despite Curve Inversion

2022-07-10

by

2022-07-10

High political drama in recent days included the assassination of former Japanese Prime Minister Abe and the resignation of UK Prime Minister Johnson. Yet, the capital markets in general, and the currency market in particular, were not roiled.

Read More »