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Tag Archives: USD

Prices: A Week in a Day

The pattern has been repeated.  The Federal Reserve, to which he appointed the Chair, and several Governors does not move as quickly as the President wants on monetary policy. He responds by escalating the trade tension, delivering the independent central bank a fait accompli.  Increasing the trade conflict succeeds where the unusual and repeated protestations of the dollar's strength fail, pushing the greenback lower in the foreign exchange market.   Until the end of the last week,...

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The Week Ahead is not about the Week Ahead

It's the last week of August.  Several economic reports will be released in the coming days. They include the US deflator of consumer expenditures that the Federal Reserve targets, China's PMI, and the eurozone's preliminary August CPI.  It is not that the data do not matter, but investors realize the die is cast.  They are looking further afield. The next US tax increase on Chinese imports goes into effect on September 1, and Beijing has threatened to retaliate. The Federal Reserve...

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Market has Second Thoughts on Magnitude of Fed Cuts Ahead of Powell

Overview:  Powell speech at Jackson Hole stands before the weekend.  Equities in Asia and Europe are finishing the week on a firm tone.  Most markets in the Asia Pacific region closed higher today, and the MSCI Asia Pacific Index snapped a four-week slide.  European bourses are edging higher, and the Dow Jones Stoxx 600 is poised to end its three-week air pocket.  US shares are higher in European trading and barring a reversal in the North American session, the S&P 500 will finish...

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Tick Up in EMU PMI Does Little, Waiting for Powell

Overview:  Soft data in Asia and the continued decline in the yuan (six days and counting) prevented Asian equities from following the US lead from yesterday when the S&P 500 advanced by 0.8%.  European shares are paring yesterday's 1.2% advance despite an unexpected gain in the EMU flash PMI.  US shares are little changed in the European morning.  Benchmark 10-year bond yields in Europe are 1-2 bp higher, and though the political crisis in Italy has not been resolved, Italian bonds...

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European Stocks Snap Back, Market Hopeful Italian Election can be Delayed

Outlook:  The end of the US equity three-day advance yesterday weighed on Asia Pacific shares today.  Most benchmarks fell.  Better than expected trade data helped Thailand buck the trend.  A firmer tone emerged in the European morning, and the Dow Jones Stoxx 600 has recouped yesterday's losses and more.  It was led higher by consumer discretionary, energy, and industrials.  US shares are also trading firmer today, and the S&P 500 is also retracing a good part of yesterday's 0.8%...

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Marking Time Ahead of PMI and Powell

Overview:  Global equities and bonds are firmer in quiet turnover, and the dollar is narrowing mixed in narrow ranges.  The big events of the week, the eurozone flash PMI and Powell's speech at Jackson Hole still lie ahead.  The MSCI Asia Pacific Index rose for the third consecutive session, led by Korea and Australia's 1%+ gains.  Europe's Dow Jones Stoxx 600 is firm and testing two-week highs. US equities are also trying to extend yesterday's gain.  The rise in US yields yesterday...

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China’s Rate Reform Helps Markets Extend End of Last Week Recovery

Overview: China announced some changes in its interest rate framework that is expected to lead to lower rates.  This helped lift equity markets, which were already recovering at the end of last week from the earlier drubbing.  Chinese and Hong Kong shares led the regional rally with 2-3% gains.  The Nikkei gapped higher for the third time in six sessions, and the first two were followed by lower gaps.  European stocks are higher, and the Dow Jones Stoxx 600 is trying to string the...

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A Look at the Charts

The White House is unlikely to comment on it, even if it is aware that the Chinese yuan was the third strongest currency in the world last week.  The British pound was the strongest, rising a little less than 1% against the dollar and snapping a 14-week plummet against the euro.  None of the other major currencies appreciated against the dollar last week.  The Chilean peso was the strongest among emerging market currencies, rising about 0.4%.  It is the second consecutive weekly gain...

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Markets Take Collective Breath Ahead of the Weekend

Overview:  The global capital markets are ending the tumultuous week calmly, but it is far from clear that is will hold long.  Next week's flash PMIs have potential to disappoint, and there is risk of new escalation in the US-China trade conflict as the PRC threatens to take action to countermeasures to the new US tariffs. Most equity markets are higher, but the gains pare the week's losses but extend the losing streak.  The MSCI Asia Pacific's has fallen nearly 7% of the four-week...

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Animal Spirits Lick Wounds

Overview:  It took some time for investors to recognize that the scaling back of US tariff plans was not part of a de-escalation agreement. There was an explicit acknowledgment by US Commerce Secretary Ross that there was no quid pro quo. The US tariff split was more about the US than an overture to China.  In fact, as China did in September when the US sanctioned it for buying weapons from Russia, this week it refused a request from the US for a port call in Hong Kong. This, coupled...

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