Wednesday , September 22 2021
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Marc Chandler

Marc Chandler

He has been covering the global capital markets in one fashion or another for more than 30 years, working at economic consulting firms and global investment banks. After 14 years as the global head of currency strategy for Brown Brothers Harriman, Chandler joined Bannockburn Global Forex, as a managing partner and chief markets strategist as of October 1, 2018.

Articles by Marc Chandler

Ever Grand

1 day ago

Overview: Coming into yesterday’s session, the S&P 500 had fallen in eight of the past ten sessions.  It closed on its lows before the weekend and gapped.  Nearly the stories in the press blamed China and the likely failure of one of its largest property developers, Evergrande.  Those that are prone to the sky-is-falling narratives refer to it as Lehman moment.  The S&P ‘s 2.7% decline yesterday was the largest in half of a year, and the VIX jumped to four-month highs. China, Taiwan, and South Korean markets remain closed today, but the Hang Seng stabilized, and although Evergrande fell further in Hong Kong, others in the property sector stabilized.  Japanese markets closed yesterday, played catch-up today, and the Topix fell 1.7%, and the Nikkei 225 was off

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Risk Appetites Didn’t Return from the Weekend

2 days ago

Overview: Investors’ mood did not improve over the weekend, and the lack of risk appetites are rippling through the capital markets today. Equities have tumbled, yields have backed off, and the dollar is well bid.  Hong Kong and Australia led the sell-off in the Asia Pacific region, off 3.3% and 2.1%, respectively. Regional losses may have been larger, but Japan, Chinese (mainland), and South Korea markets were on holiday. Europe’s Dow Jones Stoxx 600 is off 2%, the most in two months. US futures are pointing to opening losses of 1%+. The carnage is giving the bonds markets a bid. The US 10-year yield is off a couple of basis points, around 1.33%. Europe’s benchmarks are mostly 1-2 bp lower. The dollar is extending last week’s gains against nearly all the major

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The Dollar is Aided by Speculation of a Hawkish Fed, Will It Sell-off on the Fact or Disappointment?

3 days ago

The US dollar continued to trend higher last week, helped by the unexpectedly strong retail sales report.  Despite disappointing August jobs growth and the moderation in consumer prices, the Fed has no compelling reason not to move forward with plans to taper before the end of the year.  The Norwegian krone had been bid most of last week, ahead of the central bank’s likely rate hike next week, but it lost nearly 1% before the weekend. It was the second consecutive weekly decline. The Swiss franc, on the other hand, was the weakest of the majors, falling almost 1.6%.  The Swiss National Bank will lag behind the interest rate cycle, though deflation risks have diminished, and August CPI (EU harmonized) was the highest since April 2019.  The SNB meets the day before

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FX Daily, September 15: China Disappoints, but the Yuan Remains Strong

7 days ago

Swiss Franc
The Euro has fallen by 0.10% to 1.0849

EUR/CHF and USD/CHF, September 15(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com – Click to enlarge

FX Rates
Overview: The sixth decline of the S&P 500 in the past seven sessions set a negative tone for equity trading in the Asia Pacific region, and the poor Chinese data did not help matters. News that China’s troubled Evergrande would miss next week’s interest payment weighed on sentiment too. Only South Korea and India of the large markets in the region managed to escape unscathed, even as North Korea tested ballistic missiles for the second time in a week. European bourses have also eased, falling for the second consecutive session and six of the last seven. Meanwhile, US futures are posting

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Is it Really all about US CPI?

8 days ago

Overview: The markets are in a wait-and-see mode, it appears, ahead of the US CPI figures, as it absorbs bond supply from Europe and monitors the potential restructuring of China’s Evergrande. A new storm may hit US oil and gas in the Gulf before recovering from the past storm and helping to underpin prices. China and Hong Kong led the decliners in the mixed Asia Pacific session that saw the Nikkei post its highest close since 1990. South Korea, Taiwan, and Indian markets rose too. European shares are nursing small losses, and US futures are little changed. The US 10-year yield is first near 1.34%, while European yields are mostly 1-3 bp higher, with Italy outperforming. Germany, Italy, the Netherlands, and the EU’s “Next Generation” fund sell bonds today.  With

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How (Not) to Win Friends and Influence People

9 days ago

How (Not) to Win Friends and Influence People
Overview: There are two big themes in the capital markets today. The first is the ongoing push of the Chinese state into what was the private sector. Today’s actions involve breaking Ant’s lending arms into separate entities, with the state taking a stake. This weighed on Chinese shares and Hong Kong, where many are lists. On the other hand, Japanese markets extended their recent gains. The Nikkei, for example, is has fallen once in the past 10 sessions. South Korea and Australia’s markets rose, but the other major bourses in the region fell. On the other hand, there is, outside of Asia, an embracement of risk. Europe’s Dow Jones Stoxx 600 is snapping a three-day slide, while the US S&P 500 and Dow are poised to end

