Category: Currency

US Bond Market Week in Review: A Rate Hike Is In the Cards, Edition

     Numerous Fed Governors have correctly observed that both unemployment and inflation levels support a rate hike.  Unemployment is 4.6%; core CPI is 2.1% while total CPI is 1.6%.  But an ancillary question all Fed governors must answer is, “can the economy absorb an interest rate increase?”  Granted, a 25 basis point hike from… Read more »

US Equity and Economic Review: A Solid Week of News

     US news was very positive this week.  The second estimate for 3rd quarter GDP increased .3% to 3.2%.  Personal incomes and spending continued to rise as well.  Durable goods, which have been weak due to the oil market collapse, increased for the second consecutive month.   And the employment report showed solid gains.  The… Read more »

International Economic Week in Review: Oil Prices Might Reduce Deflationary Pressures, Edition

     This week’s most important international economic development was OPEC’s agreement to limit production.  As with all OPEC agreements, there are many details that could potentially unravel the consensus.  But the markets sent oil prices rallying, with the price of West Texas Intermediate Crude rising over 12% on the week.  Prices are now in… Read more »

Whither housing in 2017?

This has been a heckuva year for interest rates, which made in some cases new all-time lows in July, only to see 10 year US treasuries rise more than 1% off that bottom intraday this past week.If anything, interest rates are the longest of long leading indicators, because they affect housing so acutely.  Because of… Read more »

Weekly Indicators: the broad US$ joins interest rates as a negative edition

Commodity prices bottomed about one year ago.last November. Recently metals briefly turned negative, but have now resumed being positive, and surged higher in the last month. Stock prices S&P 500 Down -1.0% w/w Stock prices became a positive having made new all-time highs in summer, and made more new highs last week. Regional Fed New… Read more »

XE Market Analysis: Asia – Dec 02, 2016

The November U.S. jobs report was perhaps not as good as some were expecting, though was certainly good enough to keep a December Fed rate hike fully priced in. Yields and the dollar however, moved lower through most of the session, leaving EUR-USD at two-plus week highs of 1.0675. USD-JPY slipped under 114.00, and settled… Read more »

XE Market Analysis: U.S Unemployment Falls to A Nine-Year Low

OVERVIEW Sources at the ECB said they are likely to extend their bond purchases beyond March, with discussion over whether to reduce the monthly amount. Canadian employment increased by 10.7k in November, beating forecasts for a decline of 15k. 178,000 jobs were added in the U.S in November, higher than expected after 202,000 jobs were… Read more »

XE Market Analysis: Asia – Dec 01, 2016

The dollar rallied early in the session following stronger manufacturing ISM data, though spent most of the remaining session fading lower. The NASDAQ took another hit, apparently as Trump’s potential trade policies hurt tech shares, while yields rose. EUR-USD based at 1.0585 before printing 1.0659 highs on talk of ECB “tapering” of bond purchases, and… Read more »

Weekly Indicators for November 21 – 25

Commodity prices bottomed about one year ago.last November. Recently metals briefly turned negative, but have now resumed being positive, and surged higher in the last several weeks. Stock prices S&P 500 Up +1.4% w/w (new record high) Stock prices became a positive having made new all-time highs in summer, and made more new highs this… Read more »

XE Market Analysis: Sterling Surges on Brexit Comments

OVERVIEW Stock markets are down by around 1% across Europe while oil remains around $50 per barrel following yesterday’s OPEC agreement to cut production. UK manufacturing PMI showed growth cooled unexpectedly last month and Nationwide house price data showed prices rose at a slower pace of 4.4% in November.   Eurozone unemployment fell to a… Read more »

XE Market Analysis: Asia – Nov 30, 2016

The dollar traded higher in N.Y. on Wednesday, as incoming U.S. data helped sentiment, with the ADP jobs report, personal income, and the Chicago PMI all beating expectations. A surge in oil prices was a driver, which came following OPEC’s generally surprising agreement to cut production. WTI crude topped over $49/bbl, and up as much… Read more »

For Those of You Who Missed My Columns Last Week …

[unable to retrieve full-text content]You can find them here: US Equity Week in Review US Bond Market Week in Review International Week in Review Source: XE news feed For Those of You Who Missed My Columns Last Week …

XE Market Analysis: U.S. Adds More Private Sector Jobs

OVERVIEW Oil prices soar as OPEC ministers reportedly agree to a production cut of around 1 million barrels a day. UK consumer confidence fell more than expected in November.  German retail sales soared 2.4% last month, the sharpest rise in 5 years and more than double market expectations as rising wages and record low borrowing… Read more »

