Tag Archives: EMU

Overview: The US dollar is stabilizing a bit but only after extending its gains initially It reached almost JPY149.20, while the euro slipped to $1.0570 before recovering to straddle $1.06 in the European morning. Sterling sank a little through $1.2170 but stabilized to return to almost $1.2200. The Australian dollar tested last week's low slightly below $0.6390 before resurfacing above $0.6400. The US dollar toyed with CAD1.3500, where there is a large option...

Overview: The dollar was bought after yesterday's pullback spurred by Japanese and Chinese comments and the tighter capital controls from Beijing requiring permission to buy more than $50 mln. The economic and monetary policy divergence continues to underpin the greenback. It is firmer against all the G10 currencies and is mostly inside yesterday's ranges. Most emerging market currencies are lower, led by central European currencies. The Chinese yuan is steady....

Overview: The greenback is lower against most currencies today as it consolidates ahead of the weekend. The Dollar Index's eight-week advance is the longest since a 12-week rally 2014. The Chinese yuan is an exception. Its losses were extended today. Against the offshore yuan, the dollar traded above the onshore band, which is most often respected. Equities ae extending this week's slump. All the large bourses in the Asia Pacific region but India fell. Europe's...

Overview:  Disappointing data in Asia and Europe has sent the greenback broadly higher. The strong gains posted before the weekend were mostly consolidated yesterday when the US and Canadian markets were on holiday. The rally resumed today. The Antipodeans and Scandis have been hit the hardest (-0.7% to -1.25%) but all the G10 currencies are down. The Swiss franc and yen are off the least (-0.35%-0.45%), and the euro and sterling have taken out their recent lows....

Overview: Beijing's seemingly steady stream of measures to support the economy and steady the yuan are beginning to produce the desired effect. The yuan is snapping a four-week decline and the CSI 300 halted a three-week drop. Some economists estimate that the bevy of measures may be worth as much as 1% for GDP. The dollar is narrowly mixed ahead of the US employment data, which is expected to see the pace of job growth slow to around 170k. Of note, the Mexican peso...

Overview: The capital markets are calmer today but the US (and Canadian) jobs data stand in the way of the weekend. While equity markets are firmer, the rise in yields continues with new highs for the week being recorded today. European benchmark yields are 2-3 bp higher and the US 10-year Treasury yield is approaching 4.20%. Most of the large market in the Asia Pacific region advanced, but South Korea and Taiwan where the superconductor fascination eased. The Stoxx...

Overview: The global capital markets remain unsettled. The combination of the BOJ adjustment of its monetary policy, Fitch's downgrade of the US to AA+, ahead of a flood of supply, and new measures by China have injected volatility into the summer markets. The US dollar has extended it gains today against the G10 currencies and most emerging market currencies. The yen has recovered a bit after the BOJ stepped in and bought JGBs for the second time this week at...

Overview: The main development in the capital markets is the decline in yields. In Europe, benchmark 10-year yields are off 7-11 bp today, extending the move that began last week. The 10-year Germany Bund yield peaked last Thursday near 2.68% and is near 2.40% now. Similarly, the 10-year Italian yield has fallen from 4.42% to below 4.05% today. The 10-year US Treasury yield fell in five of the last six sessions and is off almost five basis points today. The yield...

Overview: The market continues to resist the Fed's signal that another 50 bp of hikes may be necessary to ensure inflation is headed toward its target. Previously, the market had rate cuts priced in, and it took some time for the Fed's push back to be accepted. The market converged with the Fed, and this helped the dollar recover. We suspect a similar pattern to play out again. The market does not have even one of the two Fed hikes discounted. As it moves in this...

Overview: The year-end effective Fed funds rate implied in the futures market is about 5.11%. The rate has been averaging 5.08% since the Fed hiked rates last month The Fed may go to pains to explain that the steady that to be announced later today is just a pause to get a better read on the economy, the market favors this to be the end of the tightening cycle. The dollar is trading softer against nearly all the G10 currencies. Emerging market currencies are more...