Tag Archives: USD

Overview: Benchmark 10-year yields are off 6-8 basis points in Europe and the United States. The panic seen at the start of the week in the UK has subsided considerably, as sterling recovered to almost where it was a week ago, while BOE’s hand has help steady the Gilt market. Equities in Asia Pacific suffered after the losses in the US yesterday. Hong Kong and India were notable exceptions. Europe’s Stoxx 600 is recouping around half of yesterday 1.65% fall, while...

(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...

The dollar surged last week. Sure, the push of the Fed was notable, but the larger move from Sweden’s Riksbank failed to impress. In fact, the Swedish krona was the poorest performer among the G10 currencies, tumbling 5% last week. Sterling was pummeled to $1.0860 even as the market moved to discount the likelihood of a 100 bp hike at the next Bank of England meeting on November 3. It cannot be entirely laid at the Fed’s feet. Sterling’s biggest drop (~3.5%) was...

As September winds down, three sets of economic reports will draw the most attention. We will review them and then offer a snapshot of the emerging market central bank meetings. As we have seen in the UK and Norway, several emerging market countries raised rates early (beginning in the middle of last year) but still experienced an acceleration of inflation. It obviously begs the unanswerable question about the impact on US inflation if the Fed had taken its foot off...

Business travel commitments keep me from updating the blog until the weekend, but I wanted to share a few thoughts post-Fed. First, the Fed was more hawkish, and the median dot sees 125 bp increase in the target rate in Q4.  The hawkish thrust was also evident in projecting that the target rate will remain higher for longer.  Even in 2025 sees the target rate above the longer-term (neutral) level.   Second, the market still does not fully accept the Fed's message....

Overview: Between Putin’s mobilization of 300k Russian troops and Fed Chair Powell expected to lead the central bank to its third consecutive 75 bp hike later today, the dollar rides high. It has recorded new two-year highs against the dollar bloc and Chinese yuan, while sterling was sent to new lows since 1985. Asia Pacific bourses were a sea of red for the sixth decline in the regional benchmark in the past seven sessions. Surprisingly, Europe’s Stoxx 600 is...

Overview: Yesterday’s late rally in US shares carried into the Asia Pacific session where all of the large markets advanced. However, the bears are not abdicating and Europe’s Stoxx 600 is off for the sixth consecutive session and US futures are trading lower. The sell-off in the bond market continues. European benchmark yields are mostly 8-10 bp higher and the US 10-year Treasury yield is up nearly five basis points to approach 3.54%. The two-year continues to...

Overview:  The busy week is off to a slow start as Japan is on holiday and the UK and Canadian markets are closed to honor Queen (Australia will commemorate with a holiday on Thursday). Nevertheless, the sell-off in equities continues and the US dollar is firm. Most of the large markets in Asia fell. India is a notable exception. Its benchmark rose for the first time in four sessions, helped by bank shares and Infosys. Europe’s Stoxx 600 is off for the fifth...

Verbal intervention proved sufficient to keep the US dollar below JPY145, but the greenback gained broadly. It rose to new two-year highs against the dollar-bloc and Chinese yuan ahead of the weekend and to levels against sterling not seen since 1985. The elevated price pressures, while the labor market stays tight (weekly jobless claims fell for the fifth consecutive week and reached four-month lows), have encouraged the market to look for a higher terminal Fed...