Category: Financial Markets

Financial markets news from external sources.

Key Currency Pairs: the Pound/Dollar and the Canadian Dollar/Dollar

           Due to high inflationary pressures, currency traders had assumed that the Bank of England would be raising rates this year.  BOE governor Carney threw cold water on that assumption during an interview with the BBC: The governor of the Bank of England has said that an interest rate rise is “likely” this year, but… Read more »

Moderate Mixed Messages on the International Data Front

     This week, we had the standard economic “on one hand, on the other hand” situation.  The IMF released their latest World Economic Outlook which contained bullish data.  However, we’re seeing some weakness in the OECDs leading numbers along with the Nowcasts released by the Financial Times.      First, let’s look at the positive numbers… Read more »

Canada Appears Poised For Further Growth

          The Canadian economy was hit by the oil price declile in 2014 and experienced a mild recession.  But over the last two years, it was bounced back.  Now the Bank of Canada is faced with the possibility of higher growth and the accompanying inflation.  This week, the Bank of Canada maintained their current rate… Read more »

Weekly Indicators: manufacturing growth decelerates, mortgage applications accelerate addition

March data was all positive, including the Index of Leading Indicators, buoyed particularly by the interest rate spread and ISM new orders, and also included building permits and starts, retail sales, industrial production and capacity utilization.   Source: XE news feed Weekly Indicators: manufacturing growth decelerates, mortgage applications accelerate addition

XE Market Analysis: Asia – Apr 20, 2018

The DXY posted two-week highs in N.Y. on Friday, taking its cue from firmer Treasury yields. EUR-USD fell to 1.2250 lows, down more than 100 points from overnight highs. USD-JPY topped at 107.86, a two-month top. USD-CAD printed two-week highs of 1.2749 following cooler Canada CPI and retail sales. Cable remained under pressure following BoE’s… Read more »

XE Market Analysis: North America – Apr 20, 2018

The dollar is finishing the week on a firmer footing, posting gains versus the euro and yen, and being aided higher against the pound after BoE Governor Carney walked back hawkish guidance. EUR-USD dropped through recent range lows at 1.2299-1.2307 on route to posting an 11-day low at 1.2293. There didn’t appear to have been… Read more »

XE Market Analysis: Europe – Apr 20, 2018

The dollar has been trading firmer so far today, while weakness in the yen and sterling have remained themes. The dollar bloc currencies have also seen particular weakness, concomitantly with corrections in commodity prices and global stock markets. EUR-USD, meanwhile, has flat-lined in the mid 1.2300s, remaining comfortably off the three-week high posted on Tuesday… Read more »

XE Market Analysis: Asia – Apr 19, 2018

The dollar bounced in N.Y. trade on Thursday, taking the DXY to 89.91, a one-week high, and through its 20- and 50-day moving averages of 89.80, and 89.83, respectively. In-line jobless claims and leading indicators, along with a better Philly Fed outcome had little impact, though a late day cable sell-off following dovish Carney comments… Read more »

XE Market Analysis: Mexican Peso Falls on Political Jitters

OVERVIEW FX market generally quiet with little economic data released. GBP falls after weak retail sales but recovers on M&A announcement. USD flat, Fed’s economic survey suggests economy still growing “moderately”. HIGHLIGHT Source: XE news feed XE Market Analysis: Mexican Peso Falls on Political Jitters

XE Market Analysis: North America – Apr 19, 2018

The dollar has been trading near steady on net, while moderate yen weakness was a theme during the Tokyo session. The pound also came under some pressure following a miss in UK retail sales, and the Australian dollar lifted concomitantly with commodity prices out of post-Australian jobs data lows, subsequently posting a fresh trend high…. Read more »

XE Market Analysis: Europe – Apr 19, 2018

The dollar has been trading near net steady so far today, while yen weakness remained a theme. EUR-USD has settled in the upper 1.2300s, holding below the three-week high seen earlier in the week at 1.2414. USD-JPY edged out a three-session high at 107.51, EUR-JPY a two-month high, just above 133.00, while AUD-JPY managed a… Read more »

XE Market Analysis: Asia – Apr 18, 2018

The dollar dipped in early trade, taking the DXY to 89.45 lows, from a pre-open high of 89.77. A modest USD short covering rally set in ahead of the London close, which lifted the index back to 89.63. There was no data to drive the market, and FX trade overall was subdues. EUR-USD ranged between… Read more »

