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Tag Archives: USD

Greenback Softens Ahead of CPI

Overview: It appears that investors have become more concerned about growth prospects and less about inflation in recent days. The US 10-year yield that had flirted with 3.20% at the start of the week is now around 2.93%. It is approaching the 20-day moving average (~2.90%), which it has not closed below in a little more than two months. European yields are sharply lower (~4-8 bp) with the core-periphery premium narrowing. Asia Pacific equities were mixed, but China, Hong Kong, and Australia...

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No Rest for the Weary

Overview: Risk appetites are improving on the margin. Asia Pacific stocks still fell after the sharp losses on Wall Street on Monday. Still, China, Taiwan and Indian equities traded higher. Europe's Stoxx 600 is snapping a four-day 6.5%+ slide and is up around 1.2% in late European morning turnover. US equity futures are up over 1%. The 10-year Treasury yield that pushed to 3.20% yesterday is a little above 3% now. European benchmark yields are 5-7 bp lower and the peripheral premium has...

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New Week Same Refrain: Stocks Down, Yields Up, Stronger Greenback

Overview: New week, same refrain.  Stocks down, yields up, and the dollar is broadly higher.  The Nikkei and Taiwan fell by more than 2% and South Korea and Australia were off more than 1%.  China's Shanghai and Shenzhen rose, but the CSI 300 fell again.  Europe's Stoxx 600 is off around 1.5% near midday in Europe.  US futures are 1.5%-2.0% lower.  The US 10-year yield is near 3.20%.  European bond yields are 3-8 bp higher.  The core-periphery spreads are widening, and Italy now offer around...

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Sterling,Tarred and Feathered, Bears Brunt of the Greenback’s Rally

The most important development last week was the swaps market lifting the terminal rate of the Fed funds rate toward 3.75% from around 3.25% at the end of April.  The knock-on effect sent the US 10-year yield above 3% and underpinned the greenback.  The Bank of England's 25 bp rate hike, and 1/3 of the MPC wanted a 50 bp hike despite economic forecasts a contraction in Q4 and next year as well.  The Volcker-moment sent sterling spiraling lower.  It is trading at levels not seen since July...

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Markets Remain Unsettled Ahead of US (and Canada) Employment Reports

Overview: The sharp sell-off of US equities yesterday weighed on global equities today.  The Asia Pacific bourses were a sea of read with many of the large markets off 2%-3%.  Japan, which returned from a three-day holiday was the exception and it managed to eke out a small gain.  Europe's Stoxx 600 gapped lower after yesterday's outside down session and US futures are trading around 0.3%-0.5% lower.  Meanwhile, the US 10-year yield is ending further above the 3% threshold, while European...

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Fed Day

Overview: The markets are mostly treading water ahead of the FOMC decision later today. Tech stocks tumbled in Hong Kong and the Hang Seng fell a little more than 1%, while India was the worst performer in the region falling over 2% following an unexpected and inter-meeting hike by the Reserve Bank of India.  It raised the repo rate to 4.4% from 4.0%.  Europe's Stoxx 600 is a little lower and has been unable to close the gap from Monday created from the lower opening.  US futures are firm. ...

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The Dollar Regains its Footing after Yesterday’s Drubbing

Overview:  The markets have not sustained the powerful reaction seen yesterday after the Fed hike.  Japan and South Korean markets were closed, but many bourses including Taiwan, Australia, and India rose.  Europe's Stoxx 600 rallied more than 1% and closed the gap created by Monday's sharply lower opening.  US futures are 0.5%-0.7% lower.  The NASDAQ may end its three-day rally that lifted it around 5%.  The US 10-year yield is firm near 2.95%, while European benchmark yields have also...

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RBA Surprises with a 25 bp Hike

Overview: The large bourses in Asia Pacific except Hong Kong eased.  Japan and China's mainland markets are closed for the holiday.  Europe's Stoxx 600 is up about 0.6%.  It gapped lower yesterday and has not entered the gap today.  US futures are a little softer.  The 10-year Treasury nicked the 3%-mark yesterday and is just below there now.  European benchmark yields are mostly 1-3 bp higher, but the UK Gilt yield has jumped eight basis points, and Australia’s surged 13 bp after the RBA...

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The Euro Continues to Struggle to Sustain Even Modest Upticks, but Specs Still Long in the Futures

Overview: The US dollar begins the new week on a firm note ahead of the mid-week conclusion of the FOMC meeting.  Many centers are closed for the May Day holiday, making for thinner market conditions.  Equities are mostly lower in the markets that traded today.  This includes Japan, South Korea, Australia, and India in the Asia Pacific.  In Europe, the Stoxx 600, led by a decline in information technology,  industrials, and consumer discretionary sectors,  is snapping a three-day advance. ...

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Macro and Prices

We offer our weekly macro and technical commentary below ahead of tomorrow's publication of Bannockburn's May monthly outlook.   The week ahead is packed with several central bank meetings and important high-frequency economic data.  The week begins off with China's April PMI over the weekend.  The world's second-largest economy is being hit by the lockdowns as part of the policy response to the outbreak of Covid. However, the economic impact seems somewhat milder than when the pandemic...

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