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Tag Archives: U.K.

Downside Risks to the US Employment Report?

Overview: The US dollar enjoys a firmer bias against the major currencies ahead of the July employment data. Emerging market currencies are mixed. Asian currencies are generally firm while central Europe is a bit softer. Some detect a relaxation in tensions around Taiwan, though China’s aerial harassment continues. Taiwanese shares jumped 2.25% to lead the region that saw China’s CSI 300 rally over 1%. Europe’s Stoxx 600 is giving back yesterday’s 0.2% gain, even...

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Over to the BOE

Overview: Strong gains in US equities yesterday and easing fears following Pelosi’s visit to Taiwan helped lift most Asia Pacific equities, with Hong Kong leading the way with a 2% rally. Taiwan, Australia, and India did not participate in the regional rally. The Stoxx 600 is edging higher today. It was flat on the week through yesterday. US futures are a little firmer. The greenback is offered against the major currencies led the Antipodeans. The Japanese yen...

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Dismal EMU Flash PMI on Heels of First ECB Rate Hike since 2011

Overview:  The euro is over a cent lower from yesterday’s peak, pressured by the drop in the flash PMI composite below 50 for the first time since early last year. More generally, the flash PMIs have shown the global economic momentum is waning, and the bond markets have responded accordingly. The US 10-year yield is flirting with 2.80%, its lowest level in more than two weeks. European yields are 15-20 bp lower and the spread between Italian and German bonds has...

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Italian Politics Complicate the ECB’s Task

Overview: The appetite for risk seen earlier this week is fading. Yesterday’s US equity gains helped lift most of the large markets in the Asia Pacific region, but China’s CSI 300 fell 1.1%, giving back most of this week’s gains as credit issues from the property sector haunt sentiment. Europe’s Stoxx 600 is trading heavily ahead of the ECB meeting outcome. US futures are also trading off. Benchmark 10-year yields are firmer with the US Treasury near 3.05%. European...

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Calm before the Storm?

Overview: The biggest rally in the S&P 500 in three weeks helped lift global equities today. The MSCI Asia Pacific index rose for the third consecutive session, the longest streak this month. Europe’s Stoxx 600 is up for a fourth day and is at its best level since mid-June. US futures are firmer. The rally in equities has not spurred a rise in rates. The US 10-year yield is back below 3%, and European benchmark yields are mostly 5-8 bp lower, though signs that a...

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The Dollar is on its Back Foot

Overview: The dollar’s downside correction continues today, helped by hawkish signals from the Reserve Bank of Australia and unnamed sources who have played up the chances of a 50 bp hike by the European Central Bank on Thursday. Asia Pacific equities were mixed, and mostly lower after the losses in the US yesterday. The prospect of a more aggressive ECB is weighing on European equities. The Stoxx 600 is slightly lower after rallying 2.7% in the past two sessions....

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Market Prices in More Aggressive Fed AND is more Confident of Rate Cuts by the End 2023

Overview: The higher-than-expected US CPI and the strong expectation of a 100 bp hike by the Fed in two weeks is propelling the dollar higher. It jumped to almost JPY139.40 and the euro is off more than cent from yesterday's high (though holding above parity). Even where there has been favorable economic news, like the strong jobs report in Australia, is failed to dent the greenback. Most of the large bourses in the Asia Pacific regions advanced. Hong Kong is a...

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Euro Parity Holds ahead of US CPI

Overview: The US dollar is consolidating with a slight downside bias ahead of the June CPI report. The euro held above $1.00 but is still pinned in the trough. The rate hike by the Reserve Bank of New Zealand failed to have much impact. On the other hand, the JP Morgan Emerging Market Currency Index is lower for the fourth consecutive session. Most of the large markets in the Asia Pacific region rose, led by a 2.7% rally in Taiwan after the government promised to...

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Euro Tests Parity

Overview: Equities remain under pressure as investors contemplate tighter financial conditions and the risks of recession. Most of the large equity markets in the Asia Pacific region sold-off, led by a 2.7% drop in Taiwan. Australia managed to buck the trend and managed a small gain. Europe’s Stoxx 600 is off by about 0.2% near midday after a 0.5% loss yesterday. US futures are lower and are threatening a gap lower opening for the S&P 500 and NASDAQ. Bonds are...

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Monday Blues

Overview:  The US dollar is bid against most currencies today, encouraged not just by good news in the US and poor news out of China, where Covid is flaring up and new social restrictions are fared, while Macau has been lockdown for a week. The energy crisis in Europe is fanning fears of a recession before the ECB lift rates above zero. Japanese markets bucked the global move and advanced, which it often does after the government wins an upper house election. The...

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