Tag Archive: Canada
Capital Markets are Calm though Anxiety Continues to Run High
Overview: The risk that the war in Israel spreads
remains palatable, and several observers have warned of the greatest risks of a
world war in a generation. Still, the capital markets remain relatively calm. The
US dollar is softer after closing last week firmly. The only G10 currency
unable to post corrective upticks today is the Swiss franc. Among emerging
market currencies, the Polish zloty has been boosted by the pro-EU election
results, and...
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War in Israel Spurs Flight to Dollars, Yen and Gold, While Driving up the Price of Oil
Overview: There are three main developments. First,
the market is digesting the implication of the US employment data, where the
optics were strong (336k increase in nonfarm payrolls compared with 170k median
forecast in Bloomberg and Dow Jones surveys) but some details were
disappointing (like the third consecutive decline in full-time posts,
seasonally adjusted). Second, Chinese mainland market re-opened after a six-day
holiday). Chinese stocks...
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US Employment Data to Determine Whether the Greenback’s Rally since mid-July is Over…Maybe
Overview: One key issue for market participants is
if the dollar's pullback is the beginning of something important or is largely
position adjusting ahead of today's US jobs report. We suspect that the
dollar's rally that began in mid-July is over, though a strong employment
report that boosts the chances of a Fed hike before year-end could quickly
demonstrate the folly of making claims ahead of what is still one of the most
important reports in...
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Markets Continue to Struggle
Overview: The markets remain unsettled. Follow-through
dollar selling has been limited today after yesterday's pullback. Narrow ranges
are prevailing, but the Norwegian krone and Canadian dollar, the weakest G10
currencies in recent days, are heavier again today. Although it seems that the
BOJ did not intervene earlier this week, but the dollar bulls has been
chastened just the same and the greenback is holdings below yesterday's high...
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US Yields and Dollar Rise After US Government Closure Averted
Overview: The US avoided a government shutdown,
barely, and this eased one of the headwinds that were anticipated. In turn,
this is spurring new gains in US interest rates and helping underpin the dollar
at the start of the new quarter. The 10-year Treasury is holding above 4.60%
and nearing last week's high (4.68%). The two-year yield gapped higher and is
near 5.10%. The high from September 21 was almost 5.20%. The Swiss franc is the
only G10...
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Dollar Sets Back into Month- and Quarter-End Ahead of likely US Government Shutdown
Overview: The dollar's surge stalled yesterday, and
follow-through selling has pressed it lower against all the G10 currencies
today. The dollar-bloc and Scandis are leading the move. Month-end, quarter-end
pressures, coupled with a likely partial shutdown of the government beginning
Monday, and after key chart levels were approached or violated earlier this week,
serving as a bit a cathartic event. The Swiss franc snapped a 12-day losing
streak...
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Yen Drops After BOJ Does Nothing and Says Little
Overview: The BOJ's failure to do anything or
further ideas that an exit of the negative target rate, despite the firm CPI
report helped the dollar recover the ground lost yesterday against the yen. The
focus has returned to "intervention watch" and the market continues
to press for the official pain threshold. Sterling is the weakest of the G10
currencies, off another 0.5% today following the BOE's decision not to hike
yesterday. The...
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Softer UK CPI Weighs on Sterling and Lifts Gilts, while Yen Slumps to New Low for the Year, Ahead of the FOMC
Overview: Softer than expected UK CPI has drawn
attention ahead of the key event of the day, the FOMC meeting. The UK's CPI has
spurred a dramatic rally in Gilts and saw sterling initially extend its recent
losses, falling to new four-month lows before stabilizing. The swaps market
sees less than a 50% chance of a hike by the Bank of England tomorrow. Meanwhile,
even though US Treasury Secretary Yellen suggested conditions in which
intervention by...
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The Canadian Dollar Shines in a Mostly Consolidative FX Market Ahead of the Flurry of Central Bank Meetings
Overview: Ahead of the flurry of central bank
meetings, starting with the Federal Reserve and Brazil tomorrow, the dollar is
largely consolidating in narrow ranges. The euro, sterling, and yen are trading
slightly heavier, while the dollar bloc and Scandis enjoy a firmer bias. The
Canadian dollar stands out as is trades at its best level since mid-August
ahead of its CPI report and despite a diplomatic dispute with India and the
failure of...
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Calm Before the Storm: Greenback Confined to Narrow Ranges
Overview: With
many central bank meetings in the days ahead, the dollar has begun the new week
on a quietly and mostly in tight ranges, helped by a holiday in Tokyo. G10
currencies, outside of the Scandis are slightly firmer in European turnover.
Emerging market currencies are narrowly mixed, but of note the 0.25% decline
makes the Chinese yuan the weakest. The Mexican peso is extending its recovery
into the seventh consecutive session.
While...
