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Tag Archives: PMI

Corrective Forces Help the Dollar Stabilize

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...

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US Dollar Punches Higher

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....

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China’s Measures Begin to Find Traction, US Employment Report on Tap

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...

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Dollar Gains Extended, Oil Steadies at Higher Levels after Saudi’s Cut, US Bill Deluge Begins Today

Overview:  The US dollar has extended its post-employment gains today, helped by firmer rates and several countries seeing downward revisions from the preliminary May PMI. The greenback is trading with a firmer bias against all the G10 currencies and most of the emerging market currencies, including Turkey, India, and China. July WTI gapped higher after the Saudi Arabia announced a voluntary and unilateral cut of one million barrels a day in output starting next...

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US Debt Ceiling Drama Ends with a Whimper, Focus on US Jobs and Fed

Overview: Another bizarre US debt-ceiling episode is over. President Biden will sign the bill that was approved by the Senate late yesterday. It is a bit anticlimactic for the market, for which the US jobs data is the key focus now. Outside of the fiscal drama, the Federal Reserve leadership has effectively push against market expectations for a hike later this month. The odds were around 70% earlier this week, and ahead of the jobs report, is near 30%. The dollar's...

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Yen Recovers from New 2023 Low, while Sterling Sets a New Low for the Month

Overview:  The dollar is bid. Only the Japanese yen is holding its own against the greenback but only after it fell to new lows for the year. The Scandis and Antipodeans are the heaviest among the G10 currencies, while sterling has fallen to a new low for the month. The prospect of a rate hike tomorrow has not protected the New Zealand dollar much and it is off nearly 0.5%. Emerging market currencies are more mixed. Outside of the Russian rouble, the South Korean...

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Tumbling Tokyo Prices Gives Ueda Breathing Space

Overview: Talk from two Fed officials yesterday, which seemed to validate market expectations eased the upward pressure on the dollar and helped equities launch a dramatic recovery. The market is pricing in a terminal rate near 5.50%, a little higher than the median dot in December. The S&P 500 posted a dramatic recover and posted a potential bullish key reversal. Its 0.75% closing gain was the largest advance in nearly three weeks. A large drop in Tokyo's...

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European Rates Continue to Surge, Sending Stocks Spiraling Lower

Overview: Seven of the G10 central banks pumped the brakes between last week and this week as they purposely seek to push demand back into line with supply. And there are more signs that they are succeeding in weakening growth impulses. The dramatic surge in European bond yields continues today with 10-year rates mostly rising another 13-15 bp. Italian and Greek benchmark yields are up 22-24 bp. The US 10-year Treasury yield is up nearly five basis points to 3.50%....

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Macro and Prices: Data and Psychology in the Week Ahead

The week ahead has a relatively light economic schedule, punctuated by the US Thanksgiving Day holiday on November 24. Nevertheless, the data highlights include the preliminary November PMIs, Tokyo's November CPI, and the FOMC minutes from this month's meeting. The data is not the driver now; psychology is. The precise print, for example, of the eurozone and the UK's preliminary PMI will likely be of little consequence. The composite has fallen for six consecutive...

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US Dollar Offered Ahead of the Employment Report

Overview: Risk appetites have returned but may be tested by the US jobs report. News of progress with US auditors in China helped lift Hong Kong and Chinese equities. Most of the large bourses in the region also rose. Europe’s Stoxx 600 is up a little more than 1% near midday after shedding 1.3% over the past two sessions. US futures also are trading with an upside bias. Benchmark 10-year yields are mostly a little softer today. The 10-year US Treasury yield is at...

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