Friday , October 22 2021
Home / Tag Archives: ECB

Tag Archives: ECB

The Jump in Rates Does Little for Sterling, the Canadian Dollar, and the New Zealand Dollar

Overview:  Weak growth impulses from China and a continued rise in energy prices greets the new week.  Equities are struggling.  Hong Kong, Japan, South Korea, and Taiwan fell in Asia Pacific activity.  Europe's Dow Jones Stoxx 600 is about 0.5% lower near midday, while US futures indices are also nursing small losses.  Crude is trading at new highs that puts November WTI above $83 and Brent above $85 a barrel.  Benchmark 10-year yields are mostly 4-6 bp higher.  A larger than expected jump...

Read More »

Hope Springs Eternal, or at least enough to Lift Risk Taking Today

Overview:  The animal spirits have been reanimated today.  Encouraged by the dramatic reversal in oil and gas prices, a deal in the US that pushes off the debt ceiling for a few weeks and talk of a new bond-buying facility in the euro area spurred further risk-taking today, ahead of tomorrow's US employment report.  The sharp upside reversal in US shares yesterday carried over in Asia and Europe today.  The Hang Seng, battered lately, jumped over 3%, and the Nikkei posted its first rise in...

Read More »

Tapering Or Calibrating, The Lady’s Not Inflating

We’ve got one central bank over here in America which appears as if its members can’t wait to “taper”, bringing up both the topic and using that particular word as much as possible. Jay Powell’s Federal Reserve obviously intends to buoy confidence by projecting as much when it does cut back on the pace of its (irrelevant) QE6. On the other side of the Atlantic, Europe’s central bank will be technically be doing the same thing likely at the same time. Except, Christine Lagarde said early...

Read More »

Maybe More Autumn Than Strictly August

Barely more than two weeks. That’s all was needed for the headlines to scream “bloodbath”, “end of the bull market”, and the always popular BOND ROUT!!! The 10-year Treasury yield had bottomed out in August and by mid-September 2019 this key benchmark rate screamed upward by 43 bps in just seven sessions. Yes, seven. To think, the financial media has made the last few trading days in the bond market seem like some uniquely gigantic earthquake never before witnessed in all of modern...

Read More »

Euro Holds above Yesterday’s Lows Even After the ECB Denies the FT Story

Overview:  The week is winding down and risk-appetites seem vulnerable even though the MSCI Asia Pacific Index pared its first weekly loss in four, led by gains in Tokyo and Hong Kong.  With those gains, Japanese markets turned positive for the week, while Hong Kong's loss was narrowed to just below 5%.  Europe's Dow Jones Stoxx 600 gave up its initial gains and is lower near midday in Europe. If it does not recover, its losing streak would extend to three weeks, the longest since before the...

Read More »

Frenemies Talk, but Progess is Elusive

Overview: The US dollar is paring this week's gains, retreating against most of the major and emerging market currencies today amid a risk-on mood.  Inconclusive talks between Biden and Xi, the first direct communication in more than six months, and Beijing's clarification that it will slow but not freeze new game approvals were cited as drivers.  The dollar-bloc currencies and the Norweigan krone are leading today's move, but the Australian and Canadian dollars remain the poorest performers...

Read More »

Don’t Make a Fetish Out of What may be a Minor Change in the Pace of ECB Bond Buying

Overview: Yesterday's retreat in US indices was part of and helped further this bout of profit-taking.  The MSCI Asia Pacific Index ended an eight-day advance yesterday and fell further today.  Japanese indices, which had set multiyear highs, fell for the first time in nine sessions.  Hong Kong led the regional slide with a 2.3% decline as China's crackdown on the gaming industry continued.  Some companies in this space were reportedly to enforce the limits on minors, remove "obscene and...

Read More »

The Greenback Continues to Claw Back Recent Losses

Overview:  The US dollar continues to pare its recent losses and is firm against most major currencies in what has the feel of a risk-off day.  The other funding currencies, yen and Swiss franc, are steady, while the euro is heavy but holding up better than the Scandis and dollar-bloc currencies.  Emerging market currencies are also lower, and the JP Morgan EM FX index is off for the third consecutive session.  The Chinese yuan's insignificant gain of less than 0.15% puts it on the top of...

Read More »

The Week Ahead

Don't let the US holiday on Monday distract you.  The first full week of September is jam-packed.  The highlights include the ECB meeting and China's inflation.  The Reserve Bank of Australia and the Bank of Canada also meet.  The Bank of Russia hiked rates consistently since March and moved by 100 bp in July, and meets again on September 10. Its key rate stands at 6.5%, the same as the year-over-year CPI in July.  The rate stood at 4.25% as recently as February, with inflation at 5.7%.  It...

Read More »

China, Australia, and The European Way Into Reverse Repo

We are going to start here with Europe before heading to Australia and then getting to China – and then currency. Why the ECB? It is going through the same pangs of dissatisfaction as its cousin the Federal Reserve had last summer. Like the Fed in 2020, Europe’s central bank in 2021 has climbed to the end of its grand strategy review and following its own come to the same conclusion as that other.Symmetric inflation target requiring more nuanced forward guidance. If you aren’t distracted...

Read More »