Dollar Firms on Potential Turnaround Tuesday

  • The dollar has finally gotten some traction
  • The US data highlight this week will be June retail sales today
  • The 3-month to 10-year US curve is finally back to positive territory
  • The UK reported mixed labor market data
  • RBA minutes were released; New Zealand Q2 CPI came in at 1.7% y/y, as expected
  • Pakistan is expected to hike rates 100 bp to 13.25%; Argentina June CPI is expected to rise 2.6% m/m Continue reading “Dollar Firms on Potential Turnaround Tuesday”
US Dollar Weighed Down by Dovish Fed Governors

Dollar Remains Under Pressure Post-Powell

  • The dollar remains under pressure after Powell’s testimony last week
  • The first of the regional Fed manufacturing surveys for July will be reported today
  • There are some signs that US recession fears are receding
  • China data have come in mixed for June; Colombia reports May manufacturing production and retail sales Continue reading “Dollar Remains Under Pressure Post-Powell”

Dollar Mixed as US Yields Plunge Ahead of Holiday

  • US yields continue to drop despite the Fed’s dovish capitulation and the US-China trade truce
  • The fact that the dollar is holding up well in this environment suggests the move in US yields is not occurring in a vacuum
  • ADP today will round out the jobs picture, where a 140k gain is expected
  • Swedish Riksbank kept rates steady at -0.25%, as expected; BOJ tweaked its bond purchase program
  • Caixin reported weak June services and composite PMI readings; Poland is expected to keep rates steady at 1.5% Continue reading “Dollar Mixed as US Yields Plunge Ahead of Holiday”

Dollar Mixed as Post-G20 Euphoria Wanes

  • Markets are searching for direction and three of them warn of a reversal in risk sentiment for the worse
  • Just as US tensions with China seem to be easing, they are picking up with Europe
  • The euro is benefiting from reports that Italy is backing down from its budget confrontation with the EU
  • UK PMI readings for June continued today with a much weaker than expected construction PMI of 43.1
  • RBA cut rates 25 bp to 1.0%, as expected
  • Korea June CPI was steady at 0.7% y/y; USD/HKD traded at its lowest level since September Continue reading “Dollar Mixed as Post-G20 Euphoria Wanes”

Dollar Firm in Wake of G20 Summit

  • Market sentiment was given a shot in the arm by the G20 meeting
  • Reduced US recession risk supports our view that the market needs to adjust its Fed easing expectations
  • This process should help the dollar gain even more traction
  • Weak eurozone final June manufacturing PMI readings were reported; UK manufacturing PMI was 48.0
  • Oil prices jumped on reports of an extension of OPEC+ output cuts
  • EM so far has reported weak PMI readings for June Continue reading “Dollar Firm in Wake of G20 Summit”
US Dollar Weighed Down by Dovish Fed Governors

Dollar Ends Eventful Quarter on a Soft Note

  • The dollar is closing out Q2 on a soft note; our upcoming FX Quarterly stresses that Q3 will be a waiting game
  • The G20 highlight is the Trump and Xi meeting Saturday morning at 1130 AM local time
  • During the North American session, the US has a busy data schedule
  • Eurozone reported preliminary June CPI steady at 1.2% y/y; Sweden reported weak May retail sales
  • Japan reported a slew of data; BOJ tweaked its bond purchase plans for July
  • Banco de Mexico delivered a dovish hold yesterday; South Africa reports May trade and budget data Continue reading “Dollar Ends Eventful Quarter on a Soft Note”

Dollar Mixed As Markets Await Fresh Drivers

  • Markets continue to search for direction ahead of this weekend’s G20 meeting in Osaka
  • Trump has already given markets plenty to digest
  • US reports revised Q1 GDP, weekly jobless claims, May pending home sales, and June KC Fed manufacturing index
  • Germany reports preliminary June CPI; Japan reported May retail sales
  • Brazil central bank releases its quarterly inflation report; Banco de Mexico is expected to keep rates steady at 8.25% Continue reading “Dollar Mixed As Markets Await Fresh Drivers”

Dollar Mixed as US-China Relations Improve

  • The dollar got a boost from Fed speakers yesterday; Trump comments snuffed that rally
  • There appears to be a thaw in US-China relations; US companies are finding ways around the Huawei blacklisting
  • RBNZ kept rates steady at 1.5%, as expected
  • MSCI announced that Kuwait will be added to its EM index; Malaysia May CPI was steady at 0.2% y/y
  • Thailand kept rates steady at 1.75%, as expected; Czech National Bank is expected to keep rates steady at 2.0% Continue reading “Dollar Mixed as US-China Relations Improve”

Dollar Mixed as Geopolitical Tensions Rise

  • The dollar remains under pressure this week, as we expected
  • Geopolitical tensions have risen in the Middle East; US officials sought to downplay expectations for the upcoming Trump-Xi meeting
  • The Chicago Fed National Index (CFNAI) for May came out yesterday at -0.05 vs. -0.20 expected
  • Dallas Fed President Kaplan expressed a counter-trend view regarding lower rates
  • National Bank of Hungary is expected to keep the main policy rate steady at 0.9% Continue reading “Dollar Mixed as Geopolitical Tensions Rise”