Category: Financial Markets

Financial markets news from external sources.

XE Market Analysis: Canadian Dollar Spikes as BoC Hike Rates

OVERVIEW Bank of Canada raises rates for the first time in nearly seven years. Janet Yellen says the U.S. economy can absorb further gradual rate increases.  UK unemployment rate falls to its lowest level since 1975, but wage growth is still weak. Eurozone industrial production rose at a faster pace in May, expanding 4% year-on-year…. Read more »

XE Market Analysis: North America – Jul 12, 2017

The dollar was broadly pressured as markets adjusted positions into the Congressional testimony of Fed chairwoman Yellen. EUR-USD has remained buoyant, finding support at 1.1440-50 after ebbing from a two-month peak of 1.1489, which was logged in Asian trade just ahead of Europe’s open. The euro itself traded flat to lower versus other currencies in… Read more »

XE Market Analysis: Europe – Jul 12, 2017

The dollar is lower ahead of Fed Yellen’s testimony before Congress later today, following the direction of U.S. yields. This follows remarks from Fed governor Brainard yesterday that while the start of shrinking the central bank’s balance would be “appropriate soon,” the turn lower in inflation may reduce the chances for a further interest rate… Read more »

XE Market Analysis: Markets Quiet Ahead of Yellen and Canadian Rate Decision

OVERVIEW Major currencies are generally unchanged as investors wait to hear from Janet Yellen tomorrow. Deputy Governor of the BoE avoided the subject of interest rate hikes in a speech, focusing on globalization. The San Francisco Fed President said he still expects one more rate hike, and to begin reducing its balance sheet this year…. Read more »

XE Market Analysis: North America – Jul 11, 2017

The dollar is reaching the New York open at steady-to-moderately firmer levels. The upcoming Congressional testimony of Fed chair Yellen has kept the buck in demand on dips. EUR-USD traded below 1.1400, meeting good selling interest on approaches to this level yet still remaining above yesterday’s low at 1.1381. USD-JPY punched above May’s highs and… Read more »

XE Market Analysis: Europe – Jul 11, 2017

USD-JPY punched above May’s highs and logged a near-four-month high at 114.47, capping a run of fourth consecutive session of gains. A backdrop of rallying stock markets continued to induce yen weakness, with the risk-on vibe continuing to be fed by the combination of Friday’s decent U.S. jobs report coupled with the ECB policymakers cooling… Read more »

XE Market Analysis: Asia – Jul 10, 2017

The dollar was mostly lower in N.Y. trade on Monday, as yields slipped some, and as Wall Street struggled on either side of flat through the session. There was no data on tap to drive prices. EUR-USD remained inside of Friday’s trading range, managing just a 1.1385 to 1.1406 band. USD-JPY briefly printed the 114.00… Read more »

XE Market Analysis: Global Interest Rate Outlook in Spotlight

OVERVIEW The Pound is stable today, recovering after poor economic data from last week.  The US Dollar is still riding the crest of Friday’s jobs report. German exports surge by 1.4% as Europe’s powerhouse rumbles on. UK consumer spending drops to its lowest in four years. HIGHLIGHT Source: XE news feed XE Market Analysis:… Read more »

XE Market Analysis: North America – Jul 10, 2017

The dollar started week on a mostly firmer footing, albeit moderately so, as markets continue to digest the overall encouraging U.S. jobs report of Friday, while some ECB policymakers sought to temper market speculation for a shift in policy guidance at the upcoming July meeting. EUR-USD ebbed to a low of 1.1383. With the late-June… Read more »

XE Market Analysis: Europe – Jul 10, 2017

EUR-USD has been plying a narrow range around 1.1400 in early-week trade following a somewhat indecisive reaction to the U.S. jobs report on Friday. Markets will continue to digest current events that have produced a spike in bond yields on both sides of the Atlantic over the past couple of weeks following surprising hawkishness by… Read more »

US Equity and Economic Week in Review: Sentiment Readings Are Still Bullish

    Last week’s news was just barely bullish: while the third and final reading of 1Q GDP was positive, weaker personal consumption expenditures were concerning.  In contrast, this week’s news is better: ISM data pointed to continued business expansion.  While auto sales continue to be a bit weaker, they are still increasing at stable… Read more »

International Economic Week in Review: Good News Continues

     This week, there was no overarching theme to the data.  However, the general tenor of major releases continued the more bullish trend that started at the beginning of the year.      The RBA maintained their current 1.5% interest rate this week.  Their policy announcement outlined a modestly growing economy: Source: XE news… Read more »

US Bond Market Week in Review: Is the Fed Overestimating Economic Strength?

