Tag Archives: Oil

Overview: After the making marginal new highs in early North America yesterday, the dollar pulled back, arguable dragged lower by the softness of US rates, helped by the sharp drop in oil prices and healthy reception to the US three-year note auction. However, the greenback has returned better bid today as the market continues to search for direction post-FOMC and US jobs report. The euro and sterling are the weakest of the G10 currencies through the European...

The most anticipated release of the week came in … “Unchanged” or sticky stuck from the August at 3.7% yoy. But it’s worth mentioning as we will discuss below that this is up from June CPI which was 3.09% yoy. Core CPI which excludes food and energy because of their volatility sits at 4.13% yoy down from 4.39% last month. Let’s look under the hood a bit because headlines will mention “sticky” CPI and there are some reasons that CPI will indeed...

Overview: Bonds and stocks are mostly heavier today and the dollar has turned mixed. Oil prices are consolidating after soaring to new highs since late last year on the longer than expected extension of Saudi Arabia's extra cut of one million barrels a day. Since July, it has been extending it by one month at a time. Yesterday, it extended it through Q4. Russia, who had previously indicated intentions on reducing its exports by 500k barrels, announced it was...

Overview: The US dollar is recovering today after it was sold following the jobs report before the weekend. It is enjoying a firmer bias against nearly all the G10 currencies. The dollar-bloc is faring best, while the Scandis are off close to 0.5%. Most emerging market currencies are also softer, with only a few Asian currencies edging higher today, including the South Korean won, Indian rupee, and Taiwanese dollar. With a stronger dollar and firmer interest rates,...

Overview: A surprise cut in China's seven-day repo and a stronger than expected UK employment report are session's highlights ahead of the US CPI. The base effect alone suggests a sharp fall in the year-over-year rate, while the median forecast in Bloomberg's survey has been shaved to a 0.1% month-over-month gain. The dollar is under pressure and is weaker against nearly all the G10 currencies. It is mixed against the emerging market currencies. The dollar gapped...

Overview: Although the US January CPI was in line with expectations, the year-over-year rate was a little firmer than expected. Still, the measure that Fed Chair Powell has underscored, core services, excluding shelter, moderated with a 0.3% month-over-month gain. US rates shot up and this lent the dollar support, while weighing on equities and risk sentiment. The US two-year note yield rose to almost 4.64% yesterday, the highest in three months. The greenback is...

(I am on a business trip and did not intend to post any analysis today. However, there have been a number of unexpected developments that warrant some commentary. Thanks for bearing with me.) Japanese press reports that the BOJ Deputy Governor Amamiya turned down the opportunity to become the next BOJ governor. Instead, next week, former BOJ board member Kazuo Ueda will be nominated. The market reacted dramatically, taking the yen sharply higher and sold JGBS....

Overview: The Lunar New Year holiday has shut many centers in Asia until the middle of the week, though China's mainland is on holiday all week. The signaling of a downshift in the pace of Fed tightening by some notable hawks helped lift risk appetites ahead of the weekend and saw the S&P 500 snap a four-day decline. Ahead of the weekend the NASDAQ posted its single biggest advance since last November. The downtrend line drawn of January 2022 highs in the...

Overview: The easing of vaccination, quarantine, and some travel protocols related to Covid in China (and Hong Kong) continues to draw funds back into Chinese stocks, wherever they trade. The Hang Seng rose 2.3% today to close the week with a nearly 6.6% advance. The index of mainland companies that trade there rose 2.5% on the day for a7.3% weekly gain. The CSI 300 of mainland shares rose 1% today and almost 3.3% for the week. Japan’s 1% gain today ensured a gain...

Overview:  There have been significant moves in the capital markets this week and participants are turning cautious ahead of the US employment report. After the US equity market rally stalled yesterday, nearly all the Asia Pacific bourses fell today. The strength of the yen (~3.8% this week) has weighed on Japanese equities (Nikkei -1.8% this week) and spurred the BOJ to buy ETFs today for the first time in five months. Europe’s Stoxx 600 is nursing a small loss as...