Dollar Soft as US Data Continue to Disappoint

  • The dollar remains under pressure as US data this week continue to disappoint
  • Canada reports October trade and November Ivey PMI; Chile central bank kept rates on hold yesterday
  • Data out of the eurozone came in decidedly weak today; the euro remains stuck below the $1.11 area even as sterling powers higher
  • Japan announced a large stimulus package to boost growth; Australia reported weaker than expected data
  • India unexpectedly kept rates on hold at 5.15% Continue reading “Dollar Soft as US Data Continue to Disappoint”

Dollar Stabilizes, Markets Calm on Positive Trade Headlines

  • Sanguine headlines about progress in Phase One has given risk appetite a boost today
  • ADP reports private sector jobs and consensus sees 135k; BOC is expected to keep rates steady at 1.75%
  • Chile central bank is expected to cut rates 25 bp to 1.5%; Poland is expected to keep rates steady at 1.5%
  • Sterling broke out on the upside of its trading range; final November PMIs in Europe and the UK were largely positive
  • Japan’s parliament passed the trade deal with the US; Hong Kong announced another round of stimulus Continue reading “Dollar Stabilizes, Markets Calm on Positive Trade Headlines”

Dollar Soft on Weak Data and the Return of Tariff Man

  • The dollar has taken a hit from the weaker than expected data Monday
  • Tariff man is back
  • The US economy remains solid in Q4 but there are some worrying signs for the November jobs data Friday
  • The political pressure on Turkey from the US could increase soon; South Africa’s Q3 GDP came in well below expectations at -0.6% q/q and 0.1% y/y
  • Japan JGB auction went poorly on supply concerns ahead of planned fiscal stimulus; RBA kept rates steady at 0.75% but the outlook was upbeat Continue reading “Dollar Soft on Weak Data and the Return of Tariff Man”

Dollar Firm as New Month Begins

  • The dollar had a stellar November after a shaky October, and gains should continue in December
  • A Phase One trade deal remains elusive; November ISM manufacturing PMI will be reported
  • With ten days to go, the Conservative Party lead in the polls has narrowed; eurozone and UK reported final manufacturing PMIs
  • Turkey’s Q3 GDP rose 0.9% y/y, slightly below expectations; oil prices remain volatile ahead of the OPEC+ meeting in Vienna Thursday
  • China reported November PMIs and brought a welcome dose of optimism to the region Continue reading “Dollar Firm as New Month Begins”

Drivers for the Week Ahead

  • The dollar had a stellar November after a shaky October, and gains should continue in December
  • This is a big data week for the US; the highlight will be November jobs data Friday
  • BOC meets Wednesday and is expected to keep rates steady at 1.75%
  • Germany is struggling with greater political uncertainty; UK polls suggest a tightening race ahead of the December 12 elections
  • Press reports suggest Japan is planning on a supplemental budget worth at least JPY12 trln ($110 bln); RBA meets Tuesday and is expected to keep rates steady at 0.75% Continue reading “Drivers for the Week Ahead”

EM Preview for the Week Ahead

Over the weekend, China reported stronger than expected November PMI readings while Korea reported weaker than expected November trade data.  While the China data is welcome, we put more weight on Korea trade numbers, which typically serve as a good bellwether for the entire region.  Press reports suggest the Phase One trade deal has stalled due to Hong Kong legislation passed by the US Congress.  Until a deal is wrapped up, we remain cautious on EM.  Continue reading “EM Preview for the Week Ahead”

Dollar Firm in Posting a Strong Week and Month

  • There has been very little new information for markets to digest over the Thanksgiving period
  • There are no US data releases or Fed speakers today; Canada Q3 GDP growth is expected to slow to 1.3% SAAR
  • Preliminary November CPI for the eurozone came in a 1.0% y/y for November, slightly higher than expected
  • Korea left rates unchanged at 1.25%, as expected; India Q3 GDP growth is expected to slow to 4.5% y/y
  • China reports official November PMI readings Saturday local time Continue reading “Dollar Firm in Posting a Strong Week and Month”

Review of Views

Our big-picture calls about the Trade War, the dollar, and global yields have largely gone our way, while in EM our relative value trades are performing better than our directional calls. The path to a completed Phase One deal between the US and China has been bumpy, as we had predicted, but it’s moving in the right direction. Continue reading “Review of Views”

Dollar Remains Firm Ahead of US Holiday

  • The dollar continues to edge higher; markets are showing some signs of fatigue towards positive trade headlines
  • November Chicago PMI will be the data highlight; Fed releases its Beige Book report for the upcoming December 11 FOMC meeting
  • Brazilian central bank intervened in the FX market for the first time since last August
  • In the UK, it’s all about the polls now
  • Thailand manufacturing production was weaker than expected Continue reading “Dollar Remains Firm Ahead of US Holiday”