XE Market Analysis: Bank of Canada Keeps Rates on Hold

OVERVIEW Market sentiment remains positive on headlines that US officials met with North Korean leadership. Canadian Dollar falls after BoC Governor is cautious on rate outlook.  GBP slides after inflation cools.  EUR mixed, inflation revised down. Turkish Lira outperforming after the president announces the early election. HIGHLIGHT Source: XE news feed XE Market Analysis:… Read more »

XE Market Analysis: North America – Apr 18, 2018

EUR-USD traded softer, although rebounded sharply from two separate dips below the 1.2350 level. The pair is down from the three-week high posted yesterday at 1.2414. Yesterday’s sub-forecast German ZEW survey put a lid on euro buying as the report developing an economic slowdown theme in the Eurozone’s engine economy. USD-JPY lifted some 30 pips… Read more »

XE Market Analysis: Europe – Apr 18, 2018

Narrow ranges have mostly prevailed into the London interbank open, with most of the main dollar pairings holding well within their respective ranges from yesterday. This has been seen amid an ongoing recovery rally in global stock markets as trade and geopolitical concerns continued to abate. EUR-USD has held a narrow range in the upper… Read more »

XE Market Analysis: Asia – Apr 17, 2018

The dollar bounced modestly through the N.Y. morning session on Tuesday, taking its lead from a calmer geopolitical backdrop, better incoming U.S. data, and solid earnings reports. The DXY topped at 89.66, before later pulling back to 89.49 lows. EUR-USD bottomed at 1.2337 after opening near 1.2375, while USD-JPY topped at 107.21, later briefly dipping… Read more »

XE Market Analysis: UK Unemployment Lowest Since 1975

OVERVIEW USD steadies and gains versus European currencies. EUR weakens after ZEW survey. GBP retreats from post-Brexit highs versus Dollar after wage data disappoints. AUD slightly weaker after RBA minutes. HIGHLIGHT Source: XE news feed XE Market Analysis: UK Unemployment Lowest Since 1975

XE Market Analysis: North America – Apr 17, 2018

A dollar softening theme has prevailed , with EUR-USD ascending to three-week highs above 1.2400 and USD-JPY pushing to three-day lows below 107.00. AUD-USD has also turned higher after weakening in the wake of the release of the RBA’s minutes to its April policy meeting, which stated that there was no reason to hike rates… Read more »

XE Market Analysis: Europe – Apr 17, 2018

A dollar softening theme has been prevailing, with EUR-USD printing a three-week high just above 1.2380 and USD-JPY pushing to three-day lows below 107.00. AUD-USD has also turned higher after weakening in the wake of the release of the RBA’s minutes to its April policy meeting, which was deemed as showing board members as being… Read more »

XE Market Analysis: Asia – Apr 16, 2018

FX trade was relatively quiet in N.Y. on Monday, though the dollar overall was a bit softer, seeing the DXY bottom at 89.39 from opening highs of 89.61. INcoming data was mixed, with retail sales a touch better than consensus, and the Empite State index missing the mark. EUR-USD ranged between 1.2359 and 1.2395, while… Read more »

XE Market Analysis: Sterling Marches On

OVERVIEW US Dollar dips as hopes for the Syria strikes do not escalate. Sterling heading towards post-Brexit vote highs. Loonie strengthens on last-minute oil pipeline attempt. HIGHLIGHT Source: XE news feed XE Market Analysis: Sterling Marches On

XE Market Analysis: North America – Apr 16, 2018

The dollar traded moderate softer. EUR-USD clocked a two-session high of 1.2373 from the 1.2330-35 area while the narrow USD trade-weighted index (DXY) ebbed by 0.25%. AUD-USD also traded firmer, and USD-CAD softer. Cable traded above 1.4300 for the first time since January. Elsewhere, the Russian rouble came back under the cosh following the weekend… Read more »

XE Market Analysis: Europe – Apr 16, 2018

Moderate yen outperformance has been a feature in otherwise narrow-ranging early-week trading. EUR-USD held in the lower 1.2300s, remaining within Friday’s range. USD-JPY, meanwhile, dipped below Friday’s low at 107.25 on route to a 107.13 low, which marks a correction in an upside trend that’s been in development for two weeks now, from mid 104.00… Read more »

