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Tag Archives: $MXN

The Dollar and Equities are Finishing the Week on Firm Footing

Overview: A 9.8% contraction of the Chinese economy in Q1 did not derail investor optimism today, which saw Asia Pacific stocks rally strongly after Gilead reported very preliminary positive testing of its drug to fight the coronavirus and plans to re-open are developing. Japan's Nikkei and South Korea's Kospi surged more than 3%. The MSCI Asia Pacific Index, Europe's Dow Jones Stoxx 600, and the S&P 500 are posting their first back-to-back weekly gains since the first half of...

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Where can Mexico Go?

In the old world that ended sometime last month, the peso was a king. It was among the strongest currencies in the world and appreciated against the US dollar for the past three years. It appreciated nearly 10% against the greenback, which itself was rising against most currencies.   Mexico is poorly placed to deal with the coming economic shock. The peso has already fallen nearly 30% in the five-week slide, and the full appreciation of the tragedy is not yet discounted.   First,...

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Investors Continue to Look Past the Coronavirus

Overview: The capital markets are heading into the weekend, still trying to look past the coronavirus despite the new cases in Hubei. Tokyo was a notable exception in the Asia Pacific region, as the other major equity markets, like in Hong Kong, China, Taiwan, South Korea, and Australia, advanced. The MSCI Asia Pacific Index rose for the second week. European shares are little changed, and the Dow Jones Stoxx 600 has risen by about 5% over the past two weeks. US shares are firm, and the...

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Markets Turn Quiet Ahead of Central Bank Meetings

Overview: The capital markets have turned quiet as the year-end positioning drives prices in lieu of fresh developments. Equities in the Asia Pacific region were narrowly mixed.T he smaller markets in Asia performed better than the large bourses of Japan, China, and Korea, which eased. European equities are off to a firm start, and the Dow Jones Stoxx 600 is consolidating near the record high set Monday. US shares are also trading a little higher, and the S&P 500 is within spitting...

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October Monthly

Trade,  central bank policy, and Brexit dominated the investment climate in September. The US-Chinese trade conflict stopped escalating.  Although face-to-face talks are planned in October and the list of exemptions from the punitive tariffs has increased (US soy and pork, for example, are now exempt as are 10 components of Apple’s Mac Book Pro from China), the tensions remain high.  The conflict is more than about more than trade.  It is also about market access, unfair subsidies, and...

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Markets Limp into the Weekend with the Euro Languishing at New Lows and Sterling under Pressure

Overview:  Equities remain under pressure. The MSCI Asia Pacific Index lower today, though Chinese and Australian shares were firmer.  It is the second consecutive week the benchmark has fallen.  European equities are firmer, but not enough to offset the losses earlier this week and are set to snap a five-week advance.  US shares are firmer, and the S&P 500 needs to gain about 0.5% today or record a back-to-back weekly decline.  Core bond yields are a little firmer today paring this...

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Every Currency is a Snowflake

The dollar was mostly weaker against the major currencies last week.  The Swiss franc and Japanese yen were joined by the seemingly unlikely candidate, the Swedish krona, to have gained about 1% against the US dollar last week to the lead the majors.  The yen and franc's gains extended moves already underway and perhaps, accentuated by the sell-off in stocks and the rally in bonds in response to the heightened trade tensions. The krona has the appeal of a high beta euro, and as the...

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PBOC Helps Stabilize CNY, while US Equity Recovery Lifts Sentiment

Overview: The challenges for investors have not gone away, but a combination of factors has helped stabilize the capital markets.   The PBOC set the dollar's reference rate above CNY7.0, but not as high as anticipated, and this has seen the yuan strengthen modestly today.  Meanwhile, the strong recovery in the S&P 500 has spilled over and helped lift global equities.  Asia Pacific equities were led higher by a 13% gain China's CSI300; ending a six-day decline with its biggest...

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Sterling Pounded

Overview:  The prospect of a no-deal Brexit continues to pound sterling lower.  A little more than two months ago, it was testing $1.32.  Two weeks ago it was around $1.25.  Today it traded near $1.2120 before stabilizing.  On the other hand, the 10-year Gilt yield is below 65 bp, a new multiyear low, while the international-laden FTSE 100 is holding its own in the face of heavier equity prices in Europe.  The major equity markets in the Asia Pacific region rose except for Taiwan, which...

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North American Focus: Poloz and Powell

Overview:  The US Treasury market is retreating for the fourth consecutive session ahead of Fed Chairman Powell's testimony before Congress.  It is the longest losing streak in six months, and the 10-year yield has risen 15 bp over the run.  This is helping drag up global yields, and today Asia Pacific yields mostly rose 2-3 basis points while core European bond yields are 5-7 bp higher and peripheral yields up a little less.  The small gain in the S&P 500 yesterday failed to help...

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