Sunday , January 17 2021
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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

Markets are Subdued Despite Impeachment and Record Chinese Trade Surplus

Overview:  The capital markets are becalmed today. There does not appear to be much reaction to the news that the House of Representatives impeached President Trump an unprecedented second time with greater bipartisan support than previously (10 GOP voted with the Democratic majority).  Nor has there been a significant reaction to Italy's political turmoil, where a small but key minority party withdrew from the governing coalition.  Most Asia Pacific equity markets advanced, with China and...

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PBOC Sends Signal as Market Looks Past Impeachment Vote

Overview: The US dollar is regaining ground lost in yesterday's setback against the major currencies.  Sterling is the notable exception.  It was toying with the $1.37 area, perhaps helped by the Governor of the Bank of England signal that there still are hurdles to adopting negative interest rates, which the futures market is still discounting for as soon as midyear.  The US 10-year yield that reached 1.18% yesterday before slipping is now back to around 1.12%, which has taken off pressure...

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Markets Catch Collective Breath

Overview:  The capital markets were stabilizing today after dramatic moves yesterday. Equity markets are recovering, and the dollar is paring yesterday's gains.  Most equity markets in the Asia Pacific region rose, though Taiwan, South Korea, and Australia were notable exceptions.  Europe's Dow Jones Stoxx 600 is posting a small gain, which, if retained, would be the fifth gain in seven sessions.  US shares are higher after snapping a four-day advance yesterday.  Benchmark 10-year yields are...

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Greenback Extends Recovery

Overview: Julius Ceasar is said to have "crossed the Rubicon" on January 10, 49 BCE, taking the 13th Legion into Rome, defying orders from the Senate, and precipitating the Roman Civil War that marked the end of the republic and the birth of the empire.   Last week's events paled in comparison despite the US President urging his supporters to march on Washington and demonstrate its strength. It was the only way the "stolen" landslide election would be secured.  His personal lawyer called for...

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Is the Dollar’s Decline since the Election set to Correct?

The US election in early November was an inflection point.  Stocks have rallied.  The dollar has been sold. The rise in US yields has dragged up the yields in many other countries, especially in the dollar-bloc.  European bonds have held in better, and peripheral European bonds have shined.  Italy's 10-year benchmark yield fell to a new record-low ahead of the weekend.  Before the political drama in Washington last week, we had the market had largely discounted the adverse developments.  The...

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Macro Drivers while Covid Remains Out of Control

The new Covid outbreak, social restrictions, business closures, and lockdowns render most of the upcoming data mostly irrelevant.  Given the serious spread of the infection and the seemingly slow rollout of the vaccine, the economic data will be distorted even though the impact may not be as severe as last March and April. Policy settings are also considerably more accommodative, though it does little to address the loss of capacity, especially in services.   Manufacturing is holding up...

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Can the Dollar Find Traction Even if the Employment Data Disappoint?

Overview: The global equity rally picked up this week as it closed in 2019.  The MSCI Asia Pacific Index gained today and is up in nine of the past 10 sessions.  It has fallen only in one week since the end of October.  South Korea's Kospi led today's advance with a nearly 4% rally on the back of talks that were later played down between Hyundai and Apple.  Europe's Dow Jones Stoxx 600 is at its best level today since last March and is posting gains for the fourth consecutive week.  US...

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Dollar Bounces after Insurrection Put Down

Overview:  After the National Guard were called to put down an insurrection in Washington, DC, the dollar is having its best day in around a week.  The euro's three-day rally has been halted even though German factory orders surprised on the upside.  The greenback is firmer against all the major and most of the emerging market currencies today.  Equities are moving higher.  All the markets in the Asia Pacific but Hong Kong rallied today after the 8-day advance stalled yesterday.  Hong Kong...

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High Drama Weighs on the Greenback and Lifts Yields

Overview:  One of the two Georgia Senate contests remains too close to call, but the market appears to be pricing in a Democrat sweep.  The 10-year yield has punched above 1% but has offered the greenback little support.  Yesterday, the dollar-bloc currencies rose to highs since early Q2 2018 and are extending those gains today.  The Scandis are also tracking higher.  The yen is the laggard, but the greenback remains below JPY103.00  Emerging market currencies have not been deterred by the...

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No Follow-Through Dollar Buying after Yesterday’s Recovery: Consolidative Session Likely

Overview: The poor price action in North America yesterday failed to spur much knock-on effect today.  That said, US participants may remain on edge as Georgia votes today which will greatly impact the shape of the Biden agenda.  The MSCI Asia Pacific Index extended its advance for an eighth consecutive session, and European shares are little changed, caught between rising energy and falling utilities.  US shares are firm.  Bond yields have edged up 1-2 bp in Europe and the US but were lower...

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