XE Market Analysis: Europe – Nov 30, 2016

The dollar continued to trade without directional ambition, despite the impressive Q3 GDP report out of the U.S. yesterday. Markets globally are cautious into the OPEC meeting today, with oil prices having been particularly choppy this week, rallying over 2% on Monday, diving by over 4% yesterday, and tumbling by over 1% during the Asia… Read more »

XE Market Analysis: Asia – Nov 29, 2016

The dollar started the session on a stronger footing, though spent the remainder of the day largely fading lower. Month-end adjustments, and paring of long USD positions into Wednesday’s ADP jobs report was the rationale. The market took advantage of improved U.S. Q3 GDP revisions to sell into. EUR-USD based at 1.0565 after the data,… Read more »

U.S. Economic Growth Revised Up

OVERVIEW UK consumer credit rose at its fastest pace in 11 years, with mortgage approvals stronger than expected.  South Africa’s president survived a second vote of no confidence that sent the Rand tumbling. Unemployment in Japan held steady at 3% in October, with improvement in the availability of jobs pointing to a pickup in hiring…. Read more »

XE Market Analysis: Asia – Nov 28, 2016

The dollar was fairly steady through the N.Y. session on Monday, though remained on a softer footing following overnight losses. EUR-USD ranged between 1.0563 and 1.0604, as USD-JPY traded as high as 112.80 at the open, before falling to 112.07 lows, on lower yields and a softer Wall Street. USD-CAD fell from overnight highs of… Read more »

German Borrowing Costs at Record Low

OVERVIEW Markets have kicked off the week on a negative foot, with stocks lower across Europe, and bond yields falling in a typical risk-off trade.  The Euro rallied on Francois Fillon’s victory as the Republican party’s candidate for next year’s election, but gains were short-lived. The OECD revised their global growth forecasts on expectations that… Read more »

XE Market Analysis: Asia – Nov 25, 2016

It was a relatively quiet FX session in N.Y. on Friday, though the dollar managed to take back some of the losses it suffered overnight. EUR-USD slipped back under 1.0600, as USD-JPY reclaimed the 113 handle. USD-CAD edged over 1.3500 as oil prices fell further, while cable was steady over 1.2400. The advance October trade… Read more »

UK Economy Defies Brexit Forecasts

OVERVIEW Black Friday and a Thanksgiving hangover has led to quiet markets today with currencies generally falling flat. The second estimate of Q3 UK GDP was unchanged at 0.5%, confirming the UK economy is performing well. U.S. stock markets hit fresh record highs as the rally continues.  HIGHLIGHT UK GDP growth in the three months… Read more »

XE Market Analysis: Euro Under Pressure Against Surging US Dollar

OVERVIEW The Federal Reserve’s meeting minutes show committee members agree that it might be appropriate to raise interest rates “relatively soon.” US New home sales fell in October to 1.9% to 563,000, substantially below the 595,000 forecast. The ECB warned that recent political upheaval in the UK and the US, along with upcoming referendums and… Read more »

XE Market Analysis: North America – Nov 24, 2016

The dollar has ebbed back after making new trend highs during the European AM session. USD-JPY was showing a net 0.5% gain, as of the early European PM, although about half a big figure off from the seven-month high logged earlier at 113.53. EUR-USD recouped to around 1.0570 after clocking a 12-month low earlier at… Read more »

XE Market Analysis: Europe – Nov 24, 2016

The dollar has been on the up again, clocking fresh trend highs versus many developed- and emerging-world currencies today. U.S. data yesterday, along with the minutes to the FOMC meeting in early November, pretty much cemented a Fed rate hike in December. EUR-USD logged a 12-month low of 1.0525, while USD-JPY lifted to a fresh… Read more »

XE Market Analysis: Asia – Nov 23, 2016

The dollar index rallied to fresh 13-plus year highs of 101.88 in N.Y. trade on Wednesday, as better incoming U.S. data saw Treasury yields soar to 16-month highs. EUR-USD opened near 1.0620, before making its way to 11-month lows of 1.0628 at mid-morning. USD-JPY topped at 113.97, an eight-month peak, while USD-CAD traded back over… Read more »

XE Market Analysis: US Existing Home Sales Jump

OVERVIEW US durable goods orders rebounded stronger than forecasted, rising 4.8%. Eurozone business activity grew at the fastest pace this year in November as the purchasing managers indexes came in above forecast. German businesses also performed strongly in November with the service sector PMI hitting a 6-month high of 55.0 alongside robust manufacturing activity. The UK… Read more »

