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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

Consolidative Tone to Start the Week

11 days ago

Overview: The new week has begun off quietly. The
dollar is in narrow ranges against the G10 currencies, +/- 0.15% as the North
American market prepares to open. The Dollar Index is trading inside the narrow
pre-weekend range. With softer US CPI, retail sales, and industrial production
due this week, we have a downside bias for the greenback. Most emerging market
currencies are firmer. A few Asian currencies, including the Chinese yuan and
Philippine peso are among the exceptions.Equity markets are mixed. The
MSCI Asia Pacific Index was flat last week after rally more than 6% in the
previous two weeks. Japanese, Chinese, and South Korean markets traded heavier
today, while other large bourses in the region advanced. Europe’s Stoxx 600 is
threatening to snap a

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Riksbank Cuts, Oil Slips, and the Yen Remains Under Pressure

16 days ago

(On business trip over next few days. Commentary to resume Monday.  Thanks for your patience.) Overview: Sweden’s Riksbank became the second G10
central bank to cut rates this year. The Swiss National Bank cut its deposit
rate in March. A couple other large central banks, including the European
Central Bank, and possibly the Bank of Canada, may cut rates next month. The
Swedish krona is the weakest of the G10 currencies today, off by about 0.45%,
but the Australian dollar and yen are down nearly as much. The market has taken
the dollar up by about 0.5% against the in each of the past two sessions and is
up by about the same amount today. Most emerging market currencies are softer
too, with the Indonesian rupiah and Turkish lira hovering around

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Market Pushes the Yen Lower, Helped by a Broadly Firmer Greenback

17 days ago

Overview: The dollar is firmer against all the G10
currencies today. The market is somewhat less fearful of intervention and the
yen is extending yesterday’s losses. It is rivaling the Australian dollar for
the weakest of the major currencies after the Reserve Bank of Australia left
rates on hold and played down speculation of possibility of a rate hike. Both
currencies are off around 0.4% in late European morning turnover. Disappointing
German factory orders shows the fragility of the nascent recovery. Emerging
market currencies are mostly softer, led by the central European currencies. The
Chinese yuan is also seeing yesterday’s 0.45% gain pared. It is off about 0.15%
today. The offshore yuan is off for the second consecutive session and down
almost 0.45% this

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Yen Slips, Yuan Jumps, Dollar is Mostly Softer

18 days ago

Overview: The dollar is mostly a little softer
today in thin market conditions, with Tokyo, Seoul, and London closed for
holidays. The Japanese yen is the weakest G10 currency, losing about 0.5% and
slipping through last Friday’s lows. At first, after Fed Chair Powell
did not endorse rate hike speculation, the market thought he was dovish. But after the
softer than expected jobs data and weakness in the ISM services, the market
shifted from doubting one cut to pricing in two. China’s markets re-opened for
the first time since last Tuesday. The Chinese yuan played catch-up and has
appreciated by 0.45% today, to lead the emerging market currencies. The yuan
reached its best level since late March amid speculation that Beijing may be
considering a large devaluation

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May 2024 Monthly

20 days ago

The resilience of the
US economy and stickiness of price pressures spurred a reassessment of the
trajectory of Fed policy. This sparked a sharp rise in US interest rates and
extended the dollar’s advance. The somewhat disappointing April jobs report and
a softer CPI report in the middle of May could signal that the interest rate
adjustment is over. Federal Reserve Chair Powell played down the likelihood of
the need to lift rates again, and as it was in  Q4 23, when CPI moderated to a 2%
annualized rate, the central bank is being prudent in both directions. The IMF identified US fiscal policy
as a key to fueling demand, inflation, and the stronger greenback, which has
heightened concern among several countries in the Asia Pacific region,
including Japan, South

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Dollar is Softer Ahead of the Employment Report

21 days ago

Overview: The greenback is trading with a
softer bias ahead of the US jobs report. Solid, even if not spectacular job
growth, is expected. However, recent survey data warns of the downside risks. Moreover,
counter-intuitively, the dollar has not often rallied this year into the
employment data, but frequently has in response. The dollar is softer against
the G10 currencies. The Norwegian krone is the strongest, up about 0.6% after
the central bank delivered a hawkish hold, by warning that rates may need to
stay restrictive longer than it has previously anticipated. Also, of note, the
greenback made a new low for the week against the yen near JPY152.75, which is
also a new three-week low. Emerging market currencies, but the Czech koruna and
South African rand are

