Dollar Consolidates as Markets Grapple With Rising Recession Risks

  • Reports suggest Mexico is preparing retaliatory tariffs; Senate Republicans have reportedly discussed taking legislative action to halt the US tariffs
  • Fed speakers today include Williams, Powell, and Brainard
  • Eurozone inflation for May eased to 1.2% y/y vs. 1.3% expected; UK PMIs for May continue to plunge
  • RBA cut rates 25 bp to 1.25%, as expected; the sub-50 manufacturing PMI club continues to grow in May
  • Korea May CPI rose 0.7% y/y vs. 0.8% expected; South Africa Q1 GDP was flat y/y vs. 0.6% expected Continue reading “Dollar Consolidates as Markets Grapple With Rising Recession Risks”

Markets Steady After Friday Sell-off

  • US rates markets are getting even more pessimistic
  • The Atlanta Fed’s GDPNow model is now tracking 1.2% SAAR for Q2, down from 1.3% previously
  • The trade hits keep coming; US-Mexico tariff talks begin today
  • Final eurozone manufacturing PMIs were reported; UK manufacturing PMI fell below 50
  • Korea reported May exports at -9.4% y/y; Turkey May CPI rose 18.71% y/y; Chile April retail sales are expected to contract -1.0% y/y Continue reading “Markets Steady After Friday Sell-off”

Global Markets Roiled as Tariffs Keep Piling Up

  • The week is ending on a decidedly risk-off note
  • Mexico is back on Trump’s radar screen; China reported weak official May PMI data
  • Fed Vice Chair Clarida did not deviate from recent Fed messaging in his speech yesterday
  • The US has several data releases that bear watching; Canada reports Q1 GDP
  • Japan reported a slew of data that was ultimately mixed
  • BOK kept rates steady at 1.75%, as expected; India Q1 GDP is expected to grow 6.3% y/y Continue reading “Global Markets Roiled as Tariffs Keep Piling Up”

Dollar Mixed as Some Calm Returns to Global Markets

  • Markets are trying to find their footing after a dose of strong risk-off sentiment yesterday
  • Trade tensions remain high; Fed Vice Chair Clarida speaks
  • Today sees a heavy data schedule in the US
  • Israel will head to the polls again; there appears to be a thaw in Turkey-US relations
  • Brazil Q1 GDP is expected to grow 0.5% y/y; Banco de Mexico releases its minutes Continue reading “Dollar Mixed as Some Calm Returns to Global Markets”

Rising Trade Tensions Roil Global Markets, Boost Dollar

  • The dollar rally is back on track
  • Reports suggest China is “seriously” considering limiting exports of its rare earths to the US
  • Tensions are rising even though the US refrained from naming China a currency manipulator
  • The US curve has inverted further, which finally got the attention of the equity markets
  • Comments from some candidates for UK Prime Minister have been weighing on sterling
  • Bank of Canada is expected to keep rates steady at 1.75%
  • ZAR continues to underperform; Banco de Mexico releases its quarterly inflation report Continue reading “Rising Trade Tensions Roil Global Markets, Boost Dollar”

Dollar Recovers Even as US Rates Markets Flash Yellow

  • The US rates markets are flashing yellow; curve inverts more than it did in March
  • The results of the European Parliamentary elections are still being digested; first up is Italy
  • President Trump signaled that a US-Japan trade deal may be completed in August
  • The EU vowed to reject any US demands for restricting shipments of autos and auto parts to the US; Trump said that the US is not ready to make a trade deal with China
  • Hungary is expected to keep rates steady at 0.90%; Chile central bank is the latest to take a dovish turn Continue reading “Dollar Recovers Even as US Rates Markets Flash Yellow”

Dollar Limps into the Long Weekend

  • US trading partners just got one more thing to worry about
  • Political drama in the UK is by no means over; UK reported April retail sales
  • Japan April national CPI was reported
  • Malaysia April CPI rose 0.2% y/y; Colombia is seeing divergent views from the rating agencies
  • Brazil mid-May IPCA inflation is expected to rise 5.0% y/y Continue reading “Dollar Limps into the Long Weekend”

Rising Trade Tensions Roil Global Markets

  • The tone from China has gotten increasingly strident; the dollar rally remains on track
  • FOMC minutes mirrored the party line
  • Eurozone flash PMIs were reported; the Brexit drama continues
  • India Prime Minister Modi won a commending majority; Mexico mid-May CPI is expected to rise 4.48% y/y Continue reading “Rising Trade Tensions Roil Global Markets”