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Don’t Resist the Dollar’s Pull Ahead of the FOMC Meeting

9 days ago

The US dollar enjoyed a firmer bias last week despite the disappointing jobs growth reported on September 3.  The Norwegian krone was the only major currency that gained against the greenback.  Brent was less than a quarter of a dollar firmer, so the likelihood of the central bank raising rates later this month offers a more compelling explanation.  The Australian dollar was the weakest, even though the Reserve Bank of Australia signaled it would proceed with plans to reduce its bond purchases this month.  The JP Morgan Emerging Market Currency Index fell by nearly 0.5%, its first decline in three weeks.
The macro highlights are the rash of US and Chinese data.  For the US, the releases include CPI, retail sales, and industrial production.  For China, the data

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Don’t Make a Fetish Out of What may be a Minor Change in the Pace of ECB Bond Buying

13 days ago

Overview: Yesterday’s retreat in US indices was part of and helped further this bout of profit-taking. The MSCI Asia Pacific Index ended an eight-day advance yesterday and fell further today. Japanese indices, which had set multiyear highs, fell for the first time in nine sessions. Hong Kong led the regional slide with a 2.3% decline as China’s crackdown on the gaming industry continued. Some companies in this space were reportedly to enforce the limits on minors, remove “obscene and violent content” and other unhealthy tendencies, including the “worship of money” and “effeminacy.” The Dow Jones Stoxx 600 is off for the third consecutive session, which would be the longest downdraft in a couple of months. US futures are also trading heavily. The US 10-year yield

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The Greenback Continues to Claw Back Recent Losses

14 days ago

Overview:  The US dollar continues to pare its recent losses and is firm against most major currencies in what has the feel of a risk-off day.  The other funding currencies, yen and Swiss franc, are steady, while the euro is heavy but holding up better than the Scandis and dollar-bloc currencies.  Emerging market currencies are also lower, and the JP Morgan EM FX index is off for the third consecutive session.  The Chinese yuan’s insignificant gain of less than 0.15% puts it on the top of the emerging market currency complex.  After rising nearly five basis points yesterday, the US 10-year yield has come back a couple of basis points softer at 1.35%, while European yields are narrowly mixed.  Asia Pacific yields rose in what looked like a catch-up move.

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Risk Appetites Return from Holiday

August 23, 2021

[unable to retrieve full-text content]Overview: After an ugly week, market participants have returned with strong risk appetites.  Equities are rebounding, and the greenback is paring recent gains.  Bond yields are firm, as are commodities.  Asia Pacific equities got the ball rolling with more than 1% gains in several large markets, including Japan, China, Hong Kong, and Taiwan.

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Consolidative Mood Grips Markets

August 18, 2021

Overview:  The dollar is consolidating yesterday’s advance and is confined to fairly narrow ranges in quiet turnover.  Most of the major currencies are within 0.1% of yesterday’s close near midday in Europe. The $1.1700-level held in the euro.  Most emerging market currencies have edged a little higher.  Despite the largest fall in the US NASDAQ in three weeks and the largest fall in the S&P 500 in a month, the MSCI Asia Pacific Index rose for the first time in five sessions today, led by a nearly 1.2% gain in China’s CSI 300.  The Dow Jones Stoxx 600 in Europe and US futures indices are sporting small losses.  The US 10-year note yield is firm, around 1.27%, while European benchmarks are 1-2 bp softer.  The Reserve Bank of New Zealand, citing the lockdown, held

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FX Daily, August 17: Antipodeans and Sterling Bear Brunt of Greenback’s Gains

August 17, 2021

Swiss Franc
The Euro has fallen by 0.20% to 1.072

EUR/CHF and USD/CHF, August 17(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com – Click to enlarge

FX Rates
Overview: Concern about the economic impact of the virus and new efforts by China to curb “unfair” competition among online companies has triggered a dramatic response by investors. A lockdown in New Zealand and the Reserve Bank of Australia signaling it will respond if the economic fallout increases sent the Antipodean currencies sharply lower. New Zealand rates plunged 10 bp ahead of the RBNZ meeting later this week. Japan has also formally extended and expanded its formal state of emergency to September 12. Large equity markets in the Asia Pacific region fell, led by more than 2% losses in

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Dollar Rally Stalls on Softening Rates and Dramatic Drop in Consumer Confidence