    This week, the Federal Reserve issued the minutes of their last meeting. While many commentators noted the committee’s split on the timing and amount of asset sales, I believe it’s important to look at some potential shortcomings in the committee’s analysis of the current economic situation. Let’s start with their analysis of the… Read more »

Weekly Indicators: interest rates turn negative edition

June data started out with poor motor vehicle sales, but an excellent headline jobs report. Wage growth shows no sign whatsoever of acceleration.  Both ISM manufacturing and services reports were more positive.   Source: XE news feed Weekly Indicators: interest rates turn negative edition

XE Market Analysis: Asia – Jul 07, 2017

Yields and the dollar initially headed lower after the solid U.S. jobs report, though once the dust settled, both recovered to session highs in N.Y. trade on Friday. EUR-USD fell to 1.1380 after topping at 1.1439, while USD-JPY printed near 2-month highs of 114.17, up from post-data lows of 113.51. USD-CAD bottomed at 10-month lows… Read more »

XE Market Analysis: U.S. Hiring Accelerates

OVERVIEW Bank of Japan offers to buy an unlimited amount of Japanese government bonds, seeking to contain a rise in its government bond yields. German industrial output jumped by 1.2% in May, the fifth consecutive monthly increase. UK manufacturing and industrial output both unexpectedly declined in May. UK house prices fell 1% in June and… Read more »

Points to Remember Before Today's Employment Report

     This is a very quick post.  All I want to do is highlight a few important points before we get today’s employment report.      1.) The pace of job growth has been declining.  Below is a chart of the 3-month rolling average of establishment jobs growth:   2.) Weak utilization is a… Read more »

XE Market Analysis: North America – Jul 07, 2017

The dollar has been trading mixed, losing ground to the outperforming euro while gaining versus the yen and sterling and holding near net steady versus other currencies. The euro remained underpinned following yesterday’s bout of hawkish-leaning remarks from ECB policymakers, which were followed today by above-forecast German and French industrial production numbers. There hasn’t been… Read more »

XE Market Analysis: Europe – Jul 07, 2017

The euro has remained underpinned following the fresh bout of hawkish-leaning remarks from ECB policymakers yesterday, which has been followed by an above-forecast German industrial production figure today, which rose 1.2% m/m in May versus the median forecasts for 0.3%. EUR-USD logged a high for the week, at 114.15, while EUR-JPY traded at its best… Read more »

XE Market Analysis: U.S. Private Jobs Growth Slows

OVERVIEW Federal Reserve minutes suggest policymakers are split on the outlook for inflation.  U.S. service sector growth accelerated unexpectedly in June. German industrial orders rebounded less than expected in May, rising 1% against forecasts for a 2% increase. Canada’s trade deficit doubled in May, but both exports and imports hit record highs. Australia’s trade surplus… Read more »

XE Market Analysis: Asia – Jul 06, 2017

The dollar was mostly lower in N.Y. trade on Thursday, following a softer ADP employment report, and hawkish tones from the BoE and ECB. EUR-USD topped at 1.1424, up from lows near 1.1380, while USD-JPY eased into 113.00 before finding support. USD-CAD stayed heavy as oil prices briefly bounced, while cable steadied over 1.2950.[EUR, USD] … Read more »

XE Market Analysis: North America – Jul 06, 2017

The dollar has traded softer against most currencies. USD-CAD came under fresh pressure, which found bids but amid a 1%-plus rebound in oil prices (following yesterday’s near 4% haemorrhage). EUR-USD lifted above 1.1360 after ECB member Villeroy said that the prevailing non-standard policy is “not eternal,” which was sufficient to spark a tick higher in… Read more »

XE Market Analysis: Europe – Jul 06, 2017

The dollar majors have been plying narrow ranges so far today, with a blip higher in the greenback following the release of the Fed minutes from the mid June FOMC meeting not amounting to much. The minutes didn’t discourage beliefs the Fed will continue to reduce accommodation, via rate hikes and the balance sheet unwind…. Read more »

Will Hancock’s China deal be a livex game-changer?

