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Tag Archives: $MXN

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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Collective Sigh of Relief Lifts Equities, Yields, and the Dollar

Overview: A global sigh of relief that the US will not tariff all its imports from Mexico.  Equities are all higher, and the weekend demonstrations in Hong Kong over a bill allowing extraditions to the mainland for the first time did not deter investors from bidding up the Hang Seng over 2.3%, the most this year.  European equities are following suit.  The more modest 0.4% gain through the morning session is the fifth gain in the past six sessions.  US shares are trading higher and the...

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Nervous Calm Settles Over Markets

Overview:  The global capital markets are stabilizing today after taking a body blow of broadening the use of US tariffs (in migration dispute with Mexico), threatening the ratification of NAFTA 2.0, and still escalating hostile rhetoric between the US and China, and the threat of anti-trust action against the largest digital platforms. The decline in equities is moderating today.  Most of the large Asian markets were modestly lower, but Singapore, Indonesia, and Thailand gained today...

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US Struggles to Build Physical Wall, Tries Tariff Wall on Mexico

Overview:  The US announcement to lay a 5% tariff on all goods coming from Mexico (starting June 10) until it stops the flow of "illegal migrants" spurred sharp losses in the Mexican peso and general risk-off move that strengthened the yen.  The tariffs are set to rise every month until reaching 25%.  This is a significant surprise and especially given that the Trump Administration is preparing to formally submit the USMCA to Congress.  The legislative ratification process has begun in...

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Canada, Mexico, and the USMCA

The US dollar closed today above CAD1.3500 for the first time since January 2.  Despite the setback, the Canadian dollar is the strongest of the major currencies year-to-date with a little less than a one percent gain.  The yen, in second, has is up about 0.2% (~JPY109.50).  Among emerging market currencies,  the Mexican peso's 2.6% gain puts it in in second place behind the Russian rouble's 7.2% appreciation.  It is a gross simplification to suggest that the currency moves are...

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