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In Uncoordinated Steps, Japan and China Help Slow Greenback’s Rally
Overview: The Bank of Japan Governor Ueda hinted the
world's third-largest economy may exit negative interest rates before the end
of the year. This sparked the strongest gain in the yen in a couple of months
and lifted the 10-year yield to nearly 0.70%. In an uncoordinated fashion,
Chinese officials stepped their rhetoric and indicated that corporate orders to
sell $50 mln or more will need authorization. This helped arrest the yuan's
slide. The...
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Yuan Sulks in to the Weekend, While Finishing Touches are Put on the Dollar Index’s Eighth Consecutive Weekly Gain
Overview: The greenback is lower against most
currencies today as it consolidates ahead of the weekend. The Dollar Index's
eight-week advance is the longest since a 12-week rally 2014. The Chinese yuan
is an exception. Its losses were extended today. Against the offshore yuan, the
dollar traded above the onshore band, which is most often respected. Equities
ae extending this week's slump. All the large bourses in the Asia Pacific
region but India...
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The Dollar and Oil Steady After Yesterday’s Advance
Overview: Bonds and stocks are mostly heavier today
and the dollar has turned mixed. Oil prices are consolidating after soaring to
new highs since late last year on the longer than expected extension of Saudi
Arabia's extra cut of one million barrels a day. Since July, it has been
extending it by one month at a time. Yesterday, it extended it through Q4. Russia,
who had previously indicated intentions on reducing its exports by 500k
barrels,...
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US Dollar Punches Higher
Overview: Disappointing
data in Asia and Europe has sent the greenback broadly higher. The strong gains
posted before the weekend were mostly consolidated yesterday when the US and
Canadian markets were on holiday. The rally resumed today. The Antipodeans and
Scandis have been hit the hardest (-0.7% to -1.25%) but all the G10 currencies
are down. The Swiss franc and yen are off the least (-0.35%-0.45%), and the
euro and sterling have taken out...
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China’s Measures Begin to Find Traction, US Employment Report on Tap
Overview: Beijing's seemingly steady stream of
measures to support the economy and steady the yuan are beginning to produce
the desired effect. The yuan is snapping a four-week decline and the CSI 300
halted a three-week drop. Some economists estimate that the bevy of measures
may be worth as much as 1% for GDP. The dollar is narrowly mixed ahead of the
US employment data, which is expected to see the pace of job growth slow to
around 170k. Of...
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Dollar Bulls Still in Control
Overview: What may have been hoped to be a quiet
August has turned into a feeding frenzy for dollar bulls as the contrasting
economic performance has spurred persistent buying of the greenback. Even
shallow dips have been bought. Today, it is mostly trading inside yesterday's ranges
against the G10 currencies. The PBOC set the dollar's reference rate at what
appears to be a record gap below the Bloomberg average survey, and the dollar
was scooped...
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Aussie Recovers from Poor Jobs Data, but Nokkie is Weaker Despite Rate Hike
Overview: Encouraged by the continued stream of US data, which
suggests that the world's largest economy is accelerating, the US 10-year yield
is approaching last year's 4.33% high, and the dollar's run has lifted it to
new highs for the year against the Japanese yen, Chinese yuan, and the
Australian and New Zealand dollars. Even a rate hike by Norway did not stop the
dollar from rising against the krone. The greenback is firmer against most of
the...
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Dollar’s Rally Pauses Near Key Levels
Overview: The US dollar is trading with a slightly
heavier tone in the European morning. It has stalled in front of JPY145.90,
where the BOJ intervened last September and ahead of CNY7.30, which some
observers think Chinese officials are defending. We are less convinced that
either central bank has drawn a line at a particular level and suspect it is
too early to be confident that the greenback has peaked against either. On the
back of yesterday's...
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Surprise-Packed Tuesday: China Cut Rates, Japan’s Q2 GDP Rises Twice as Fast as Expected, and UK Wages Accelerate
Overview: Today's highlights include a surprise rate
cut from China after another series of disappointing data and much stronger
than expected Japanese Q2 GDP (6% annualized pace). The UK reported an
unexpected sharp jump in average weekly earnings, which were sufficient to get
renew speculation of a 50 bp hike by the Bank of England next month. The US
dollar is mixed. The Swedish krona and dollar-bloc currencies are struggling,
while the Swiss...
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Risk Appetites Squashed by Weak Chinese Imports/Exports and Moody’s Downgrade of 10 US Banks
Overview: The combination
of falling Chinese imports and exports, Moody's downgrade of ten US small and
medium-sized banks is serving to squash risk appetites. Equities are weak, but
bond markets are strong despite the surprise tax on Italian banks announced
yesterday and the kick-off of the US $103 bln refunding today. Outside of Japan
and Australia, Asia Pacific equity markets were lower led by a 1.8% drop in the
Hang Seng and a nearly 2.2% loss...
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