Australian live cattle exporters continue to watch intently for indications as to whether mining magnate Gina Rinehart’s Hancock Prospecting will be able to secure a potentially game changing breakthrough deal to export cattle from northern Australia to China. The post Will Hancock’s China deal be a livex game-changer? appeared first on Beef Central. Source:… Read more »

Post-truth analysis of big agriculture ignores some hard truths

Post Truth. An increasingly used term to describe modern politics, and one which will also be unavoidable in discussion of agriculture. The post Post-truth analysis of big agriculture ignores some hard truths appeared first on Grain Central. Source: Grain Central Post-truth analysis of big agriculture ignores some hard truths

XE Market Analysis: Asia – Jul 05, 2017

The dollar was relatively steady through the morning session, though later slipped briefly to N.Y. session lows after the FOMC minutes release, before quickly bouncing back above pre-release levels. EUR-USD popped to 1.1357 highs from near 1.1340, before falling to 1.1326 lows. USD-JPY meanwhile, dipped to 112.98 from 113.30, and has since rallied to 113.47… Read more »

XE Market Analysis: South African Rand Slides

OVERVIEW The Eurozone economy continues to see solid levels of growth, though activity slowed slightly in the services sector with June’s PMI dipping to 55.4, from 56.3. Eurozone retail sales rose 0.4% in May, stronger than forecast, adding to the year-on-year growth of 2.6%. The UK service sector slowed more than expected last month as… Read more »

XE Market Analysis: North America – Jul 05, 2017

The dollar has continued its recovery run, posting gains for a third consecutive session in the case against the euro and sterling, and rising against other currencies . USD-JPY has logged a fresh seven-week high at 113.62, while EUR-USD has hit a five-session low at 1.1318 and Cable a four-session low at 1.2893. The narrow… Read more »

XE Market Analysis: Europe – Jul 05, 2017

The dollar majors have been directionally challenged so far today, with narrow ranges prevailing. EUR-USD has settled around 1.1350, modestly above the five-session low posted yesterday at 1.1336. USD-JPY has been trading on either side of 113.00 over the last day, holding in a consolidation pattern after logging a seven-week high at 113.47 on Monday,… Read more »

XE Market Analysis: Asia – Jul 04, 2017

The dollar majors traded steadily in quiet trading conditions in the absence of U.S. markets. The Canadian and Australian dollar were the biggest movers, with the former rallying to fresh trend highs following the latest instalment of hawkish BoCspeak, while latter dove after the RBA signalled out exchange rate strength as a hindrance to the… Read more »

XE Market Analysis: Reserve Bank of Australia Leave Rates Cautiously on Hold

OVERVIEW The Australian Dollar slumps in value as the Central Bank chooses to leave interest rates on hold with a less hawkish tone.  The US Dollar takes a rest for Independence Day. The Euro continues to consolidate in the 1.13’s against the US Dollar backed up by the recent strong economic data. The Pound weakens… Read more »

XE Market Analysis: North America – Jul 04, 2017

The narrow trade-weighted USD index edged out a fresh five-session high at 96.08, despite a softening in USD-JPY. EUR-USD declined for a fourth-straight session, which follows ECB efforts to correct its tapering message. The pair logged a four-session low at 1.1336. Cable logged a four-session low at 1.2915 before recouping toward 1.2950. UK construction PMI… Read more »

XE Market Analysis: Europe – Jul 04, 2017

The Australian dollar dove following the RBA announcement, with Governor Lowe’s statement giving a mixed prognosis of the economy and, in particular, highlighting that an “appreciating exchange would complicate” the transition of the economy from the mining investment boom. AUD-USD fell over 0.6% in making a four-session low at 0.7604, and AUD-JPY shed over 1%… Read more »

Laos kicks off the South East Asian One Belt, One Road

Laos begins construction of the first step in a much grander plan to link all of South East Asia to the Chinese railway network. Dr Ross Ainsworth investigates, and finds some surprises in Laotian wet markets along the way. The post Laos kicks off the South East Asian One Belt, One Road appeared first on… Read more »

