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Tag Archives: $CNY

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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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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Not Manipulation, Montagu’s Monkey

The Chinese have never subscribed to the modern wave of “transparency” which has swept over Western central banks. The People’s Bank of China, Big Mama, very much operates instead on the doctrine which preceded it. Basically, Montagu Norman’s way of doing things. Never explain, never excuse.This mantra has been applied to what it does outside of China as much as inside. Even when participating in the IMF’s data scheme for the first time in 2016, central bank authorities somehow left more...

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Brexit Deal Hopes Lift Sterling

Overview:  The fact that the UK and EU negotiators are still talking is seen as a constructive development and has spurred a sharp bounce in sterling.  It traded below $1.3150 before the weekend and is pushing above $1.3400 in the European morning.  It is part of the larger risk-on move lifting equities and weighing on the dollar more broadly.  Equities in the Asia Pacific region were mixed, but Japan, China, India, and Australia rose.  The Topix hit new two-year highs.  European stocks are...

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Before Bidding 2020 Good Riddance: The FOMC and BOJ

Next week is the last full week of 2020.  But before it can be bid good riddance, the Federal Reserve and the Bank of Japan hold policy meetings and a batch of high-frequency data, including the preliminary December PMI readings, which will give investors a better sense of the economic momentum going into next year.  Central banks and investors are wrestling with the same thing: a faltering recovery as the social restrictions disrupt economic activity, while at the same time cognizant that...

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December Monthly

The end of the annus horribilis is at hand, and despite the hard winter ahead for the northern hemisphere, there is a sense of optimism for the new year.  The first generation of vaccines for the coronavirus appears promising. The US has elected as president a person who is within the internationalist tradition.  The UK's standstill agreement with the EU will still expire at the end of the year, but many are still hopeful a last-minute deal can still be struck. China has entered into the...

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Equities are Heavy and the Dollar Softer to Start New Week

Overview: Month-end profit-taking saw Asia Pacific shares tumble earlier today.  Most markets are off 1-2.5% today after the MSCI Asia Pacific Index rose 2.25% last week.  European shares are mixed, but little changed.  US shares are also trading lower.  The energy sector is being dragged lower by the failure of OPEC+ to signal an agreement to extend cuts, but the formal meeting continues into tomorrow as well.  After testing $46.25 last week, WTI for January delivery is Benchmark yields are...

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Markets Look Past Near-Term Challenges

Overview:  News that the AstraZeneca vaccine was 70% effective but could be enhanced by changing dosage is lifting spirits and boosting equities.  Japan's markets were closed for a national holiday, but all the equity markets in the region advanced and many by more than 1%.  Strong export figures for the first 20 days of November helped lift South Korea's Kospi to almost a record high.  Europe's Dow Jones Stoxx 600 gapped higher traded at a new nine-month high.  US shares are also trading...

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Redistributing A Shrinking Pie Is Nothing Like A Flood; Because There Was No Flood

For the past couple months, the foreign official sector has been able to go back to buying (net) US Treasuries again. Not a lot, but it’s a change from the prior period when overseas central banks and governments would dependably dump tens of billions each month. Contrary to convention, this kind of buying corresponds to rising rates, the reflationary stuff. It’s when foreigners sell their Treasury reserve assets, that’s when UST prices tend to jump and yields fall. If it had been just...

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