XE Market Analysis: Europe – Nov 23, 2016

The dollar has remained buoyed but below trend highs. USD-JPY has hugged the 111.00 level in the absence of Tokyo markets, which today were closed for the Labour Thanksgiving public holiday. The pair is holding near the five-and-a-half-month high at 111.36, which was made on Monday. Another set of record highs among the main Wall… Read more »

XE Market Analysis: Asia – Nov 22, 2016

The dollar picked up ground in morning N.Y. trade on Tuesday, though remained below recent trend highs seen against the euro and yen. The greenback later reverses moderately lower, perhaps as U.S. accounts pared back positions ahead of Thursday’s Thanksgiving holiday. Wall Street posted record highs, taking the DJIA over the 19,000 mark for the… Read more »

Retail sales forecast near term improvement

Real retail sales is perhaps my favorite of all economic data points.  That’s because it is so useful forecasting a number of different consequences. And it just got a little more useful. Last week’s consumer inflation for October was reported up a hot +0.4%.  That means that October real retail sales which were up a… Read more »

XE Market Analysis:US Thanksgiving Hits Pause on Dollar Rally

OVERVIEW Donald Trump announced that he will pull the plug on the Trans-Pacific Partnership (TPP) in his first days in office. Wall Street’s four main stock markets hit joint all-time highs for the first time since 1999 as investor sentiment remained on a high following Trump’s election. UK government borrowing came in below forecast last… Read more »

XE Market Analysis: Asia – Nov 21, 2016

The dollar was mixed in N.Y. trade on Monday, advancing versus the euro and yen, while losing ground to the CAD and sterling. Risk-on conditions aided sentiment, with major equity indices all printing record highs. EUR-USD opened at session highs of 1.0645, before making its way to 1.0590 lows. USD-JPY found support at 110.50, and… Read more »

XE Market Analysis: Surprise Spike by Pound

OVERVIEW Germany’s central bank expects growth to be “significantly stronger” in the current quarter, boosted by manufacturing after the temporary slowdown in the summer.  Vice-Chair of the Federal Reserve, Stanley Fischer indicated that long-term US interest rates will likely remain “low” as there is room for employment growth to continue running above the long-run trend…. Read more »

XE Market Analysis: Europe – Nov 21, 2016

The dollar has opened the week in subdued fashion, narrowly orbiting the 1.0600 and 111.00 levels versus the euro and yen respectively, although still managing to edge out a new trend high versus the latter, at 111.18. EUR-USD has left its Friday trend low at 1.0569 untroubled. The USD index has traded flat today after… Read more »

US Bond Market Week in Review: Expect a Rate Hike, Edition

     This week was loaded with Federal Reserve speeches, media appearances and interviews.  But the most important was Janet Yellen, who gave an upbeat presentation of the U.S economy while also clearly supporting an interest rate increase at an upcoming meeting, barring some type of negative economic shock.      Her comments highlighted the following economic… Read more »

US Equity and Economic Review: A Week of Solid News

     This week’s economic news was positive.  The leading and coincident indicators point to continued expansion.  Retail sales strongly advanced for the second consecutive month while housing starts printed one of their strongest reports in years.  Industrial production, which was unchanged, was the only weak number.  But weakness is confined to the oil sector;… Read more »

International Economic Week in Review: Most Bullish, Edition

     The main international story since the U.S. election is the rise in global bond yields.  Trump’s election has led investors to believe a large increase in U.S. bond issuance is around the corner, leading to a sell-off of U.S. treasuries.  Most other international news this week was positive.  E.U. news points to continued… Read more »

Weekly Indicators: long leading interest rates turn negative edition

Commodity prices bottomed about one year ago.last November. Recently metals briefly turned negative, but have now resumed being positive. Stock prices S&P 500 Up +0.8% w/w Stock prices became a positive having made new all-time highs in summer. They have not made new 6 month lows, so they remain a positive. It will take a… Read more »

XE Market Analysis: Asia – Nov 18, 2016

The dollar index printed fresh 13+ highs of 101.47 in N.Y. on Friday, the move coming as EUR-USD slid to 1.0570 lows, and as USD-JPY held firm over 110.50 into the close. USD-CAD found support into 1.3500, while cable slid over 100 points to near 1.2300. Aside from leading indicators, which had little impact on… Read more »

