Tag Archive: #USD

Risk Assets Given a Reprieve

2022-03-09

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2022-03-09

Overview: US equities failed to sustain early gains yesterday, but risk appetites have returned today.  Asia Pacific equities had a poor start, with Chinese and Japanese indices losing ground, but the equity benchmarks in Taiwan, Australia, India, and most of the smaller markets traded higher.  Taiwan's 1.1% gain is notable as foreign investors continued to be heavy sellers. 

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Vladimir Nogoodnik Roils Markets

2022-03-07

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2022-03-07

Overview:  The economic disruption seen since the US warning of an imminent Russian attack on February 11 continue to ripple through the capital and commodity markets.  Equities are being slammed.  Most Asia Pacific bourses were off 2-3% today. Europe's Stoxx 600 gapped lower ad has approached February 2021 levels, orr about 2.6% today.  US futures are around 1.5% lower.

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Capital and Commodity Markets Strain

2022-03-04

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2022-03-04

Overview:  The capital and commodity markets are becoming less orderly.  The scramble for dollars is pressuring the cross-currency basis swaps.  Volatility is racing higher in bond and stock markets.  The industrial metals and other supplies, and foodstuffs that Russia and Ukraine are important providers have skyrocketed.  Large Asia Pacific equity markets, including Japan, Hong Kong, China, and Taiwan fell by 1%-2%, while South Korea, Australia,...

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European Currencies Continue to Bear the Brunt

2022-03-03

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2022-03-03

Overview: Russia's invasion of Ukraine and the global response is a game-changer, as Fed Chair Powell told Congress yesterday.  The UK-based research group NISER estimated that world output will be cut by 1% next year or $1 trillion, and global inflation will be boosted by three percentage points this year and two next. 

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The Dollar and Yen’s Safe Haven Appeal Slackens

2022-02-27

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2022-02-27

Russia's invasion of Ukraine overwhelmed other drivers of the foreign exchange market.  When everything was said and done last week, the odds of a 50 bp hike by the Federal Reserve in the middle of March was little changed slightly above 25%. The odds of a 50 bp hike by the Bank of England have been reduced from a little over 60% before the US government's warning that a Russian attack could happen at any time on February 10 to 36% on February 18. 

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Russia’s Military Action Shakes Markets

2022-02-24

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2022-02-24

Overview: News that the separatists were calling on Moscow for military assistance began the risk-off move, and Russia hitting targets across Ukraine has rippled across the capital markets.  Equites have been upended.  Most bourses in the Asia Pacific region were off 2%-3%, while the Stoxx 600 in Europe gapped lower and is off around 3.5% in late morning dealings. 

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FX Daily, January 26: Federal Reserve and Bank of Canada Meet as Risk Appetites Stabilize

2022-01-26

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2022-01-26

After a slow and mixed start in Asia, where Australia and India are on holiday, equity markets have turned higher.  Europe's Stoxx 600 is up around 1.9% near midday in Europe, which if sustained would be the biggest gain of the year.  US futures are snapping backing too, with the S&P 500 popping more than  1% and NASDAQ by 2%. 

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FX Daily, January 17: PBOC Eases, but the Yuan Firms

2022-01-17

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2022-01-17

EUR/CHF and USD/CHF, January 17
Overview: Russia is thought to be behind the cyber-attack on Ukraine at the end of last week, but a military attack over the weekend may be underpinning risk appetites today.  The dollar's pre-weekend gains are being pared slightly.  Led by the Canadian dollar and Norwegian krone, the greenback is lower against most major currencies, with the yen being the notable exception, which is off about 0.2%.

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Is the Dollar Due for a Bounce?

2022-01-16

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2022-01-16

The US dollar had one of its worst weeks in a few months.  Although there has been some talk about the historical pattern of weakness after the first Fed hike in a cycle, many participants were surprised.  The dollar struggled in the last couple of weeks of 2021, but this seemed to be explained by year-end position squaring amid light interest.

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How the Market Responds to US CPI may set the Near-Term Course

2022-01-12

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2022-01-12

Overview:  US stocks built on the recovery started on Monday and Powell's suggestion of letting the balance sheet shrink later this year eased some speculation of a fourth hike this year, which seemed to allow the Treasury market to stabilize. 

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The Chagrin of Beijing and the Problem of Time

2021-12-19

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2021-12-19

The central bank meeting cycle is over. Most of the important high-frequency data has been released until early January. The US debt ceiling has been lifted, avoiding an improbable default. A year ago, there was a sense of optimism, with a couple of vaccines being announced and monetary and fiscal stimulus boosting risk-appetites. Populism, which had been in the ascendancy after the Great Financial Crisis, seemed to be retreating in Europe and the...

