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Tag Archives: CAD

March Monthly

The dollar rose against most of the major and volatile emerging markets currencies, like the South African rand, Turkish lira, and the Brazilian real in February.  The gains were mostly by default as concerns about the strength of the US economy continued to linger.  The weakness abroad, especially in Europe, seemed more profound.  Trade tensions ebbed as investors correctly anticipated an extension of the US-Chinese trade freeze, while the beginning of the EU-Japan trade...

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Markets Shrug-Off Trump’s Attempt to Talk the Dollar Down

Overview:  Comments by US President Trump over the weekend, complaining about the dollar's strength weighed on the greenback initially in Asia, but it quickly recovered.  Reports of progress on a US-China trade deal helped lift the Shanghai Composite above the 3000-level for the first time since the middle of last year. Asian equities mostly rallied with China.  Korea and Taiwan were notable exceptions after disappointing PMI data.  European shares are moving higher, and...

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A Look at the Charts

The US dollar was mixed against the major currencies last week.  The dollar-bloc currencies and the Japanese yen fell,  while the other major currencies rose, led by sterling (1.1%) on ideas that the risk of a no-deal Brexit was diminished, and the Swedish krona (0.9%) that was bolstered by 1.2% growth in Q4, quarter-over-quarter (around twice what economists expected). Dollar Index:  The Dollar Index rose in February by nearly what it lost in January, leaving it little...

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Could the Worst be Behind China and Germany? Or Hope Springs Eternal

Overview:  News that MSCI plans to substantially boost China's equity weighting in its indices and a better than expected Caixin manufacturing PMI and some easing of India-Pakistan tensions helped bolster the risk-taking appetite going into the weekend.  This lifting equity and weighing on bonds.  China's CSI 300 rose 2.2% for a 6.5% weekly gain.  The Shanghai Composite has risen every week this year.  Europe's Dow Jones Stoxx 600 is up 0.6% through the European morning and...

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Trump Walks Away from North Korea. Should Beijing Worry?

Overview:  News that the US-North Korean summit ended abruptly without an agreement spurred losses in equities and gains in the Swiss franc and Japanese yen.  US President Trump willingness to walk away from the talks is important in and of itself, but it also sends a warning not to go all in on a US-China trade agreement that could also sour at the last minute. North Korea may express its displeasure by renewing missile tests.   In addition, the tension between India and...

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Dollar Trades Heavily, While Prospects of a Softer and Later Brexit Send Sterling Higher

Overview:  As the North American session is about to begin, the markets await developments in the UK House of Commons where a vote is expected today on Prime Minister May's proposal to hold votes on around March 12 on the Withdrawal Bill and no deal.  However, perceptions of a reduced likelihood of a no-deal exit continued to fuel sterling gains.  Pakistan has reportedly shot down two Indian aircraft as the tension between these two nuclear powers intensify.  The anxiety...

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Dollar Thumped on Confirmation of Tariff Delay while Stocks Advance

Overview: The extension of the US-China tariff freeze had been telegraphed, but the confirmation is the single biggest driver of the day.  Equities, led by a 5%+ advance in China, have rallied in Asia and Europe. Benchmark 10-year bond yields are mostly 1-2 basis points higher.  Peripheral yields are lower.  Fitch's decision before the weekend, affirming Italy's rating, help ease fears ahead of Moody's (March 15) and S&P (April 26) reviews.  The dollar is softer...

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Breakout Continues to be Elusive for the Greenback

The US dollar has failed to break higher, and this seems to boost the chances that it experiences a near-term setback.  Elsewhere we suggest that two dominant themes--US-China trade talks and Brexit--will likely be delayed.   The combination of the technical condition and the macro backdrop may deter players from looking for a break out in the week ahead.  A delay in Brexit is understood to be good for sterling because it ostensibly reduces the risk of a no-deal exit. An...

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Markets Ending Week with A Whimper

Overview:  The global capital markets are winding down what appears to be an inconclusive week quietly and on a mixed note.  The MSCI Asia Pacific Index is poised to snap a four-day advance but held on to a nearly 2% gain for the week.  European bourses are mostly higher, and although the weekly advance of around 0.5% may not be that impressive, Dow Jones Stoxx 600 has only fallen in one of the first eight weeks of the year for a 9.5% year-to-date gain.  Benchmark yields...

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Aussie Slammed by Dalian Coal Embargo, While Firmer Flash PMI does Euro Little Good

Overview:  The US dollar is firm against most major and emerging market currencies.  There is more optimism on US-Chinese trade as a series of understandings are drafted, and an extension past March 1 of the tariff freeze is reportedly in the works.  Mixed economic data and a call from a local bank for two rate cuts this year did not have as much impact on the Australian dollar as reports suggesting that Dalian, where 2% of Australia coal goes, has blocked imports to which...

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