Tuesday , March 19 2024
Home / Tag Archives: trade (page 3)

Tag Archives: trade

Reserve Bank of Australia Surprises, but Aussie Struggles

Overview: The jump in US interest rates helped lift the greenback to new 20-year highs against the Japanese yen and pushed the euro back below $1.07. US equities saw initially strong gains pared and this set the tone for today’s activity. Most of the equity markets in the Asia Pacific region fell, but Japan and China. Europe’s Stoxx 600 is giving back more than half of yesterday’s 0.9% gain. US futures are off about 0.5%. The US 10-year yield is off a couple of...

Read More »

The Week Ahead: US CPI and PPI Set to Soften

The Fed's 50 bp rate hike is behind us.  Another 50 bp hike is expected next month. The April employment report will do little to calm the anxiety about the "too tight" labor market.  The decline in the participation rate was disappointing and this coupled with decline in Q1 productivity raies questions about the economy's non-inflationary speed limit.    One of the fascinating things about the markets is that sometimes the cause take place after the effect.  This...

Read More »

Central Banks on a Preset Course Reduces Significance of High-Frequency Data

Arguably the most important data next week is the flash PMI. It is not available for all countries, but for those generally large G10 economies, the preliminary estimate is often sufficiently close to the final reading to steal its thunder. Moreover, and this applies to high-frequency data more broadly, given the overshoot of inflation in most counties, with some exceptions, notably in Asia, central banks appear to be on set courses.  The near-term data are...

Read More »

RBA Drops “patience” to Send the Aussie Higher

Overview: The Reserve Bank of Australia hinted that it was getting closer to a rate hike.  The Australian dollar was bid to its best level since the middle of last year.  Australian stocks advanced in a mixed regional session while China and Hong Kong markets were closed for the local holiday.  BOJ Kuroda called the yen’s recent moves “rapid.”  The yen is sidelined today as the dollar weakens against other major currencies, led by the Antipodeans.  In addition to the...

Read More »

ECB Meeting and US and China’s CPI are the Macro Highlights in the Week Ahead

One of the most significant market responses to Russia's attack on Ukraine is in the expectations for the trajectory of monetary policy in many of the high-income countries, including the US, eurozone, UK and Canada.  The market has abandoned speculation of a 50 bp hike in mid-March by the FOMC and the Bank of England.  It has also scaled back the ECB's move to 20 bp this year from 50 bp.  Even after the Russian invasion, the market had discounted a 75% chance that...

Read More »

Capital and Commodity Markets Strain

Overview:  The capital and commodity markets are becoming less orderly.  The scramble for dollars is pressuring the cross-currency basis swaps.  Volatility is racing higher in bond and stock markets. The industrial metals and other supplies, and foodstuffs that Russia and Ukraine are important providers have skyrocketed.  Large Asia Pacific equity markets, including Japan, Hong Kong, China, and Taiwan fell by 1%-2%, while South Korea, Australia, and India managed...

Read More »

The Dollar Slips Ahead of CPI

Overview: The US dollar is trading with a lower bias ahead of the September CPI report due early in the North American session. Long-term yields softened yesterday and slipped further today, leaving the US 10-year yield near 1.56%.  European benchmark yields are 3-4 bp lower. The shorter-end of the US coupon curve, the two-year yield is firmer. Equities are enjoying a slightly better tone, though Japan, Taiwan, and Australia’s markets traded heavily in the Asia...

Read More »

Dollar Rallies as Energy Surge Quashes Animal Spirits

Overview: Investors worry that surging energy prices will sap economic activity and boost prices.  It is sparking a sharp drop in equities and bonds while lifting the dollar.  The Nikkei fell for the eighth consecutive session, and today's 1% drop brings the cumulative decline to 9%.  South Korea's Kospi also fell by more than 1%.  Some of the smaller markets in the region, like Malaysia, Indonesia, and the Philippines, rose by more than 1%.  They are an anomaly. ...

Read More »

How (Not) to Win Friends and Influence People

How (Not) to Win Friends and Influence People Overview: There are two big themes in the capital markets today. The first is the ongoing push of the Chinese state into what was the private sector. Today’s actions involve breaking Ant’s lending arms into separate entities, with the state taking a stake. This weighed on Chinese shares and Hong Kong, where many are lists. On the other hand, Japanese markets extended their recent gains. The Nikkei, for example, is has...

Read More »

FX Daily, July 13: Headline US CPI may Decline for the First Time in a Year

Swiss Franc The Euro has fallen by 0.18% to 1.0831 EUR/CHF and USD/CHF, July 13(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates Overview: New record highs in the US S&P 500 and NASDAQ coupled with China allowing Tencent to acquire a search engine helped lift Asia Pacific equities. It is the first back-to-back by MSCI’s regional index for more than two weeks. Australia’s market was a notable exception. The lockdown...

Read More »