International Economic Week in Review: International Potpouri

             This was a modest week of international news.              Canadian news was light this week, with building permits being the main release.  Permits dropped 2.6%, but remain in the 775-850 range, where they’ve been for the last 10 months:   The Bank of Canada recently imposed increased lending restrictions, where were summarized… Read more »

And Overview of the EU

           Peter Praet gave his assessment of the EU region in a speech on April 9.    Let’s begin with his assessment of inflation: Source: XE news feed And Overview of the EU

XE Market Analysis: Asia – Apr 13, 2018

The DXY advanced modestly ahead of the N.Y. open on Friday, though spent much of the remainder of the session sideways to slightly lower. The index topped at 89.88, before falling off to 88.72 in light afternoon trade. A softer U. of Michigan sentiment outcome weighed some on the dollar, though activity overall was thin…. Read more »

XE Market Analysis: North America – Apr 13, 2018

The yen weakened, while sterling and the Australian dollar outperformed and the dollar trade mixed. The other commodity currencies also posted moderate gains. AUD-JPY was showing the biggest gain, as of the late London morning, with the cross showing a gain of 0.7%, logging a one-month peak at 83.99. AUD-JPY is widely view as a… Read more »

XE Market Analysis: Europe – Apr 13, 2018

The yen weakened moderately while most of the other main currencies posted narrow ranges in pre-London trading in Asian markets. USD-JPY lifted to a fresh six-week high of 107.58, while EUR-JPY lifted toward trend highs and AUD-JPY clocked a one-month high at 83.69. A rebound in global markets aided the yen lower as more of… Read more »

XE Market Analysis: Asia – Apr 12, 2018

The DXY moved to three-session highs in N.Y. on Thursday, topping at 89.95 at mid-morning. Mostly in-line jobless claim and import price data provided some early support, though the dollar later faded some, as CNBC reported the U.S. is prepared to strike 8 targets in Syria, though UN Ambassador Haley coolly said they’re “methodically” exploring… Read more »

XE Market Analysis: Syria Worries Ease, Euro Weakens

OVERVIEW Euro weakens after dovish ECB minutes. Japanese Yen weakens on Trump’s tweet on the timing and/or possibility of attacking Syria.  Swedish Krona slips after CPI miss. GBP strong due to seasonal flows, house price survey remains weak. HIGHLIGHT Source: XE news feed XE Market Analysis: Syria Worries Ease, Euro Weakens

XE Market Analysis: North America – Apr 12, 2018

The dollar found some bids following an early-morning tweet shower from Trump, which, among other things, said that an attack on Syria had not yet been decided and suggested that he doesn’t have any plans to sack special council Mueller. USD-JPY lifting about 15 pips from pre-tweet shower levels, enough for the pair to post… Read more »

XE Market Analysis: Europe – Apr 12, 2018

The dollar majors have once again plied narrow ranges, EUR-USD in the mid-to-upper 1.2300s after a four-day run higher capped out yesterday at 1.2397, and USD-JPY in the upper 106.0s. The lack of directional impulse has been seen in most other currency pairings, and Asian stock markets. The Nikkei 225 closed with a fractional 0.12%… Read more »

XE Market Analysis: Asia – Apr 11, 2018

The greenback was fairly steady through the N.Y. session on Wednesday, with narrow ranges seen in major pairings. U.S. CPI was on the cool side, which weighed slightly. The dollar perked up after the FOMC minutes later in the session, which were a tad on the hawkish side. EUR-USD bottomed at session lows of 1.2347,… Read more »

XE Market Analysis: Dollar Weakens as Market Worries Switch to Syria

OVERVIEW Markets wary of US air strikes against Syria following Trump’s tweets. EUR edging higher in quiet trade.  GBP recovers after weaker than expected data.  JPY firmer as risk appetite remains mildly negative. RUB slide continues. HIGHLIGHT US consumer price inflation fell for the first time in 10 months in March, but underlying inflation continued… Read more »

Further slow deterioration in real money supply, mortgage applications

Let me start by emphasizing that neither of the two indicators I am chiefly discussing in this post have actually turned negative on any sustained basis.  But if there has been a theme in my posts in the last 6 to 12 months, it has been the slow decline of the overall positive readings among… Read more »

XE Market Analysis: North America – Apr 11, 2018

The dollar has posted modest losses versus its major counterparts, continuing a theme seen since last Friday’s U.S. jobs report miss, though the greenback managed moderate gains against the dollar bloc currencies, which fared less well as investor risk appetite flagged in the face of the geopolitical risks. USD-JPY drifted under 107.00 after peaking yesterday… Read more »

