Tag Archive: Japan
Sharp Fall in US Yields ahead of Large Supply
Overview: The market continues to monitor
developments in Israel and the Middle East. The economic calendar is light
today and the market is showing a strong appetite for risk. Except for China
and South Korea, large bourses in the Asia Pacific rallied. Japan's indices
jumped more than 2% and Australia by 1% to lead the region. Europe's Stoxx 600
is up 1.5% near midday, which, if sustained would be the largest in nearly a
month. US index futures...
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War in Israel Spurs Flight to Dollars, Yen and Gold, While Driving up the Price of Oil
Overview: There are three main developments. First,
the market is digesting the implication of the US employment data, where the
optics were strong (336k increase in nonfarm payrolls compared with 170k median
forecast in Bloomberg and Dow Jones surveys) but some details were
disappointing (like the third consecutive decline in full-time posts,
seasonally adjusted). Second, Chinese mainland market re-opened after a six-day
holiday). Chinese stocks...
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US Employment Data to Determine Whether the Greenback’s Rally since mid-July is Over…Maybe
Overview: One key issue for market participants is
if the dollar's pullback is the beginning of something important or is largely
position adjusting ahead of today's US jobs report. We suspect that the
dollar's rally that began in mid-July is over, though a strong employment
report that boosts the chances of a Fed hike before year-end could quickly
demonstrate the folly of making claims ahead of what is still one of the most
important reports in...
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Strategic Ambiguity Leaves Intervention Question Unanswered, but US Dollar has Steadied
Overview: Dramatic yen price action around the JOLTS
report yesterday after the dollar pierced the JPY150 level spurred speculation
of BOJ intervention. Although there has been no confirmation, the strategic
ambiguity is helping steady the yen and the dollar more broadly today, even
though US yields remain firm. Final PMI readings were a better than the flash
estimates and this may also be facilitating the consolidative tone. Most
promising, from a...
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US Yields and Dollar Rise After US Government Closure Averted
Overview: The US avoided a government shutdown,
barely, and this eased one of the headwinds that were anticipated. In turn,
this is spurring new gains in US interest rates and helping underpin the dollar
at the start of the new quarter. The 10-year Treasury is holding above 4.60%
and nearing last week's high (4.68%). The two-year yield gapped higher and is
near 5.10%. The high from September 21 was almost 5.20%. The Swiss franc is the
only G10...
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Dollar Sets Back into Month- and Quarter-End Ahead of likely US Government Shutdown
Overview: The dollar's surge stalled yesterday, and
follow-through selling has pressed it lower against all the G10 currencies
today. The dollar-bloc and Scandis are leading the move. Month-end, quarter-end
pressures, coupled with a likely partial shutdown of the government beginning
Monday, and after key chart levels were approached or violated earlier this week,
serving as a bit a cathartic event. The Swiss franc snapped a 12-day losing
streak...
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Looming US Government Shutdown Stems the Dollar’s Surge
Overview: The increasingly likely partial US federal
government shutdown has spurred a bout of liquidation of long dollar positions.
The psychologically important JPY150 level was approached, and the euro was
sold through $1.05 yesterday, and the greenback has come back better offered
today. It is lower against all the G10 currencies. It is mixed against the
emerging market currency complex, with central European currencies and South
African rand...
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Firmer Bonds and Stocks, but the Dollar Presses Ahead
Overview: The S&P 500 hit three-month lows
yesterday, while the Conference Board's measure of consumer confidence fell to
a four-month low. New home sales fell to their lowest level in five years. The
US federal government appears headed for a partial shutdown on October 1. Still,
the greenback rides high. It is extending its gains against several G10
currencies, including the euro and sterling. The Swiss franc is moving lower
for the 12th...
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Dollar Edges to New High for the Year against the Japanese Yen, While Developer Woes Hit Chinese Stocks and Yuan
Overview: The US dollar begins the new week on a
firm note. It is trading at new highs for the year against the Japanese yen and
is bid against nearly all the G10 currencies, though the Swedish krona and
Canadian dollar are resisting the greenback's push. Most emerging market
currencies are heavier, with the Polish zloty and a few East Asian currencies
holding their own. Gold is trading with a heavier bias near $1922, but within
the ranges seen at...
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Yen Drops After BOJ Does Nothing and Says Little
Overview: The BOJ's failure to do anything or
further ideas that an exit of the negative target rate, despite the firm CPI
report helped the dollar recover the ground lost yesterday against the yen. The
focus has returned to "intervention watch" and the market continues
to press for the official pain threshold. Sterling is the weakest of the G10
currencies, off another 0.5% today following the BOE's decision not to hike
yesterday. The...
