Multiple Themes in Markets

The markets were driven by multiple themes last week. Dollar ended up broadly higher as supported by hawkish FOMC minutes and rebound in treasury yields. However, it’s outshone by New Zealand and then Australian Dollar. Kiwi was boosted by stronger than expected CPI. Meanwhile, the Aussie was pulled up by iron ore prices, which countered…

Stocks Adjust to Higher Yields

The headline story this week has been the downturn in global equity markets. The S&P500 has fallen about 6% this past week, the biggest five-day loss since February. A bond market rout was the cause then, and it was behind the move in recent days too, as equities re-price to reflect the higher yield environment.…

US Growth Remains on Track

This past week’s economic reports largely came in close to expectations and suggest third quarter real GDP growth will rise close to our expectations of a solid 3.1% annual rate. Most of the key economic data came at the end of the week. Retail sales data came in a bit light, rising just 0.1%, but…

Dollar Not Ready to Resume Up Trend Yet

Yen and Swiss Franc ended as the weakest ones last week as global stock markets ended higher. There were some jitters in risk sentiments after US announced to move on with tariffs on additional USD 200B in China imports, which come effective as soon as in September. But investors were quickly relieved after China’s refrained…

G7 to Fed Hike and ECB Judgement Day

While trade tension between the US and its allies dominated the headlines last week, Euro emerged as the strongest major currency. Receding Eurozone internal political risks was a key factor. German 10 year bund yield hit as high as 0.52, comparing to 0.186 low just two weeks ago, before closing at 0.45. Expectation of a…

Dollar Turned into Consolidation Phase

Dollar’s late pull back last week suggested that it has turned into consolidation phase, after long-stretched rally. Retail sales, housing, regional Fed surveys and industrial production will be released from the US this week. But we don’t expect them to be too market moving. Instead, Eurozone data like German ZEW could move the greenback more.…

Yen Beat Dollar

Dollar ended last week broadly higher except versus the Japanese Yen. While economic data from the US were generally disappointing, they were not bad enough to alter Fed’s path of three rate hikes this year. Just that, the data didn’t add to the chance of the fourth hike in December. On the other hand, data…