Summary: The US dollar has bobbed back higher from a slight weakening yesterday ahead of the event risk of the week for the US, the FOMC meeting tomorrow, however little anticipation the market has drummed up for the latest thoughts from Powell and company. Elsewhere, turbulent Chinese markets are the development most worth studying for knock-on effects, whether...
Summary: Yesterday saw a sharp recovery in risk sentiment in the US, with equities rebounding and treasuries retreating. But the backdrop elsewhere shows many other pieces do not fit with the notion that we are seeing a comprehensive improvement in sentiment. Establishing a more consistent picture in either direction will be critical tactically to determine the...
Summary: USDJPY swooned to a pivotal level yesterday without yes breaking as the JPY thrived on weak risk sentiment and tumbling commodities prices, together with a fresh plunge in safe-haven bond yields. Elsewhere EURUSD continues to tease in the 1.1765-1.1800 area with no resolution. The wave of risk-off yesterday has sent the usual suspects lower, with...
Summary: The RBNZ is the latest central bank to remove policy accommodation among G10 currencies, with the Bank of Canada having led the charge in April and likely set to taper purchases again at its meeting later today. Today we look at some hopefully uncorrelated trades for the coming months as the normalization theme potentially deepens, and even in one case...
Summary: The US June CPI report came in far hotter than expected at both the core and headline, setting a new high bar for the cycle. While some will point to the especially large contribution from the used cars and trucks category to the higher than expected reading, a number of other categories have shown strong rises in recent months and the Fed is at risk of...
Summary: The USD has firmed to new local highs against several currencies without much help from coincident indicators and despite an indifferent ADP payrolls report yesterday. One reason for fresh USD strength could be the latest burst of USD liquidity suggesting that the Fed will have no choice but to signal a tapering sooner rather than later. US ISM...
Summary: We are finally getting a follow up dose of USD strength after the currency spent all of last week consolidating back to the weak side in the wake of the sharp surge from the FOMC meeting of the prior week. The ability of the US dollar to even hold up reasonably well is interesting, given that the market continues to express solid conviction in the...
Summary: The market has made a significant adjustment in the wake of the FOMC meeting last week, but the action at the start of this week suggests that any follow-on move from here could be fitful, as we have a long few months to watch data develop and as the Fed could push back against over-interpretation of what happened last week. Elsewhere, the Swedish krona...
Summary: The move in Fed rate expectations in the wake of the FOMC meeting has largely stuck and continues to support the US dollar, while the interesting new twist is a sudden surge in the Japanese yen, one that has little to do with Bank of Japan meeting overnight and probably far more to do with long US yields coming down sharply despite the focus on the...
Summary: Friday brought a sharp reversal of the US dollar strength from Thursday as the US May payrolls data was seen as likely to lower the odds that the Fed will deviate from its current patient stance on trying to see through strong labour market and inflation data in the near term. The last biggest test on that front will the US May CPI release on Thursday....
Summary: Yesterday, the US dollar perked up far more sharply than did Fed rate expectations on the release of strong US data, perhaps as the market wanted a look at the official May jobs report today before reacting. With Nonfarm payrolls growing a bit more slowly than expected, the USD is reversing back lower on reduced odds that the Fed will need to shift its...
Summary: The US dollar is firming again, but moves have been so hesitant and lacking in staying power in both directions recently. Making it clear that USD traders are plagued with uncertainty here and want to wait as long as possible, perhaps for a firmer message from the Fed on its next steps, before committing risk to any traders. Elsewhere, TRY plumbed new...
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...
