Monday , April 6 2020
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The author Marc Chandler
Marc Chandler
He has been covering the global capital markets in one fashion or another for more than 30 years, working at economic consulting firms and global investment banks. After 14 years as the global head of currency strategy for Brown Brothers Harriman, Chandler joined Bannockburn Global Forex, as a managing partner and chief markets strategist as of October 1, 2018.

Marc Chandler

Oil Firm, Greenback Extends Gains

Overview:  Global equities are finishing the week on a soggy tone despite the 2%+ gains seen in the US yesterday. The extension of shutdowns, rising contagion and fatality rate, and imploding economies weigh on prices.  In Asia, Korea and Indonesia bucked the trend to most minor gains.  Europe is giving back yesterday's gains, and the Dow Jones Stoxx 600 is nearly flat on the week.  US shares are paring yesterday's gains as well,  Benchmark bond yields are little changed, though, at 60...

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Optimism on Oil Deal Steadies Risk Appetites…for the Moment

Overview: After US stocks dropped more than 4% yesterday, investor sentiment has improved, apparently sparked by ideas that the pain will force oil producers to find a way to reduce supply. Oil prices have surged, with the May WTI contract rallying around 7%. Asia Pacific equities were mostly higher, with Japan and Australia the notable exceptions. The Dow Jones Stoxx 600 is a little firmer, but for the seventh consecutive session, it is chopping around the 300-320 range. US shares are...

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April Monthly

In March,  the G10 and many emerging market countries, governments, and central banks unveiled large emergency measures.  The motivation is to blunt the economic impact of the novel coronavirus that has seen more than two billion people around the world have their movement restricted. Large swathes of the world's economy have shut down.  The nature of the shock means that the first countries to push its companies to re-start, and especially export-oriented countries, such as China,...

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Hemorrhaging Resumes

Overview: There is no reprieve for investors. Equities are falling sharply. Nearly all the Asia Pacific markets slumped but Australia. Chinese markets fared better than most, but the Nikkei was off 4.5%, and India was down almost as much in late dealings. Europe's Dow Jones Stoxx 600 is off more than 3% near midday, led by a sell-off in banks that are suspending dividends and share buybacks. It is giving back the last two days of gains. US share is sharply lower. Yesterday, the S&P...

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March Ends like a Lion, No Lamb in Sight

Overview: The coronavirus plague upended the world in March. Equities are finishing the month on a firm note. Strong gains in the US yesterday and an unexpectedly strong Chinese PMI (yes, to be taken with the proverbial grain of salt) helped lift most Asia Pacific and European markets today. Japan and Australia are exceptions to the generalization. The Dow Jones Stoxx 600 is slightly higher but appears to be waiting for US leadership to break higher. Benchmark 10-year yields are...

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Monday Blues

Overview: Risk appetites remain in check as the spread of the coronavirus is leading to more and longer shutdowns.  Asia Pacific equities fell with Australia, the notable exception.  Its benchmark rallied a record 7%, encouraged by additional stimulus measures.  Led by financials, following new that the ECB is requesting banks hold off dividend payments until October (which frees up an estimated 30 bln euros), real estate, and consumer discretionary sectors, the Dow Jones Stoxx 600 is...

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Technicals Turn Against the Dollar

The dollar rallied strongly from March 9 through March 20 or the start of last week on March 23.  It has subsequently sold off and done so in dramatic fashion.  It is not clear the trigger of the stunning reversal.  Some observers attribute it to the Fed's currency swap lines, which were offered daily (seven-day operations) to a handful of large central banks. Others link it to the better risk appetites reflected in meaningful bounces in equity markets, but nothing as striking as the...

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The Lay of the Land

The markets are an incredible aggregator of information.  The corona crisis has denied grist to the mill.  With so many unknowns, it is as if investors latched on to the US fiscal debate.  A camel, it is said, is a horse made in committee, and so too with the laborious legislative process of the American republic. When everything is said and done, more is often said than done.  However, this time is different.  Leaving aside the response to the public health emergency, G-10...

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Nervousness Ahead of the Weekend

Overview:  Officials appear to have persuaded investors that they have put into place measures that will cushion the economic blow and ensure that the financial system continues to function.  After seemingly goading officials into action, investors are choosing not to resist. Moreover, there is a recognition that many programs are scalable.  Risk assets dipped initially yesterday and came roaring back.  Good follow-through buying was seen in the Asia Pacific region.  Australia and...

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Rumor Bought, Fact Sold

(Weekly initial jobless claims since 1987) Overview: Speculation that the US Senate would pass the large stimulus bill worth around 10% of US GDP is thought to have fueled a bounce in equities in recent days. The bill was approved and will now go to the House, where a vote is expected tomorrow. If the rumor was bought, the fact has been sold.  The first to crack was the Asia Pacific region. Equities were mixed with the Nikkei shedding 4.5% and the Kospi off 1%. China and Hong Kong markets...

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