Overview: ECB President Draghi underscoring the likely need for more stimulus broke the subdued tone as market participants took a “wait and see” stance ahead of tomorrow’s FOMC decision. Draghi’s comments sent the euro through $1.12 for the first time in two weeks and drove European bonds yields to new lows. Asian equity markets were mostly …
Draghi Ends Calm Ahead of FOMC, Sending the Euro and Yields Down Read More »
Overview: Retail sales and industrial production disappointed in both the US and China prior to the end of the tariff truce, declared by the US in a series of presidential tweets on May 5. The reaction function of the US to the drop in equities was to play down tensions on three fronts. First, a …
Japan reported a slightly larger than expected July current account surplus earlier today. The July balance has improved over June without fail since 2003. Japan’s current account surplus is not driven by the trade balance. In fact, Japan recorded a trade deficit of JPY1 bln on a balance-of-payments basis in July, its third deficit in …
Japanese Investors Buy Treasuries and French Bonds and Sell Bunds and Gilts Read More »
The US policy mix gets a privileged place in our understanding of what is the dollar. Tighter monetary policy and looser fiscal policy could be the closest thing to an elixir for currencies. It is the policy mix that the US is pursuing. The idea is that such a policy mixed draws capital inflows. This is …