Tag Archives: FOMC

Overview: The capital markets have been choppy as pre-existing positioning meets new thoughts on the implications of a second Trump administration. The dollar has found better footing today after giving back a chunk of Wednesday's gains yesterday. The yen is an exception, but it is not exception that the dollar trades heavier against the yen as the US 10-year yield drifts lower. On the week, the most G10 currencies are holding on to gains against the dollar. Here...

Overview:  The markets are calmer after yesterday's post-US election drama. A consolidative tone has emerged in the foreign exchange market, and the dollar is softer against all the G10 currencies, led the 1% gain in the Norwegian krone, after the central bank left rates on hold. Sweden's Riksbank delivered the expected half-point cut and the krona is up 0.5%. Japanese officials warned against excessive moves, and the PBOC set the dollar's reference rate almost 1%...

Overview:  The US dollar's decline continued yesterday after the steep jobs’ revision and an unusual solid auction of the Treasury's 20-year bond. The minutes from the recent meeting confirmed that the FOMC will begin its easing cycle next month. The dollar is mostly firmer today. The market has looked through the stronger than expected eurozone flash PMI--seeing the impact of the Olympics--and stalled the euro's rally, which lifted it to new highs for the year...

Overview: The preliminary annual revision to US jobs growth is front and center today. It has gotten more play that usual, amid speculation of a historically large revision. Yet, the direct impact on policy may be minimal. Federal Reserve officials, including Chair Powell, acknowledged that the payroll growth may have been overstated. Moreover, the Fed's judgment of the labor market is not based on one element of the multidimensional labor market. Indeed, given the...

Overview: The capital markets have begun the week in subdued fashion. Japanese markets were closed for the Mountain Day celebration, and this week's key events, which include US and UK CPI, and the Reserve Bank of New Zealand meeting and potentially its first rate cut. The uncertainty about the market positioning and the extent of the carry-trade may also be dampening activity. The yen and Swiss franc are the weakest of the G10 currencies today, off around 0.4%. The...

Overview:  Yesterday's poor 10-year note US Treasury auction helped turn the equity market lower and this carried over into Asia Pacific and European activity today. Today, Treasury completes its quarterly refunding with the sale of $25 bln 30-year bonds. The general tone in the foreign exchange market is one of consolidation. Japanese investors were buyers of foreign stocks on bonds last week, according to the latest portfolio flow report, which is not what one...

Overview: The US dollar is mostly firmer today ahead of what promises to be an eventful week. Sterling is bearing the brunt today, off a little less than half-of-a-cent as expectations creep up of a rate cut this week and Chancellor of the Exchequer Reeves plays up the poor state of public finances left by the Conservative government. Sterling (and the euro's) five- and 20-day moving averages have crossed. The yen is mostly within the pre-weekend range. Outside a of...

Overview: The dollar is bid. What makes its performance standout is that it is taking place as US rates have fallen. The US 10-year yield is near 4.20%, the lowest in more than two months. The two-year yield is near 4.67%. It has fallen every session this week for a cumulative decline of more than 20 bp. It is not so much that constructive developments took week, but that Europe and Japan are suffering from self-inflicted injury. Macron's call for snap elections in...

Overview: The dollar fell alongside US rates yesterday after the softer than expected CPI. The move on both rates and the dollar were pared after the FOMC meeting which held rates steady as widely expected, but the median dot now anticipated one cut this year rather than three. The dollar has recovered more ground today and is trading with a slightly firmer bias G10 currencies. However, trading is quiet and mostly narrow ranges have dominated. North American...

Overview: The US dollar is mixed, but the spotlight is on the Japanese yen. It appears that with the market challenging Monday's intervention, Japanese officials entered the market shortly after the US equity market closed yesterday, as the Asia Pacific session got underway and sold dollars again. Initial estimates suggest the intervention amount was two-thirds of Monday's. The timing caught the markets wrongfooted. Tokyo markets are closed Friday and Monday, but...