US Dollar Strengthens Further

OVERVIEW Mario Draghi said the Eurozone economy required continued monetary stimulus to support growth, and policy decisions will be based on the assessment of inflation prospects. German exports to the UK and the U.S. dropped sharply in the third quarter, highlighting the impact of the Brexit vote and the presidential election. The bond market sell… Read more »

XE Market Analysis: Asia – Nov 17, 2016

The dollar continued higher through the N.Y. session on Thursday, taking the dollar index to fresh 14-year highs of 100.90 in the process. Fed chair Yellen virtually guaranteed a December rate hike in her congressional testimony, which took Treasury yields and the dollar higher. Sentiment was buoyed by decent incoming U.S. data as well, with… Read more »

The post-Brexit lows in interest rates finally ignite the housing market

I have been waiting with increasing concern for the post-Brexit new lows in interest rates to ignite the housing market.  This morning’s housing starts and permits data shows that has finally happened. To reiterate my mantra, interest rates lead housing permits and starts, with an assist from demographics.  Since the prime demographic of those entering… Read more »

UK Retail Sales At 14 Year High

OVERVIEW  Financial markets appeared to pause for breath on Wednesday morning after a week of frantic activity following the surprise election of Donald Trump. U.S. consumer price inflation was inline with expectations, rising 0.4% last month and 1.6% year-on-year, the fastest pace in two years. Eurozone inflation was a little weaker than expected last month,… Read more »

XE Market Analysis: Asia – Nov 16, 2016

The dollar advanced further in N.Y. trade on Wednesday, despite some U.S. data misses. The dollar index rallied to 100.55, 14-year highs, as EUR-USD slipped to 1.0666 lows, and USD-JPY touched 109.75. USD-CAD pulled back to 1.3405, as oil prices shot up on reports that OPEC is close to production cap agreement. Cable bottomed under… Read more »

XE Market Analysis: Euro Weakens as Dollar Rally Continues

OVERVIEW September’s UK data showed the unemployment rate unexpectedly fell to an 11-year low of 4.8%. Average earnings however, rose 2.4% as expected. US producer prices were unexpectedly flat last month. Declining costs of services offset an increase in the costs of goods.  The Swiss National Bank’s Chairman and Vice Chairman both stressed the importance… Read more »

XE Market Analysis: Asia – Nov 15, 2016

The dollar index printed fresh 11-month highs in N.Y. on Tuesday, with gains led by USD-JPY, which topped at 109.19. EUR-USD was heavy, though managed to hold over Monday’s trend low of 1.0711. Cable traded under 1.2400, though ended the session near 1.2450, as USD-CAD fell under 1.3500 as oil prices rallied sharply. Incoming U.S…. Read more »

XE Market Analysis: Carney Warns of Slow Motion Slowdown for UK

OVERVIEW Third quarter Eurozone GDP growth came in as expected at 0.3% from the second quarter, matching the same weak pace of growth seen in Q2. German economic growth slowed more than expected in Q3, increasing just 0.2% from the second quarter and 1.5% annualized as exports fell following the Brexit vote.  U.S. retail sales… Read more »

XE Market Analysis: North America – Nov 15, 2016

The dollar sagged as the “Trumpflation” rally came to a pause. EUR-USD rebounded briefly back above 1.0800 and USD-JPY settled lower. In the mix was sterling underperformance following an unexpected dip in inflation data for October.[EUR, USD]The euro staged a rebound, led by a 0.5% gain in EUR-USD, which logged an intraday high at 1.0816…. Read more »

XE Market Analysis: Asia – Nov 14, 2016

The dollar index advanced to 11-month highs in N.Y. on Monday, topping at 100.22. This came as EUR-USD slid to 10-month lows of 1.0712, USD-JPY rallied to five-month highs of 108.54, and USD-CAD topped at 1.3588, a nine-month high. Treasury yields moved to fresh trend highs, which was supportive of the USD, as was an… Read more »

US Dollar Rallies High For 2016

OVERVIEW Last week’s election continues to drive FX movements, with the Euro remaining under pressure and the Dollar strengthening. Japan’s economy expanded at a faster pace in the third quarter growing 0.5% as exports recovered, but BoJ Governor Kuroda warned, “risks to both economic activity and prices are skewed to the downside”. Eurozone industrial output… Read more »

US Manufacturing Has Been Declining For Half a Century

The idea that US manufacturing jobs could regain their prominence was a central tenant of Trump’s populist message.  But a look at the long-term trends indicates this is a secular decline that can’t be reversed. Let’s start by looking at total manufacturing jobs. Manufacturing jobs jumped in WWII for obvious reasons.  Then, during the 1950s, they… Read more »

