Tag Archives: ECB

Overview: The US dollar is mostly softer today against the G10 currencies, with the notable exception, yen, Swiss franc, and sterling. The risk-on mood is seen in the foreign exchange market with the Antipodean and Scandi currencies leading the move against the greenback. The yen has fallen by about 1.3% this week, leading losers, while sterling's 1.1% gain puts it at the top. Despite the poor showing of US equities yesterday, risk appetites returned and most of the...

Overview: The BOJ defied speculation and stuck to its current policy, which saw the yen sell-off sharply. The dollar rallied about 3.4 yen before falling back. The greenback is broadly lower against the other G10 currencies. However, for the fifth consecutive session, the euro has stalled around $1.0870. While UK headline inflation softened, mostly due to fuel, core prices were unchanged, and this may have helped sterling extend its recent gains to almost $1.2365....

Overview: After sharp losses yesterday, the US dollar has stabilized today arguably ahead of Fed Chair Powell’s speech at the Riksbank symposium. Yesterday’s Fed speakers stuck to the hawkish rhetoric, and this seemed to help reverse the equity market gains, though the greenback remained soft. If Powell does not push back against the easing of financial conditions, it could very well fan risk-taking appetites and lead to a further easing of financial conditions. Asia...

Overview: Don't fight the Fed went the manta as the market took the US two-year yield back up to 4.50% in the aftermath of the FOMC minutes last week, the highest in over a month. The minutes warned of a premature easing of financial conditions. And then bam, softer than expected hourly earnings and a weak service PMI and bonds and stocks rallied, and the dollar was sold. This is a key part of the backdrop for this week, for which several Fed officials will speak,...

Overview: The US dollar extended yesterday's gains as the market adjusts positions ahead of the jobs data. Yesterday and today's price action looks to have strengthened the near-term technical outlook for the greenback. However, the intraday momentum indicators are stretched. This warns of the risk of a counter-intuitive move after the data, barring a significant surprise. Meanwhile, one of the Fed's leading hawkish voices, St. Louis Fed President Bullard seemed to...

Overview:  Yesterday's greenback gains have been mostly reversed today. New efforts by China in its property market and anticipation of more stimulus helped rekindle the animal spirits today. Asia and Europe shrugged off yesterday's losses on Wall Street and the rally in bonds continued. The 8-12 bp decline in European benchmark 10-year yields comes even though the final composite PMI was better than expected fanning hopes of a short and shallow economic downturn....

Overview: Seven of the G10 central banks pumped the brakes between last week and this week as they purposely seek to push demand back into line with supply. And there are more signs that they are succeeding in weakening growth impulses. The dramatic surge in European bond yields continues today with 10-year rates mostly rising another 13-15 bp. Italian and Greek benchmark yields are up 22-24 bp. The US 10-year Treasury yield is up nearly five basis points to 3.50%....

Overview: The US dollar has come back bid after losing ground against most currencies as the markets reacted to the FOMC decision and press conference. The Antipodeans and Scandis have been tagged the hardest, illustrating the risk-off mood, and arguably the weakening growth prospects. Countries that peg their currencies to the dollar have hiked rates, as has the Philippines and Taiwan. The Swiss National Bank and Norway have also lifted policy rates by 50 bp and 25...

Overview: There are two themes today. First, there has been a modest bout of profit-taking on Chinese stocks (and yuan) after last week’s surge. Second, the ahead of the five G10 central bank meeting this week a series of market-sensitive economic reports, a consolidative tone is seen in most of the capital markets. Most of the large bourses in the Asia Pacific region fell, led by a 2.2% loss in Hong Kong and 3% loss in its index of mainland shares. Europe’s Stoxx...

Half of the G10 central banks meet in the week ahead. The Fed is first on December 14, and the ECB, BOE, Swiss National Bank, and Norway's Norges Bank meet the following day. Before turning a thumbnail sketch of the central banks, let us look at the November US CPI, which will be reported as the Fed's two-day meeting gets underway on December 13. The terms of the debate have shifted. It is no longer about when US inflation will peak but how fast it will come down....