Tag Archives: Australia

Overview: The reverberations from last week continue to roil the capital markets today. Equities and bonds have been sold and the greenback bought. Most of the large markets in Asia Pacific fell by more 2%, including Japan’s Nikkei, Taiwan’s Taiex, and South Korea’s Kospi. Ironically, the Shanghai and Shenzhen Composites eked out minor gains, but the CSI 300 still eased. Europe’s Stoxx 600 is off 1% after falling nearly 1.7% before the weekend. US futures warn of...

 Overview:  The poor eurozone PMI underscores likely recession and weighs on the single currency, which was sold to a new 20-year low.  Rather than a "Turn Around Tuesday"  a broadly consolidative session is unfolding. Asian and European equities are weaker, while US futures are positive but little changed.  Benchmark 10-year bond yields are mostly firmer and the premium offered by Europe's periphery is edging higher.  The US 10-year is little changed near 3.02%....

For many, this will be the last week of the summer. However, in an unusual twist of the calendar, the US August employment report will be released on September 2, the end of the following week, rather than after the US Labor Day holiday (September 5).  The main economic report of the week ahead will be the preliminary estimate of the August PMI. The policy implications are not as obvious as they may seem. For example, in July, the eurozone composite PMI slipped...

Overview: The sell-off in European bonds continues today. The 10-year German Bund yield is around four basis points higher to bring the three-day increase to about 22 bp. The Italian premium over Germany has risen by almost 18 bp over these three sessions. Its two-year premium is widening for the fifth consecutive session and is above 90 bp for the first time in almost three weeks. The 10-year US Treasury yield is a little softer near 2.88%. Most of the large Asia...

After two-quarters of contraction, many still do not accept that the US economy is in a recession. Federal Reserve officials have pushed against it, as has Treasury Secretary Yellen. The nearly 530k rise in July nonfarm rolls, more than twice the median forecast in Bloomberg's survey, and a new cyclical low in unemployment (3.5%) lent credibility to their arguments. If Q3 data point to a growing economy, additional support will likely be found.  While the interest...

Overview: The US dollar enjoys a firmer bias against the major currencies ahead of the July employment data. Emerging market currencies are mixed. Asian currencies are generally firm while central Europe is a bit softer. Some detect a relaxation in tensions around Taiwan, though China’s aerial harassment continues. Taiwanese shares jumped 2.25% to lead the region that saw China’s CSI 300 rally over 1%. Europe’s Stoxx 600 is giving back yesterday’s 0.2% gain, even...

Overview: Strong gains in US equities yesterday and easing fears following Pelosi’s visit to Taiwan helped lift most Asia Pacific equities, with Hong Kong leading the way with a 2% rally. Taiwan, Australia, and India did not participate in the regional rally. The Stoxx 600 is edging higher today. It was flat on the week through yesterday. US futures are a little firmer. The greenback is offered against the major currencies led the Antipodeans. The Japanese yen...

Overview: The Federal Reserve delivered its second consecutive 75 bp rate hike, and Chair Powell left the door open for another large hike at the next meeting in September. Yet, the market took away a dovish message and the dollar suffered, rates slipped, and equities rallied. Central banks with currencies pegged to the dollar had to hike too. This includes Hong Kong, Saudi Arabia, Bahrain, and UAE, which matched the move in full. Kuwait and Qatar hiked by 25 bp and...

Overview:  The euro is over a cent lower from yesterday’s peak, pressured by the drop in the flash PMI composite below 50 for the first time since early last year. More generally, the flash PMIs have shown the global economic momentum is waning, and the bond markets have responded accordingly. The US 10-year yield is flirting with 2.80%, its lowest level in more than two weeks. European yields are 15-20 bp lower and the spread between Italian and German bonds has...

Overview: The resignation of a UK prime minister makes for high political drama, but the markets hardly moved on it. Sterling, like most of the major currencies, are recovering against the dollar today. UK equities are higher but are not really outperforming their peers. Asia Pacific bourses rallied, with Taiwan leading the way with a 2.5% surge. Europe’s Stoxx 600 is up 1.4% after yesterday’s 1.65% gain. US futures are around 0.25%-0.35% better. Benchmark bond...