Tag Archives: 4) FX Trends

Overview: The US dollar has come back bid today. It is rising by 0.25%-0.50% against all the G10 currencies. The Canadian dollar is the most resilient today, which is often the case when the greenback is firm. The Australian dollar is off the most after reaching its strongest level since late February yesterday. Sterling is a middling performer today ahead of the anticipated Bank of England rate hike. The dollar is also firmer against most emerging market...

Overview: The market sentiment remains fragile. Equities are mostly lower. Japan was a notable exception, and concerns about China's economy after a sharp decline in imports took mainland and Hong Kong listed companies sharply lower. Europe's Stoxx 600 is giving back yesterday's 0.35% gain plus more. Bank shares are off 0.65% after rallying 4.20% over the past two sessions. US equity futures are heavier. Benchmark 10-year yields are mostly a couple basis points...

Overview: There is a nervousness that hangs over the capital markets. Although US banks shares recovered at the end of last week, many continue to see the sector’s challenges as the harbinger of a dramatic reversal in the Fed’s stance. America’s debt ceiling looms large and could be a few weeks away. China led Asia Pacific bourses higher, and, ironically, its bank shares extended their rally. Japan, returning from last week’s holiday was notable exception. Relative...

The combination of the US bank stress, the approaching debt ceiling, and the Fed's opening the door to a pause in rates weighed on risk sentiment and dragged the greenback lower. KBW's indices for large and regional bank shares bled 7.4%-8.0% lower last week to cut through March's lows like a hot knife through butter. Still the price action was constructive ahead of the weekend. US Treasury Secretary Yellen warned that the X-date when the government's cash runs out...

Overview: The US dollar is weaker against all the G10 currencies today but the Swiss franc. The backdrop seems fragile even though a few regional bank shares have done better in after-hours trading and Apple's earnings were received well by the markets. Due to seasonal factors and other considerations, many are warning about a US jobs report, even though ADP's estimate surprised to the upside earlier this week. Equities were mixed in the Asia Pacific region, while...

Overview:  The market took a dovish message away from the Bank of Japan and sent the dollar above JPY136, its best level since March 10 and spurred a sharp rally in JGBs. Japanese equities led the rally among the Asia Pacific markets. Europe has not been able to follow suit. It disappointed with Q1 GDP (0.1% rather than 0.2%). The Stoxx 600 is of about 0.3%, leaving it off about 1.3% this week, its first weekly loss since the middle of March. US equity futures are...

Overview: Some regional bank earnings were weighing on investor sentiment but reports that the FDIC is running out of patience with First Republic Bank to strike a private deal and could decide to downgrade its assessment. This could lead to limits on its ability to use the Fed's emergency facilities. Other reports said that the bank's advisers are securing commitments to buy a new stock as part of a broader restructuring. Still, while the KBW bank index of large...

Overview: The re-emergence of bank stress reverberated through the US markets yesterday, downgrading the perceived chances of a Fed hike next week and sending the US 2-year yield sharply lower. The yield settled 13 bp lower, the largest drop in three weeks. The risk-off sent the US dollar higher against most of the major and emerging market currencies. Follow-through US dollar gains today has been mostly limited to the Australian dollar, where after today's CPI...

The yen is off about 1% this month to bring the year-to-date decline to about 2.4%. It fell by 12.2% in 2022 and 10.3% in 2021. The yen rallied against the dollar for the five preceding years. Over that five-year period the dollar fell from around JPY124 to JPY99, but it was all done in H1 16, and after a rally at the end of 2016 and very early 2017 (to about JPY118.65), the dollar ground down around JPY101. This year’s dollar low was set in mid-Jan near JPY127.25...

Overview:  The dollar is mostly lower, led by the Swiss franc and euro. However, despite softer US rates and a victory for the LDP in local Japanese elections, the yen is trading with a softer bias. Japanese stocks recovered from the pre-weekend profit-taking seen after the Nikkei make new highs for the year. Most other large bourses in the region except Taiwan and India also moved lower. Note that China's CSI 300 fell for the fourth consecutive session and the...