Tag Archives: US

The US dollar rally is of historic proportions. Its climb is relentless, though there was around a 4-7% pullback for a few weeks beginning in mid-July. Since then, the greenback has made up for lost time and appreciated to multiyear highs against most of the major currencies. The first real bout of profit-taking in nearly a month seen in recent days looks corrective in nature.   The different performances cannot be entirely traced to monetary policy differences,...

Overview: The euro traded below parity for the second time this year and sterling extended last week’s 2.5% slide. While the dollar is higher against nearly all the emerging market currencies, it is more mixed against the majors. The European currencies have suffered the most, except the Norwegian krone. The dollar-bloc and yen are also slightly firmer. The week has begun off with a risk-off bias. Nearly all the large Asia Pacific equity markets were sold. Chinese...

For many, this will be the last week of the summer. However, in an unusual twist of the calendar, the US August employment report will be released on September 2, the end of the following week, rather than after the US Labor Day holiday (September 5).  The main economic report of the week ahead will be the preliminary estimate of the August PMI. The policy implications are not as obvious as they may seem. For example, in July, the eurozone composite PMI slipped...

Overview: The markets are putting the finishing touches on this week’s activity. Japan, returning from yesterday’s holiday bought equities, and its major indices jumped more than 2%. China, South Korea, and Australia struggled. Europe’s Stoxx 600 is firmer for the third consecutive session. It is up about 1.3% this week. US futures are also firmer after reversing earlier gains yesterday to close lower on the day. The US 10-year yield is flat near 2.88%, while...

Overview: Speaker Pelosi's visit to Taiwan has added to the risk-off mood of the capital markets today. Most of the large Asia Pacific equities sold off, with Australia and India being notable exceptions. Europe's Stoxx 600 is off for the second consecutive session, and by the most (~0.60%) since mid-July. US futures are also weaker. Benchmark 10-year rates are lower. The 10-year Treasury is off a couple of basis points to below 2.55%, while European yields are...

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...

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...

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...

Overview: The sharp sell-off in US equities yesterday, led by tech, is weighing on today’s activity. Most of the large Asia Pacific markets excluding Japan and India lost more than 1% today. The three-day rally in Europe’s Stoxx 600 is being snapped today. US futures are posting small losses. The US 10-year yield is little changed around 3.17%, while European benchmarks are narrowly mixed, with the periphery doing better than the core. The dollar is enjoying a firmer...

The pendulum of market sentiment swings dramatically.  It has swung from nearly everyone and their sister complaining that the Federal Reserve was lagging behind the surge in prices to fear of a recession.  On June 15, at the conclusion of the last FOMC meeting, the swaps market priced in a 4.60% terminal Fed funds rate.  That seemed like a stretch, given the headwinds the economy faces that include fiscal policy and an energy and food price shock on top of monetary...