US Equity and Economic Review: A Data Light Week

     Perhaps by design, there was little meaningful economic news last week.  But we are seeing the 3Q earnings season winding down.  The news has been positive: We now have Q3 results from 445 S&P 500 members or 89% of the index’s total membership. Total earnings for these 445 index members are up +4.0%… Read more »

Weekly Indicators: the spike in interest rates and stocks is the story edition

Commodity prices bottomed about one year ago.last November. Recently metals turned negative, but have now resumed being positive, with a big positive move this week. Stock prices S&P 500 Up +3.8% w/w Stock prices became a positive having made new all-time highs in summer. They have not made new 6 month lows, so they remain… Read more »

Mexican Peso Hits Fresh Record Lows

OVERVIEW The U.S. election and the prospect of a vast fiscal stimulus plan under Donald Trump continues to cause volatility across financial markets.  The Dollar is broadly higher as rising interest rates attract money flows to U.S. assets, particularly from emerging market assets.  After the Singapore Dollar fell to its weakest since February, Singapore’s central… Read more »

XE Market Analysis: Asia – Nov 10, 2016

The dollar was jittery through the N.Y. session on Thursday, posting gains early on before pulling back some later in the session. EUR-USD printed near three week lows of 1.0865 before bouncing, as USD-JPY topped at 106.94, a four-month peak, before pulling back as tech stocks pulled back sharply. USD-CAD eased back from over 1.3500,… Read more »

Two long leading indicators continue to rate caution

We’ve had two economic releases this week that are both recent creations, and both of which have merit as long leading indicators: the Senior Loan Officer Survey, and the Labor Market Conditions Index.  The former has only an 18 year history, and the latter is a recent aggregation of data that goes back 50 years…. Read more »

Investors Consider Euro Elections After Trump Win

OVERVIEW In contrast to forecasters expectations, markets appear to be viewing yesterday’s election result as positive overall. The Dollar is broadly higher against its G10 counterparts, with signals that risks are improving against the Japanese Yen. Emerging market currencies are under pressure from the strengthening US Dollar, down by 2-3%, as money flows toward developed… Read more »

XE Market Analysis: Europe – Nov 10, 2016

The dollar has held up and forex markets have generally been stable so far today following the extreme volatility of the last day. USD-JPY has settled in the mid 105s . A low was printed at 101.19 yesterday, and a high, seen in early Tokyo trade today, at 105.95, which is the loftiest level seen… Read more »

Trump, America and the World Markets

In the wake of yesterday’s U.S. Election, global markets saw tumultuous volatility leading into the final results. The USD was heavily offered leading into the final tally, losing ground to most of its developed peers as a Trump win looked to be more and more likely. Site activity began to increase early in the day… Read more »

Mexican Peso Plunges to Record Low with Trump Elected

OVERVIEW Donald Trump’s election is now the second major political upset of 2016, carrying far greater significance for the world than Brexit.  As it became clear that Trump was likely to win in the early hours of Wednesday morning, financial markets were significantly lower and the US Dollar was weaker. Following Trump’s unexpectedly conciliatory speech… Read more »

XE Market Analysis: Asia – Nov 08, 2016

Wall Street turned opening losses into moderate gains, as USD-JPY printed over the 105.00 mark, a one-week high, and as gold futures tumbled to seven-session lows near $1,273.00. USD-MXN, an election proxy, dove to two-month lows. Based on recent market sentiment, these tandem moves seemed to indicate traders had decided that Clinton would win the… Read more »

Markets Brace Themselves

OVERVIEW Financial markets are quiet as Americans head to the polls, with campaigning in the most divisive election in the country’s history ends.  Chinese trade data was weaker than expected, with exports falling 7.3% year-on-year and on the surplus. German industrial production fell 1.8% in September, the largest decline in more than two years which… Read more »

XE Market Analysis: Asia – Nov 07, 2016

It was risk on through the N.Y. session on Monday, with stellar Wall Street gains coming on the back of the FBI letter over the weekend, which let Hillary off the legal hook. The markets are inclined to think Clinton as the status-quo candidate, and with her odds now seemingly improved, risk appetite picked up… Read more »

Dollar Strengthens on Latest Election Twist

OVERVIEW Stock markets are higher today as investors are relieved that Hillary Clinton won’t face criminal charges. German factory orders unexpectedly fell 0.6% in September, the steepest fall in five months both at home and abroad. Eurozone retail sales fell 0.2%, a second month of declining sales which rose 1.1% compared to last year.  The… Read more »