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Japan Drives Home Message

22 days ago

Overview: The US dollar is mixed, but the
spotlight is on the Japanese yen. It appears that with the market challenging
Monday’s intervention, Japanese officials entered the market shortly after the
US equity market closed yesterday, as the Asia Pacific session got underway and
sold dollars again. Initial estimates suggest the intervention amount was
two-thirds of Monday’s. The timing caught the markets wrongfooted. Tokyo
markets are closed Friday and Monday, but yesterday’s operation will likely
make the market cautious about challenging Japanese officials without good
cause. Most emerging market currencies are firm, but central European
currencies are softer. The offshore yuan is trading stronger than the onshore
yuan for the first time this year. Mainland

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May Day Fed Day

23 days ago

Overview: Much of Asia and Europe are off for the
May Day labor holiday. The dollar is mostly softer in the thin activity. However,
the dollar has edged higher against the yen and approached JPY158. The euro
initially fell to $1.0650, a six-day low and where a billion euros in options
expire later today. It has recovered to almost $1.0675. Emerging market
currencies are subdued. Central European currencies, the South African rand,
and Mexican peso are sporting slightly firmer profiles. Asia Pacific equity markets that were open
today (e.g., Japan, Australia, New Zealand) fell after the large losses seen in
the US yesterday. European equities are closed but the UK’s FTSE is slightly
firmer. US index futures continue yesterday’s retreat. The 10-year UK Gilt

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Yen Retreats, while Stronger EMU GDP Underscores Nascent Recovery and Lifts the Euro

24 days ago

Overview:  Stronger than expected eurozone GDP
strengthened the sense that a nascent recovery may be taking hold and has given
the euro a bid in the European morning. The dollar, though, is enjoying a
firmer tone against the other G10 currencies today. Australia’s unexpected
weakness in retail sales has weighed on the Antipodean currencies. The Aussie
and Kiwi are off slightly more than 0.5% today. Japanese data were mixed (a
recovery in industrial production but weakness in retail sales) and the market
has taken the dollar to almost JPY157. It had settled near JPY156.35 yesterday.
The market is still treading gingerly after yesterday’s drama and possible
intervention. Emerging market currencies are mixed, with Turkey and Hungary
leading the advancers and the

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Yen Dumps before It Jumps

25 days ago

Overview:  The FOMC meeting, the US employment report, and
eurozone CPI were to be the highlights of the week, but the Japanese yen stole
the march to start the week. The dollar soared to almost JPY160.20 before
falling sharply to JPY154.55 and then rebounding to almost JPY156.00. Intervention
has not been confirmed and BOJ data will not cover it until next month. On
balance, it appears that most think it was algo-trading in thin markets given
the Japanese holiday. The dollar weakened against the other major currencies,
and although it is still lower on the day, the downside momentum may have
stalled. Emerging market currencies are more mixed. Turkey, South Africa,
Hungary, and Mexico are leading, while Russia, Czech, and Indonesia are
laggards. Equities are off

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Week Ahead: FOMC, US Jobs, EMU Inflation, JPY Pressure

27 days ago

The backing up of US rates did not lift the dollar broadly as it appeared to have done previously.  The dollar-bloc currencies, led by the Australian dollar, and sterling advanced last week, while the Swiss franc and Japanese yen were unable to find traction.  The Bank of Japan had an opportunity to have protested the yen’s weakness more adamantly but did not do so.  Recognizing the role of interest rate differentials as an important driver, the Ministry of Finance threatens action but seems reluctant to intervene. Still, the market continues to probe for the official pain threshold.   This year, the greenback has generally weakened in the run-up to the employment data and recovered afterward.  It has trended lower over the last couple of weeks and that

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Where We Stand

April 12, 2024

I am on vacation, and then on a business trip that will interrupt the commentary until the weekly note on April 30. The May monthly analysis will be published the following week after the FOMC meeting and April employment report. I wanted to weigh in on a few key market issues before leaving. New Divergence: The continued robust US jobs growth (276k average in Q1 24 and 251k average in 2023) and above-trend growth allow the Federal Reserve to remain focused on inflation. And for good reason: CPI has consistently been reported this year above expectations. The headline rate stands at six-month highs. Fed Chair Powell has drawn attention to the core services excluding housing, and it rose at around an 8% annualized pace in Q1. For all practical purposes, the

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Dollar Consolidates but Adjustment is Not Over

