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Tag Archives: China

Japanese Fireworks Continue as the Market Turns to the FOMC

Overview: The FOMC meeting is today's highlight but the drama in Japan continues to rivet the market. The Ministry of Finance warned of the risk of material intervention in the foreign exchange market, and the BOJ bought bonds in an unscheduled operation a day after its downgraded the 1.0% cap to a reference rate, whatever that means. The yen is trading with a slightly firmer bias. The Swiss franc is also trading a little firmer, but the other G10 currencies are a...

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Markets Calm but Trepidation Runs High

Overview: Fears that the Israel-Hamas war was going to widen this past weekend sent gold and oil sharply higher at the end of last week. A reportedly more restrained Israeli entrance into Gaza has seen gold pullback back below $2000 (~-0.6%) and December WTI soften (~-1.7%). The US dollar is mostly softer. Stronger-than-expected Australian retail sales fan the risk of a hike next week and this appears to be helping the Australian dollar lead the advancing G10...

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Dollar Steadies after Yesterday’s Surge, Oil Jumps Ahead of the Weekend while Yields Soften

Overview: The capital markets seemed to have an exaggerated response to the US CPI, where the headline rate, flattered by the rise in energy, rose by 0.1% in September than forecast. Rather than decline, the headline year-over-year rate was unchanged at 3.7%. The core rate was as expected slowing to 4.1% from 4.3%. Next week's US data, including retail sales, industrial production, existing home sales, and the index of leading economic indicators are expected to...

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Greenback Consolidates Ahead of September CPI

Overview: The dollar is mixed against the G10 currencies. It is confined to narrow ranges ahead of today's CPI report. The Russian ruble is the strongest of the emerging market currencies following the imposition of new capital controls, forcing many exporters to repatriate their foreign earnings. After posting a key upside reversal at the end of last week, gold continues to recover. It nearly $1883 so far today, the best level in more than two weeks. November WTI...

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Bonds Extend Recovery

Overview: Broadly speaking, the dollar's recent pullback was extended today but the momentum appears to be slowing, perhaps ahead of tomorrow's US CPI report. The Dollar Index slipped to its lowest level since September 25 before steadying. The greenback is mixed as the North American market is set to open. The dollar bloc and Swedish krona are the underperformers. The Swiss franc is the best, up about 0.2%, while the yen and euro are little changed. Most emerging...

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War in Israel Spurs Flight to Dollars, Yen and Gold, While Driving up the Price of Oil

Overview: There are three main developments. First, the market is digesting the implication of the US employment data, where the optics were strong (336k increase in nonfarm payrolls compared with 170k median forecast in Bloomberg and Dow Jones surveys) but some details were disappointing (like the third consecutive decline in full-time posts, seasonally adjusted). Second, Chinese mainland market re-opened after a six-day holiday). Chinese stocks slipped and...

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US Yields and Dollar Rise After US Government Closure Averted

Overview: The US avoided a government shutdown, barely, and this eased one of the headwinds that were anticipated. In turn, this is spurring new gains in US interest rates and helping underpin the dollar at the start of the new quarter. The 10-year Treasury is holding above 4.60% and nearing last week's high (4.68%). The two-year yield gapped higher and is near 5.10%. The high from September 21 was almost 5.20%. The Swiss franc is the only G10 currency holding its...

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Dollar Sets Back into Month- and Quarter-End Ahead of likely US Government Shutdown

Overview: The dollar's surge stalled yesterday, and follow-through selling has pressed it lower against all the G10 currencies today. The dollar-bloc and Scandis are leading the move. Month-end, quarter-end pressures, coupled with a likely partial shutdown of the government beginning Monday, and after key chart levels were approached or violated earlier this week, serving as a bit a cathartic event. The Swiss franc snapped a 12-day losing streak yesterday, its...

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Firmer Bonds and Stocks, but the Dollar Presses Ahead

Overview: The S&P 500 hit three-month lows yesterday, while the Conference Board's measure of consumer confidence fell to a four-month low. New home sales fell to their lowest level in five years. The US federal government appears headed for a partial shutdown on October 1. Still, the greenback rides high. It is extending its gains against several G10 currencies, including the euro and sterling. The Swiss franc is moving lower for the 12th consecutive session....

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In Uncoordinated Steps, Japan and China Help Slow Greenback’s Rally

Overview: The Bank of Japan Governor Ueda hinted the world's third-largest economy may exit negative interest rates before the end of the year. This sparked the strongest gain in the yen in a couple of months and lifted the 10-year yield to nearly 0.70%. In an uncoordinated fashion, Chinese officials stepped their rhetoric and indicated that corporate orders to sell $50 mln or more will need authorization. This helped arrest the yuan's slide. The Australian dollar...

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