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Tag Archives: $TLT

Make it or Break It Week for the Dollar?

The US dollar was little changed for most of last week and then weakened against most of the major currencies ahead of the weekend.  The consensus narrative is that comments by the US Administration fanned optimism on a trade agreement with China, and that encouraged a rally in risk assets.  We are skeptical, in part because earlier worries failed to entice much of a market reaction.  Also, bond yields fell last week, with the 10-year yield on US Treasuries leading the way with an 11 bp...

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The Dollar Snaps Back after the October Pullback: Who has the Big Mo’ Now?

The US dollar had a solid week as the recovery from the October slide began.  We had a high conviction it was coming, but we thought the technical indicators gave scope for one more marginal new low, which in the end did not materialize.  It is difficult to say that there had been much new information or progress on the three macro issues that have captivated investors:  US-China trade, Brexit, and global economic outlook.  The UK is headed for the December 12 election, and that is the...

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Charts Suggest Scope for One More Push Lower for the Dollar before a Correction

The US dollar traded heavily last week, falling against all the major currencies but the Canadian dollar.  The Bank of Canada softened its neutral stance a few hours before the Federal Reserve signaled a pause after delivering its third rate cut to complete its midcourse correction. The Federal Reserve's real broad trade-weighted dollar index, which arguably is the single best measure when considering the economic impact of changes in foreign exchange prices, eased in October by a...

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Greenback’s Recovery has more Room to Run

After a three-week decline, the dollar was over-extended in our view, coming into the past week.  A correction began in recent days, and the greenback rose against the major currencies but the Canadian dollar last week.  Among emerging market currencies, Latam provided the bookends.  Ahead of today's elections (October 27), the Argentine peso fell about 2.8% to finish near two-month lows.  On the other side was the Brazilian real, which was up as much as the peso was down.  Pension...

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Dollar had a Poor Week but Technicals Warn Against Chasing it Much Further

The dollar fell against the major currencies, but the yen and Norwegian krona, and slippage against the yen was minor around 0.15%.  The krone's weakness was notable.  It lost 0.9% against the dollar to trade at 18-year lows.  It lost around 2% against the euro to trade at record lows.  It is difficult to identify the fundamental driver as the central bank is the only major one to be raising interest rates.  Indeed, it has doubled its deposit rate to 1.5% this year. The Swedish krona,...

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Dollar Struggles and Key Levels Approached

A combination of softer US inflation readings and some optimism that the Brexit may not be as disruptive as it had seemed and that the prospects of another tariff truce between the US and China, weighed the dollar and encouraged risk-on plays.  Of the major currencies, the yen and Swiss franc were the only ones unable to gain against the greenback.  Amid progress to avert a disruptive Brexit, sterling shot up, gaining a little more than 2.7% against the dollar, the most in two years.   ...

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Streaking Markets–Euro has a 4-day Advance in Tow and the US 10-Year Yield, a 7-day Drop

Global growth concerns spurred by disappointing PMI data and broadening trade tensions, as the US prepares to act against Europe to the full extent that WTO allows, drove the capital markets over the past week.  The dollar was mixed.  The yen, euro, sterling traded higher, while the Canadian dollar, Swiss franc and Swedish krona weakened.  The short-end of the US curve that had shown some doubts about another Fed cut this year swung hard toward possibly two more cuts. The US two-year...

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What the Charts Say: Lower Yields and Softer Equities?

Disappointing flash PMI figures helped push the euro to new lows for the year last week to almost $1.09.  The dollar rose against most of the major currencies.  The dollar bloc fared the best, while no-deal Brexit fears and dovish comments by a traditional hawk at Bank of England took the wind from sterling's sails and sent it roughly two-cents lower (~1.5%).  The dollar was also firmer against nearly all the emerging market currencies.  The Turkish lira bucked the pressure, though and...

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Wary Investor Sentiment Continues To Favor Long Bonds In 2019

What’s keeping long-dated bonds at the head of this year’s performance ledger for fixed-income markets? Recession worries still top the list, although nervous investors can point to this week’s renewed prospects for impeaching Trump as a factor, too. Whatever the driver, year-to-date returns for bonds continue to show that long maturities are running well ahead of the rest of the field, based on a set of ETFs that span the US fixed-income markets. This year’s top performer by a...

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Look for Yuan Weakness and Yen Strength to Begin the Week

The Japanese yen and Canadian dollar were the only major currencies to gain against the US dollar last week.  They are also the only major currencies to appreciate against the dollar so far this year.  US President Trump's apparent playing down of the pressure to strike a partial deal with China before the 2020 election weighed on stocks and lifted the so-called safe-haven currencies ahead of the weekend.  When everything was said and done, from the attack on Saudi Arabia to the money...

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