Dollar and Equities Sink as Trade Pessimism Rises

Pessimism regarding a Phase One trade deal has intensified; further muddying the waters are recent US Congressional actions

FOMC minutes contained no surprises; regional Fed manufacturing surveys for November continue

South Africa is expected to cut rates by 25 bp to 6.25%

Korea reported trade data for the first twenty days of November; Indonesia kept rates steady at 5.0%, as expected Continue reading “Dollar and Equities Sink as Trade Pessimism Rises”

Dollar Firms as US-China Tensions Flare

  • The US Senate unanimously passed a bill in support of the Hong Kong protestors, inviting retaliatory threats from China
  • FOMC minutes will be released; Canada reports October CPI
  • A snap poll after the first UK debate gave a slight edge to Prime Minister Johnson
  • South Africa’s CPI came in slightly below expectations, bolstering our out-of-consensus call for a cut by the SARB tomorrow
  • Japan and Taiwan reported weak trade data; PBOC shaved 5 bp off benchmark Loan Prime Rates Continue reading “Dollar Firms as US-China Tensions Flare”

Dollar Stabilizes as Markets Await Fresh Drivers

  • Press reports suggest that the mood in Beijing is pessimistic after President Trump pushed back against tariff rollbacks
  • Fed Chair Powell met with President Trump and Treasury Secretary Mnuchin yesterday
  • Hungary is expected to keep rates steady; the deadline to form a government in Israel is fast approaching
  • RBA released dovish minutes from its November policy meeting Continue reading “Dollar Stabilizes as Markets Await Fresh Drivers”

Dollar Mixed as New Week Begins

  • The dollar remains under modest pressure; the US economy has slowed more sharply than expected in Q4
  • The Bundesbank warned that the German economy is likely to stagnate in Q4
  • Latest UK polls show the Conservative party consolidating its lead
  • China unexpectedly cut the 7-day reverse repo rate by 5 bp to 2.5%, the first since 2015; Thailand Q3 GDP grew 2.4% y/y vs. 2.7% expected Continue reading “Dollar Mixed as New Week Begins”

Dollar Mixed Ahead of US Retail Sales Data

  • Markets continue to dance to the tune of trade headlines
  • During the North American session, the highlight is US October retail sales
  • Banco de Mexico cut rates yesterday by 25 bp to 7.50%, as expected
  • Israel October CPI is expected to rise 0.5% y/y
  • Hong Kong tensions are likely to worsen; Malaysia reported Q3 GDP Continue reading “Dollar Mixed Ahead of US Retail Sales Data”

Dollar Treads Water Ahead of Key US Data

  • US-China talks have reportedly hit a snag
  • In yesterday’s appearance before the Joint Economic Committee, Powell covered no new ground
  • Chile central bank will offer $4 bln of 30- and 90-day currency swaps to help support the peso; Mexico is expected to cut rates 25 bp to 7.5%
  • Eurozone reported solid preliminary Q3 GDP data; UK retail sales came in weaker than expected in October
  • Japan reported weak Q3 GDP data; Australia reported weak October jobs data; China reported weak October IP and retail sales Continue reading “Dollar Treads Water Ahead of Key US Data”

Dollar Firm as Risk-Off Sentiment Takes Hold

  • Uncertainty about the US-China trade deal has weighed on risk appetite
  • During the North American session, the US reports October CPI and budget data
  • Reports suggest President Trump has asked his economic advisors to explore a tax cut ahead of the 2020 elections
  • UK reported lower than expected October CPI data; Spain is moving towards a left-leaning coalition faster than expected
  • RBNZ unexpectedly kept rates steady at 1.0% Continue reading “Dollar Firm as Risk-Off Sentiment Takes Hold”

Dollar Firm as US Returns from Holiday

  • With US-China talks ongoing, we got some good trade news from Europe
  • President Trump speaks before the New York Economic Club today
  • The UK Conservative party – and the pound – received a boost yesterday on news that the Brexit Party will not run against them in the elections
  • UK labor market data was mixed; German data continue to suggest small green shoots; Japan reported weak October machine tool orders Continue reading “Dollar Firm as US Returns from Holiday”

Dollar Mixed as Risk-off Impulses Take Hold

  • Markets should be prepared for negative headlines as we approach the endgame of the first stage of the US-China trade deal
  • Due to the US holiday, there are no US data reports
  • The political campaign in the UK has shifted into high gear; UK data came in largely weaker than expected
  • Spain’s election went roughly as expected: back to political limbo
  • Japan reported weak September core machine orders; China reported weak October money and loan data Continue reading “Dollar Mixed as Risk-off Impulses Take Hold”