XE Market Analysis: Asia – Jul 03, 2017

The dollar rallied in N.Y. trade on Monday, though activity dried up after the London close, as U.S. traders made their way to the exits ahead of Tuesday’s Independence Day holiday. Incoming data was supportive, as the June manufacturing ISM handily beat street expectations. Wall Street rallied, taking the Dow to all-time highs, as yields… Read more »

XE Market Analysis: North America – Jul 03, 2017

The dollar rebounded some of the losses it saw last week. The narrow trade-weighted USD index was showing a 0.4% gain, as of the late European PM session, which follows the 2.5% loss of last week. This Wednesday’s release of the FOMC minutes from the mid-June meeting is focusing market attention, as they should contain… Read more »

XE Market Analysis: Europe – Jul 03, 2017

The dollar has started the week steady to firmer after coming under broad pressure last week. Trading conditions will be thin today with Canadian markets closed, and the U.S. out tomorrow. USD-JPY nudged to the north of 112.50 just as the London interbank take to their desks, having been settled in the low-to-mid 112.0s during… Read more »

International Economic Week in Review: The Data is Clearly Improving

     For a long time, the global economic recovery was barely noticeable.  Yes, there was growth.  But it just this side of positive.  This started to change in the 4Q16, when the Markit Economics’ sentiment indicators highlighted the first solid evidence of rising confidence.  The trend started to accelerate in the 1Q17 as both the… Read more »

US Equity and Economic Review: Some Moderately Concerning Weakness

     This week, the BEA released their final numbers for 1QGDP.  This table shows the numbers for the Q/Q numbers (left column) and Y/Y numbers (right column): Source: XE news feed US Equity and Economic Review: Some Moderately Concerning Weakness

Weekly Indicators: yield curve strengthens, money supply weakens edition

May data this week included two positive measures of consumer confidence, increases in personal income and spending, a continuing increase in house prices, and a strongly positive Chicago PMI reading. The only negative was a decline in durable goods. Source: XE news feed Weekly Indicators: yield curve strengthens, money supply weakens edition

Crossbred feeder steers $1345 in smaller AuctionsPlus offering

Despite scattered showers in Northern NSW and Southern QLD, demand for cattle online continued to waiver this week, with a softer clearance rate compared to the recent past. Weaners and heifers made up the majority of AuctionsPlus listings, and sold well. The post Crossbred feeder steers $1345 in smaller AuctionsPlus offering appeared first on Beef… Read more »

XE Market Analysis: Asia – Jun 30, 2017

The dollar steadied some in N.Y. trade on Friday, moving off its lows of the week as month and quarter end profit taking set in. Incoming U.S. data was decent, with personal income, Chicago PMI and Michigan sentiment all beating expectations. This said, the data had little impact on the greenback. EUR-USD topped at .1.1427,… Read more »

Property: Interest piqued in Ceres assets; Terra Firma plays down CPC sale talk

Terra Firma deputy chair Justin King has played down suggestions that the private equity fund may be about to sell its Consolidated Pastoral Co business in Australia. The post Property: Interest piqued in Ceres assets; Terra Firma plays down CPC sale talk appeared first on Beef Central. Source: Beef Central Property: Interest piqued in… Read more »

XE Market Analysis: North America – Jun 30, 2017

The dollar managed to rebound against the euro, which came under broad corrective pressure. EUR-USD dropped by some 50 pips in making a low at 1.1392. EUR-JPY, EUR-GBP and other euro crosses also fell. The common currency was perhaps due a correction after rallying quite strongly this week on the ECB tapering narrative. Source:… Read more »

XE Market Analysis: Europe – Jun 30, 2017

The dollar has remained soft amid a backdrop of risk aversion, with the apparent hawkish awakening at a number of key central banks prompting a defensive reaction in richly-priced global equity markets. EUR-USD consolidated just off yesterday’s 13-month high at 1.1445, USD-CAD logged a fresh five-month low at 1.2971, Cable posted a five-week high at… Read more »

XE Market Analysis: US Dollar Under Pressure

OVERVIEW British Pound, Euro, and the Canadian Dollar are all higher following central bank stimulus withdrawal comments. U.S. first-quarter GDP growth was revised up to 1.5% annualized on stronger consumer spending.  Euro-zone economic sentiment jumped more than expected in June, highest level since August 2007. UK lending data was stronger than expected in May as… Read more »