August 16, 2021

Profit-taking on long dollar positions was seen ahead of the weekend.  The yield on the December 2022 Eurodollar futures slipped to finish unchanged on the week that saw CPI and PPI reports. The preliminary University of Michigan’s consumer confidence measure tumbled to its lowest level since 2011 as the delta variant flares, leading to new social restrictions and delays in the return to work in the US for many. The market appears to have fully discounted a Fed hike at the end of next year.  Although at the June FOMC meeting, two officials thought that two hikes by the end of 2022 would be appropriate, the market, investors seem reluctant to give countenance now.  This, coupled with the proximity of key support like $1.1700 in the euro, $0.7300 in the Australian

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Markets Look for Direction, Currencies in Narrow Ranges

August 12, 2021

Overview: The global capital markets are subdued today as investors wrestle with the rising virus, the shifting stance of several central banks, and a more tense geopolitical backdrop.  Equity markets are struggling today.  Most of the large bourses in the Asia Pacific region, including Japan, China, Hong Kong, and Taiwan, moved lower, and Europe’s Dow Jones Stoxx 600 threatens to snap an eight-session advance.  US futures are narrowly mixed.   The US 10-year yield that reached 1.37% yesterday is little changed near 1.35% today.  Asia Pacific yields fell 1-3 bp, and European yields are edging higher.  In the foreign exchange market, the Scandis are firmer, while the dollar bloc is softer. The euro, sterling, and yen are straddling unchanged levels.  Turkey is

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Rising Rates Underpin the Greenback

August 11, 2021

Overview: The US dollar remains firm ahead of the July CPI release, and even though Chicago Fed Evans demurred from the hawkish talk, the market is getting more comfortable with the idea of a rate hike next year.   The implied yield of the December 2022 Eurodollar futures is rising for the sixth consecutive session.  Most emerging market currencies are also under pressure.  The JP Morgan Emerging Market Currency Index edged up yesterday to snap a five-day drop but is resuming its decline today.  The US 10-year yield is near 1.37%, ahead of today’s auction, which is the highest level in nearly a month.  European benchmark yields are 2-4 bp higher.  Record highs in the S&P 500 and Dow Industrials yesterday had limited impact on activity in the Asia Pacific

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Gold’s Flash Crash and Limited Follow-Through Greenback Gains

August 9, 2021

Overview:  A flash crash saw gold drop more than $70 an ounce in early Asia. Silver was dragged lower too.  The precious metals have stabilized at lower levels, but it signals a rough adjustment to a higher interest rate environment as a hawkish BOE and strong US employment data suggest peak monetary stimulus is at hand.  The dollar is broadly mostly firmer against the major and emerging market currencies.  The JP Morgan Emerging Market Currency Index is lower for the fifth consecutive session, while the euro was sold to its lowest level in five months before stabilizing. Bonds in the Asia Pacific region sold off in the wake of the jump in US yields after the jobs report, but benchmark yields are 1-2 bp lower in Europe, and the US 10-year yield is a little softer

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The Greenback Reversed Higher in the Middle of Last Week and the Jobs Data Provided an Accelerant

August 9, 2021

The second consecutive monthly surge in US non-farm payrolls of more than 900k ensured that the five-week decline in the 10-year yield was over and sent the dollar to new highs for the week against most of the major currencies.  The two-year yield’s 2.5 basis point increase does not sound like much, but it is the largest increase in seven weeks and the second-largest increase since early April.  Against most of the major currencies, the dollar reversed higher in the middle of last week.  The follow-through buying on the back of the jobs report puts the greenback in a good position to re-challenge last month’s highs.  The combination of higher US rates and a broadly stronger dollar may not typically bode well for emerging market currencies. Indeed, the JP Morgan

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US Employment Data is Important but for the Millionth Time, Don’t Exaggerate It

August 6, 2021

Overview: Record high closes yesterday for the S&P 500 and NASDAQ have done little to help global equities today.  Most of the Asia Pacific region markets, but Japan and Australia slipped ahead of the weekend while still holding on to gains for the week.  Europe’s Dow Jones Stoxx 600 is threatening to snap a four-day advance, and US futures are trading a little lower. The US 10-year yield reached 1.125% in the middle of the week and is extending yesterday’s recovery to nearly 1.25%, a couple of basis points higher on the week.  European yields have firmed today too.  The dollar is bid ahead of the jobs report, with the Japanese yen the most resilient. Emerging market currencies are mostly lower, with the JP Morgan EM currency index off for the fourth consecutive

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Yesterday’s Dollar Recovery Stalls

