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Tag Archives: CAD

Global Bond Rally Continues, Greenback Remains Firm

Overview: The US 10-year yield is trading below the Fed funds target.  The two-year yield is trading below the lower end of the Fed funds target range.  A warning by New Zealand that the next rate move could be a cut sent New Zealand and Australian yields to new record lows.  In Japan, the 10-year yield slipped below the overnight unsecured call rate.  Benchmark yields in Europe are mostly lower, with the yield on the 10-year German Bund is slumping to new three-year lows...

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Monday Blues: Equities Pare Quarterly Gains

Overview:  Global equities have soured after the US shares dropped the most since very early in the year before the weekend.  Asia's sell-off was led by the 3% decline in Nikkei, while Malaysia fared among the best, surrendering 1%.  Europe's Dow Jones Stoxx 600 is off for a fourth session. It lost 1.2% at the end of last week and gapped lower today but stabilizing after the better than expected German IFO survey.   The S&P 500 closed its week's lows of 2800.  US shares...

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Thoughts about the Price Action

The Federal Reserve was more dovish than expected, but that did not stop the dollar from appreciating against most of the major currencies last week.  Even the Norwegian krone, which one would have thought would have been better supported following the central bank's rate hike, closed lower on the week. Among the majors, the yen and Swiss franc were resilient in the face of the dollar's strength. The dollar also rose against many of the high-beta emerging market...

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Dreadful EMU PMI and US Machinations Rival Brexit for Attention

Overview:  The S&P 500 recovered from the post-FOMC reversal to close a new 5-month high yesterday, led by technology.  Financials were the only main sector to retreat.  The large equity markets in Asia, Japan, China, Australia, South Korea, and Taiwan all advanced.  Europe's Dow Jones Stoxx 600 reversed its initial gains and is nursing a small loss on the week.  US shares were little changed but are being dragged down by the reversal in Europe.    Benchmark 10-year...

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Dovish Fed Sends Global Yields Lower, but Little Succor for Stocks

Overview:  The dovishness of the Federal Reserve sent ripples through the capital markets.  US equities reversed initial gains, but Asia Pacific equities edged higher, though Japanese markets were closed for a national holiday.  European shares are struggling, as financials and consumer discretionary lead the 0.3% push lower.  US shares are also trading with a heavier bias.  Yields have come off and the US 10-year yield that had finished last week a little below 2.60% is...

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FOMC: Above Trend Growth Requires Continued Monetary Support

The Federal Reserve sounded more dovish than many expected and this prompted a 5-7 bp drop in US rates, and the dollar fell to new lows for the week against many of the major currencies.  The median Fed forecast now anticipates no hike this year but one next year.  The Fed will also taper the roll-off of its balance sheet and completing it by the end of September.   In December, 11 officials anticipated two or three hikes this year.  Now only six see one or two hikes...

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Brexit Drama Continues but Fed Moves to Center Stage

Overview:   US stocks were not able to hold onto early gains yesterday, and this has helped set the stage for today's heavier bias.   Asia Pacific markets were narrowly mixed, with Japan and Korea eking out small gains while China and Taiwan slipped a little.  Europe's Dow Jones Stoxx 600 is threatening to snap a five-day advance as materials, healthcare, and energy leads the profit-taking while communication and real estate are proving a bit more resilient.  Benchmark...

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Third Vote on Withdrawal Bill Scuppered Until after EU Summit

Overview:  The capital markets remain subdued.  Many Asian equity markets eased after a strong two-day advance.  European equities are slightly firmer.  The S&P 500 closed at new five-month highs yesterday.  Benchmark 10-year yields are mostly a little softer.  Australian 10-year bond yield fell five basis points, and the discount to the US widened to a new high since the early 1980s.  The minutes from the Reserve Bank of Australia underscore the importance of this week's...

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Dollar Correction may Continue

The US dollar fell against all the major currencies except the Japanese yen in the week following the disappointing job growth in February.  The Norwegian krone was the strongest of the majors, appreciating 2.8% against the dollar and nearly 2% against the euro amid speculation the central bank will be the first, and maybe only major central bank to hike rates this year.  The Norges Bank is expected to hike its deposit rate to 1.00% from 0.75% due to the rise in price...

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Euro and Yen Volatility Slips to New Five-Year Lows on the Ides of March

Overview:  The capital markets are calm ahead of the weekend.  Outside of Australia and Thailand, Asia Pacific equities advanced, while European shares are mostly little changed. The regional benchmarks, like the S&P 500 have recouped last week's losses.  Benchmark 10-year yields are little changed on the day, leaving the US 10-year yield virtually unchanged on the week near 2.62%. The benchmark Japanese government bond yield has hovered around minus five basis points,...

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