Tag Archives: EMU

Overview: The market was gearing up for a June Fed hike and officials and this helped lift the greenback. However, the Fed Governor Jefferson, nominated to be the next vice-chair, pushed back against it. His views are thought to reflect the Fed's leadership. Philadelphia Fed's Harker, who is a voting member of the FOMC also backed a pause. This is not quite what we expected when we suggested the US interest rate adjustment was complete or nearly so. Still, it broke...

Overview:  The dollar is bid. Only the Japanese yen is holding its own against the greenback but only after it fell to new lows for the year. The Scandis and Antipodeans are the heaviest among the G10 currencies, while sterling has fallen to a new low for the month. The prospect of a rate hike tomorrow has not protected the New Zealand dollar much and it is off nearly 0.5%. Emerging market currencies are more mixed. Outside of the Russian rouble, the South Korean...

Overview: The dollar is mostly consolidating last week's gains. The big news has been on the political front. Thailand's opposition parties dealt the military-led government a powerful blow. But in Turkey, Erdogan staved off a serious challenge and a run-off later this month looks likely, while his party maintained its parliamentary majority. Tensions over arms shipments to Russia have eased between the US and South Africa, giving the rand a boost. The greenback's...

Overview: The US dollar is weaker against all the G10 currencies today but the Swiss franc. The backdrop seems fragile even though a few regional bank shares have done better in after-hours trading and Apple's earnings were received well by the markets. Due to seasonal factors and other considerations, many are warning about a US jobs report, even though ADP's estimate surprised to the upside earlier this week. Equities were mixed in the Asia Pacific region, while...

Overview:  The market took a dovish message away from the Bank of Japan and sent the dollar above JPY136, its best level since March 10 and spurred a sharp rally in JGBs. Japanese equities led the rally among the Asia Pacific markets. Europe has not been able to follow suit. It disappointed with Q1 GDP (0.1% rather than 0.2%). The Stoxx 600 is of about 0.3%, leaving it off about 1.3% this week, its first weekly loss since the middle of March. US equity futures are...

Overview: Some regional bank earnings were weighing on investor sentiment but reports that the FDIC is running out of patience with First Republic Bank to strike a private deal and could decide to downgrade its assessment. This could lead to limits on its ability to use the Fed's emergency facilities. Other reports said that the bank's advisers are securing commitments to buy a new stock as part of a broader restructuring. Still, while the KBW bank index of large...

Overview: As the long-holiday ends, risk appetites have returned. Equities and yields are mostly higher. The dollar is seeing yesterday's gains pared. Yesterday's setback in the yen helped lift Japanese stocks, with the Nikkei advancing 1%. Several other markets in the region also gained more than 1%, including Australia and South Korea. China's CSI was an exception. It slipped fractionally. Europe's Stoxx 600 is up nearly 0.6% through the European morning, and bank...

Overview: There are three themes today. First, the sharp decline in US rates seen yesterday (-14 bp on the two-year yield) on the back disappointing economic data seemed a bit exaggerated and the two-year yield has bounced back to almost 3.90% from around 3.81%. This appears to be helping the dollar consolidate today. Second, bank shares are coming under renewed pressure. The US KBW bank index fell almost 2% yesterday after a 0.5% decline on Monday. Today, the Topix...

Overview: The pendulum of market expectations has swung dramatically and now looks for 100 bp cut in the Fed funds target this year. That seems extreme. At the same time, the dollar's downside momentum has stalled, suggesting that the dollar may recover some of the ground lost recently as the interest rate leg was knocked out from beneath it. The euro twice in the past two days pushed through $1.09 only to be turned away. Similarly, sterling pushed above $1.23 but...

Overview: Talk from two Fed officials yesterday, which seemed to validate market expectations eased the upward pressure on the dollar and helped equities launch a dramatic recovery. The market is pricing in a terminal rate near 5.50%, a little higher than the median dot in December. The S&P 500 posted a dramatic recover and posted a potential bullish key reversal. Its 0.75% closing gain was the largest advance in nearly three weeks. A large drop in Tokyo's...