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Tag Archives: Olympics

Capital Markets Remain Unhinged

Overview: The dramatic move in the capital markets continues.  The US dollar is soaring as yields and equities slide.  The US 10-year yield has fallen below 1.30 to 1.26%  European benchmark yields are 1-4 bp lower, while Australia and New Zealand have seen a 7-9 bp drop today.  Signals that the PBOC may provide more monetary support helped drive China's 10-year bond yield below 3% for the first time since last August.  Those currencies levered for growth, namely the dollar-bloc and the...

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Softer Yields = Softer Dollar

Overview:  The surge in consumer prices reported on Wednesday saw rates jump and the dollar push higher.  Stronger than expected producer prices yesterday, and news of wage increases (average 10%) at Mcdonalds and for 75,000 people Amazon wants to hire, saw rates ease and the dollar's upside momentum stall.  Before the week draws to a close, the US reports April retail sales and industrial production figures.  US stocks recovered smartly from the stomach-clenching sell-off on Wednesday,...

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The Dollar Remains on the Defensive

Overview:  Last week's cyberattack on the largest US gasoline pipeline continues to lift oil and gasoline prices.  The June gasoline futures gapped higher to extend last week's 2.4% gain but has subsequently moved lower to enter the gap.  June WTI is firm and holding above $65. The supply disruption is key, but iron ore prices soared 10% on strong Chinese demand. More broadly, the CRB Index settled last week at six-year highs.  Led by South Korea, Asia Pacific equities markets moved higher,...

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Data To Show Surging US Growth, but is that Enough to Lend the Dollar Support?

Overview:  Ahead of what is expected to be reports confirming the surging US economy, the dollar remains on its back foot, unable to sustain even modest upticks.  The euro has drawn closer to $1.20, and the dollar is holding below JPY109 for the first session since March 24.  The dollar-bloc currencies lead today's move against the greenback, but nearly all the emerging market currencies are participating too.  The JP Morgan Emerging Market Currency Index is rising for the third consecutive...

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Animal Spirits Start the Weekend Early

Overview:  Profit-taking weighs on equity markets, and the dollar is trading higher ahead of the weekend.  Most Asia Pacific markets are still closed for the holiday, but Victoria's snap lockdown dragged Australian shares lower.  Japan and Indian markets were narrowly mixed, but the selling pressure is clearer in Europe, where the Dow Jones Stoxx 600 has had a heavier bias.  US shares are also trading off, though coming into today, the S&P 500 was up about 0.75% for the week. US markets...

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China’s Expansion Does not Prevent Deflation

Overview:  Despite a soft close in US indices yesterday, global shares are on the march again today.  Led by China and Hong Kong, most large markets in the Asia Pacific region advanced today.  Officials gave approval for a new game from Tencent, which helped lift the Hang Seng.  Europe's Dow Jones Stoxx 600 slipped fractionally yesterday but has recouped and more today, led by utilities, information technology, and materials.  US shares are trading with a firmer bias.  Bond markets remain...

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Dramatic Investor Adjustment Continues

Overview: The warning by the US Center for Disease Control and Prevention that Americans should prepare for an outbreak of Covid-19 sent the S&P 500 tumbling to an 11-week low and the 10-year Treasury yield to a record low near 1.30%. The volatility of the S&P (VIX) jumped to its highest level since 2018. The sell-off in global equities continues unabated. Thailand (-5%) and Australia (-2.3%) led the carnage in the Far East. The MSCI Asia Pacific Index was sold through its 200-day...

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