International Economic Week in Review: A Bare Bones, Election Shortened Column

     This is an election shortened report.        EU economic news continued to point to a region growing modestly.  Top line GDP was up .3% Q/Q and 1.6% Y/Y.  Due to a 1.1% increase in service costs, inflation advanced .5% M/M.  For a third consecutive month, the unemployment rate was 10%.  Finally, Markit… Read more »

US Bond Market Week in Review: A Rate Hike is Looking More and More Likely

     This week’s bond markets indicates the Fed is probably preparing the markets for an increase at the December meeting.      This week’s announcement – where they voted to maintain their current rate policy – characterized labor market growth as “solid.”  As this chart shows, the current 3, 6 and 12-month moving averages are… Read more »

US Equity and Economic Review: Despite a Good Earnings Season, the Markets Head Marginally Lower

     This week, ISM released their manufacturing and service indexes.  The former increased .4 to 51.9, an expansionary reading. Although production, new orders, new export orders and employment readings rose, only 8 of 18 industries grew.  Still, the headline reading was still positive.  The services number decreased 2.3 to 53.8.  While the sub-indexes for business and… Read more »

Weekly Indicators: the economy forecasts a narrow Clinton victory edition

Commodity prices as measured by industrial metals bottomed last November. ECRI subsequently turned up as well, enough so that both turned positive. Recently metals turned negative, but have now resumed being positive. Stock prices S&P 500 Down -1.9% w/w Stock prices became a positive having made new all-time highs in summer. They have not made… Read more »

XE Market Analysis: Asia – Nov 04, 2016

The dollar moved higher in the immediate aftermath of the U.S. jobs report, which was a bit light on the headline, though upward revised prior months made up for it. Gains were short lived however, as persistent U.S. election concerns weighed the greenback down. Wall Street managed a small bounce, with short covering after a… Read more »

U.S. Job Growth Remains Strong

OVERVIEW Eurozone service sector growth slowed unexpectedly last month, with the PMI dipping to 52.8 as the bloc’s recovery remains weak. The Canadian economy unexpectedly added 43,900 jobs last month, the second month in a row of strong hiring by companies.    Australian retail sales beat expectations rising 0.6% in September, a second month of… Read more »

XE Market Analysis: Europe – Nov 04, 2016

Yen weakness provided the main directional theme in forex markets in pre-London trade in Asia. This corrected some of the safe-haven strength the currency had seen earlier in the week, helping USD-JPY find ifs feet after clocking a one-month low at 102.54 yesterday. The pair settled in the low 103s, which still leaves it with… Read more »

XE Market Analysis: Asia – Nov 03, 2016

The dollar was mixed in N.Y. trade on Thursday, losing ground to the euro and pound, while making modest gains versus the yen and CAD. Incoming U.S. data was mixed, with jobless claims higher than expected, and productivity better than forecasts. Factory orders were firm, though the services ISM was weaker than expected. None of… Read more »

Pounds Jump on Court Ruling

OVERVIEW Last night the Federal Reserve left rates on hold and signaled a hike saying, “the Committee judges that the case for an increase in the federal funds rate has continued to strengthen.” Activity in the UK service sector jumped last month with the PMI rising to 54.5, the highest reading since March, as the… Read more »

XE Market Analysis: Asia – Nov 02, 2016

The dollar was on a softer footing through the N.Y. session on Wednesday, with U.S. election uncertainty keeping risk taking levels under pressure. The greenback steadied ahead of the Fed, though edged lower after the FOMC announcement, which revealed few surprises. The statement said the case for a rate hike has continued to strengthen, though… Read more »

Dollar Falls as Trump Rises

OVERVIEW The latest polls are showing Trump gaining ground, causing the safe-haven Yen and Swiss Franc to rise as investors worry about the prospect of him becoming president.  The New Zealand Dollar hit a two-week high and is up one percentage point against the US Dollar after unemployment dropped to 4.9%, its lowest in almost… Read more »

Houses, cars, and rents point to consumer under pressure

The two biggest expenses for most consumers are shelter and transportation.  Prior to a recession, typically the first sector to pull back is housing (more than a year before the onset of a turndown), and subsequently car and truck purchases (about 6 months before the t urndown). This year both housing (with the exception of… Read more »

XE Market Analysis: Asia – Nov 01, 2016

The dollar was lower versus the euro, yen and CHF on N.Y. trade on Tuesday, with risk-off conditions building into the FOMC announcement on Wednesday, and uncertainty over the U.S. election next Tuesday. Market dear indicators moved sharply, with the VIX index up better than 10%, and USD-MXN up sharply to one-month highs on Trump… Read more »