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Bulls Shrug Off Bout of Profit-Taking, Leaving the Greenback Poised to Rally into Year-End

2021-12-19

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2021-12-19

(The regular analysis will resume after the New Year.  In the meantime, look for several occasional thematic posts over the next couple of weeks.  Here is to a healthy and happy New Year!).  The dollar recovered from the bout of profit-taking seen after the FOMC largely confirmed market expectations to post a weekly advance against all the major and most emerging market currencies.  The omicron variant continues to sweep across the world, and...

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The Week Winds Down with Equities under Pressure and the Dollar Mostly Firmer

2021-12-17

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2021-12-17

Overview: The combination of the volatility and a large number of central bank meetings have exhausted market participants, and the holiday phase appears to have begun. Equities are under pressure following the sell-off yesterday in the US. Japan, China, and Hong Kong suffered more than 1.2% losses, while Australia, South Korea, and Taiwan posted minor gains. It was the fifth loss in the past six sessions for the MSCI Asia Pacific Index. Europe's...

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Fed Unleashes Animal Spirits

2021-12-16

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2021-12-16

Overview:  The Fed's hawkish pivot came a few weeks before yesterday's FOMC meeting, which confirmed more or less what the market had already largely anticipated. Buy the (dollar) on rumors (of tapering and more aggressive stance on rates) and sell the fact unfolded, and unleashed the risk-appetites which rippled through the capital markets. US stocks rallied yesterday, and the futures point to a gap higher opening today. Large Asia Pacific...

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Has the Market Carried the Fed’s Water? Is the Dollar Vulnerable to Buy the Rumor and Sell the Fact?

2021-12-15

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2021-12-15

Overview: The US dollar is trading with a bit of heavier bias against most of the major currencies as the focus turns to today's FOMC meeting, where a clear consensus has emerged in favor of faster tapering and a dot plot pointing to a steeper pace rate hikes.  Emerging market currencies led by Turkey and South Africa are mostly lower. The JP Morgan Emerging Market Currency Index is lower for the third straight session.  The US 10-year Treasury...

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No Turnaround Tuesday for Equities?

2021-12-14

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2021-12-14

Overview:  Activity in the capital markets is subdued today, ahead of tomorrow's FOMC meeting conclusion and the ECB meeting on Thursday.  The MSCI Asia Pacific equity index fell for the third consecutive session.  European bourses are heavy after the Stoxx 600 posted an outside down day yesterday. Today would be the fifth consecutive decline. Selling pressure on the US futures indices continues after yesterday's losses.  Australia and New Zealand...

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Dollar Starts the Week Bid ahead of the FOMC

2021-12-13

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2021-12-13

Overview: Equities, bonds, and the dollar begin the new week on a firm note.  Japanese, Chinese, Australian, and New Zealand equities advanced in the Asia Pacific region.  Europe's Stoxx 600 is snapping a three-day decline, and US futures are 0.25%-0.35% higher.  The US 10-year yield is a little softer at 1.48%. European benchmark yields are mostly 1-2 bp lower, and near 0.71%, the UK Gilt's yield is at a three-month low.  The dollar is rising...

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Can Dollar Bears Resist the Fed? Can Yuan Bulls Shrug-Off the PBOC?

2021-12-12

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2021-12-12

US yields and the dollar softened after the release of the November CPI figures before the weekend.  The data were in line with expectations showing the headline rate accelerated to 6.8% and the core rate to 4.9%.  The price action likely reflected positioning rather than a reassessment of the outlook for next week's FOMC meeting.  Nearly everyone recognizes the likelihood that the pace of tapering is quickened, and the individual forecasts reflect...

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Yuan Rises Despite China’s Move and the Fed’s Course is Set Regardless of Today’s CPI

2021-12-10

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2021-12-10

Overview:  After US equity indices posted their first loss of the week,  Asia Pacific and European equities fell.  While the MSCI Asia Pacific Index fell for the first time since Monday, Europe's Stoxx 600 is posting its third consecutive decline.  US futures are trading slightly firmer.  The US 10-year Treasury yield is up about 1.5 bp to 1.51%, which is about eight basis points higher than it settled last week when the sharp drop in equities saw...

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Markets Turn Cautious Ahead of Tomorrow’s US CPI

2021-12-09

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2021-12-09

Overview: The euro has come back offered after its seemingly inexplicable advance yesterday.  The dollar is firmer against most major currencies today, with the yen an exception after JPY114.00 held on yesterday's advance.  Most emerging market currencies are also softer, with a handful of smaller Asian currencies proving a bit resilient.  Most large bourses advance in the Asia Pacific region, except Japan and Australia.  Europe's Stoxx 600 is...

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