Dollar Firm as Europe Fails to Deliver

  • The dollar is stabilizing; reports suggest the White House is developing a plan to reopen the US economy sooner rather than later
  • Both Hong Kong and Singapore just tightened restrictions on gathering and movement
  • FOMC minutes for the March 15 decision will be released today
  • No united action came out of yesterday’s EU finance minister conference call; we suspect the lack of any progress on a package was why the ECB yesterday began accepting Greek bonds
  • Poland is expected to keep policy steady; yesterday, Hungary started asset purchases in an emergency meeting
  • S&P downgraded the outlook on Australia’s AA rating from stable to negative; RBNZ Assistant Governor Hawkesby noted the bank is ‘very open’ to expand the QE program Continue reading “Dollar Firm as Europe Fails to Deliver”

Dollar Soft as Risk-On Sentiment Intensifies

  • High-frequency data on coronavirus infections and death rates continue to stabilize; the rebound in equity markets continues
  • Democrats are reportedly planning another round of stimulus; the Fed introduced a new program to help keep credit flowing to small businesses
  • Reports suggest the IMF is preparing a new program to help ease the global dollar shortage
  • Eurozone finance minister will hold a conference call today; UK Prime Minister Johnson remains in intensive care
  • State of emergency declared in seven Japan prefectures; Abe’s stimulus package proposal came in at JPY108.2 trln
  • RBA kept policy unchanged but hinted it may taper its QE and OMOs; MAS eased capital requirements in an effort to boost lending Continue reading “Dollar Soft as Risk-On Sentiment Intensifies”

Dollar Mixed, Equities Higher as Virus News Stream Improves

  • It was a relatively good weekend in virus-related news; measures of implied volatility continue to trend lower
  • The dollar is trying to build on its recent gains; investors continue to try and gauge just how bad the US economy will get hit
  • The outlook for oil prices remains highly uncertain and volatile
  • Germany signaled that its stance regarding aid to the weaker eurozone countries remains unchanged; the news stream for the UK has turned negative
  • Prime Minister Abe nearly doubled the size of the next stimulus package to JPY108 trln ($988 bln); Hong Kong Financial Secretary Paul Chan offered a sobering take on the local economy Continue reading “Dollar Mixed, Equities Higher as Virus News Stream Improves”

Dollar and Oil Continue to Climb

  • Confirmed Covid-19 cases reached the one million case milestone worldwide; the dollar continues to recover
  • The US data highlight will be March jobs data; here are some more thoughts about that latest shocking initial jobless claims print
  • Weak final eurozone services PMI readings were reported; incredibly, Italy’s services and composite  readings plunged to 17.4 and 20.2
  • Final UK services and composite PMIs fell too but not as dramatically
  • Turkish March inflation declined, opening the door for further easing; oil prices have been on a wild ride over the last two sessions on speculation of supply cuts by major players
  • Australia February retail sales rose 0.5% m/m; Caixin’s China services and composite PMIs bounced back in March Continue reading “Dollar and Oil Continue to Climb”

Dollar Mixed as Markets Consolidate

  • The situation in Italy and Spain continues to plateau in terms of deaths and new cases, but the focus remains on the US
  • Weekly jobless claims will be the data highlight today; Florida finally went on lockdown
  • Canadian government officials now put the total cost of its fiscal package to combat the virus impact at around CAD250 bln ($176 bln)
  • The EU has broken into two camps with regards to their visions for a virus rescue plan
  • Oil futures shot up today on a few different headlines
  • The Reserve Bank of New Zealand ordered banks to stop paying dividends to their parent companies Continue reading “Dollar Mixed as Markets Consolidate”

Dollar Bid as Market Sentiment Worsens

  • The virus news stream out of Europe has improved a bit
  • The US is already taking about the next relief bill; the Fed continues to roll out measures to address dollar funding issues
  • ADP and ISM manufacturing PMI are the US data highlights
  • Regulators across Europe are asking banks to stop paying dividends; eurozone and UK reported final manufacturing PMIs
  • Japan Q1 Tankan report was released; BOJ tweaked its bond buying program for April
  • RBA minutes were released; Korea reported weak March trade data Continue reading “Dollar Bid as Market Sentiment Worsens”

Dollar Builds on Recent Gains

  • The news on the virus front is decidedly mixed
  • DXY remains resilient and has retraced about a third of last week’s plunge; US manufacturing data today are expected to show continued weakness
  • Mexico announced yesterday that it will start using the dollar swap lines with the Fed; Chile is expected to cut rates 50 bp to 0.50%
  • Japan’s government proposed a stimulus package worth JPY60 trln ($554 bln); China reported strong official March PMI readings Continue reading “Dollar Builds on Recent Gains”

Dollar Starts the Week on Firm Footing

  • There has been some positive news on the virus front, especially from Italy
  • President Trump announced that social restrictions will likely have to be extended beyond Easter
  • This week, we will get more evidence of just how deep the damage to the US economy could be
  • Brazil reports central government budget data
  • Germany remains at risk; both South Africa and UK were downgraded Friday
  • Oil prices are making new lows to levels not seen in 17 years
  • China delivered another wave of monetary easing; MAS eased aggressively, as expected Continue reading “Dollar Starts the Week on Firm Footing”

Dollar Ends Bad Week on Firmer Footing

  • The number of confirmed cases in the US (85.6K) has overtaken that of China (81.3K)
  • S&P oversaw an absolute bloodbath in the ratings of the oil exporters late yesterday
  • Funding markets remain stressed, but they are improving in some areas; credit markets have followed the improvement in broad risk appetite over the last few sessions
  • There will be some minor US reports; Mexico reports February trade; Colombia is expected to cut rates 50 bp to 3.75%.  
  • Portugal is working on legislation for a moratorium on debt payments of up to six months
  • Japan passed the budget for FY2020 and reported Tokyo March CPI; RBI cut rates in an emergency move and suspended loan payments for companies and consumers Continue reading “Dollar Ends Bad Week on Firmer Footing”