XE Market Analysis: Asia – Jun 29, 2017

The dollar was lower again on Thursday in N.Y., taking EUR-USD to 14-month highs of 1.1444 in the process. USD-JPY came under attack as the risk backdrop deteriorated, with global equities taking it on the chin, as global central banks this week seemed to all turn hawkish at once. USD-CAD fell under 1.3000 for the… Read more »

One year later, Brexit has been "a fire across the river"

One year ago, just after the Brexit vote, I wrote that I saw it as “a fire across the river,” a shame for the UK, but an issue that would not have more than a minor effect on the US economy.  This was in response to a speech by Fed President Lael Brainard in which he… Read more »

XE Market Analysis: North America – Jun 29, 2017

The dollar and yen lost ground to most other currencies. The euro logged fresh trend highs versus the dollar and yen, though traded more mixed against other currencies, gaining versus the Swiss franc but losing ground to the pound and commodity currencies today. EUR-USD edged out a one-year peak at 1.1419 and EUR-JPY lifted into… Read more »

XE Market Analysis: Europe – Jun 29, 2017

The dollar and yen have weakened against most currencies today. EUR-USD edged out a one-year peak at 1.1419, Cable posted a three-week high at 1.2876, USD-CHF forayed into seven-month-plus low territory, and the greenback saw respective four- and three-month lows against the Canadian and Australian dollars. As for the yen, while USD-JPY remained rangebound in… Read more »

XE Market Analysis: North America – Jun 28, 2017

The dollar continued to trade mixed, losing ground to the euro and Canadian dollar, holding steady versus the yen while gaining ground against the Australian dollar. EUR-USD extended the ECB taper-talk rally, catalysed by Draghi’s remarks of yesterday, and clocked a one-peak at 1.1388, subsequently settling around 1.1360. USD-CAD was a notable mover, tumbling by… Read more »

XE Market Analysis: Europe – Jun 28, 2017

The euro’s ascent has continued, with EUR-USD logging a high at 1.1378, which is the loftiest level seen since June 2016, while EUR-JPY made a 127.77 peak, the highest level the cross has seen since March 2016. EUR-GBP has punched above recent congestion highs and is trading in seven-month high territory. The spark was ECB… Read more »

XE Market Analysis: Asia – Jun 27, 2017

The dollar fell against the European majors and the CAD in N.Y. on Tuesday, with EUR-USD printing 10-month highs of 1.1343 following hawkish comments from ECB chief Draghi. Cable was dragged higher as well, topping 1.2800 for the first time in over a week. USD-CAD was pressured lower by a rebound in WTI crude prices,… Read more »

XE Market Analysis: Euro Jumps on Draghi's Stimulus Comments

OVERVIEW The Bank of England tightened its credit rules for banks to cool borrowing, particularly by consumers. The Confederation of British Industry (CBI) said its monthly retail sales balance rose to +12 in June, far exceeding forecasts of +2. U.S house price growth unexpectedly slowed to 5.7% last month. U.S. consumer confidence rose to 118.9… Read more »

XE Market Analysis: North America – Jun 27, 2017

The dollar traded generally softer today as markets continued to digest yesterday’s sub-forecast U.S. durable orders report and softening price indicators in the Dallas Fed index. The narrow trade-weighted USD index was showing a 0.5% decline as of the early European PM session, just above the low at 96.58, which is a two-session low. EUR-USD… Read more »

XE Market Analysis: Europe – Jun 27, 2017

The dollar majors remained in fairly narrow ranges, though there has been some movement. AUD-USD logged a one-week high of 0.7609, while USD-JPY logged a five-week high at 112.07 before turning lower, to around 111.70. The retreat in USD-JPY came after the U.S. said that it had detected preparations by the Syrian regime for another… Read more »

XE Market Analysis: Asia – Jun 26, 2017

The dollar slipped early on the back of a disappointing durables report, taking EUR-USD to eight session highs of 1.1219 from opening lows near 1.1180. The pairing later eased into 1.1176 lows after the London close. USD-JPY dipped from 111.70 to 111.36 lows after the data, though later printed 111.90, a one-month high. The rally… Read more »

XE Market Analysis: German Business Confidence at Record High

OVERVIEW FX markets remain subdued, but global stocks are broadly higher. Theresa May has secured the support of the DUP party, giving her a narrow and fragile majority in parliament. UK annual consumer lending growth slowed to 5.1% in May, down sharply from 6.4% in April. The British Bankers Association reported a further dip in… Read more »

