Tag Archives: JPY

(here is a draft of my monthly column for a Chinese paper) The US dollar has had a rough few months.  It has fallen against most major and emerging market currencies this year.  A critical issue for global investors and policymakers is whether the dollar’s uptrend is over, or is this just a respite.  Much is at stake with the answer. The variability of exchange rates could account for a third of the total return of a basket of international equities and twice as much for a basket of...

Equity markets are seeing this week's gains trimmed after the S&P 500 fell 0.5% yesterday, recording its biggest loss in two weeks.  Disappointing earnings in some tech leaders spurred profit-taking, The US 10-year Treasuries are consolidating the week's nine basis point increase in yields after nearing 1.90% yesterday.  Asian bonds yields tracked US Treasury yields higher while European bonds are narrowly mixed as they consolidate yesterday's increase.   The US dollar recovered from...

The following observations are drawn from the weekly report of Japan’s Ministry of Finance unless noted otherwise.  We use the weekly data instead of monthly to identify changes of trend earlier.  We use simple convention of the week by the last rather than the first day. That means that the report for the week ending April 1 is the first week of April.  To smooth out the volatility, we will often refer to a four-week average. The latest MOF report was released earlier today.   1....

The ECB meeting is the session’s highlight.  In recognition of the risk that ECB President Draghi expresses displeasure with the premature tightening of financial conditions through the exchange rate channel is encouraged a modest bout of euro selling.  The single currency has drifted back toward the lows seen at the start of the week near $1.1275.   The euro has held above last week’s lows, which were set April 14 near $1.1235.  A retracement target of the euro’s gains since March 10 ECB...

The US dollar has been largely confined to yesterday’s ranges against the major currencies. China’s yuan slipped lower for the first time in four sessions, while the Shanghai Composite fell 2.3%, the most since the end of February.   While a few equity markets in Asia managed to follow suit after US equity market gains carried the S&P 500 above 2100 since last November, small gains in Tokyo (0.2%), Australia (0.5%) were sufficient to keep the MSCI Asia-Pacific Index flat.  European...

The US dollar has been largely confined to yesterday’s ranges against the major currencies. China’s yuan slipped lower for the first time in four sessions, while the Shanghai Composite fell 2.3%, the most since the end of February.   While a few equity markets in Asia managed to follow suit after US equity market gains carried the S&P 500 above 2100 since last November, small gains in Tokyo (0.2%), Australia (0.5%) were sufficient to keep the MSCI Asia-Pacific Index flat.  European...

Global capital markets staged an impressive recovery after the initial reaction to the failure to freeze oil output sent reverberations through the oil markets, commodities, and Asian equities. The sharp reversal begun in Europe and extended in North America has been sustained. Oil prices remain firm. Perhaps the realization that the labor dispute in Kuwait has reduced output by as much as 60% (to 1.1mln barrels a day) helped underpin prices. The fall in output may be of greater immediate...

Oil producers failed to reach an agreement yesterday at the meeting in Doha.  That is the main spur to today’s activity.  It is not that the outcome was a surprise.  One newswire poll found around half of the respondents thought an agreement was elusive.   Although not oil experts by any stretch, we too thought political considerations made it unlikely that Saudi Arabia would be willing to sacrifice market share to its rival Iran.  We also understood why Iran could not accept a freeze on...

The US dollar turned in a mixed performance last week, which given the softer than expected inflation, retail sales data, and industrial output figures, coupled with the poor technical backdrop, could be a signal that its decline in recent months has run its course.    The dollar-bloc continued its advance, led by the Australian dollar’s nearly 2% gain.   Higher commodity prices (the sixth weekly advance for the CRB Index in the last eight week) may have helped.  The persistent strength...

The US dollar is well bid in the Europe and is poised to start the North American session with the wind to its back.  Despite firmer equity and industrial metal prices, most emerging market currencies are also succumbing to the rebounding greenback. The euro has yet to convincingly breakout of the range that has confined it this month.  That would require a break of the $1.1300 area.  However, as we have noted the two-year interest rate differential between the US and Germany, which does...