Dollar Soft as Markets Await Fresh News and Rumours

  • The dollar is coming under pressure again; markets are finally waking up to the fact that a stimulus deal before 2021 is unlikely; 10-year Treasury yields have been trading in a narrow range for months
  • The quiet US data week continues; Ireland broke from the pattern of how other European countries are tightening mobility rules; Hungary is expected to keep the base rate steady at 0.60%. 
  • Japan reported September convenience store sales; dovish RBA remains dovish; RBNZ Governor Orr tried to out-dove the RBA
  • PBOC maintained its benchmark loan rates, as expected; Taiwan reported strong September export orders Continue reading “Dollar Soft as Markets Await Fresh News and Rumours”

Dollar Weakens as Chinese Data and Brexit Compromises Boost Market Sentiment

  • The dollar is coming under pressure again; the stimulus bill discussions refuse to go away; there are no US data releases today
  • ECB officials are sounding very dovish; both sides of the Brexit debate are showing willingness to compromise; Moody’s UK downgrade late Friday has had little impact on UK assets
  • Japan September trade data improved but remain weak; Chinese data overnight remain supportive of the recovery narrative; NZ Prime Minister Ardern easily won weekend elections Continue reading “Dollar Weakens as Chinese Data and Brexit Compromises Boost Market Sentiment”

Dollar Softens as Market Sentiment Improves

  • The dollar bounce is running out of steam; Trump is still hoping for a stimulus deal; we think more stimulus is coming but on the other side of the election
  • The main event is September US retail sales; BOC announced some changes to its financial market support programs; it is coming under criticism from the opposition Conservatives
  • With the EU summit wrapping up with no Brexit breakthrough, we await the UK decision on whether to walk away or not; corporate credit risk in Europe has ticked higher this week but remains very subdued overall
  • New Zealand holds general elections Saturday; the RBNZ just delivered a dovish hold and appears to be setting the table for negative rates Continue reading “Dollar Softens as Market Sentiment Improves”

Dollar Gains as Market Sentiment Goes South

  • Virus restrictions across Europe continue to sour sentiment; the dollar is benefiting from the risk-off backdrop
  • The stimulus package is deader than Elvis; Fed manufacturing surveys for October will start to roll out; weekly jobless claims will be reported; Chile is expected to keep rates steady at 0.5%
  • The unofficial deadline for Brexit has likely been extended; the two-day EU summit in Brussels starts today; Israel reports September CPI
  • Australia reported September jobs data; the RBA is likely to add stimulus soon
  • China is seeing fading price pressures and a central bank that continues to pump liquidity into the system; protests in Thailand continue to rock the capital Continue reading “Dollar Gains as Market Sentiment Goes South”

Dollar Bounce Remains Modest as Headwinds Build

  • The dollar is making a modest comeback; stimulus talks have hit a dead end; we get more US inflation readings for September
  • Brexit talks continue ahead of the EU summit Thursday and Friday; a new bill by the UK government could change the investment landscape in the country
  • The EU recovery fund has hit some speed bumps; the Netherlands is the latest country to impose stricter measures; eurozone IP came in slightly lower than expected
  • China reported strong money and loan data; Singapore and Korea kept monetary policy unchanged, as expected Continue reading “Dollar Bounce Remains Modest as Headwinds Build”

Dollar Bleeding Stanched as Markets Search for Direction

  • Markets have a bit of a risk-off feel today; the dollar bleeding has been stanched for now; IMF releases its updated World Economic Outlook
  • A stimulus package before the election appears doomed; Fed’s Barkin and Daly speak; a big data week for the US kicks off with September CPI today
  • UK jobs data came in decidedly downbeat even though the furlough scheme has not yet ended; BOE Governor Bailey said that the bank is not yet ready to implement negative rates
  • Japan will unveil a fiscal stimulus package before year-end; China reported strong September trade data; Chinese regulators scrapped the 20% deposit rule on FX forwards; Indonesia kept rates steady at 4.0%, as expected Continue reading “Dollar Bleeding Stanched as Markets Search for Direction”

Dollar Slide Continues as US Fiscal Stimulus Remains Questionable

  • The dollar remains heavy; stimulus talks may or may not be dead; the White House is still sending mixed signals
  • This is another quiet day in terms of US data; Canada reports September jobs data
  • We got some more eurozone IP readings for August; following Greece yesterday, it’s Italy’s turn today to register another record low for its 10-year bond yield
  • UK data came in significantly weaker than expected; Japan reported weak August real cash earnings and household spending
  • Chinese assets had a strong re-opening after a week-long holiday, helped by a strong services PMI reading; India delivered a dovish hold, as expected Continue reading “Dollar Slide Continues as US Fiscal Stimulus Remains Questionable”

Dollar Remains Heavy as Markets Await Fresh Drivers

  • The US Vice Presidential debate was a comparatively cordial affair, though the impact on the election is likely to be limited; polls continue to move in favor of Biden, including in swing states
  • The weak dollar narrative under a Democratic sweep continues to play out; the outlook for fiscal stimulus is as cloudy as ever; FOMC minutes contained no big surprises
  • Weekly jobless claims will be reported; like last week, there will be a quirk to this week’s initial claims; Canada reports September housing starts
  • Markets have shrugged off the latest UK Brexit ultimatum; rising infection rates are driving government in Europe to re-impose restrictions; sovereign spreads of EU periphery countries have been trending lower.
  • BOJ upgraded its regional assessments; business sentiment in Japan continues to improve; RBNZ is setting the table for negative rates Continue reading “Dollar Remains Heavy as Markets Await Fresh Drivers”

Dollar Vulnerable as US Economic Outlook Worsens for Q4

  • Virus-related headlines continue to worsen, at least in terms of infection rates; the dollar has been unable to break any new ground
  • President Trump called off stimulus talks with House Speaker Pelosi until after the election; the decision will have wide-ranging implications; US House published a series of proposals to curb the power of big tech
  • FOMC minutes will be released; this is another quiet day in terms of US data; Canada reports September Ivey PMI; Peru is expected to keep rates steady at 0.25%. 
  • Industrial data from Germany and Spain for August came in decidedly downbeat; Poland is expected to keep rates steady at 0.10%
  • China foreign reserves came in at $3.143 trln in September; Taiwan reported September trade data Continue reading “Dollar Vulnerable as US Economic Outlook Worsens for Q4”