April 11, 2024

Overview:  Higher than expected US CPI for the
third consecutive month drove US interest rates sharply higher and lifted the
greenback broadly. The market appears to be catching its proverbial breath today,
but the shallow consolidation suggests the moves are not over. The ECB meeting
is likely to highlight the new divergence that has opened. The dollar has
reached nearly JPY153.30, and although Japanese officials cautioned about the
fx moves, intervention while Prime Minister Kishida is on his state visit to
the US strikes us highly unlikely. In any event, the broad dollar gains were fundamentally driven. China’s March CPI (-1.0% month-over-month and 0.1%
year-over-year) underscores the scope for the easier monetary policy, but the
PBOC continues to resist the

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US CPI, New Security Initiatives with Tokyo and Manila, Bank of Canada Meeting

April 10, 2024

Overview: The dollar has been confined to
narrow ranges ahead of the US CPI report. Given the backup of US rates and the
stronger-than-expected jobs growth, the greenback’s performance has been
unimpressive. The Reserve Bank of New Zealand signaled that it was in no hurry
to cut rates and it helped underpin the New Zealand dollar. Up about 0.2%
today, it is leading the G10 currencies higher. Strong earnings from TSMC may
have helped underpin the Taiwanese dollar (~0.3%), which is trailing the
Mexican peso (~0.35%) to lead the emerging market currencies. Many Southeast Asian markets are closed to
the holiday today, including South Korea, where the parliament election is
taking place. Exit polls suggest a strong showing by the opposition Democratic
Party. The Hang

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Dollar Consolidates Softer Ahead of Tomorrow’s CPI

April 9, 2024

Overview: The dollar is trading with
a softer bias in mostly narrow ranges against the G10 currencies. It did not
rally much ahead of the US jobs data, and it was not able to sustain the upside
momentum afterwards, despite the jump in US yields. Former St. Louis Fed President
Bullard, who still has a strong reputation in the market, told Bloomberg TV
yesterday that three cuts were his base case this year. The Scandis and
Antipodeans are the strongest today, up about 0.25%-0.33%. The dollar continues
to hold below JPY152 barely. Most emerging market currencies are also firmer
today. The dollar continues to trade just inside its band against the onshore
yuan. Most of the large Asia Pacific equity markets rallied, led
by a 1.85% gain in Taiwan and a 1.1% advance by

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Will the Market Push the Dollar Above JPY152 as Japanese Prime Minister Heads to the US?

April 8, 2024

Overview:  The jump in US rates after the employment
report failed to ignite a sustained rally in the dollar and this shaken the
market’s near-term confidence. The dollar has been mostly confined to narrow
ranges and the low yielding Swiss franc and Japanese yen are softest with the
G10 complex today. The dollar is knocking on JPY152. The Scandis and Antipodeans lead the advancers. The euro has
made little headway despite a much stronger than expected German industrial
output. Mainland China markets re-opened, and the dollar remains at the upper
end of the 2% band and above it against the offshore yuan. Most emerging market
currencies are softer, but the South African rand’s 0.5% gain stands out, which
some see as a gold play. The yellow metal reached a new

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Week Ahead: Strong US Jobs Data Failed to Sustain Dollar Rally, Can the March CPI do Better?

April 6, 2024

The March US employment data were stronger than expected and
lend support to the re-acceleration hypothesis and an extension of US
exceptionalism. In Q1 24, nonfarm payrolls rose by an average of 276k. It was
the strongest quarter in a year and compares with an average monthly job gain
of about 251k in 2023. The unemployment rate slipped as the household survey
jumped around 500k after falling in the previous two months. The workweek
increased, and the participation rate rose. Reasons to dismiss the employment
data are becoming thinner. The economy is still growing faster than what the
Fed regards as the long-term non-inflation pace (1.8%). The US two-year yield
rose 12 bp and approached the high for the year (4.75%), and the 10-year yield
set a new high (4.43%)

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US Employment Data to Set Dollar’s Course

April 5, 2024

Overview: The
focus is squarely on the US employment report. At the risk of oversimplifying,
given the position adjustment in the past 48 hours, a solid report can see the
greenback recover, while a disappointing report will likely see it deepen the
correction of the rally that began with the February jobs report. The dollar
recovered in the North American afternoon yesterday and many observers
attributed it to the bevy of Fed comments. Yet, the interest rate market saw
little reaction. It seemed that it was the dramatic reversal in US equities
that helped dragged global shares down today, that forced US rates lower. 
Asia Pacific equities tumbled, led by more than 1% losses in Japan and South
Korea. Europe’s Stoxx 600 is off around 1.2%, and if sustained, could

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China PMI is Better than Expected but the Greenback Still Rises above CNY7.23