August 5, 2021

Overview: US interest rates and the dollar turned higher following comments by the Fed’s Vice Chairman Clarida, who appeared to throw his lot with the more hawkish members. The dollar recovered from weakness that had seen it fall to almost JPY108.70, its lowest level since late May, and lifted the euro to $1.19.  Still, there has been little follow-through dollar or Treasury buying today.  The euro and yen are marginally softer, but most other major currencies post small gains.  Emerging market currencies are mixed, and the JP Morgan Emerging Market Currency Index is slightly softer, declining for the third consecutive session and four of the past five.  The US 10-year yield is hovering around 1.18%, while European yields are 1-3 bp lower at new multi-month

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FX Daily, July 22: Enguard Lagarde

July 22, 2021

Swiss Franc
The Euro has risen by 0.08% to 1.0828

EUR/CHF and USD/CHF, July 22(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com – Click to enlarge

FX Rates
Overview: The rally in US shares yesterday, ostensibly fueled by strong earnings reports, is helping to encourage risk appetites today. The MSCI Asia Pacific Index is posting its biggest gain in around two weeks, though Japan’s markets are closed today and tomorrow. The Dow Jones Stoxx 600 is building on yesterday’s rally, and with today’s ~0.8% gain, it is up on the week. US equities are also trading with a firmer bias. The 10-year US yield that spiked to nearly 1.125% on Tuesday is knocking on 1.30% today. European bond yields are mostly softer, and Italy’s benchmark yield has slipped to a

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FX Daily, July 21: Did Japan Deliver a Fait Accompli to the US?

July 21, 2021

Swiss Franc
The Euro has fallen by 0.18% to 1.0837

EUR/CHF and USD/CHF, July 21(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com – Click to enlarge

FX Rates
Overview: The biggest rally in US equities in four months has helped stabilize global shares today. In the Asia Pacific region, Japan, China, and Australian markets advanced. Led by information technology and consumer discretionary sectors, Europe’s Dow Jones Stoxx 600 is up around 1.35% near the middle of the session. US equity futures are firm, though the NASDAQ is lagging. The US 10-year yield that briefly dipped below 1.13% yesterday is firm today, around 1.25%, while European bond yields are 1-2 bp firmer. After a poor retail sales report, Australia’s benchmark yield slipped a couple of

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FX Daily, July 20: Doom and Gloom Takes Toll

July 20, 2021

Swiss Franc
The Euro has risen by 0.16% to 1.0846

EUR/CHF and USD/CHF, July 20(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com – Click to enlarge

FX Rates
Overview: The capital markets have begun stabilizing after yesterday’s dramatic moves. The MSCI Asia Pacific Index did, though, see follow-through selling, and the third consecutive loss saw the benchmark close below its 200-day moving average for the first time in a year. Europe’s Dow Jones Stoxx 600 is posting small gains to snap a four-day drop. US futures are also trading higher. The US 10-year Treasury yield sank to 1.17% yesterday in heavy volume, 60 bp off its March peak. It finished below its 200-day moving average for the first time since early November. The 30-year bond yield fell to

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FX Daily, July 16: BOJ Tweaks Forecasts

July 16, 2021

Swiss Franc
The Euro has risen by 0.10% to 1.085

EUR/CHF and USD/CHF, July 16(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com – Click to enlarge

FX Rates
Overview: The markets head into the weekend with little fanfare. Most large equity markets in the Asia Pacific region slipped earlier today. Hong Kong, which will be exempt from the need to secure mainland’s cybersecurity approval for foreign IPOs, and Australia were notable exceptions. European bourses are edging higher, while US futures are oscillating around unchanged levels. After closing below 1.30%, the US 10-year yield is around 1.33%. European yields are little changed, but German, Dutch, Spanish and Greek benchmarks recorded new three-month lows today. The US dollar is narrowly

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FX Daily, July 15: Strong Gains in US CPI and PPI Don’t Stop the Bond Market Rally

July 15, 2021

Swiss Franc
The Euro has risen by 0.08% to 1.0837

EUR/CHF and USD/CHF, July 15(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com – Click to enlarge

FX Rates
Overview: Strong inflation prints this week have not prevented the long-term US interest rates from tumbling. The 10-year yield is about 10 bp lower than where it closed on Tuesday after the lackluster 30-year auction. The 30-year yield itself is 11 bp lower. Fed Chair Powell did not break new ground yesterday and insisted that the bar of “significant further progress” has not been met to begin reducing its bond purchases. A possible deal in OPEC saw a sharp drop in crude oil prices, and there is some follow-through selling today. European yields are lower, though hawkish comments are

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FX Daily, July 14: RBNZ Moves Ahead of the Queue, Will the Bank of Canada Maintain its Place?