Aussie Strengthens After RBA Keeps Rates on Hold

OVERVIEW The Bank of Japan left monetary policy on hold overnight, despite delaying time for hitting the inflation target to “around fiscal 2018”. China’s official Purchasing Managers’ Index showed activity expanded at the fastest pace in more than two years in October, with the PMI rising to 51.2 from 50.4 in September. UK manufacturing activity… Read more »

XE Market Analysis: North America – Nov 01, 2016

The dollar has traded mixed, tumbling against the Australian dollar, which outperformed after the RBA left policy unchanged, ebbing against the euro, while gaining versus the yen, which weakened after the BoJ left policy unchanged, trimmed CPI projections and pushed back its expected time for inflation to reach the 2% target. Many European nations are… Read more »

XE Market Analysis: Europe – Nov 01, 2016

The Aussie dollar was the standout performing, rallying on the RBA’s decision to leave policy unchanged. AUD-USD and AUD-JPY are registering the biggest movement out of the currencies we track, showing respective gains of 0.7% and 0.8% into the London interbank open. Australia’s weak core inflation data had fed some speculation that the RBA might… Read more »

XE Market Analysis: Asia – Oct 31, 2016

The dollar started the Monday N.Y. session on a firmer footing, though lost altitude through the remainder of the session. Incoming U.S. data was nothing special, with personal income and consumption in-line, and the Chicago PMI coming up short of expectations. EUR-USD based at 1.0935, then rallied to 1.0976 in afternoon trade. Cable was the… Read more »

XE Market Analysis: Eurozone Growth Soft but Steady

OVERVIEW Markets have opened on a cautious note ahead of a big week of central bank meetings. Uncertainty over the U.S. presidential election has increased with the polls narrowing following a new investigation into emails found on Hilary Clinton’s top aide’s laptop. U.S. consumer spending increased more than expected in September, rising 0.5% versus August…. Read more »

XE Market Analysis: North America – Oct 31, 2016

The dollar has recouped some of the losses seen following news last Friday that the FBI is investigating new emails of Clinton. The upcoming U.S. Presidential election, which will take plane next Tuesday, will dominate market attention from here on in. At least one weekend poll showed Trump to have narrowed the gap to 1… Read more »

XE Market Analysis: Europe – Oct 31, 2016

The dollar has recouped some of the losses seen following news last Friday that the FBI is investigating new emails of Clinton. The upcoming U.S. Presidential election, which will take plane next Tuesday, will dominate market attention. At least one poll showed Trump to have narrowed the gap by 1 percentage point. The FOMC meets… Read more »

US Equity and Economic Review: A Stronger 3Q GDP Report But Weaker Market

     On Friday, the BEA released the first estimate of 3QA GDP.  The headline rate was 2.9% — a welcome change from the previous 3 quarters.  However, this marked the 8th consecutive quarter below 3%:      PCEs continued their strength: Durable goods purchases (blue) increased strongly for the second consecutive quarter.  Service expenditures (green) maintained… Read more »

US Bond Market Week in Review: The Global Savings Glut is Alive and Well

     Over the last few weeks, 2 central bankers have argued the “global savings glut” is a primary reason for low interest rates.  In a speech on October 17th, Fed President Fisher commented: Let me move now to the second major development on my list. In addition to its effects on labor force growth, the… Read more »

International Economic Week in Review: A Closer Look at Canada

     Earlier this week, Bank of Canada president Stephen Poloz testified before the Canadian parliament, discussing the latest Monetary Policy Report.  He noted that, due to weak exports, low oil prices and a shift in governmental housing policy, the Bank was lowering their growth projections.  But it also appears that after an oil price slide… Read more »

Weekly Indicators: gas prices up, usage down, consumers wobble edition

Commodity prices as measured by industrial metals bottomed last November. ECRI subsequently turned up as well, enough so that both turned positive. In the last 5 weeks, however, metals have been negative for all but two weeks. Stock prices S&P 500 Down -0.7% w/w Stock prices became a positive having made new all-time highs in… Read more »

XE Market Analysis: Asia – Oct 28, 2016

The dollar was fairly steady through the morning session, getting a modest boost from the better U.S. GDP report. EUR-USD remained near the 1.0900 mark until early afternoon, while USD-JPY held above 105.00 after posting new three-month highs of 105.53. Later, the greenback fell to session lows across the board following reports that the FBI… Read more »

