Covid-19

Liquidity and Macro Compete for Upper Hand

It is sometimes said that two emotions drive the capital markets, fear and greed.  That may cast it in moralistic terms, but there does seem to be two attractors that the pendulum of market sentiment is presently swinging between. On the one hand, central banks have eased monetary policy through conventional and unconventional measures. Governments …

Liquidity and Macro Compete for Upper Hand Read More »

Investors Catch Collective Breath, but Sentiment remains Fragile

Overview:  Risk-appetites appear to have stabilized for the moment. Most equity markets are higher. Japan and Malaysia were exceptions, but the MSCI Asia Pacific Index rose for the first time this week. In Europe, the Dow Jones Stoxx 600 is recouping about a third of yesterday’s loss. The S&P 500 gapped lower yesterday, and although …

Investors Catch Collective Breath, but Sentiment remains Fragile Read More »

Equities are Firm but New Developments Needed or Risk Appetites may Become Satiated

Overview: Risk appetites have returned today after taking yesterday off. The MSCI Asia Pacific Index advanced every day last week, slipped yesterday, and jumped back today. Most of the national benchmark advanced at least 1.5%, and the Nikkei led the way with a 3% rally to reach its best level since mid-March. European markets re-opened after …

Equities are Firm but New Developments Needed or Risk Appetites may Become Satiated Read More »

Flavor of the Day: Consolidation

Overview: Global equities are struggling after the S&P 500 staged a dramatic reversal yesterday. The early 3.5% gain was completely unwound and closed slightly lower.  With few exceptions (e.g., Japan and the Philippines), most equity markets in the Asia Pacific region and Europe are lower. Benchmark 10 year bond yields are consolidating yesterday’s rise, but peripheral …

Flavor of the Day: Consolidation Read More »

The Long Winter

G7 officials used to say that foreign exchange markets should be driven by fundamentals. It struck some as vacuous. What else could drive the largest part of the capital markets, a $6.6 trillion a day turnover prior to the crisis but macro? The challenge is really which macro factors should determine exchange rates. There seems to …

The Long Winter Read More »