Tag Archive: EU

Dollar Slips but Dip may Offer New Opportunity

Overview: The US dollar is offered today. It is trading softer against all the G10 currencies, with the yen the notable exception, and it is flat. The Antipodean are leading the way, taking out last week's highs, as has the euro. That said, the intraday momentum indicators are stretched as NY dealers return from the long holiday weekend. The Scandis are also trading above last week's highs. The yen, sterling, Canadian dollar, and Swiss franc are...

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US Tech Sell-Off Challenges Risk Appetites Ahead of the FOMC

Overview: Ahead of the US Treasury's quarterly refunding announcement and the outcome of the FOMC meeting, the dollar is trading higher against all the G10 currencies. With US high-flying tech stocks posting steep losses after disappointing earnings reports, the currencies most sensitive to risk-appetites, the dollar bloc and the Norwegian krone are the weakest. Emerging market currencies are mixed. The South African rand, Philippine peso, and...

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BOJ Speculation Unwound, Taking the Yen Lower

Overview: The busy week of central bank meetings is off to a mostly slow start. The dollar is narrowly mixed in quiet turnover, except against the Japanese yen. Many participants seemed to exaggerate the risks of a BOJ move next week and dollar continued its recovery that began ahead of the weekend. Among emerging market currencies, central European currencies appear to be aided by the firmer euro. They are resisting the dollar's advance seen...

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Dollar Sell-Off is Getting Stretched

Overview: Softer-than-expected US CPI, following weaker than expected job growth has sent the greenback tumbling. The dollar is stabilizing against the yen today, but the downside momentum is intact against the other major currencies. The euro approached $1.1175, sterling $1.3080, and the greenback slumped to almost CHF0.8615. The Australian dollar reached $0.6850, and the New Zealand dollar tested $0.6360. The Canadian dollar, often a laggard in a...

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The Dollar Reverses Early Gains

Overview:  The debt ceiling drama is not over. The agreement between the negotiating teams of President Biden and House Speaker McCarthy sets the stage for the next act in the drama: each side must deliver the votes. A preliminary vote today in the House of Representatives is likely today ahead of floor vote tomorrow. Still, the market is optimistic, and risk is favored. Asia Pacific bourses were mixed today. We note that the chip sector helped...

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The Extended Holiday Makes for Subdued Price Action

Overview: The holiday continues. In the Asia Pacific region, Hong Kong, Australia, and New Zealand, and the Philippines markets were closed. The regional bourses advanced but China.  European markets remain closed. US equity futures are narrowly mixed. The 10-year US Treasury yield is off nearly three basis points to about 3.36%. The dollar is trading quietly mostly within ranges seen before the weekend. It is slightly softer against most of the...

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Monday: A Short Note while US is on Holiday

The dollar is mostly softer, but turnover is mostly quiet.  The Swedish krona leads the move after higher-than-expected underlying inflation.  It is a mild risk-on day with equities moving higher too.  In the Asia Pacific region, China stood with the CSI 300 up almost 2.5%.  Europe’s Stoxx 600 is up fractionally to recoup most of the pre-weekend decline.  US equity futures are narrowly mixed.  European bond yields are little changed, with a couple...

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Greenback Extends Recovery

Overview: The honeymoon for risk assets that began the year ended with a bang at the end of last week with the monster US jobs report and the rebound in the service ISM. Disappointing news from several large US tech companies provided extra encouragement. The yen's weakness helped Japanese stocks today, but the other larger bourses in the Asia Pacific area were sold, with losses in Hong Kong, the CSI 300, South Korea, and Taiwan off more than 1%....

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Subdued Ending to a Quiet Week, Ahead of Next Week’s Fireworks

Overview: Leaving aside the Australian dollar, which is benefiting from the optimism over China's re-opening and a reassessment of the trajectory of monetary policy after a stronger than expected inflation report, the other G10 currencies traded quietly this week and are +/- less than 0.5%. The risk-on honeymoon to start the year remains intact. The MSCI Asia Pacific Index has risen every day this week and index of mainland shares that trade in...

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Political Developments Overshadow Economics

Overview: There is nervous calm in the capital markets today.  The weakness of US shares yesterday is taking a toll today. An exception in the Asia Pacific region is the Hang Seng and the index of mainland shares that trade there, which up around 3.5% today on thUe easing of some Covid protocols.  Europe’s Stoxx 600 is off for a fifth day, its longest losing streak in nearly two months. US futures are posting minor gains. Benchmark 10-year yields...

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Yesterday’s Dollar Recovery Questioned Today

Overview: The 11 bp jump in the 10-year US yield yesterday after dropping nearly 26 bp in the previous three sessions, helped the greenback recover and took a toll on stocks. Still, the S&P 500 is above the low set on November 30 (~3939) before Fed Chair Powell's talk that day.

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Week Ahead: Focus Shifts away from the US after Robust Jobs Data and Stronger than Expected Inflation

The latest US employment and inflation figures are passed. The market is confident of a 75 bp rate hike next month. While a 50 bp in December is still the odds-on favorite, the market has a slight chance (~15%) of a 100 bp move instead after the robust jobs report and stronger-than-expected September CPI.

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Bank of England Steps in to Buy Inflation-Linked Bonds for the First Time

Overview:  The dollar continues to ride high. It reached its highest level against the yen since the recent intervention. The Canadian dollar has fallen to its lowest level in two-and-a-half years and the New Zealand dollar is approaching the 2020 extreme.

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Dollar Slump Halted as Stocks and Bonds Retreat

Overview: Hopes that the global tightening cycle is entering its last phase supplied the fodder for a continued dramatic rally in equities and bonds. The euro traded at par for the first time in two weeks, while sterling reached almost $1.1490, its highest since September 15.

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Can the US Employment Report be Anti-Climactic Ahead of Long North American Weekend?

Overview:  Nothing is decisive, but the recent string of data pushes the needle a little more to a soft landing for the US economy and gave the US dollar another leg up. The risk is that some of the buying drained some of the interest that may materialize after today's US jobs report. The greenback is softer against the major currencies except the Japanese yen. The dollar is extending its rally against the yen for the sixth consecutive session and...

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EU plant Einführung eines speziellen Crypto-Regulators

Wie genau dieser Regulator aussehen wird, ist noch nicht im Detail bekannt. Derzeit sprechen Offizielle lediglich von einem „Regulatory Body“, der Autorität über den Crypto-Sektor haben wird. Es ist jedoch anzunehmen, dass damit eine neue staatliche Organisation kreiert werden wird. Crypto News: EU plant Einführung eines speziellen Crypto-RegulatorsDamit kommt es zur Einführung einer sechsten Autorität des Finanzsektors, die das Ziel verfolgt,...

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Greenback Softens, but Think Twice about Chasing It

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...

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The Greenback Bounces Back

Overview: After modest US equity gains yesterday, the weaker yen and Beijing’s approval of 60 new video games helped lift most of the large markets in the Asia Pacific region.

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Greenback Softens Ahead of CPI

Overview: It appears that investors have become more concerned about growth prospects and less about inflation in recent days. The US 10-year yield that had flirted with 3.20% at the start of the week is now around 2.93%.

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Inflation and Geopolitics in the Week Ahead

The Omicron variant may be less fatal than the earlier versions, but it is disrupting economies. The surge in the Delta variant well into Q4 in the US and Europe was already slowing the recoveries.  Investors will likely take the high-frequency real sector data with the proverbial pinch of salt until January data available beginning later this month.

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