Tag Archives: US

The latest US employment and inflation figures are passed. The market is confident of a 75 bp rate hike next month. While a 50 bp in December is still the odds-on favorite, the market has a slight chance (~15%) of a 100 bp move instead after the robust jobs report and stronger-than-expected September CPI. The implied yield of the December Fed funds futures has ground higher for 12 consecutive sessions to about 4.23%. After two straight quarters of contraction, the...

Overview: There has been little follow-through dollar selling so far today after yesterday’s dramatic downside reversal after the initial flurry of buying in response to the stronger than expected US CPI. Still, the upticks look corrective in nature and the intraday momentum indicators are stretched, raising the prospect of new sales by North American operators today. The sharp recovery in US equities did carry over into Asia and Europe where most bourses are ending...

Overview: There seems to be a nervous calm today ahead of the US CPI. The dollar is hovering near JPY147 but the risk of BOJ intervention in the North American session seems slim. The BOE’s emergency Gilt buying operation ends tomorrow and UK bonds yields have tumbled. While equities in the Asia Pacific region lost ground, Europe’s Stoxx 600 is trying to snap a six-day decline. US equity futures are firm. Yields in Europe are mostly 3-6 bp lower, and despite...

Overview: The dramatic moves spurred by the BOE maintaining the end of the week deadline for its Gilt purchases, which have been quite modest given its wherewithal, have calmed. Sterling is firmer on the day, though long-end Gilt yields are higher. The dollar has pushed above JPY145.90, where the BOJ intervened last month. Risk appetites more broadly appear to have stabilized, but we suggest it may be a modest bout of position adjusting ahead of tomorrow’s US CPI....

Overview: The start of the new week has not broken the bearish drive lower in equities. Several Asia Pacific centers were closed, including Japan, Taiwan, and South Korea. China’s markets re-opened, and the new US sanctions coupled with the disappointing Caixin service and composite PMI took its toll. The CSI 300 was off 2.2% and the Hang Seng dropped nearly 3%. After falling 1.2% at the end of last week, Europe’s Stoxx 600 gapped lower today and is off almost...

Overview: The big bond and stock market seen yesterday has continued today. The Reserve Bank of Australia’s reversion to a quarter-point hike stokes hope that the aggressive tightening cycle more broadly is set to slow. The UN’s Conference on Trade and Development became the latest to warn that the synchronized tightening risks a global recession and a prolonged period of stagnation. The large equity markets in the Asia Pacific region rose 2.0%-3.75%.  Europe’s Stoxx...

Overview: The markets begin October with some trepidation.  Rumors continue to circulate about the health of a large European bank, cross currency swaps are elevated, suggest dollars are more difficult to access.  The S&P 500 settled on new lows for the year at the end of last week.  China and South Korea on closed for national holidays. Chinese market will not open until next week, and Hong Kong markets are closed tomorrow.  While the Nikkei advanced, the other...

(Business travel will prevent me from updating the blog for the next couple of days.  Thank you for your patience.  Good luck.) Overview: After extending last week’s moves yesterday, the capital markets are mostly calmer today. Sterling is firmer, as are UK Gilts. The dollar is mostly consolidating inside yesterday’s range. Equities are stable to higher. Most of the large markets in the Asia Pacific region, but India edged higher, led by a 1.45% gain in China’s CSI...

Overview: Sterling’s pounding continued in Asia where it was driven to $1.0350, a new record low before stabilizing. UK rates also continued to rise sharply after the new government promised more tax cuts next year. The right-wing victory in Italy was not surprising but it kept pressure on Italian bonds. China took more action to slow the yuan’s descent The dollar is broadly higher. All the G10 currencies and most emerging market currencies are lower. Risk appetites...

Overview: The firmer than expected US CPI set off a major reversal of the recent price action. It is a two-prong issue. The first is about inflation and the squeeze on the cost-of-living. The second, and more powerful in the capital markets is how the Fed is likely to respond. This drove US stocks and bonds lower and lifted the dollar broadly. Asia Pacific bourses were a sea of red. Most major markets were off 1-2%, while the Nikkei, the Hang Seng, and Australia’s...