July 14, 2021

Swiss Franc
The Euro has risen by 0.18% to 1.0833

EUR/CHF and USD/CHF, July 14(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com – Click to enlarge

FX Rates
Overview: The Reserve Bank of New Zealand jumped to the front of the queue of central banks adjusting monetary policy by announcing the end of its long-term asset purchases. New Zealand’s s 10-year benchmark yield jumped seven basis points, and the Kiwi is up almost 1%, to lead the move against the greenback today. Sterling is up around a quarter of a percentage point after it reported a larger than expected rise in CPI.  Most of the other major currencies, but the Swiss franc and Swedish krona are posting small gains. Emerging market currencies are also narrowly mixed, leaving the JP Morgan

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FX Daily, July 13: Headline US CPI may Decline for the First Time in a Year

July 13, 2021

Swiss Franc
The Euro has fallen by 0.18% to 1.0831

EUR/CHF and USD/CHF, July 13(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com – Click to enlarge

FX Rates
Overview: New record highs in the US S&P 500 and NASDAQ coupled with China allowing Tencent to acquire a search engine helped lift Asia Pacific equities. It is the first back-to-back by MSCI’s regional index for more than two weeks. Australia’s market was a notable exception. The lockdown in Sydney is weighed on new confidence measures and prompts economists to cut growth forecasts for Q3. European equities are softer. Weakness in health care and utilities is offsetting the gains in information technology and materials. US futures are slightly lower as well. The US 10-year Treasury yield is

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FX Daily, July 12: Markets Adrift ahead of Key Events

July 12, 2021

Swiss Franc
The Euro has risen by 0.04% to 1.0849

EUR/CHF and USD/CHF, July 12(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com – Click to enlarge

FX Rates
Overview: The new week has begun quietly. The dollar is drifting a little higher against most major currencies, with the Scandis and dollar-bloc currencies the heaviest. The yen and Swiss franc’s resilience seen last week is carrying over. Most liquid and freely accessible emerging market currencies are lower, and the JP Morgan EM currency index, which snapped a four-day drop ahead of the weekend, is trading lower today. It has fallen in three of the past four Mondays. Benchmark 10 year bond yields are softer, with the 10-year Treasury yield off almost three basis points to 1.33%. European

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Measuring Inflation and the Week Ahead

July 12, 2021

There is quite an unusual price context for new week’s economic events, which include June US CPI, retail sales, and industrial production, along with China’s Q2 GDP, and the meetings for the Reserve Bank of New Zealand, the Bank of Canada, and the Bank of Japan. In addition, the US Treasury will sell $120 bln in coupons while the US earned income tax credit and the child tax credit is rolled out.
The dollar surged even while interest rates fell. The US 10-year yield has risen in only four weeks since the end of Q1, and it has fallen in seven of the past nine weeks. It is off 111 bp since the start of the month. The 30-year bond yield fell to 1.85%, its lowest level since early February, before recovering ahead of the weekend.
It is not only at the long end that

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FX Daily, July 09: PBOC Cuts Reserve Requirements after Inflation Measures Ease

July 9, 2021

Swiss Franc
The Euro has risen by 0.17% to 1.0859

EUR/CHF and USD/CHF, July 09(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com – Click to enlarge

FX Rates
Overview: The capital markets are winding down what has been a challenging week that has seen equity markets slide and the dollar and bonds rally. The MSCI Asia Pacific fell for the fourth consecutive session, but the more interesting story may be the intrasession recovery that could set the stage for a better performance next week. The Nikkei gapped lower and rallied by around 2%, though still closed (0.65%) lower. Similarly, the Shanghai Composite recovered to new session highs after dropping over 1.1% at the open and closed less than 0.1% lower. South Korea and Taiwan indices fell a little

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FX Daily, July 08: Capital Markets Remain Unhinged

July 8, 2021

Swiss Franc
The Euro has fallen by 0.51% to 1.0852

EUR/CHF and USD/CHF, July 08(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com – Click to enlarge

FX Rates
Overview: The dramatic move in the capital markets continues. The US dollar is soaring as yields and equities slide. The US 10-year yield has fallen below 1.30 to 1.26% European benchmark yields are 1-4 bp lower, while Australia and New Zealand have seen a 7-9 bp drop today. Signals that the PBOC may provide more monetary support helped drive China’s 10-year bond yield below 3% for the first time since last August. Those currencies levered for growth, namely the dollar-bloc and the Norwegian krone, are bearing the burden today with a 0.50%-0.75% slide. The Japanese yen and Swiss franc are

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