XE Market Analysis: Europe – Apr 11, 2018

The dollar has posted modest losses versus its major counterparts, which continues a theme seen since last Friday’s big U.S. jobs report miss. USD-JPY drifted moderately lower, back toward 107.00 after peaking yesterday at 107.39, which left last week’s six-week high at 107.49 untested. Yen crosses also saw a similar price action, with the yen… Read more »

XE Market Analysis: Asia – Apr 10, 2018

The dollar index fell early on, led by EUR-USD’s rally, bottoming at 89.55, a two-week low, before later recovering to 89.80. Warmer PPI data supported the buck to a degree, following its early decline. EUR-USD ranged between 1.2379 and 1.2325, settling into 1.2350 at the close. USD-JPY meanwhile, topped at 107.40, finding support from the… Read more »

XE Market Analysis: There Is No Instance of a Nation Benefiting from Prolonged “Trade” Wars: Sun Tzu’s “Art of War"

OVERVIEW Global stock markets are in the green as trade disputes are quashed by Chinese President. US PP advances 0.3% in March, fuelling expectations that the economy is ripe for more than three rate hikes. Risk-on trades driving commodity currency higher against the USD. HIGHLIGHT Source: XE news feed XE Market Analysis: There Is… Read more »

XE Market Analysis: North America – Apr 10, 2018

The yen underperformed for a second day, while the dollar bloc currencies outperformed after China’s President Xi struck a conciliatory tone, pledging a more open economy and lower tariffs for automobile imports, at his keynote speech before the Boao Forum today. This aided stock markets higher in Asia and Europe, while S&P 500 futures were… Read more »

XE Market Analysis: Europe – Apr 10, 2018

Yen weakness has been the main show in town, with the biggest mover having been the global stock market correlating AUD-JPY cross, which is showing a 0.9% gain as the London interbank market takes to its collective desk. USD-JPY is showing a 0.4% advance, earlier posting a two-session high at 107.24. Chinese President Xi’s keynote… Read more »

XE Market Analysis: Asia – Apr 09, 2018

The dollar weakened overall into the N.Y. open on Monday, seeing the DXY slip to a low of 89.82 in afternoon trade. The FX market was largely quiet however, with narrow trading ranges seen in the major dollar pairings. Wall Street surged higher on eased trade tensions, as Trump economic advisor Kudlow sounded optimistic. Traders… Read more »

XE Market Analysis: Russian Rouble Slumps as US Unveils Sanctions

OVERVIEW US Dollar softer as trade tensions remain front and center. German exports plunge as global trade concerns rise. British Pound is supported by house price data and rate hike bets. Canadian Dollar firms on NAFTA optimism. Turkish Lira falls to fresh record lows.   HIGHLIGHT Source: XE news feed XE Market Analysis: Russian Rouble… Read more »

XE Market Analysis: North America – Apr 09, 2018

The dollar has been trading neutrally versus its main counterparts. EUR-USD has been plying a narrow path around the 1.2270 mark, consolidating Friday’s post-U.S. jobs report gains, which lifted the pair from the low 1.2200s. USD-JPY has been steady, holding near 107.00. Risk sentiment improved as the Asia session progressed, despite the ratchetting-up in geopolitical… Read more »

A Review of EUR/USD; AUD/JPY; USD/CAD

EUR/USD             First a bit of history:   Source: XE news feed A Review of EUR/USD; AUD/JPY; USD/CAD

US Economy Still in Solid Shape

            ISM released their latest manufacturing and non-manufacturing reports this week.  The manufacturing number was down 1.5 but is still a very heathy 59.3.  New orders were also off, but they are also very strong (61.9).  However, the real story in this report were the anecdotal comments, which contained negative information about the tariffs: … Read more »

Powell and Bullard Both See Additional Rate Hikes

            This week, there were two key speeches by Federal Reserve governors.  The most important was from new Fed President Jerome Powell.  I have previously described him as a technocrat; his latest speech further solidifies that description.  Like most Fed governors, he believes the labor market is the single-best indicator of the economy’s health.  He… Read more »

