Dollar Stabilizes Ahead of US Jobs Data

  • Markets are back to risk-on mode as US-China tensions appear to be on hold; the dollar is getting some modest traction
  • May US jobs data will be the main event; Canada also reports May jobs data
  • The euro and European credit spreads have reacted positively to the ECB decision; the latest round of high-level Brexit talks is set to end with little progress
  • Russia reports May CPI; oil continues to recover
  • Japan reported April household spending; Philippines reported May CPI

Continue reading “Dollar Stabilizes Ahead of US Jobs Data”

Dollar Firm as Risk-On Sentiment Ebbs Ahead of ECB Decision

  • Risk sentiment is taking a breather today after a strong run; the dollar is getting some modest traction
  • Fed tweaked its municipal bond program; weekly jobless claims are expected to rise 1.843 mln; Brazil and Mexico are seeing record high daily death counts
  • ECB is expected to ease today; Germany agreed on a new fiscal package that exceeded expectations
  • BOE warned that UK banks should plan for a possible hard Brexit; Swiss deflation is deepening
  • Australia reported weak April trade and retail sales data; Thailand reported May CPI

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Dollar Soft as Risk-On Sentiment Persists

  • The dollar remains under pressure; amongst a heavy US data load, highlight will be ADP private sector jobs data; BOC is expected to keep policy steady
  • UK pushed back against reports suggesting a compromise on some key Brexit issues; Germany’s latest domestic stimulus plan failed to pass the first negotiating hurdle
  • ECB released details of its PEPP operations for the first time; Turkey reported higher than expected May CPI and clamped down on FX-based hedge funds
  • Australia Q1 GDP contracted -0.3% q/q vs. -0.4% expected; Indonesia continues to be one of the success stories for EM Continue reading “Dollar Soft as Risk-On Sentiment Persists”

Dollar Broadly Weaker After Reports of Possible Brexit Compromise

  • The dollar remains under pressure; there is a debate as to the root causes of recent dollar weakness
  • May auto sales will be the only US data release today; protests in the US are further denting Trump’s re-elections prospects, at least according to betting odds
  • The G7 meeting planned at Camp David this month was postponed after German Chancellor Merkel declined his invitation
  • Press reports suggest a possible compromise in the UK-EU trade negotiations; oil futures are rising on prospects of an extension of the OPEC+ output curbs
  • RBA kept policy steady, as expected; Moody’s downgraded India by a notch to Baa3 and maintained a negative outlook

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Dollar Stabilizes as China Delivers a Warning

  • US-China tensions remain high after China responded by reportedly pausing agricultural imports from the US; the dollar has recovered from earlier losses as a result
  • ISM May manufacturing PMI will be the data highlight today
  • Brexit negotiations seem to be heading down the usual brinkmanship path; eurozone reported final manufacturing PMIs; Turkey is leaning on state banks for the next stage of the stimulus program
  • China’s Caixin manufacturing PMI surprised to the upside at 50.7; Korea reported weak May trade data; Hong Kong reported weak April retail sales data

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Dollar Broadly Weaker Despite Rising US-China Tensions

  • The jubilant market mood is being tested by US-China conflict theme; the dollar remains under pressure
  • President Trump will hold a press conference today to discuss China; Trump is also opening up a Pandora’s Box in his latest offensive against social media companies
  •  May Chicago PMI will be the data highlight today; Fed Chair Powell speaks
  • Canada and Brazil report Q1 GDP data; Colombia is expected to cut rates 50 bp to 2.75%
  • Germany is reportedly preparing a second stimulus package of between €50-100 bln; eurozone May CPI was reported
  • Japan data dump was seen overnight; Bank Indonesia opined that the rupiah is undervalued; China reports official May PMI readings Sunday local time Continue reading “Dollar Broadly Weaker Despite Rising US-China Tensions”

Dollar Firm as US-China Tensions Continue to Rise

  • Tensions between the US and China continue to rise; the dollar is finding some traction
  • Fed Beige Book contained no surprises; NY Fed President Williams said the Fed is “thinking very hard” about targeting yields; weekly jobless claims are expected at 2.1 mln vs. 2.438 mln last week
  • Germany reports May CPI; ECB is likely to ease next week; BOE continues to show its dovish colors; Poland is expected to keep rates steady at 0.5%
  • Japan’s Cabinet Office maintained its view that the economic outlook continues to deteriorate; Korea cut rates 25 bp to 0.5%, as expected Continue reading “Dollar Firm as US-China Tensions Continue to Rise”

Dollar Broadly Weaker as Markets Focus on Stimulus from Europe and Japan

  • Market sentiment remains positive despite still-rising tensions between the US and China ; the dollar remains under pressure
  • Reports suggest the Trump administration is considering a range of sanctions on Chinese entities; regional Fed manufacturing surveys for May will continue to roll out;
  • The Fed releases its Beige Book report for the upcoming FOMC meeting June 10; Banco de Mexico releases its quarterly inflation report
  • Reports suggest the EC will propose a fiscal rescue package worth EUR750 bln; Bank of France Governor Villeroy de Galhau called for the removal of the so-called capital key
  • Japan announced another round of fiscal stimulus; USD/HKD continues to drift lower Continue reading “Dollar Broadly Weaker as Markets Focus on Stimulus from Europe and Japan”

Dollar Broadly Weaker with Markets Moving into Risk-On Mode

  • The virus news stream is largely positive; cross-market measures of implied volatility have been trending lower; the dollar is soft
  • Regional Fed manufacturing surveys for May will continue to roll out; Brazil reports mid-May IPCA inflation and April current account data
  • BOE Chief Economist Haldane confirmed that the bank is still reviewing negative rates; parts of the UK curve remain negative
  • ZAR is outperforming on positive reopening news and the favorable outcome from S&P; Hungary is expected to keep policy steady
  • PBOC continues to let the yuan drift weaker; China tried to reassure observers that Hong Kong’s judiciary will remain intact and independent; Singapore announced its fourth round of fiscal stimulus Continue reading “Dollar Broadly Weaker with Markets Moving into Risk-On Mode”