Tag Archives: USD

The yen's surge may be easing.  It made a new marginal high in Asia, but has not been able to sustain it   Technically, a hammer candlestick pattern may be traced out by the greenback's recovery today. Supporting the greenback is the movement in interest rate differentials.  The US 10-year premium over Japan has widened by nearly 10 bp since last Thursday.   Near 184 bp, it is the widest this month.  The two-year premium has also widened at 96 bp.  It is also the widest this month. The...

 Early in the financial crisis, the US forced all large banks to take an infusion of capital.  This helped put a floor under the US financial system.  Regulators and stakeholders encouraged US banks to address the significant nonperforming loan problem. The eurozone banking woes persist.  Before the weekend, the shares of the one the largest banks was trading at 25 -year lows.  The problem with nonperforming loans though is largely concentrated in the periphery.  Italy is moving to...

Speculators in the futures market were not particularly active in Commitment of Traders reporting week ending April 5.  There was only one gross position adjustment which we regard as significant (defined as a 10k contract change), and that was in the yen.   Yen bulls extended their gross long position by 13.3k contract to new record of 98.1k contracts.   However, the bears are beginning to get itchy and have sold into the yen gains for the second consecutive week.  The gross short yen...

Although there is no convincing technical evidence that dollar's retreat in Q1 is over, we suspect it is nearly complete.  We will be especially sensitive to reversal patterns, divergences with technical indicators, and other signs that the move is exhausted. The fundamental economic driver of our medium term constructive outlook for the US dollar, the divergence of monetary policy between the major central banks, relative health of the financial sector, and absorption of capacity,...

The old head and shoulders pattern in the dollar against the yen is back in vogue.  We first pointed it out in the first week of January here. Recall the details.  The neckline is drawn around JPY116.30 and measuring objective is near JPY107.00.   That target also corresponds to a 38.2% retracement of the big Abe-inspired dollar rally (~JPY106.80).   This Great Graphic from Bloomberg shows the pattern.   We note the conflicting flows presently.  Portfolio managers continue to be large...

The US dollar is better bid today but remains largely in the ranges seen in recent days.  There a few developments to note, which together are lifting European equities after Asian equities softened.   First, the API oil inventory estimate showed an unexpected fall of 4.3 mln barrels.  An increase of half the magnitude was expected.  The DOE estimate, which is considered more reliable, will be one of the North American highlights today.  Second, and also supporting the oil complex today...

There are four events that will shape market psychology in the week ahead.  They are Yellen's speech to the NY Economic Club, US jobs data, eurozone March CPI and PMI, and Japan's Tankan Survey.   The broad backdrop is characterized by the rebuilding of risk appetites since the middle of February, though the MSCI emerging market equity index put in its low on January 20, as did the CRB Index.  The price of oil appeared to bottom then as well, but it retested the lows in mid-February and...

The US dollar rose against all the major and most emerging market currencies last week. After selling off following the ECB and FOMC meetings, the dollar found better traction.  It was helped by widening interest rate differentials.  Regional Fed manufacturing surveys for March suggest the quarter is ending on a firm note.  With new orders rising, it is reasonable to expect the momentum to carry into Q2.   Nearly half of the regional Fed presidents spoke last week, and the general...

The US dollar rose against all the major and most emerging market currencies last week. After selling off following the ECB and FOMC meetings, the dollar found better traction.  It was helped by widening interest rate differentials.  Regional Fed manufacturing surveys for March suggest the quarter is ending on a firm note.  With new orders rising, it is reasonable to expect the momentum to carry into Q2.   Nearly half of the regional Fed presidents spoke last week, and the general...

Since 2015, the SNB provides its balance sheet items in a different form. Previously the monthly bulletins provided a history of the balance sheet. The last monthly bulletin appeared for August 2015. It contained all important data of the SNB and the Swiss economy. The balance sheet data is often 2 months or older.  The weekly monetary data and the IMF data about FX reserves and more are published a lot more quickly, but they are not that complete like the monthly bulletin. SNB...