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Higher for Longer Lifts the Dollar, while SNB Surprises Many by Standing Pat–Over to the BOE
Overview: The Federal Reserve's hawkish hold, which
included 50 bp less of cuts next year than it had signaled in June, has lifted
the dollar against most currencies today. The notable exception is the Japanese
yen. The greenback did extend its advance to new highs for the year before the
market turned cautious ahead of the outcome of the Bank of Japan meeting
tomorrow. The Swiss franc is the weakest of the G10 currencies after the Swiss
National...
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Softer UK CPI Weighs on Sterling and Lifts Gilts, while Yen Slumps to New Low for the Year, Ahead of the FOMC
Overview: Softer than expected UK CPI has drawn
attention ahead of the key event of the day, the FOMC meeting. The UK's CPI has
spurred a dramatic rally in Gilts and saw sterling initially extend its recent
losses, falling to new four-month lows before stabilizing. The swaps market
sees less than a 50% chance of a hike by the Bank of England tomorrow. Meanwhile,
even though US Treasury Secretary Yellen suggested conditions in which
intervention by...
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The Canadian Dollar Shines in a Mostly Consolidative FX Market Ahead of the Flurry of Central Bank Meetings
Overview: Ahead of the flurry of central bank
meetings, starting with the Federal Reserve and Brazil tomorrow, the dollar is
largely consolidating in narrow ranges. The euro, sterling, and yen are trading
slightly heavier, while the dollar bloc and Scandis enjoy a firmer bias. The
Canadian dollar stands out as is trades at its best level since mid-August
ahead of its CPI report and despite a diplomatic dispute with India and the
failure of...
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Calm Before the Storm: Greenback Confined to Narrow Ranges
Overview: With
many central bank meetings in the days ahead, the dollar has begun the new week
on a quietly and mostly in tight ranges, helped by a holiday in Tokyo. G10
currencies, outside of the Scandis are slightly firmer in European turnover.
Emerging market currencies are narrowly mixed, but of note the 0.25% decline
makes the Chinese yuan the weakest. The Mexican peso is extending its recovery
into the seventh consecutive session.
While...
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Heightened Speculation of an ECB Hike Tomorrow Fails to Lend the Euro Support
Overview: The US dollar is trading with a
firmer bias against all the G10 currencies ahead today's August US CPI report. Even
increased speculation that the ECB will hike rates tomorrow has failed to lift
the euro, while a larger than expected contraction in the UK's July GDP pushed
sterling briefly through last week's lows. The dollar rose to a marginal new
high for the week against the Japanese yen, as the market seemed uninspired by
the cabinet...
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Yuan Sulks in to the Weekend, While Finishing Touches are Put on the Dollar Index’s Eighth Consecutive Weekly Gain
Overview: The greenback is lower against most
currencies today as it consolidates ahead of the weekend. The Dollar Index's
eight-week advance is the longest since a 12-week rally 2014. The Chinese yuan
is an exception. Its losses were extended today. Against the offshore yuan, the
dollar traded above the onshore band, which is most often respected. Equities
ae extending this week's slump. All the large bourses in the Asia Pacific
region but India...
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Battle for $1.07 in the Euro
Overview: Despite disappointing German
industrial output, where the 0.8% decline was twice expectations, the euro is
holding above $1.07, where large options exist that are expiring over the next
few sessions. The greenback is consolidating against the Japanese yen, where
the fear of intervention has increased. Sterling remains on its back foot after
yesterday's seemingly dovish comments by Bank of England Governor Bailey. Emerging
market...
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US Dollar Punches Higher
Overview: Disappointing
data in Asia and Europe has sent the greenback broadly higher. The strong gains
posted before the weekend were mostly consolidated yesterday when the US and
Canadian markets were on holiday. The rally resumed today. The Antipodeans and
Scandis have been hit the hardest (-0.7% to -1.25%) but all the G10 currencies
are down. The Swiss franc and yen are off the least (-0.35%-0.45%), and the
euro and sterling have taken out...
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China’s Measures Begin to Find Traction, US Employment Report on Tap
Overview: Beijing's seemingly steady stream of
measures to support the economy and steady the yuan are beginning to produce
the desired effect. The yuan is snapping a four-week decline and the CSI 300
halted a three-week drop. Some economists estimate that the bevy of measures
may be worth as much as 1% for GDP. The dollar is narrowly mixed ahead of the
US employment data, which is expected to see the pace of job growth slow to
around 170k. Of...
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Position Squaring Ahead of US Data Helps the Dollar Recoup Some Recent Losses
Overview: Position-squaring ahead of today's US
personal consumption data and perhaps tomorrow's jobs report is giving the
dollar a firmer profile against most G10 and emerging market currencies. The
Scandis have been the hit hardest and are off 0.75%-0.85%. The euro and
sterling about 0.35%-0.45% lower. The yen is the only G10 currency that is
slightly firmer. The dollar-bloc is nursing small losses (0.10%-0.15%). Despite
the firmer than expected...
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