Dollar on Back Foot as Equities Slide

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Overview:  Profit-taking continues to weigh on global equities earnings concerns saw the biggest drop in the S&P 500 in three weeks.  The MSCI Asia Pacific Index fell for the fourth consecutive session.  The Nikkei gapped lower for the second straight session and has now retraced half of the gains scored since early June.  The Shanghai… Read More

Back to the Well Again

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Overview:  After slapping punitive tariffs on structural steel from China and Mexico last week, US President Trump threatened to end the tariff truce with China because it has not stepped up its purchases of US agriculture products.  Trump said the tariff freeze was in exchange for ag purchases, but at the time it seemed as… Read More

Intervention: Huff, Puff, and Bluff

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Economists, strategists, and reporters continue to have a difficult time getting a handle on the disruptive American President.  They insist on taking seriously every feint of a person who appears to relish keeping his friends and adversaries off-balance. One continues to fuel a discussion that is generating more heat than light.  Previously, Trump accused one… Read More

Marking Time on Monday

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Overview:   The new record highs in US equities ahead of the weekend coupled with Chinese data that suggested the economy was gaining some traction as Q2 wound down is helping underpin risk appetites to start the week.  Japanese markets were closed today, but equities were mostly firmer in the Asia Pacific regions, markets in China,… Read More

What to Watch if Fed and ECB are Committed to Easing

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There is little doubt after the Federal Reserve Chairman Powell’s testimony last week and the FOMC minutes that a rate cut will be delivered at the end of the month.  Similarly, after comments by several ECB officials and the record of their recent meetin.g confirms it too is prepared to adjust policy.  The timing of… Read More

Greenback Limps into the Weekend

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Overview:  Higher than expected US CPI and the second tepid reception to a US bond auction this week pushed US yields higher and helped stall the equity momentum. Asia Pacific yields, especially in Australia and New Zealand jumped 8-10 bp in response, and Spanish and Portuguese bonds bore the burden in Europe.  Barring a sharp decline… Read More

North American Focus: Poloz and Powell

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Overview:  The US Treasury market is retreating for the fourth consecutive session ahead of Fed Chairman Powell’s testimony before Congress.  It is the longest losing streak in six months, and the 10-year yield has risen 15 bp over the run.  This is helping drag up global yields, and today Asia Pacific yields mostly rose 2-3… Read More

Macro Monday

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Overview:  The capital markets have begun the week in a mixed note. Asia Pacific equities tumbled, led by 2%+ losses in China and South Korea, but European shares are edging higher, and a positive close would be the seventh in the past eight sessions.  The S&P is little changed.  Asia Pacific bond yields moved higher, as… Read More

Surge in Oil Punctures Holiday Markets

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Overview: With many centers closed for the extended holiday, the calm in the global capital markets has been punctuated by reports that the US is considering ending its exemption for eight countries to have bought Iranian oil over the past six months.  The waivers were to end on May 2, but previously it was thought… Read More