XE Market Analysis: North America – Jun 26, 2017

The dollar perked some after edging out fresh lows against a number of currencies, including sterling and the commodity units. USD-JPY was a driver, with the yen itself coming under broader pressure amid a risk-on backdrop, with stock markets across Asia and Europe rallying today. The pair lifted to a three-session high of 111.71. EUR-USD… Read more »

XE Market Analysis: Europe – Jun 26, 2017

The dollar has traded steady-to-softer so far in early-week trading, though USD-JPY is an exception, with the pair nudging to a two-session high of 111.38 as the yen came under a phase of selling. Stock markets have rallied in Asia, aided by a 1%-plus gain in oil prices, gaining for a third consecutive session, which… Read more »

US Equity and Economic Review: How Many Ways Can You Say Moderate?

   This week, the Conference Board released their latest leading and coincident indicators.  They were up .3% M/M while the 6-month rolling average was +2.3%.  But while 9 of 10 indicators increased, there’s been an industrial weakness for the last 7 months: Source: XE news feed US Equity and Economic Review: How Many Ways… Read more »

Weekly Indicators: no change at the summer solstice edition

May data this week included new and existing home sales, both of which increased, and the Index of Leading Indicators, which was also positive. Source: XE news feed Weekly Indicators: no change at the summer solstice edition

US Bond Market Week in Review: The Fed Has to Rethink Their 2% Inflation Target

       For what seems like forever, the Fed has been saying they are using a 2% inflation target.  Given this expansion’s weak growth, this seems to be a fair and appropriate number.  But intuition can be deceiving.  The San Francisco Federal Reserve has issued several reports showing the natural rate of interest to be right around… Read more »

As Temperatures Rise, Europes Economy Shows Signs of Cooling

OVERVIEW The service sector PMI in Europe disappoints as activity tails off as we approach the end of the second quarter Sterling rallies helped by interest rate expectations that UK interest rates may go higher sooner rather than later Bank of Mexico raises interest rates to 7% The US dollar sidelines while market waits for… Read more »

New home sales confirm slowdown – but not negative

In my reports on housing permits and starts over the last week, I pointed out the added importance of today’s new home sales report.  Permits and starts both turned south to new 12 month lows and single family permits at least slowed to a 6 month low. Source: XE news feed New home sales… Read more »

XE Market Analysis: North America – Jun 23, 2017

EUR-USD lifted before capping out 1.1187, ahead of reported option-related selling interest into 1.1300. The pair subsequently drifted to a low of 1.1161 before settling around 1.1175. The flash June composite PMI reading undershot expectations, though still pointed to relatively robust growth, while price increases slowed, which should keep the ECB hawks at bay. USD-JPY… Read more »

XE Market Analysis: Europe – Jun 23, 2017

The dollar has traded mostly softer so far today. EUR-USD has drifted moderately northward, pushing toward recent range highs in the upper 1.11s. Cable has seen a similar price action in rising above 1.2700, making this the third consecutive up day the pair has seen. USD-CAD is lower, trading in the lower 1.32s, correcting most… Read more »

Central Banks Signal Shift Away From Stimulus

OVERVIEW The Norwegian central bank kept interest rates on hold as expected, but signalled a change in bias, removing guidance that it could cut rates this year. The New Zealand central bank left rates on hold as expected. UK Manufacturing activity strengthened again in June as factory orders hit their highest level in nearly 30… Read more »

XE Market Analysis: Asia – Jun 22, 2017

The dollar has remained on a softer tack during the pre-Europe session in Asia. The narrow trade-weighted USD index logged a three-day low at 97.12 as EUR-USD lifted to a three-session high at 1.1177, and USD-JPY to a three-day low at 110.95. Oil prices managed to find a toehold after tumbling 6% since last week’s… Read more »

XE Market Analysis: Europe – Jun 22, 2017

The dollar has remained on a softer tack during the pre-Europe session in Asia. The narrow trade-weighted USD index logged a three-day low at 97.12 as EUR-USD lifted to a three-session high at 1.1177, and USD-JPY to a three-day low at 110.95. Oil prices managed to find a toehold after tumbling 6% since last week’s… Read more »