Q3 GDP: Indian Summer now, but a darkening sky on the horizon

Real GDP for Q3 was reported this morning, and as I am sure you already know, it was the best in four quarters: This is, as I have said frequently over the last few months, Indian Summer.  The economy accelerated to a very decent, if not spectacular, rate of growth.  That’s the good news. The… Read more »

US Dollar Remains Strong Closer to Presidential Election

OVERVIEW US Q3 advance GDP is released at 2.9% annualised against the expected 2.6%, where exports were significantly higher as personal consumption slumped. The Pound remains weak despite the strong post Brexit economic data. Pound falls as Northern Ireland High Court rules that Provincial law does not restrict the trigger of article 50.  HIGHLIGHT The… Read more »

XE Market Analysis: North America – Oct 28, 2016

The dollar struggled for direction, overall, with EUR-USD remaining rooted to the 1.0900 level, despite net encouraging data of the Eurozone, and with USD-JPY settling back to near net unchanged levels after edging out a fresh three-month peak at 105.42. Japanese data today were mixed. Core national CPI came in unchanged at -0.5% y/y in… Read more »

XE Market Analysis: Europe – Oct 28, 2016

USD-JPY rallied to a fresh three-month peak at 105.37 concomitantly with a spike in U.S. Treasury yields. EUR-JPY managed to edge out a two-week peak, while AUD-JPY has remained below the three-month high seen earlier in the week. The weaker yen fuelled Japanese stock market outperformance, with the Nikkei 225 closing with a 0.7% while… Read more »

XE Market Analysis: Asia – Oct 27, 2016

The dollar was on a firmer footing through the N.Y. session on Thursday, resulting in USD-JPY climbing to three-month highs, USD-CAD to a seven-month top. EUR-USD faded, though remained above lows of the week. Cable meanwhile, eased into 1.2150, despite the better U.K. GDP reported in London morning trade. Incoming U.S. data was mixed, with… Read more »

More mixed signals in the housing market

The picture of the housing market go a little bit less murky this week, and a little bit brighter. First of all, new home sales, while down from the July peak, continued with the upward trend.  Thhis is best shwon by comparing the more noisy monthly data (blue) with the quarterly average (red): The quarter… Read more »

XE Market Analysis: UK Post Brexit Economy Resilient in Q3

OVERVIEW Sterling jumps from below 1.21 on Tuesday to testing towards 1.23 helped by the strong Q3 GDP reading. The Mexican Peso weakens as Trump starts to edge ahead in the polls, especially in Florida. The trade deficit in the US grows as the US Dollar’s strength bites into its competitiveness. HIGHLIGHT Q3 GDP data… Read more »

XE Market Analysis: Europe – Oct 27, 2016

EUR-USD oscillated around 1.0900 and USD-JPY around 104.50 in mostly eventful forex trading ahead of the London open. USD-JPY has run out of puff after logging a three-month peak at 104.87 on Tuesday. EUR-JPY and other yen crosses have seen a similar price action. BoJ Governor Kuroda appeared before parliament today, where he said that… Read more »

XE Market Analysis: North America – Oct 27, 2016

The dollar majors remained directionally uneventful into the North American open. EUR-USD settled to an oscillation around 1.0900, below yesterday’s one-week high at 1.0946. The pair has now made three successive higher closing levels on the daily chart, which along with a tallying decline in downside momentum indicators suggest a base has been established after… Read more »

XE Market Analysis: Asia – Oct 26, 2016

The dollar pulled back some in morning N.Y. trade on Wednesday, as profit taking continued following Tuesday’s nine-month top in the DXY. Incoming U.S. data was supportive of the greenback however, with trade and inventory data implying a stronger Q3 GDP reading. The USD later turned higher, also helped by an oil rally inspired Wall… Read more »

XE Market Analysis: The Aussie Shows Kangaroo-like Qualities

OVERVIEW Sterling took a pounding yesterday from 1.2240 to 1.2080 as higher US house prices helped strengthen the US dollar while domestic politics in the UK weakened Sterling. The Canadian Dollar continues to weaken gradually to 1.3350 against the US Dollar despite a gradual strengthening in oil prices. The Swiss Franc had a sudden move… Read more »

XE Market Analysis: North America – Oct 26, 2016

The dollar traded on softer footing, principally against the euro and the Australian dollar. EUR-USD popped above yesterday’s 1.0905 high, building on the rebound from the 1.0851 low, which was the lowest level seen since March. The high so far is 1.0933, which is the loftiest level seen since last Thursday’s post-policy meeting ECB press… Read more »