Summary: Most major currencies are caught in recent ranges, although the JPY weakness has tried to find a new leg and the CNH is making waves in showing rare isolated strength of sufficient magnitude to warrant a pushback from Chinese authorities overnight, a sign that the move will have a hard time extending from here. Elsewhere, we await a follow up on further...
Summary: The commodities correction and the likely related easing lower of bond yields over the last couple of sessions are offering strong support for a comeback in the Japanese yen here, and the low CPI data out of Japan overnight reminds us that Japanese real yields have remained far more positive than elsewhere despite the fuss over inflation and despite the...
Summary: The market tried to react to hints in the FOMC meeting minutes released late yesterday that an eventual asset purchase taper will find its way onto the Fed agenda, but the wording was too lacking in urgency or specifics to deserve much of a market reaction. Elsewhere, the gyrations in risk sentiment yesterday in the cryptocurrency market were an...
Summary: The US dollar index finds itself close to the lows of the year this morning as EURUSD posted a new high and the USD was offered almost across the board this morning. The move may be able to extend here with little fuss if the US treasury market stays calm and the FOMC minutes tomorrow evening fail to shift the view on the Fed. Elsewhere, Hungary and...
Summary: Last week started with the US dollar seemingly set to extend lower after a weak April jobs report, but a US April CPI spike on Wednesday sent the action back in the opposite direction. This move then yielded to USD weakening into the end of last week on a rising swell of positive risk sentiment. It all suggests that the market is severely lacking in...
Summary: The markets have pressed the pause button on the recent USD sell-off, as rising long US yields and rocky risk sentiment have offered some support and fundamental support for the move via widening yield spreads and other factors is not particularly in evidence. With the US CPI up today and Fed Vice Chair Clarida, perhaps the logjam can be broken for the...
Summary: The ECB meeting yesterday failed to provide new developments for EUR bulls, although the euro has bounced back again today. In the US, a Biden proposal to nearly double the capital gains tax would represent the most significant shift in US tax policy in forty years if it sees the light of day. And after the consolidation in US treasury yields, USDJPY is...
Summary: Price action is choppy after a risk-off wave yielded to a risk-on counterpunch yesterday, keeping the tactical outlook difficult. The Bank of Canada caught the market off guard yesterday with more hawkish than expected guidance on the economy, although Canadian yields suggest that the CAD reaction may have been a bit over-baked. ECB on tap today, where...
Summary: An ugly reversal in global risk sentiment, together with a solid rally in treasuries, had the USD and JPY on the bid across the board in what used to be the typical pattern for risk-off developments across markets, in stark contrast to the patterns brought about in the recent past by rising yields. The G10 smalls were hit the hardest on this development,...
Summary: The best scenario for USD bears would be one in which the positive growth outlook elsewhere picks up relative to the already white hot US economy, especially now that the biggest US fiscal impulse is a done deal. But there are a few factors here that should make USD bears uncomfortable, and only one of those is the implications of not yet having seen...
Summary: The US dollar is breaking down through important levels to start the week after recent very strong US data failed to take the currency higher as US treasuries looked through the data. Perhaps helping the greenback lower at the margin has been a revival of risk sentiment in Asia. Medium term uncertainties abound, but USD bears may have a spell of clear...
Summary: Commodities have generally beat a path back higher this week, and most commodity-linked currencies have responded with a break higher. Even the ruble is back on the recover path despite US sanctions. If commodities and pro-cyclical currencies post a solid close today to end the week on a strong note for the reflationary theme, we could be set for a...
Summary: The EURUSD has retraced nearly all the way back to 1.2000 and neutralized the downside risk and more powerful momentum has now arrived in commodity-linked FX since yesterday against the big dollar, whether in G10 or in EM, the Russian ruble loudly excepted on new US sanctions incoming. More strong US data expected today, but the reaction to the CPI data...
Summary: The US dollar is not making any broader statement here as treasuries jump back and forth and EURUSD dances on the edge of critical resistance, mostly driven by recent Euro strength rather than anything USD-related. Fresh developments are adding to the risks for a reduced fiscal impulse from the US in coming months, with possibly negative implications for...
Summary: The headlines touted a dovish set of FOMC minutes, further reducing the recent spike in expectations for Fed rate hikes and supporting US treasuries, but the US dollar was not particularly reactive. EURUSD has risen to a critical tactical level that must hold if the USD bulls are to maintain a key pillar of support. Meanwhile, low volatility suggests a...
Summary: The sharp rally in US treasuries and fall in yields in recent sessions has brought some profound relief to the lowest yielding currencies, from the euro to the most negative yielding of them all, the Swiss franc. The move could yet deepen further, but far too early to call a change of trend. Elsewhere, India and Russia are worth mention in the EM space....
Summary: The malaise in Asian markets is weighing on sentiment, but it is hard to get too down in the European session when the flash March German manufacturing PMI rolled in at a blistering 66.6 this morning. The EURUSD is mulling whether it should follow through lower after breaking below an important support this morning just before the strong EU flash PMI...
Summary: The New Zealand government moved aggressively against housing speculation with a raft of new measures overnight, a loud policy signal that the whole world should pay attention to, as policies aimed at inverting the K-shape are going to spread aggressively around the world. Also, commodity dollar pain and easing US yields driving a steep yen recovery...