XE Market Analysis: Europe – Jun 21, 2017

The yen firmed up and dollar gains stalled today as a more risk-off tone took hold in global markets, USD-JPY settled I the lower 111.0s, down from yesterday’s four-week high at 111.79. Yesterday’s 3%-plus plunge in oil prices agitated a pullback in stock markets, which has been supportive of the yen. The minutes to April… Read more »

XE Market Analysis: North America – Jun 21, 2017

The dollar traded modestly softer today for the most part today. USD-JPY settled in the lower 111.0s, down from yesterday’s four-week high at 111.79. Yesterday’s 3%-plus plunge in oil prices agitated a pullback in global stock markets, which has been supportive of the yen. The minutes to April 26-27 BoJ policy meeting, pre-dating last week’s… Read more »

XE Market Analysis: Sterling Jumps as Rate Debate Intensifies

OVERVIEW BoE’s chief economist, Andy Haldane, says a vote for a rate hike could happen in the coming months.  U.S. existing home sales unexpectedly rose 1.1% in May. UK government borrowing narrowed more than expected in May as VAT receipts increased. The ECB remains cautious about the outlook for global growth noted by the positive… Read more »

XE Market Analysis: Sterling Caught Between Politics and Economics

OVERVIEW Sterling remains sensitive to politics and economics as the Brexit negotiations begin in a cordial manner. The Japanese economy reports solid exports at their highest level for two years. The Reserve Bank of Australia is becoming concerned about the increasing levels of credit. HIGHLIGHT The Pound has weakened in reaction to comments made by… Read more »

The housing slowdown has arrived

On Friday housing permits and starts both declined, and significantly enough that they have become a negative.  Let’s take a closer look. First of all, here are permits for all structures (blue) and for single family homes (red): Source: XE news feed The housing slowdown has arrived

XE Market Analysis: Sterling Future is Uncertain as Brexit Negotiations Begin

OVERVIEW The Sterling remains stable on the day that the formal Brexit negotiations begin. The Federal Reserve’s Dudley has painted a positive picture of the U.S. economy. Euro is steady after Macron achieves a parliamentary majority. South African Rand plummets as political instability strikes again. HIGHLIGHT Source: XE news feed XE Market Analysis: Sterling… Read more »

Weekly Indicators: housing and the Fed overshadow weekly steadiness edition

 May data underwhelmed this week. Producer prices were unchanged, while consumer prices declined. That was the best news. But industrial production was flat, while capacity utilization declined. Retail sales declined, including in real terms. Consumer sentiment as measured by the University of Michigan declined. Housing starts and permits both declined significantly. Source: XE news… Read more »

XE Market Analysis: U.S. Housing Market Shows Further Signs of Slowing

OVERVIEW U.S. housing starts fell 5.5% and building permits fell 4.9% last month. U.S. consumer sentiment dipped in June with the Uni Michigan index dropping from 97.1 to 94.5. Bank of Japan keeps interest rates on hold and rules out from an early exit from its stimulus due to weak inflation. Eurozone inflation data confirmed… Read more »

US Bond Market Week in Review: The Fed is Missing the Inflation Picture

          On Wednesday, the Fed voted to raise interest rates 25 basis points.  To support their argument, they observed that “the labor market has continued to strengthen and that economic activity has been rising moderately so far this year. Job gains have moderated but have been solid, on average, since the beginning of the year,… Read more »

Waiting on the yield curve

As I wrote last week, nobody should ever rely on a single indicator to forecast the economy.  There is always some indicator that at any given time is consistent with a recession.  Even those that are most reliable occasionally have a misfire.or at very least a near miss. Source: XE news feed Waiting on… Read more »

International Economic Week in Review: The Growth Story Continues

     Internationally, the UK elections were this week’s biggest story.  May’s party had a 20 point lead in the polls when she called for snap elections.  By when all the votes were counted, the Tories lost their majority, forcing her to form a coalition government.  The pound broke through the 128 level versus the dollar… Read more »

US Equity and Economic Review: Current Recession Probability is Low, Part II

     In the first half of this column, I looked at the long-leading, leading and coincident indicators, along with commodity prices and asset markets to determine if the standard causes of a recession exist.  I concluded they do not.  Here, I’ll look at several components of GDP to determine if there is any existence of… Read more »

