Overview: Conflicting headlines about US-China trade whipsawed the markets in Asia, but when things settled down, perhaps, like the partial deal that has been hinted, net-net little has changed. Asian equities were mixed, with the Nikkei, China’s indices, and HK gaining, while most of the others slipped lower. The 0.9% gain in the S&P 500 yesterday …
Overview: Central bank activity is still very much the flavor of the day, but investors are looking for the next focus. The Bank of Japan and the Swiss National Bank stood pat, while Indonesia cut for the third consecutive time and the Hong Kong Monetary Authority and Saudi Arabia quickly followed the Fed. Brazil cut its …
Overview: The prospect of “lower for longer” continues to fuel the bond and stock rally. The initial US equity response to the Fed was positive but not strong and closed about 0.3% higher. Asia Pacific equities followed suit with mostly modest gains, except for China and Hong Kong, where gains of more than 1% were …
Overview: Asian shares recovered from opening losses to finish mostly higher, with the Shanghai Composite up nearly 2% and India tacking on 1% after the election was called, starting April 11. European markets, led by energy, communication, and materials sectors, is up about 0.5% through midday. The S&P 500, which closed lower every day last week is …
Greenback Starts New Week Decidedly Mixed, with Brexit Anxiety Weighing on Sterling Read More »
Overview: Lifted by the re-opening of Chinese markets after the week-long Lunar New Year holiday, global equities are trading firmer. Outside of Japanese markets that were closed, the large markets in Asia–China, Taiwan, South Korea, and Hong Kong advanced. European bourses are following suit, and the Dow Jones Stoxx 600 is up more than three-quarters …
In recent weeks, the macro story focused on the shifting outlook for Fed policy and the Sino-American trade relationship. There is unlikely to be further progress on either issue in the week ahead. The Fed won’t raise interest rates until toward the middle of the year at the earliest. The government shutdown will limit new …
Nearly every investment strategy seems to fall in one of three buckets. There is trend-following–go with the underlying direction of prices–and its opposite, mean reversion, look for the trend to be reversed. Lastly, there are arbitrage strategies. We would put carry trades, where a low yielding currency is borrowed to finance the purchase of a …
Norges Bank: As widely expected, Norway hiked rate for the first time since 2011. Paradoxically, it was seen as a dovish hike. The rate path was lower than many expected. The next hike is seen in Q1 2019. The krone was sold, and it is the only major currency that is not gaining against the …
The trajectory of monetary policy in the US and Europe has been fairly clear. There is practically no doubt that the Fed will hike rates on September 26. Despite softer than expected PPI and CPI figures, the market has become more confident of another move in December. The Federal Reserve’s balance sheet unwind reaches its maximum …
Dollar Pullbacks Remain Shallow as Rate Differentials Widen Read More »
The US dollar surged last week, with the Dollar Index rising 1.25%, the most since April. The dollar is being boosted by two drivers. The first is the policy mix and interest rate divergence. The other is the intensification of pressure on emerging market. Turkey has a disastrous combination of more fundamentals, large short-term foreign currency …