Weekly Indicators: interest rates rise again edition

March data started out with a weakly positive jobs gain and a flat unemployment rate. Wages improved overall, but did not gain YoY for non-managerial workers. Motor vehicle sales improved. Both ISM manufacturing and services indexes decelerated but remained strongly positive. Source: XE news feed Weekly Indicators: interest rates rise again edition

XE Market Analysis: It Isn’t Over till It’s Over as Trade Fears Persist

OVERVIEW Commodity currencies are trading lower as the US Administration considers new $100 billion tariffs on Chinese imports. US non-farm payroll data is expected to show another solid growth. USD/DXY Index currently holding to close the week on a high for the second successive week. HIGHLIGHT Source: XE news feed XE Market Analysis: It… Read more »

XE Market Analysis: Dollar Rallies as Trade Rhetoric Calms

OVERVIEW Risk appetite recovers amid a calmer view of trade war risks. Stock markets rally strongly, European markets up over 2%. GBP under pressure from weak services data. EUR also under pressure from softer data. US trade deficit hits 9.5 year high. HIGHLIGHT The Dollar is rallying across the board today versus the Japanese Yen where it… Read more »

XE Market Analysis: China Strikes Back with Trade Tariffs

OVERVIEW A cautious tone came down upon the financial markets today as China responded to the US with trade tariffs on US goods. The construction sector in the UK literally froze in March as the beast from the East put this sector into contractionary territory in March. Inflation in Europe ticked higher, while the unemployment… Read more »

XE Market Analysis: EU Manufacturing Sector Stumbles

OVERVIEW EU manufacturing sector drops more than expected in March. UK manufacturing inches higher according to the Purchasing Manager’s Index. The Reserve Bank of Australia leaves rates on hold at 1.5%. US manufacturing slowed to 59.3. HIGHLIGHT The factory boom in the EU continues to wane into March. This is now the third month in… Read more »

XE Market Analysis: US and China Trading Tariffs Keep Investors Nervous

OVERVIEW The Sterling is a top performer among G10 currencies. EUR is weak in the holiday-thinned market. Japan Tankan tick lower on strong JPY. USD DXY Index down 0.11% over fears that global trade war will slow economic growth. HIGHLIGHT Source: XE news feed XE Market Analysis: US and China Trading Tariffs Keep Investors… Read more »

The Fed between Scylla and Charybdis: an update

About three years ago, I wrote that in raising rates the Fed was caught between the Scylla of higher long rates killing the housing market and the Charybdis of falling long rates causing a yield curve inversion, and that “The Fed has to hope that long rates remain in a narrow band of stability.”  https://bonddad.blogspot.com/2015/05/analyzing-crosscurrents-maturing.html … Read more »

The EU and UK Take a Few Modest Economic Hits

           At the end of 2016, economic news from the EU started turning more bullish.  Sentiment indicators from Markit economics were the first to pick this up which was followed by loan growth, retail sales, and finally industrial production.  Mario Draghi – the head of the ECB – has noted this trend on several occasions,… Read more »

Australia is in Good Economic Shape

            We’ve gotten the latest round of AIG industry PMIs for Australia’s construction, manufacturing and service sectors.  All three are expanding.  Although the manufacturing index dropped 1.2 points, tt has been above a 50 reading for 17 months, indicating continued growth.  All seven activity sub-indexes are rising and 6/8 sectors are growing.  The service sector… Read more »

The New and Improved Fed is Definitely More Hawkish

                WE have a new Fed Chairman: Jerome Powell.  We also have a new Fed, in the sense that the FOMC Committee released their revised economic projections at their latest meeting: Source: XE news feed The New and Improved Fed is Definitely More Hawkish

Weekly Indicators: flatter yield curve balance lower long rates edition

February data included a decline in consumer confidence from both sources, and a decline in the Chicago PMI, which was nevertheless still positive. Nominal personal income and spending increased, but in real terms income was flat. House prices continued to increase strongly YoY. Source: XE news feed Weekly Indicators: flatter yield curve balance lower… Read more »

XE Market Analysis: German Unemployment Rate Falls to A Record Low

OVERVIEW US consumer spending rises modestly while inflation picks up. UK 2017 GDP growth revised up, current account deficit revised down. Canadian GDP unexpectedly declined in January. HIGHLIGHT Unemployment in Germany fell to a record low in March, reflecting the strength of a labor market that has become the cornerstone of a consumer-led upswing. The… Read more »

