Saturday , November 23 2019
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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

Dollar Snaps Back

Overview: The idea that a US-China trade deal is proving more elusive than the agreement in principle on October 11 implied is being seized upon to spur what we suspect is an overdue round of profit-taking in global equities. The MSCI Asia Pacific Index snapped a three-advance, with over 1% declines in South Korea and Australia. Europe's Dow Jones Stoxx 600 set new multiyear highs yesterday before reversing lower and is extending the losses today, threatening the 20-day moving average...

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Hong Kong Stocks Rally as Stand-Off Continues

Overview: The run-up in equities continues to be the dominant development in the capital markets. Although the Japanese and South Korean bourses fell, the rise in Australia, China, Hong Kong, and Taiwan underpin the MSCI Asia Pacific Index. The Hang Seng's gains  (1.5% on top of yesterday's 1.3% rise) are notable as the situation on the ground remains intense and unresolved. European markets are higher, and the Dow Jones Stoxx 600 is at new four-year highs, while US shares are firmer...

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Sterling Shines in Subdued Start to the New Week

Overview: Equities in Europe and the US look to extend their six-week rally, while the MSCI Asia Pacific Index gets back on the winning way after stumbling last week. Despite the escalation of the conflict in Hong Kong, the Hang Seng rose 1.35% to lead the region and recoup a chunk of last week's 4.8% slump. The Dow Jones Stoxx 600 puts the European benchmark within spitting distance of the four-year high set recently. The S&P 500 gapped higher at the start of last week to new...

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Make it or Break It Week for the Dollar?

The US dollar was little changed for most of last week and then weakened against most of the major currencies ahead of the weekend.  The consensus narrative is that comments by the US Administration fanned optimism on a trade agreement with China, and that encouraged a rally in risk assets.  We are skeptical, in part because earlier worries failed to entice much of a market reaction.  Also, bond yields fell last week, with the 10-year yield on US Treasuries leading the way with an 11 bp...

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Economic Entrails in the Week Ahead

The exaggeration of the significance of a few data points led many observers to posit a synchronized global economic rebound.  Disappointing data from China, Japan, and Australia last week suggested that the Asia Pacific region is not experiencing it.  Japan's export prowess is a thing of the past.  Net exports were a drag on Q3 GDP. The October trade balance is likely to show that there has been little improvement.  Japan has recorded an average monthly trade deficit of about JPY157...

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Market Runs with US Line that US-China Deal is Close

Overview: Comments by US presidential adviser Kudlow playing up the prospects of a trade agreement between the US and China, with other reports suggesting a key call will be held today, is helping to underpin sentiment into the weekend. The MSCI Asia Pacific Index pared this week's loss today, with China the only main market not participating, despite the PBOC's unexpected injection of CNY200 bln of the Medium-Term Lending Facility. The regional benchmark snapped a five-week advance....

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Unexpected German Growth Fails to Buoy the Euro

Overview: Rising trade anxiety and disappointing economic reports from the Asia Pacific region helped unpin the profit-taking mood in equities, while bond yields continued to pullback. The MSCI Asia Pacific Index and the Dow Jones Stoxx 600 are in the red for the fourth time in the last five sessions. Germany reported a surprise 0.1% expansion in Q3, but it has done little for the DAX or the euro. The S&P 500 eked out a small gain yesterday but is trading heavier again now....

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Investors Temper Euphoria

Overview: The recent rise in equity markets and backing up in yields spurred many observers to upgrade their macroeconomic outlooks rather than the other way around. Yet we continue to see may worrisome signs. It is not just trade, though, of course, that is part of it. Sentiment itself is fragile and will likely follow prices. Led by Hong Kong, where the confrontation is intensifying, and the Hang Seng's 1.8% drop, regional markets tumbled. The MSCI Asia Pacific Index fell for the...

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Farage Declares Truce with Tories after being Offered a Peerage, Underpins Sterling

Overview: Global capital markets are calm as investors look for a new catalyst. The MSCI Asia Pacific Index snapped back after posting its first back-to-back decline in a month. All the equity markets were higher, but Australia. The Nikkei, Kospi, and Taiex led the advance with about a 0.8% gain. European shares closed firmly near session highs yesterday, even if still lower on the day, and there has been some follow-through buying today. The S&P 500 is little changed after ending...

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Dollar Consolidates and Equities Follow Asia Lower

Overview: Escalating violence in Hong Kong and the continued fall in Chinese producer prices weighed on equities in Asia Pacific trading. The MSCI Asia Pacific Index has risen nearly 7% during the five-week rally and is off to a weak start this week. Hong Kong's Hang Seng fell around 2.6%, its biggest loss in three months, and China's CSI 300 was off 1.75%. Nearly all the local markets fell but Australia. European shares are also under pressure. The Dow Jones Stoxx 600 has also rallied...

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