Dollar Remains Bid as Virus News Stream Worsens

  • The World Health organization said the worst of the pandemic is still to come; the dollar continues to benefit from risk-off sentiment
  • Fed Chair Powell warned of extraordinary uncertainty ahead; June Chicago PMI will be the data highlight; Colombia is expected to cut rates 50 bp to 2.25%
  • German lawmakers are moving to defuse the challenge to the ECB’s QE program; UK Prime Minister Johnson is going full FDR; we see heightened downgrade risks for the UK
  • China approved the controversial security law for Hong Kong; China official PMIs surprised on the upside; Japan IP and employment data continued to deteriorate

Continue reading “Dollar Remains Bid as Virus News Stream Worsens”

US Dollar Weighed Down by Dovish Fed Governors

Dollar Begins the Week Under Pressure Again

  • The virus news stream remains negative; pressure on the dollar has resumed
  • The US economy is taking a step back just as Q3 is about to get under way; there are some minor US data reports today
  • UK Labour leader Starmer overtook Prime Minister Johnson in the latest opinion poll; Macron’s party did poorly in French local elections
  • French and German leaders meet to discuss the planned EU pandemic rescue package; UK and EU begin their “intensified timetable” for Brexit negotiations
  • Japan reported May retail sales and department store sales; China industrial profits rebounded nicely to 6.0% y/y in May

Continue reading “Dollar Begins the Week Under Pressure Again”

Dollar Steady as US Virus Numbers Worsen

  • The continued rise in infection rates amongst many states in the US led to yet another record number of registered cases; the dollar continues to benefit from risk-off sentiment
  • The Fed ordered the largest US banks not to increase dividends or resume stock buybacks through at least Q3; yesterday’s jobless claims data are worth a mention
  • A major indexing event could add to US equity market volatility; Mexico cut the overnight rate by 50 bp to 5.0% yesterday
  • ECB reported M3 data for May; Turkey kept rates on hold yesterday at 8.25%; Japan reported June Tokyo CPI

Continue reading “Dollar Steady as US Virus Numbers Worsen”

Dollar Firm as Risk-Off Sentiment Persists

  • Higher infection numbers in the US and other countries continue to fuel risk aversion across global markets; the IMF released more pessimistic global growth forecasts yesterday
  • The US has rekindled trade provocations against China through Huawei; weekly jobless claims will be reported; regional Fed manufacturing surveys for June will continue to roll out
  • Fitch cut Canada’s rating by a notch to AA+ with stable outlook; Mexico is expected to cut rates 50 bp to 5.0%; Brazil central bank releases its quarterly inflation report
  • The ECB announced a new euro liquidity facility for central banks outside the euro area; its account of the June meeting will be released
  • Turkey is expected to cut rates 25 bp to 8.0%; Philippine central bank unexpectedly cut rates 50 bp to 2.25%

Continue reading “Dollar Firm as Risk-Off Sentiment Persists”

Dollar Firm as Risk-Off Sentiment Returns

  • Risk-off sentiment has picked up from reports that the US will impose new tariffs against the EU; there’s also been a messy set of headlines regarding the virus contagion outlook in the US
  • The IMF will release updated global growth forecasts today; the dollar is benefiting from risk-off sentiment; another round of fiscal stimulus in the US is in the works
  • Brazil announced a slew of new easing measures to improve liquidity conditions in local credit markets; Mexico reports mid-June CPI
  • Germany’s June IFO survey came in on the stronger side of forecasts; Austria issued the second 100-year bond in its history and it was very well received
  • Czech Republic is expected to keep rates steady at 0.25%; Hungary surprised with a 15 bp cut yesterday
  • The BOJ’s initial emergency response to the pandemic appears to be over; RBNZ delivered a dovish hold; Thailand kept rates steady at 0.5%, as expected

Continue reading “Dollar Firm as Risk-Off Sentiment Returns”

Dollar Remains Under Pressure as Markets Celebrate Strong June PMIs

  • Global equities took a sharp but short-lived hit from what appears to have been a misinterpretation of US trade advisor Navarro’s comments about China; the dollar remains under pressure
  • The regional Fed manufacturing surveys for June continue to roll out; Brazil central bank releases its minutes
  • Eurozone and UK flash PMI readings for June were better than expected; Hungary is expected to keep policy steady
  • Japan and Australia June PMI readings improved

Continue reading “Dollar Remains Under Pressure as Markets Celebrate Strong June PMIs”

Dollar Begins the Week Under Pressure

  • Concerns of a second wave of infections weighed on markets during the Asian sessions but seem to have faded as Europe opened
  • In the US, the virus news stream remains mixed; there are only minor US data out today
  • BOE Governor Andrew Bailey is apparently thinking about thinking about hiking rates; the UK government is reportedly discussion another round of counter-cyclical stimulus
  • RBA Governor Lowe said he was not concerned with recent AUD strength; Korea reported trade data for the first 20 days of June Continue reading “Dollar Begins the Week Under Pressure”

Sterling Pounded Ahead of BOE Decision

  • The second wave infection narrative is gaining ground; the dollar has gotten some traction from building risks
  • Fed Chair Powell broke no new ground on his second day of testimony before Congress
  • Regional Fed manufacturing surveys for June will continue to roll out; weekly jobless claims will be reported; Brazil cut rates 75 bp last night, as expected
  • ECB allotted EUR1.31 trln in its latest TLTRO operation; BOE is expected to increase its asset purchases by GBP100 bln
  • SNB and Norges Bank kept rates steady, as expected; however, Norway delivered a hawkish hold
  • Antipodean data disappointed overnight; Indonesia cut rates 25 bp, as expected

Continue reading “Sterling Pounded Ahead of BOE Decision”