• News that top US and Chinese trade officials spoke by phone is helping to boost market sentiment
• UK Prime Minister May called off the Parliamentary vote originally planned for today
• Odds of a no-deal Brexit are rising; UK reported stronger than expected labor market data today
• Add France to the list of fiscally irresponsible eurozone countries
• US rates have stabilized, at least for now; focus turns to the upcoming US inflation readings
• Turkey reported a record October current account surplus of $2.77 bln; South Africa October manufacturing production rose 3.0% y/y

Continue reading “Dollar Consolidates as Markets Stabilize”

• Global equity markets remain under pressure this week as risk-off sentiment continues to impact global markets
• Markets continue to reprice Fed tightening potential; we do not think there is a Powell Put
• The focus now turns to US inflation and retail sales readings this week
• China is speaking out against the arrest of Huawei’s CFO Meng Wanzhou; trade data for November came in much weaker than expected
• UK parliament is scheduled to hold its Brexit vote Tuesday
• The ECB and Norges Bank meet Thursday; the central banks of Turkey, Brazil, and Peru meet this week

Continue reading “Drivers for the Week Ahead”

• The US yield curve continues to flatten
• Fed tightening expectations are still falling
• The November US jobs report is the data highlight of the week
• Market sentiment is so negative right now that one data point can’t turn the tide
• Eurozone final Q3 GDP growth came in lower than expected at 1.6% y/y
• Press reports suggest UK Prime Minister May is considering a delay to the Brexit vote
• OPEC talks continue
• Brazil IPCA consumer inflation is expected at 4.17% y/y; Mexico November CPI is expected to rise 4.6% y/y

Continue reading “Dollar Firm, Markets Calm Ahead of US Jobs”

• US bond and equity markets reopen today amidst a backdrop of risk-off sentiment
• US-China relations are likely to remain on edge after the arrest of Huawei’s CFO Meng in Canada
• Because of yesterday’s holiday, the ADP report was delayed until today; yesterday’s Beige Book gave a balanced view of the economy
• Prime Minister May’s government is contemplating concessions to win over Brexit rebels
• Oil is coming under severe pressure again after Saudi officials highlighted difficulties in agreeing to a significant output cut
• Canada reports October trade and November Ivey PMI; Australia reported trade and retail sales
• EM is coming under renewed pressure despite lower US rates; South Africa reported Q3 current account data

Continue reading “Dollar Firm as US-China Developments Feed Risk-Off Sentiment”

• Markets are stabilizing as China attempted some damage control overnight
• The 10-year yield broke decisively below 3% Monday and continued to move lower yesterday
• Eurozone reported final services and composite PMIs for November
• UK Prime Minister May lost three key votes in Parliament; the last UK PMI prints for the week were weak
• Australian GDP data came in much weaker than expected; Philippines November CPI rose 6.0% y/y
• Reserve Bank of India kept rates steady, as expected; National Bank of Poland is expected to keep rates steady at 1.5%

Continue reading “Dollar Hangs on to Gains as Markets Stabilize”

• The dollar remains under pressure as the drop in US rates picks up steam
• An inverted US yield curve has been the market bogey-man this year
• This yield compression comes despite surging oil prices and firm US data
• BOE Governor Carney defended the bank’s Brexit analysis that was released last week
• Reserve Bank of Australia left rates steady, as expected
• The EM manufacturing PMIs for November have so far been eye-opening

Continue reading “Dollar Remains Under Pressure as US Rates Fall, Portion of Curve Inverts”

• Markets are breathing a sigh of relief after the G20 meeting
• Russia and Saudi Arabia agreed to extend their plan to support the oil market into 2019
• The Trump-Xi dinner yielded a 90-day truce
• The November US jobs report Friday will be the data highlight of the week
• There is a full slate of Fed speakers this week before the pre-FOMC press embargo goes into effect next week
• Ahead of the December 11 UK parliamentary vote on May’s Brexit plan, the bill will be debated
• Reserve Bank of Australia meets Tuesday and Bank of Canada meets Wednesday

Continue reading “Drivers for the Week Ahead”

• The dollar continues to claw back some of this week’s losses ahead of the weekend
• Yesterday, FOMC minutes did not really reveal much new but markets of course focused on the dovish aspects
• The G20 meeting gets under way today in Buenos Aires; the most important meeting will be that of Trump and Xi.
• Eurozone reported preliminary November CPI; Italy signaled some willingness to tighten its budget
• China reported weak official November PMI
• Japan reported a fair amount of data; The BOJ tweaked its bond-buying program slightly
• Bank of Korea hiked rates 25 bp to 1.75%, as expected; Poland November CPI rose 1.2% y/y; India reports Q3 GDP

Continue reading “Dollar Claws Back Losses Ahead of Weekend and G20”

• The dollar has stabilized after the initial sell-off in the wake of Powell’s speech
• Markets might be reassessing the knee-jerk reaction to Powell
• Fed messaging could use some work; FOMC minutes will be released today
• Oil prices have slid to new lows for this move today
• Germany reports preliminary November CPI today, followed by the eurozone reading Friday
• Banco de Mexico releases its monetary policy minutes

Continue reading “Dollar Stabilizes in the Wake of Powell Comments”