Tag Archives: Japan

Overview: Weekend accounts seemed to try to understand what Fed Chair Powell said by beginning with the large drop in US rates. Yet, most accounts miss the fact that no matter what Powell has said, the market has more often than not reacted as if he were a dove. Rates have come back firmer today, perhaps as some recognized the overshoot. The US two-year yield is up nearly seven basis points after falling 14 before the weekend. The 10-year yield is almost six basis...

Overview: The dollar is beginning the week on a soft note, despite the modest backing up of yields over the last couple of sessions and better than expected data, including Black Friday sales and the preliminary November PMI. It is sporting minor losses against all the G10 currencies, but the Canadian dollar, which is the weakest of the major currencies this quarter and month. The greenback is also lower against most emerging market currencies, but the Turkish lira...

Overview: Corrective forces helped the dollar stabilize yesterday and it enjoys a firmer today. The euro has slipped below $1.09, and the dollar has resurfaced above JPY149.00. The FOMC minutes seem dated by the more than 30 bp decline in the US 10-year yield, the 7% rally in the S&P 500 and roughly 3% drop in the Dollar Index. The implied year-end 2024 Fed funds rate has fallen by 10 bp to 4.51% (5.33% currently). The Japanese government downgraded its economic...

Overview: The dollar is beginning the new week narrowly mixed against the G10 currencies. Sterling seems largely unaffected by the cabinet reshuffle that has seen former Prime Minister Camron return as the foreign minister, replacing Cleverly who replaces Home Secretary Braverman. The dollar rose to new highs for the year against the Japanese yen (~JPY151.85). The market has shown little reaction to the pre-weekend news that Moody's cut the outlook for US credit to...

Overview: The dollar is mostly firmer against the G10 currencies and has been confined to tight ranges through the European morning. Outside of the China's deflation and Japan's monthly portfolio flow data that showed Japanese investors bought the most amount of US Treasuries (~$22 bln) in six months in September, the news stream is light. Most emerging market currencies are trading with a softer bias today. The Philippine peso is the strongest among the emerging...

Overview: The dollar's sell-off last week was extreme and it recovered yesterday and through the European session today. The Australian dollar has been hit the hardest. It is off more than 1% today after the RBA lifted the cash rate by 25 bp (to 4.35%). Still, the US dollar's gains have stretched intraday momentum indicators, suggesting the upside correction may be nearly over. The greenback's moves appear to have been driven by interest rate expectations. Recall...

Overview: The US dollar, which was sold last week after the FOMC and soft employment report, remains on the defensive today. The Antipodean currencies and yen are struggling, but the other G10 currencies are firm. The dollar is also lower against most emerging market currencies. Still, given the magnitude of the dollar's pullback, we suspect some consolidation is likely.Asia Pacific equities rallied, helped by the sharp gains in the US before the weekend. Note that...

Overview: The Bank of Japan softened its 1.0% cap on the 10-year, while lifting its core CPI forecast this fiscal year and next. This disappointed many who anticipated a bolder move to exit the extraordinary monetary policy. The yen was sold in disappointment and the dollar has returned to the JPY150.75 area. The eurozone contracted by 0.1% in Q3, while October CPI came in below expectations at 2.9%. The greenback is softer against most of the other G10 currencies....

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...

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...