Dollar Weakens, China Data Surprises

  • The dollar has given up what little traction it got from the firm US data yesterday; the yen is not participating at all
  • China reported strong March exports and money and loan data
  • Press reports that four Republican Senators will oppose Herman Cain’s Fed nomination
  • UK Prime Minister hinted at some sort of compromise on a post-Brexit customs union
  • MAS kept policy steady at its semiannual policy meeting, as expected
  • India reports March CPI and February IP; Colombia reports February IP and retail sales Continue reading “Dollar Weakens, China Data Surprises”

Dollar Firm in the Wake of ECB Decision and FOMC Minutes

  • Despite some early post-ECB losses yesterday, the euro battled back to end up basically flat
  • We believe shifting market expectations, especially with regards to the Fed, will be the next driver in the dollar rally
  • There are many Fed speakers today; US reports March PPI
  • The UK and the EU have agreed to extend the Brexit deadline until October 31
  • Voting began in India today and will run until May 19; Peru central bank is expected to keep rates steady at 2.75%
  • South Africa February manufacturing production is expected to rise 0.5% y/y Continue reading “Dollar Firm in the Wake of ECB Decision and FOMC Minutes”

Dollar Soft Ahead of ECB Decision and FOMC Minutes

  • ECB is widely expected to keep policy unchanged; we cannot imagine anything emerging that is remotely hawkish
  • US reports March CPI and budget data; no Fed speakers but FOMC minutes will do the talking
  • EU holds an emergency summit today ahead of the Brexit deadline Friday
  • UK reported February trade, IP, construction output, and monthly GDP; Japan reported weak orders data
  • IMF cut its global growth forecast for this year to 3.3% from 3.5% seen in January
  • Netanyahu and his Likud party likely won the Israeli elections; Brazil March IPCA inflation is expected at 4.44% y/y

Continue reading “Dollar Soft Ahead of ECB Decision and FOMC Minutes”

Dollar Remains Under Broad-based Pressure

  • The dollar remains under some pressure but let’s keep things in perspective
  • JOLTS data and Fed Vice Chair Clarida speech are the North American highlights
  • UK Prime Minister May will stop in Berlin and Paris today on the way to the EU summit in Belgium tomorrow
  • Global trade tensions are likely to remain high no matter what happens with China
  • Oil continues to make new highs for this move as supply concerns are rising
  • Voters in Israel elect the next government and polls suggest it’s a toss-up
  • HKD traded at its strongest level since January 31; Mexico March CPI is expected to rise 4.01% y/y

Continue reading “Dollar Remains Under Broad-based Pressure”

Drivers for the Week Ahead

  • Last week’s data did not provide much clarity on the state of the US economy; it is a fairly busy US data week
  • Atlanta Fed’s GDPNow model is now tracking 2.1% SAAR for Q1
  • President Trump continues his efforts to affect Fed policy, both directly and indirectly
  • ECB meets Wednesday and is expected to keep policy unchanged
  • EU holds an emergency summit Wednesday ahead of the Brexit deadline Friday
  • In EM, the central banks of Israel, Peru, and Singapore meet this week

Continue reading “Drivers for the Week Ahead”

Dollar Mixed, Markets Calm Ahead of Jobs Data

  • The highlight today will be the US jobs data; the clues have been mixed
  • US-China trade talks appear to be progressing
  • Prime Minister May has asked the EU for a Brexit delay until June 30
  • Canada also reports March jobs data
  • President Trump will nominate Herman Cain to fill one of the Fed vacancies
  • Norway’s sovereign wealth fund will remove EM from its bond index
  • Philippines reported softer than expected March CPI; Colombia March CPI is expected to rise 3.09% y/y

Continue reading “Dollar Mixed, Markets Calm Ahead of Jobs Data”

Dollar Firm as Markets Search for Direction

  • FX markets continue to struggle for direction
  • The UK Parliament narrowly voted to block a no-deal Brexit late last night
  • President Trump will reportedly meet China Vice Premier Liu today at the White House
  • The ECB account of the March meeting will be released today ahead of its meeting next Wednesday
  • Weak German factory orders were reported; Italy cut its 2019 growth forecast to 0.1% from 1.0% previously
  • Reserve Bank of India cut rates 25 bp, as expected; other Asian EM central banks sounded notes of caution

Continue reading “Dollar Firm as Markets Search for Direction”

Dollar Softens as Market Sentiment Improves

  • Market sentiment has improved from potential positive developments in Brexit and US-China trade talks
  • During the North American session, ADP reports March private sector jobs (175k expected)
  • The oil rally seems to be a function of an improved global outlook as well as tighter OPEC supplies
  • Eurozone and UK reported March services and composite PMI readings
  • Australia reported firm data overnight
  • Turkey March CPI rose 19.71% y/y; National Bank of Poland is expected to keep rates steady at 1.5%

Continue reading “Dollar Softens as Market Sentiment Improves”

Dollar Firms on Potential Turnaround Tuesday

  • The dollar has recovered smartly on a potential Turnaround Tuesday
  • The Atlanta Fed’s GDPNow model is now tracking 2.1% SAAR, up from 1.7% previously
  • We now have two pieces of the labor market puzzle for March
  • UK Parliament rejected all Brexit alternatives in late voting Monday; UK continues to report March PMI readings
  • Reserve Bank of Australia kept rates steady at 1.5%, as expected
  • Korea March CPI rose 0.4% y/y

Continue reading “Dollar Firms on Potential Turnaround Tuesday”