Tag Archives: 4.) Marc to Market

Overview: Ukraine’s Mariupol refuses to surrender as the war is turning more brutal according to reports. Iran-backed rebels in Yemen struck half of a dozen sites in Saudi Arabia, driving oil prices higher. China’s prime lending rates were unchanged. The MSCI Asia Pacific Index, which rallied more than 4% last week, traded heavily today though China and Taiwan’s markets managed to post small gains. Tokyo was closed for the spring equinox. Europe’s Stoxx 600 is steady...

Swiss Franc The Euro has risen by 0.14% to 1.0387 EUR/CHF and USD/CHF, March 17(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates Overview: The markets continue to digest the implications of yesterday’s Fed move and Beijing’s signals of more economic supportive efforts as the Bank of England’s move awaited. The US 5–10-year curve is straddling inversion and the 2-10 curve has flattened as the Fed moves from one horn of the...

The Federal Reserve hiked the Fed funds target rate by 25 bp as widely anticipated. It clearly signaled it was beginning an ongoing hiking cycle. The FOMC statement also indicated the balance sheet roll-off would begin at a coming meeting. The uncertainty posed by Russia’s invasion of Ukraine was acknowledged, but the FOMC recognized that in the first instance it boosts price pressures while also weakening growth. There was one dissent. The noted hawk, St. Louis Fed...

Overview: While the World Health Organization debates about downgrading Covid from a pandemic, the rise China and Hong Kong cases is striking.  A lockdown in Shenzhen and restrictions in Shanghai, coupled with a record fine by PBOC officials on Tencent drove local stocks sharply lower.  China’s CSI 300 fell 3% and a measure of Chinese stocks that trade in HK plunged more than 7%.  The Hang Seng itself dropped 5%.  Covid in China and Hong Kong adds to the risk of...

Overview: US equities failed to sustain early gains yesterday, but risk appetites have returned today.  Asia Pacific equities had a poor start, with Chinese and Japanese indices losing ground, but the equity benchmarks in Taiwan, Australia, India, and most of the smaller markets traded higher.  Taiwan’s 1.1% gain is notable as foreign investors continued to be heavy sellers.  Europe’s Stoxx 600 is snapping a four-day drop with an impressive 3.3% gain, led by the...

Overview:  The economic disruption seen since the US warning of an imminent Russian attack on February 11 continue to ripple through the capital and commodity markets.  Equities are being slammed.  Most Asia Pacific bourses were off 2-3% today. Europe’s Stoxx 600 gapped lower ad has approached February 2021 levels, orr about 2.6% today.  US futures are around 1.5% lower. The reaction in the major bond markets is subdued.  The US 10-year yield is near 1.72%, off...

One of the most significant market responses to Russia's attack on Ukraine is in the expectations for the trajectory of monetary policy in many of the high-income countries, including the US, eurozone, UK and Canada.  The market has abandoned speculation of a 50 bp hike in mid-March by the FOMC and the Bank of England.  It has also scaled back the ECB's move to 20 bp this year from 50 bp.  Even after the Russian invasion, the market had discounted a 75% chance that...

Overview:  The capital and commodity markets are becoming less orderly.  The scramble for dollars is pressuring the cross-currency basis swaps.  Volatility is racing higher in bond and stock markets. The industrial metals and other supplies, and foodstuffs that Russia and Ukraine are important providers have skyrocketed.  Large Asia Pacific equity markets, including Japan, Hong Kong, China, and Taiwan fell by 1%-2%, while South Korea, Australia, and India managed...

Overview: Russia’s invasion of Ukraine and the global response is a game-changer, as Fed Chair Powell told Congress yesterday.  The UK-based research group NISER estimated that world output will be cut by 1% next year or $1 trillion, and global inflation will be boosted by three percentage points this year and two next.  The recovery in US stocks yesterday may have helped lift Asia Pacific shares today (China and India are notable exceptions). However,...

Russia's invasion of Ukraine overwhelmed other drivers of the foreign exchange market.  When everything was said and done last week, the odds of a 50 bp hike by the Federal Reserve in the middle of March was little changed slightly above 25%. The odds of a 50 bp hike by the Bank of England have been reduced from a little over 60% before the US government's warning that a Russian attack could happen at any time on February 10 to 36% on February 18.  It has halved...