XE Market Analysis: Asia – Mar 28, 2018

The DXY moved to its best levels in nearly a week, topping at 89.86 after opening near 89.44. Upgraded Q4 U.S. Upwardly revised Q4 GDP helped dollar sentiment, as did the partial unsinding of trade war fears. EUR-USD fell to 1.2335 lows from 1.2410 at the open, as USD-JPY ran up to 106.48 highs. USD-CAD… Read more »

Update on 2018 forecast, stock and bond movements

In this relatively slow news week, let me update a couple of subjects on which I’ve recently posted here.   A few days ago Lakshman Achuthan of ECRI revealed a change in their longer term forecast:   Source: XE news feed Update on 2018 forecast, stock and bond movements

XE Market Analysis: North America – Mar 28, 2018

The dollar traded firmer, especially against the yen and Swiss franc. USD-JPY logged a one-week high at 105.95 after more than reversing intraday losses. EUR-JPY and other yen crosses also picked up from intraday declines, but remained off recent highs. EUR-USD dipped to a 1.2376 low, making it a 1 bid figure correction from yesterday’s… Read more »

XE Market Analysis: Europe – Mar 28, 2018

The yen was moderately bid amid a rekindling in risk aversion in global asset markets, led by a sharp tech-sector rout on Wall Street yesterday, which left the Nasdaq nursing a hefty 2.9% loss at the close of the regular session. USD-JPY drifted to a 105.32 low, subsequently picking itself up back above 105.50 into… Read more »

XE Market Analysis: Asia – Mar 27, 2018

The dollar index rallied some early in the session, topping at 89.63, before heading back to 89.30 lows. Wall Street started higher, with the Dow supported by big GE gains, though losses ensued, especially in the NASDAQ, where Tesla and Facebook were hit, and NVIDIA pulled the plug on autonomous car testing. Treasury yields pulled… Read more »

XE Market Analysis: North America – Mar 27, 2018

The dollar has posted a decent rebound after posting fresh lows versus the euro and other currencies. The narrow trade-weighted USD index (DXY) is showing a gain of 0.3% presently, at 89.29, retracing about two thirds of the decline seen over the last day, which earlier left a six-week low at 88.94. Source: XE… Read more »

XE Market Analysis: Europe – Mar 27, 2018

The yen posted fresh lows today, losing ground for a second straight day amid a backdrop of reviving risk appetite and associated gains in global stock markets. USD-JPY clocked a three-session high of 105.75 in Tokyo, about a 35 pip gain on the New York closing levels, putting in some further distance from the 16-month… Read more »

XE Market Analysis: Asia – Mar 26, 2018

The DXY fell to levels last seen on February 19, dropping to 89.02, after opening at 89.32. Despite a Wall Street raly, as trade tensions eased, and higher Treasury yields,. the dollar got no support. Bigger picture, trade issues will most likely remain, and the U.S. fiscal position is seen deteriorating further. As a result,… Read more »

XE Market Analysis: US Dollar Weakens as Trade War Fears Ease

OVERVIEW US Dollar is weaker across the board. British Pound is broadly higher based on improved risk appetite. Trade fears ease after comments from U.S. Treasury Secretary and Chinese Premier. HIGHLIGHT The US Dollar index has fallen around 0.5% to a 5-week low as trade tensions were eased by comments from US Treasury Secretary Steve Mnuchin,… Read more »

XE Market Analysis: North America – Mar 26, 2018

The dollar and yen traded softer against most other currencies as risk appetite rebounded in global markets after U.S. Treasury Secretary Mnuchin said that there has been “productive” talks with China. This helped allay investor anxieties about prospects for an escalating trade way. Most stock markets rallied in Asia and Europe, while S&P 500 and… Read more »

XE Market Analysis: Europe – Mar 26, 2018

The dollar has traded modestly softer against most currencies, outside the case of USD-JPY amid a backdrop of relative stability in stock markets in Asia and with S&P 500 futures posting gains of near 1% in overnight trading. EUR-USD posted a tow-session high of 1.2383. Cable also edged out a two-day peak, while USD-CAD drifted… Read more »

What the Fed Thinks: Quarles, Mester, Barker, and some Conclusions

            Vice chairman of supervision Quarles explained his opinion of the U.S. economy in a speech on February 26.  He began by noting that unemployment was 4.1%.  He believes this has “spilled over” into consumer confidence which, in conjuntion with growing household wealth, is sustaining consumer spending.  He believes that transitory factors caused inflation’s weakness… Read more »