US Bond Market Week in Review: Current Recession Probability Is Low, Part 1

     While the general economy continues to expand at its now famous “moderate” pace, several economic releases over the last few months indicate there are small areas of softness.  Two consecutive months of weaker auto sales will likely translate into slightly lower auto sector employment in the summer or early fall.  While the recently declining… Read more »

XE Market Analysis: British Pound Hit by Unexpected Election Result

OVERVIEW The UK election result was inconclusive as governing Conservative party lost seats. Canadian job growth accelerated in May at its fastest pace in 8 months.  UK industrial and manufacturing production were much weaker than expected.  ECB’s Nowotny said a rising Euro would complicate the central bank’s task of setting monetary policy.  HIGHLIGHT Source:… Read more »

Farmer gives pecans a reputation makeover

Michelle Chicken’s nuts are sold all over the world, but what the Queensland farmer really wants is to improve their reputation at home. Source: ABC Beef Cattle Farmer gives pecans a reputation makeover

XE Market Analysis: Euro Weakens After ECB Cuts Inflation Forecast

OVERVIEW Eurozone GDP growth revised up to 0.6%, the fastest pace in 2 years. ECB leaves rates on hold but disappoints markets expecting discussions around further tapering of Q.E. German industrial production rose above expectations to 0.8% in April, and March was revised from 0.4% month-over-month to -0.1%. China’s trade surplus rose to $40.81 billion,… Read more »

NEVER rely on just one indicator

Prof. Tim Duy writes some excellent material about the Federal Reserve, and I greatly respect his knowledge.  But he posted something earlier this week that I think is dangerously off-base, and worth making into a lesson. Source: XE news feed NEVER rely on just one indicator

XE Market Analysis: North America – Jun 06, 2017

The dollar continued on a softer tack against most currencies, which saw the USD tip to a new seven-month low at 96.49. USD-JPY was the biggest mover, losing nearly 1% in making six-week lows under 109.50. The buck also posted a on week low versus the Canadian dollar, a 12-day nadir against the Australian dollar,… Read more »

XE Market Analysis: Europe – Jun 06, 2017

The dollar remained on a softening track, with the narrow USD index clocking a fresh seven-month low at 96.49. A run of net weaker U.S. data, particularly last Friday’s May employment report, has suggested a shallower Fed tightening trajectory lies ahead than hitherto expected. Fed funds futures were late yesterday implying 91% odds for a… Read more »

XE Market Analysis: Asia – Jun 05, 2017

The FX market was quiet in N.Y. trade on Monday, leaving major dollar pairings largely inside of narrow ranges. Incoming U.S. data was mixed, with factory orders softer than expected, and services ISM about in line with forecasts. EUR-USD ranged between 1.1235 and 1.1264, as USD-JPY was stuck inside of 110.26 to 110.68. USD-CAD topped… Read more »

XE Market Analysis: British Pound Lifted by Latest Polls

OVERVIEW Eurozone service sector activity remained strong in May, underpinned by increasing demand as the PMI held steady at a 6-year high of 56.8. The UK service sector PMI fell more than expected to 53.8 in May, as the upcoming election, Brexit, and weaker spending by households resulted in slower activity growth. U.S. service sector… Read more »

XE Market Analysis: North America – Jun 05, 2017

The dollar picked up some demand versus its G3 counterparts following the phase of weakness sparked by Friday’s sub-forecast U.S. jobs report, which built expectations for a more shallow Fed tightening trajectory. EUR-USD fell back under 1.1140, putting in a little distance from the seven-month peak seen on Friday at 1.1185. USD-JPY, after extending to… Read more »

XE Market Analysis: Europe – Jun 05, 2017

The dollar has consolidated after tumbling on Friday following the U.S. employment miss, which built expectations for a more shallow Fed tightening trajectory. The narrow USD index steadied above the seven-month low it saw on Friday, and EUR-USD drifted modestly lower, to around 112.70, after logging a seven-month high at 112.85 in the wake of… Read more »

International Economic Week in Review: Solid News Continues

     Three years ago, Larry Summers reacquainted us with the term “secular stagnation” – a term originally used during the Great Depression to describe an extended period of weak but positive economic growth.  In an interview this week, he stated he still agrees with that particular assessment of the overall economic situation: Source:… Read more »