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Tag Archives: Brazil

Soggy Start to the New Week

Overview:  Rising energy prices and softer survey data weighs on sentiment.  Tensions between the US and China may rise, which has not been good for equities when the US formally acknowledges that Beijing has not complied with the Phase 1 trade commitments.  OPEC+ is not likely to accelerate output increases of more than 400k barrels as it previously agreed.  Chinese mainland markets are still closed, and Hong Kong listings bore the brunt of the Evergrande break-up. South Korea and Taiwan...

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What to Expect When You are Expecting

Overview: The markets have stabilized since Monday's panic attack but have not made much headway.  China and Taiwan returned from the extended holiday weekend.  Mainland shares were mixed. Shanghai rose by about 0.4%, while Shenzhen fell by around 0.25%.  Taiwan got tagged for 2%, and Japan's Topix was off 1%.  Hong Kong and South Korean markets were closed.  Europe's Dow Jones Stoxx 600 is firmer for the second day but is still lower for the week.  US indices barely entered the gap left...

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Central Bank Fest

In terms of central bank meetings, the week ahead is one of the busiest.  No fewer than 13 central banks hold policy meetings, divided between six major and seven emerging markets.  While the significance of US monetary policy for the world makes the FOMC meeting a highlight, it is Norges Bank, Norway's central bank, that will steal the march, becoming the first high-income country to lift rates since the pandemic struck.  Among the emerging market central banks, Brazil is poised to hike the...

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Wait Until Tomorrow

Overview: The rise in 10-year benchmark yields stands out.  The US 10-year yield is up four basis points to 1.36%, while European yields are 3-5 bp higher.  Australia, where the central bank indicated it would proceed with its tapering plans, saw no change in their benchmark, and its two-year yield remained a little below zero.  Equity markets are mixed.  The MSCI Asia Pacific Index has been up for the past seven sessions, struggled today, though Japanese and Chinese markets advanced by more...

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Consolidative Mood Grips Markets

Overview:  The dollar is consolidating yesterday's advance and is confined to fairly narrow ranges in quiet turnover.  Most of the major currencies are within 0.1% of yesterday's close near midday in Europe. The $1.1700-level held in the euro.  Most emerging market currencies have edged a little higher.  Despite the largest fall in the US NASDAQ in three weeks and the largest fall in the S&P 500 in a month, the MSCI Asia Pacific Index rose for the first time in five sessions today, led...

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Rising Rates Underpin the Greenback

 Overview: The US dollar remains firm ahead of the July CPI release, and even though Chicago Fed Evans demurred from the hawkish talk, the market is getting more comfortable with the idea of a rate hike next year.   The implied yield of the December 2022 Eurodollar futures is rising for the sixth consecutive session.  Most emerging market currencies are also under pressure.  The JP Morgan Emerging Market Currency Index edged up yesterday to snap a five-day drop but is resuming its decline...

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US Employment Data is Important but for the Millionth Time, Don’t Exaggerate It

Overview: Record high closes yesterday for the S&P 500 and NASDAQ have done little to help global equities today.  Most of the Asia Pacific region markets, but Japan and Australia slipped ahead of the weekend while still holding on to gains for the week.  Europe's Dow Jones Stoxx 600 is threatening to snap a four-day advance, and US futures are trading a little lower. The US 10-year yield reached 1.125% in the middle of the week and is extending yesterday's recovery to nearly 1.25%, a...

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Yesterday’s Dollar Recovery Stalls

Overview: US interest rates and the dollar turned higher following comments by the Fed's Vice Chairman Clarida, who appeared to throw his lot with the more hawkish members. The dollar recovered from weakness that had seen it fall to almost JPY108.70, its lowest level since late May, and lifted the euro to $1.19.  Still, there has been little follow-through dollar or Treasury buying today.  The euro and yen are marginally softer, but most other major currencies post small gains.  Emerging...

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Markets Becalmed

Overview:  The US 10-year yield is hovering around 1.18% in Europe, while the on-the-run JGB benchmark yield is below zero for the first time this year.  Greek and Australia's 10-year bond yields are at new six-month lows. The softer yields saw the dollar fall to two-month lows against the yen, while the Swiss franc rose to the highest level since last November against the euro.  Equities appear to like the lower yields.  The S&P 500 set a closing record high yesterday, and, with the...

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RBA Surprises

Overview: US Treasury yields were slipping, but the weaker than expected manufacturing ISM, which included the slowest rise in price paid since March, sent the 10-year yield below 1.15% and the 30-year below 1.83%.  The yen appears to be the most sensitive of the major currencies to US yields, and the drop in yields saw the dollar trade down to  JPY109.20 and post its lowest close since early June.   US equities pared early gains, which had lifted the Dow to new record highs before reversing...

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