What the Fed Thinks: Williams and Bostic

            This is the second part of my series looking at this year’s committee members to determine who are the hawks and who are the doves.  In the first part, we looked at Powell, Dudley and Brainard, all of whom are hawkish.  Here, I will start with San Francisco president John Williams who recently explained… Read more »

What the Fed Thinks: Powell, Dudley, and Brainard

            The Yellen era at the Federal reserve is over; the Powell era has officially begun.  Yellen had the unenviable task of steering the Fed from an easy money policy to a gradual tightening bias.  Her work was cut out for her; when Bernanke tried to raise rates, the market had a “taper tantrum” that… Read more »

Weekly Indicators: slow deterioration of long leading indicators edition

February data included a big increase in the Index of Leading Indicators, positive existing home sales month over month, and positive durable goods orders. A small decline in new home sales was the only negative. Source: XE news feed Weekly Indicators: slow deterioration of long leading indicators edition

XE Market Analysis: Asia – Mar 23, 2018

The dollar weakened in N.Y. trade on Friday, weighed down by ongoing trade concerns, as China said it would slap tariffs on some U.S. exports. Trump spooked the markets when he threatened to not sign the omnibus spending bil (though he later signed it), resulting in lower equities. The DXY remained near its recent lows… Read more »

XE Market Analysis: North America – Mar 23, 2018

The dollar is softer today, although above lows seen yesterday versus many of the main currencies, or above the 16-month low that was seen during the Tokyo session earlier today in the case against the yen. EUR-USD clocked a high at 1.2349 earlier, since settling lower by remaining 0.2% up on the day. There seems… Read more »

XE Market Analysis: Europe – Mar 23, 2018

The yen remained underpinned as risk aversion continued to course through global markets on the realizing threat of Trumpian trade wars. USD-JPY logged a 16-month low at 104.64. Japanese inflation data today may have given the yen an added bid, with the BoJ-watched core CPI reading rising to a rate of 1.0% y/y in February… Read more »

XE Market Analysis: Asia – Mar 22, 2018

The DXY bounced to 89.96 highs, after printing 89.41 one-month lows in London morning trade. Risk off conditions prevailed through the session, as trade concerns rose following Trump’s direction to the U.S. Trade Office to consider increased tariffs on Chinese goods, with a list that initially would include $50 bln in Chinese exports. The dollar… Read more »

XE Market Analysis: Asia – Mar 21, 2018

The dollar initially fell, rose to session highs, then turned choppy after the as-expected 25 basis point Fed rate hike. The dot-plot remained at 3 2018 tightenings (some had been expecting a shift to 4), which was likely the catalyst for the initial dollar-slide. Overall however, the statement was little changed, and in the scheme… Read more »

XE Market Analysis: North America – Mar 21, 2018

The dollar has traded softer into the Fed’s policy announcement. Cable led the way, with the pair gaining about 0.5% following an unexpected dip in the UK unemployment rate and better-than-forecast rise in average household incomes. The pair logged a two-day high at 1.4075. EUR-USD, meanwhile, lifted to the upper 1.2200s, putting in some distance… Read more »

XE Market Analysis: Europe – Mar 21, 2018

The dollar majors have plied narrow ranges to far today. EUR-USD lifted to the north of 1.2250 after logging a three-week low yesterday at 1.2239, which capped a recent down move driven by a widening in the U.S. Treasury over Bund yield spread. USD-JPY has settled to a consolidation with a modest downward drift after… Read more »

XE Market Analysis: Asia – Mar 20, 2018

The dollar moved higher in N.Y. trade on Tuesday, with buyers stepping inahead of what will almost surely be a 25 basis point Fed rate hike on Wednesday. The DXY topped at 90.40, a near three-week high, and closed above its 50-day moving average, which stands at 89.95. EUR-USD opened the session near 1.2310, and… Read more »

XE Market Analysis: UK Inflation Dips

OVERVIEW Sterling holds its ground despite slowing inflation data. The Euro dips as the ZEW economic sentiment survey plunges. The RBA minutes point to the low-interest rates boosting employment. The US Dollar remains quiet ahead of tomorrow’s FOMC rate decision. HIGHLIGHT We have seen Sterling’s rally consolidate above the psychological 1.40 level against the US… Read more »