April 1, 2024

Overview: The dollar is trading quietly against the G10
currencies as European markets remain on holiday. Narrow ranges have prevailed.
The dollar-bloc currencies are leading with minor gains, perhaps helped on the
margins by better-than-expected Chinese PMI, but the Scandis, which also
typically do well amid a better global growth profile are the laggards. This
may speak to the light liquidity conditions. Japan may have missed a tactical
opportunity to intervene to knock the dollar back ahead of what may be a solid
US jobs report at the end of the week. Erdogan’s AK Party lost the weekend
elections. The opposition CHP won 35 mayorships against 24 for the AKP. The
early signals are that Erdogan will stick with the turn toward economic
orthodoxy and in the current

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April 2024 Monthly

March 30, 2024

The macroeconomic and
geopolitical developments have not changed substantially over the past month. The
resilience of the US economy allows the Federal Reserve to put more emphasis on
achieving price stability. While the market favors a June cut (66% vs. 80% at the end of February), it has
not been fully discounted for over a month. The biggest event in March may have been the
well-telegraphed exit from negative interest rate policy and Yield Curve
Control by the Bank of Japan. Yet, over the course of last month, Japan’s
two-year yield rose was virtually unchanged and the 10-year yield rose less than two basis points to 0.73%. For all practical purposes, the eurozone and UK
economies are stagnant, but the respective central banks also do not appear in
any hurry

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Waller Pushes on Open Door: Push for Patience Lifts the Dollar, Complicating Japanese Efforts

March 28, 2024

Overview: Comments by Fed Governor Waller, urging
patience on rates and wanting more evidence that price pressures are moderating
has helped the greenback extend its recent gains. The yen is the notable
exception as the fear of intervention has restrained the dollar bulls. Poor
German data, including a sharp 1.9% drop in February retail sales, the fourth
consecutive monthly decline, underscored the euro’s negative divergence, and the
single currency was sold to new lows for the month below $1.0780. The
Antipodeans and Scandis are leading the G10 currencies lower with 0.6%-0.8%
losses. Emerging market currencies are mostly lower. The South Korean won, and
Taiwanese dollar are exceptions with miniscule gains. Equities in the Asia Pacific region are
mixed. Japan,

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Heightened Threat of Japanese Intervention Pushes Greenback Away from JPY152

March 27, 2024

Overview: The dollar neared JPY152, setting a new
34-year high. This appeared to spur a senior official meeting in Tokyo,
ostensibly to talk about the response. Previously, we suggested that Friday,
when most markets outside of Asia will be closed, could provide an interesting
opportunity for intervention. The implicit threat was enough to take the dollar
to JPY151.10 in the European morning. Most of the G10 currencies are softer
against the dollar but the yen. A dovish Riksbank had negligible impact on the
Swedish krona. It could be the second G10 central bank to cut rates, following
last week’s Swiss decision. It may move in May. Most emerging market currencies
are softer today. The South African rand is the strongest, up by about 0.3%
before the central bank

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Dollar’s Recent Gains Pared but Firm Undertone Remains Intact

March 26, 2024

Overview: After surging at the last week, the dollar
consolidated yesterday and is continuing to do so today as slightly lower
levels. The Swiss franc is the only G10 currency unable to gain traction
against the greenback today. Still, the dollar’s pullback has barely met the
minimum retracement targets of the jump last Thursday and Friday. The PBOC
lower the dollar’s fix slightly, but the proverbial toothpaste is out of the
tube and officials are struggling to reestablish order. Against the offshore
yuan, the dollar remains outside of its 2% onshore band. The Hungarian forint
is the strongest of the emerging market currencies ahead of the central bank’s
rate decision, where a 75 bp cut is expected after the base rate was slashed by
100 bp last month. Asia

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Dollar Extends Gains Against the Yen but Broadly Firmer Ahead of the FOMC

March 20, 2024

Overview: The US dollar remains bid ahead of the outcome of today’s
FOMC meeting. No change in policy is expected, but the forward guidance, partly
delivered in the updated projections, is the focus. In the last iteration
(December), the Fed "dot" was for three rate cuts this year. Japanese
markets were closed for a national holiday today but dollar’s gains against the
yen have been extended and the greenback is nearing the peak seen in the last
two years slightly ahead of JPY152. The dollar is broadly higher but is holding
below yesterday’s best levels against the other G10 currencies. Emerging market
currencies are mostly lower. The South Korean won slightly firmer and may have
bene helped by flows in the South Korean stock market amid reports Nvidia is

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Greenback Surges after BOJ Hikes and Ends YCC and RBA Delivers a Dovish Hold

March 19, 2024

Overview: The US dollar is surging today against
most of the G10 currencies, and although the intraday momentum is stretched
ahead of start of the North American session, there may be little incentive to
resist before the end of the FOMC meeting tomorrow. The Bank of Japan’s rate
hike and the end of Yield Curve Control were not seen as the start of the
tightening cycle. The two-year JGB yield slipped to a two-week low and settled
below its 20-day moving average for the first time since mid-January. The Reserve
Bank of Australia delivered a dovish hold by dropping the reference the future
tightening. The yen (~-0.95%) and Australian dollar (~-0.85%) are the weakest
of the G10 currencies. Emerging market currencies are lower, led by the
Philippine peso (~-0.65%).

