Tag Archives: 4) FX Trends

Overview: Asia Pacific equities were mixed as the China, Hong Kong, Taiwan, and South Korean markets, among the large markets were unable to gain in the wake of a solid performance in the US. Europe is also struggling to maintain the upside momentum that has lifted the Stoxx 600 for the past four sessions. It is nearly flat as this note is penned. US futures are firm. Benchmark bond yields are higher, and the 10-year US Treasury yield is edging above 4.05%. European...

Overview:  Global equities moved higher in the wake of the strong gains in the US yesterday. US futures point to the possibility of a gap higher opening today. Most of the large Asia Pacific bourses rallied 1%-2%, with China’s CSI a notable exception, slipping fractionally. Europe’s Stoxx 600 is edging higher and is near two-week highs. If the gains are sustained, it will be the fourth consecutive advancing session, the longest in two months. Benchmark yields are...

Overview: The markets have returned from the weekend with a greater appetite for risk. Equities and bonds are rallying, and the dollar is better offered. China, Hong Kong, South Korea, and Indian bourses advanced. Mainland shares edged higher even though Zhengzhou, a city of one million people, near an iPhone manufacturing hub was locked down due to Covid. Europe’s Stoxx 600 is up nearly 0.5% to extend its recovery into a third session. US futures are trading a...

By nearly any measure one chooses, the dollar is historically rich. When it does turn, it would likely be dramatic. That is what happened after the stronger-than-expected US CPI figures. However, the lack of follow-through is what one would expect if the greenback’s bull move was intact.Still, we expect the dollar’s super-cycle is entering a new phase. The market has practically priced in a 5.0% terminal Fed funds rate, and we suspect that it needs clear guidance...

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. The implied yield of the December Fed funds futures has ground higher for 12 consecutive sessions to about 4.23%. After two straight quarters of contraction, the...

Overview: There has been little follow-through dollar selling so far today after yesterday’s dramatic downside reversal after the initial flurry of buying in response to the stronger than expected US CPI. Still, the upticks look corrective in nature and the intraday momentum indicators are stretched, raising the prospect of new sales by North American operators today. The sharp recovery in US equities did carry over into Asia and Europe where most bourses are ending...

Overview: There seems to be a nervous calm today ahead of the US CPI. The dollar is hovering near JPY147 but the risk of BOJ intervention in the North American session seems slim. The BOE’s emergency Gilt buying operation ends tomorrow and UK bonds yields have tumbled. While equities in the Asia Pacific region lost ground, Europe’s Stoxx 600 is trying to snap a six-day decline. US equity futures are firm. Yields in Europe are mostly 3-6 bp lower, and despite...

Overview: The dramatic moves spurred by the BOE maintaining the end of the week deadline for its Gilt purchases, which have been quite modest given its wherewithal, have calmed. Sterling is firmer on the day, though long-end Gilt yields are higher. The dollar has pushed above JPY145.90, where the BOJ intervened last month. Risk appetites more broadly appear to have stabilized, but we suggest it may be a modest bout of position adjusting ahead of tomorrow’s US CPI....

SNB Jordan is on the wires speaks in general terms: Central bank independence is crucial to fight inflation effectively central banks could face political pressures to slow down or postpone interest rate hikes to tackle inflation central banks more politically vulnerable as inflation rises Comments outline reasons why central banks in general need to remain independent. Will be on alert for any comments on monetary policy.   [embedded content]...

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. The greenback is firmer against all the major currencies but the Swiss franc, and against nearly all the emerging market currencies today. Equities have been sold. Japan, South Korea, and Taiwan re-opened after...