XE Market Analysis: North America – Mar 20, 2018

The dollar has traded firmer so far today. EUR-USD dipped to the low 1.2300s, aided lower by a sub-forecast German ZEW survey. USD-JPY lifted to a three-session high of 106.86, Bloomberg reported a Japanese MoF official complaining that recent yen movements have been too volatile and trading too strongly. Japanese data today included the March… Read more »

XE Market Analysis: Europe – Mar 20, 2018

The yen traded softer, while the dollar and most other currencies traded within their respective ranges from yesterday. EUR-USD settled in the lower-to-mid 1.2300s, below the three-session high that was logged yesterday at 1.2359 following reports that the ECB is shifting its focus to the rate path. USD-JPY lifted to a three-session high of 106.44,… Read more »

XE Market Analysis: Asia – Mar 19, 2018

Stock markets on both sides of the Atlantic took a beating on Monday. Reports that Facebook users’ data was used by a political advertising firm weighed heavily on the tech sector, taking FB stock down as much as 8%. Yields were lower on the risk-off backdrop, and the dollar fell broadly as well. The DXY… Read more »

XE Market Analysis: Brexit Transition Deal Agreed

OVERVIEW The Brexit transition deal gives Sterling a welcome boost and is a welcomed relief for businesses. US Dollar focuses on the forthcoming FOMC rate decision where rates are expected to rise. The EU trade surplus disappoints as a stronger Euro starts to bite. Putin wins the election convincingly for another six-year term. HIGHLIGHT … Read more »

XE Market Analysis: North America – Mar 19, 2018

EUR-USD wound back intraday losses that were seen in pre-Europe trading in Asia rising to the 1.2280-90 area. EUR-JPY, EUR-CHF and other euro crosses are also up, with the notable exception of EUR-GBP, which has descended further into three-month low terrain on pound outperformance, which has been bid on the expectation of positive news on… Read more »

XE Market Analysis: Europe – Mar 19, 2018

Both the dollar and yen have traded firmly against most other currencies in early-week trading so far. EUR-USD has ebbed to a 17-day low at 1.2258, and EUR-JPY a two-week low, of 129.61, as a consequence. The biggest movers out of the main currencies have been AUD-JPY, NZD-JPY and CAD-JPY, which are down between 0.3%… Read more »

International Economic Week in Review: Japan Is in Strong Shape

          The Bank of Japan released their latest Meeting Minutes, which contained a positive appraisal of the Japanese economy.  The bank noted that several “virtuous cycles” were in play.  They first noted that business profits had lifted sentiment, leading to rising investment.  That relationship is shown in the following three charts… Read more »

Central Bankers Are Starting to Push Back Against Protectionist Rhetoric

          Comparative advantage is central to the idea of international trade.  It states that a country will produce more of product X if the country’s opportunity cost for the extra unit of production is lower than other choices.  The easiest example is derived from the different standard of living between a… Read more »

International Economic Week in Review: Both Canada and the EU Continue Growing

              On March 8, Deputy Bank of Canada governor Timothy Lane gave a speech titled, “Canada’s Economic Expansion: A Progress Report.”  To provide the required background, Canada had a mild recession a few years ago, caused by OPEC’s opening the production spigot which drove down oil prices.  Most of Canada was moderately touched; the… Read more »

Weekly Indicators: a more positive tone edition

February data included a decline in monthly housing permits and starts, and also retail sales. Industrial production and capacity utilization grew strongly. Consumer and producer prices increased at a rate slightly above normal. Consumer sentiment as measured by the University of Michigan rose sharply. Source: XE news feed Weekly Indicators: a more positive tone… Read more »

XE Market Analysis: Asia – Mar 16, 2018

The dollar bounced into the weekend, taking the DXY to highs of 90.38, levels last seen on March 1. U.S. data was supportive, as U. of Michigan sentiment came in stronger, along with better industrial production figures. EUR-USD dipped to two-week lows of 1.2260 from 1.2330 highs, while USD-JPY recovered to 106.23 highs from 105.60…. Read more »

XE Market Analysis: World Economy Threatened by Steel and Aluminum Tariffs

OVERVIEW US Dollar retreats as Trump replaces national security advisor. Sterling holds ground on optimistic Brexit talks tone. Canadian Dollar will be glad to see the end of this week. The Euro vulnerable as steel and aluminum tariffs worry investors. HIGHLIGHT Source: XE news feed XE Market Analysis: World Economy Threatened by Steel and… Read more »