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Heightened Speculation of a BOJ Move Tomorrow did not Stop the Nikkei from Rallying or Yen from Slipping

March 18, 2024

Overview: The US dollar is trading with a mostly
softer bias against the G10 currencies. The notable exceptions are the Japanese
yen and Swiss franc. Ironically, speculation of a Bank of Japan rate hike
appears to have increased, while there is a risk that the Swiss National Bank
cuts rates this week. The Norwegian krone is the strongest of the major
currencies. The central bank meets later this week but is widely expected to
stand pat. The continued rise in oil prices may be buoying it. Most emerging
market currencies are softer. The MSCI Asia Pacific Index
snapped a seven-week advance last week but rebounded today. The Nikkei rallied
nearly 2.2%, its biggest rally in a month. Better industrial production data
from China may have helped the CSI 300 rally nearly

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Week Ahead: Central Banks

March 16, 2024

There has been a dramatic adjustment to US rates. The
two-year yield was near 4.40% before the US employment report on March 8 and it
reached near 4.73% before the weekend. The 25 bp surge is the largest weekly increase
since last May. For the first time in four months, the Fed funds futures strip
is no longer has at least three rate cuts discounted. The interest rate
adjustment underpinned the dollar, which rose against all the G10 currencies
last week.  Like
the US two-year yield, the 10-year yield also rose every day last week, and its 23 bp increase was the most since the last October. The Dollar Index’s 0.70% gain was the largest rise in eight weeks, and ended a three-week decline. Rising rates helped lift the greenback almost 1.4% against the Japanese yen,

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Euro’s Recovery to $1.09 Looks Vulnerable while Yen Falls to New Lows for the Week After Strong Pay Raises Confirmed

March 15, 2024

Overview: At the end of last week, the
derivatives market was again pricing in nearly four Fed cuts this year, but
this week’s data have seen expectations re-converge with the Fed’s three rate
cuts signaled in December, while cutting the odds of June hike to the lowest in
the more than four months. This has helped lift the dollar against all the G10
currencies this week. As is often the case in a firm US dollar environment, the
Canadian dollar has fared the best, slipping only 0.4%. Despite
heightened speculation that the Bank of Japan could hike rates as early as next
week and strong wage gains for employees at large companies, the yen is off by
more than 1% this week and trading recorded a six-day low today. Emerging
market currencies are mixed today, with

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Strong US Retail Sales may Help Extend the Dollar’s Recovery

March 14, 2024

Overview: We have put emphasis on today’s US retail
sales report. A recovery from the weather-induced weakness in January should
underscore the resilience of US demand after another 200k jobs were created and
personal income jumped 1%. While the dollar has traded firmer in the first half
of this week, given the 25 bp jump in the US two-year yield, its performance is
somewhat disappointing. It is narrowly mixed in the European morning against
the G10 currencies. The dollar bloc, sterling- and the Norwegian krone enjoy a
slightly firmer bias. The euro, yen, and Swiss franc are nursing minor losses. Most
emerging market currencies are softer, but for the second consecutive session,
the Hungarian forint is recovering and leading the advancers. Equity markets are

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Consolidation Featured Ahead of Tomorrow’s US Retail Sales and Friday’s Japanese Wage News

March 13, 2024

Overview: We came into this week
expecting the dollar to rise on the back of a recovery in rates. The two-year
note has risen from 4.40% after the jobs report to 4.60%. The dollar’s rise has
been less impressive. The Dollar Index had begun with week with a six-day fall
in tow. Today is it is rising for the third session. However, the gains have
been a modest 0.80% off the pre-weekend lows. The dollar broadly is
consolidating in narrow ranges thus far today in quiet turnover. Despite
promising reports on wage negotiations in Japan, the yen is softer for the
second session. A quiet North American session is expected ahead of tomorrow’s
retail sales report. The US Treasury sells $22 bln 30-year bonds today. Yesterday’s
10-year sale tailed and saw lighter indirect

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