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Tag Archives: USD

How the Market Responds to US CPI may set the Near-Term Course

Overview:  US stocks built on the recovery started on Monday and Powell’s suggestion of letting the balance sheet shrink later this year eased some speculation of a fourth hike this year, which seemed to allow the Treasury market to stabilize.  What amounts to a greater appetite for risk is carrying over into Asia Pacific activity today. Many of the large bourses advanced more than 1%, with the Hang Seng up almost 2.8% and the Nikkei up  nearly as much.   Bond...

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The Chagrin of Beijing and the Problem of Time

The central bank meeting cycle is over. Most of the important high-frequency data has been released until early January. The US debt ceiling has been lifted, avoiding an improbable default. A year ago, there was a sense of optimism, with a couple of vaccines being announced and monetary and fiscal stimulus boosting risk-appetites. Populism, which had been in the ascendancy after the Great Financial Crisis, seemed to be retreating in Europe and the United...

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Bulls Shrug Off Bout of Profit-Taking, Leaving the Greenback Poised to Rally into Year-End

(The regular analysis will resume after the New Year.  In the meantime, look for several occasional thematic posts over the next couple of weeks.  Here is to a healthy and happy New Year!).  The dollar recovered from the bout of profit-taking seen after the FOMC largely confirmed market expectations to post a weekly advance against all the major and most emerging market currencies.  The omicron variant continues to sweep across the world, and efforts in large parts...

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The Week Winds Down with Equities under Pressure and the Dollar Mostly Firmer

Overview: The combination of the volatility and a large number of central bank meetings have exhausted market participants, and the holiday phase appears to have begun. Equities are under pressure following the sell-off yesterday in the US. Japan, China, and Hong Kong suffered more than 1.2% losses, while Australia, South Korea, and Taiwan posted minor gains. It was the fifth loss in the past six sessions for the MSCI Asia Pacific Index. Europe's Stoxx 600 is off...

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Fed Unleashes Animal Spirits

Overview:  The Fed's hawkish pivot came a few weeks before yesterday's FOMC meeting, which confirmed more or less what the market had already largely anticipated. Buy the (dollar) on rumors (of tapering and more aggressive stance on rates) and sell the fact unfolded, and unleashed the risk-appetites which rippled through the capital markets. US stocks rallied yesterday, and the futures point to a gap higher opening today. Large Asia Pacific bourses, led by a 2%...

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Has the Market Carried the Fed’s Water? Is the Dollar Vulnerable to Buy the Rumor and Sell the Fact?

Overview: The US dollar is trading with a bit of heavier bias against most of the major currencies as the focus turns to today's FOMC meeting, where a clear consensus has emerged in favor of faster tapering and a dot plot pointing to a steeper pace rate hikes.  Emerging market currencies led by Turkey and South Africa are mostly lower. The JP Morgan Emerging Market Currency Index is lower for the third straight session.  The US 10-year Treasury yield is flat, near...

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No Turnaround Tuesday for Equities?

Overview:  Activity in the capital markets is subdued today, ahead of tomorrow's FOMC meeting conclusion and the ECB meeting on Thursday.  The MSCI Asia Pacific equity index fell for the third consecutive session.  European bourses are heavy after the Stoxx 600 posted an outside down day yesterday. Today would be the fifth consecutive decline. Selling pressure on the US futures indices continues after yesterday's losses.  Australia and New Zealand bonds played...

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Dollar Starts the Week Bid ahead of the FOMC

Overview: Equities, bonds, and the dollar begin the new week on a firm note.  Japanese, Chinese, Australian, and New Zealand equities advanced in the Asia Pacific region.  Europe's Stoxx 600 is snapping a three-day decline, and US futures are 0.25%-0.35% higher.  The US 10-year yield is a little softer at 1.48%. European benchmark yields are mostly 1-2 bp lower, and near 0.71%, the UK Gilt's yield is at a three-month low.  The dollar is rising against all the major...

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FX Daily, December 6: Semblance of Stability Returns though Geopolitical Tensions Rise

Swiss Franc The Euro has risen by 0.26% to 1.041 EUR/CHF and USD/CHF, December 6(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates Overview: The absence of negative developments surrounding Omicron over the weekend appears to be helping markets stabilize today after the dramatic moves at the end of last week. Asia Pacific equities traded heavily, and among the large markets, only South Korea and Australia escaped unscathed...

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FX Daily, December 02: Calm Surface Masks Lack of Conviction

Swiss Franc The Euro has risen by 0.09% to 1.0587 EUR/CHF and USD/CHF, December 2(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates Overview: The downside reversal in US stocks yesterday seemed to accelerate after the first case of the Omicron variant was found in the US. In itself, it should not be surprising, but perhaps, what was especially disheartening is that the person had been fully vaccinated. The S&P 500...

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