Weekly Focus – Momentum Setback
The strong start in markets from early January experienced some setback this week on rising infections, as countries are hit by a second wave of COVID-19 despite vaccinations gathering pace as well as bond markets falling back (in yields). With President Biden taking office and the significant fiscal expansion...
Cliff Notes: Gauging Economic Strength at the Turn of the Year
Key insights from the week that was.
This week saw a number of key data updates globally, most notably consumer sentiment and the labour force survey in Australia and GDP for China. In Washington DC, Joe Biden was also sworn in as the 46th US President.
Beginning with Australian Westpac-MI consumer...
Stay Safe Friday
Wall Street positive but Asia cautious
Wall Street had another positive session overnight, but a few swirling doubts have crept into Asian markets, with equities across the region indicating that regional investors prefer caution as the week closes. Hong Kong has announced a complete lockdown of part of Kowloon this...
Stocks Cool Off From Record Highs
US futures in the red.
Major events next week could dictate risk sentiment.
Bullish case for equities still valid.
Oil benchmarks pare weekly advance.
The rally in global stocks is taking a breather before the weekend, having posted a new record high on Thursday. Most Asian benchmark indices are...
Asia Markets Rise As Biden Takes Over
Asian equity markets join in presidential honeymoon
The FOMO buy everything trade was back in force overnight, with President Biden’s swearing-in unleashing another round of stimulus-powered buying. Morgan Stanley’s impressive earnings data and a huge by Netflix on their zero borrowing/buyback news added to the jovial mood on Wall Street....
Yellen Stimulates Markets
Yellen says more stimulus on its way
Wall Street got back to business as usual overnight, buying equities and selling the US dollar as Janet Yellen, in her Treasury Secretary selection testimony, told them everything they wanted to hear. They wanted to hear more stimulus, and Ms Yellen delivered 1.9...
Equities Climb On Yellen Dovishness
Equities move higher on Yellen stimulus tailwinds
All eyes are on the confirmation hearing for Janet Yellen, who is expected to be confirmed as US Treasury Secretary. Ms Yellen, the Federal Reserve’s former head, will testify that the US risks a more prolonged recession and long-term damage to the economy...
Deficits Be Damned
The Financial Times reports that Treasury Secretary Nominee Janet Yellen, the Federal Reserve's former head, will state that the US risks a more prolonged recession and long-term scarring if it does not inject more government spending into the economy. The prepared remarks obtained by the FT ahead of Ms...
Yellen Is Expected To Advocate Further Stimulus Measures To Support The Restart Of The Economy
Markets
With US markets closed in observance of the Martin Luther King Jr Holiday, trading took a slow start of the week. Asian equity indices finished mixed with China outperforming in the wake of better-than-expected Q4 GDP data. After opening in the red, a protracted and gradual bottoming out process...
Quiet Start to the Week
A quiet start to the week, with the US bank holiday meaning trading is likely to remain extremely thin throughout the session.
European stock markets are mixed, lacking any real direction, as has been the case for much of the last week. With so much good news priced in over...
Commodity Currencies Stay Generally Weak While Euro Could Stabilize Temporarily
Commodity currencies remain generally weak today on mixed market sentiments. On the other hand, Yen, Swiss Franc and Dollar are the strongest. Euro remains soft too, but recovery in crosses, in particular against Sterling, is limiting its downside for the moment. Gold also stabilizes back in prior range after...
China GDP Outperforms
China starts week with strong data
China’s GDP for Q4 showed an increase of 6.50% YoY for Q4, leaving China on track to expand by 2.30% for 2020. Industrial Production rose by an impressive 7.30% as the rest of the world’s insatiable demand for Made in China showed no signs...
Asian Equity Markets Slide
Asia follows Wall Street fall
A weak Wall Street close and the Huawei semiconductor ban over the weekend has set up Asia for a soft opening today. Wall Street took fright at poor US Retail Sales data on Friday, highlighting a weakening trend in the domestic sector over the past...
Strong China GDP Can’t Shake Off Virus Blues, Dollar Firms
Markets wrestle vaccine and stimulus optimism with worsening near-term gloom
Upbeat Chinese GDP highlights global growth disparity as US retail sales sag
Euro stuck in the doldrums, eyes Italian confidence votes
China notches up positive full-year growth in 2020
As most major economies struggle under the weight of the pandemic,...
A Cautious Start To A Busy Week
Following a solid start to the year, investors are turning more cautious as data continues to be released, corporates present their outlook for 2021, President-Elect Joe Biden sets out his economic plan, and most importantly developments around Covid-19 continue.
Asian stocks traded mixed today despite data showing that China’s economy...
Crude Falls As US Rig Count Rises For Eighth Week
The price of crude oil declined in early trading as investors reacted to the rising number of oil rigs in the United States. In total, the number of oil and natural gas rigs increased by 18 to 424. In the Permian Basin, the number of rigs increased by the...
The Dollar Could Retain The Benefit Of The Doubt Today
Markets
Markets finished the week with a cautious risk bias last Friday with Biden's $1900 billion stimulus plan lifting spirits only temporarily. Its announcement was the market's cue for some profit-taking while pondering the way forward. The narrowest Senate majority possible won't make it easy for the plan to be...
Steady USD And Lower Rates/Yields
Market movers today
Today is a very quiet day. The most important events are the ECB, Norges Bank and the Bank of Japan meetings on Thursday, although we do not expect any of the central banks to do much else than taking stock.
On Wednesday, President-elect Joe Biden is...
EUR/USD Pressing 1.2 Key Support as Dollar Lifted by Yellen
Dollar opens the week generally higher, as supported by comments from former Fed chair Janet Yellen. Though, at this point, Yen mildly stronger while Swiss Franc is also firm. The triple argues that there is some underlying cautiousness in investor sentiments, despite solid Q4 China data. That's also reflected...
China GDP grew 6.5% in Q4, but Dec data mixed
China's GDP grew 6.5% yoy in Q4, accelerated from prior quarter's 4.9% yoy, beat expectation of 6.1% yoy. Overall, GDP grew 2.3% in 2020, making it the only major economy that avoided a contraction, due to the coronavirus pandemic that started with outbreak in Wuhan.
December data were mixed. Industrial...
Week Ahead: Biden Inauguration, More Lockdowns, and Central Bank Meetings
On Wednesday, January 20th, Joe Biden will be sworn in as the 46th President of the United States. After a controversial four years, President Trump will leave office, one way or another. Hopefully Congress can move forward with Joe Biden’s economic agenda as the coronavirus continues to plague the...
Week Ahead – Earnings Season in Focus
Optimism remains despite Covid-19 surge
Earnings season is under way and will become an increasing focus in the coming weeks. New variants of Covid-19 are causing major surges across many countries which is forcing more severe and extended restrictions. Economies are coping well under the circumstances but will come under...
Week Ahead – ECB, BoJ and BoC Meet But All Eyes on US Capitol
The first of the new year’s central bank meetings will get under way next week and it will be a heavy schedule on the data front as well. The European Central Bank, Bank of Japan and Bank of Canada will almost certainly be debating the latest setback to the...
Dollar Shrugs At Biden Stimulus Plan
Currency markets are unmoved by Biden wish-list
Currency markets entered a holding pattern overnight, ahead of the Biden stimulus release, and have remained to circling in Asia this morning. Part of the reason is that the fiscal package contents were well telegraphed beforehand and contained no reactionary surprises. The stimulus...
US Senate May Filibust Biden Goodie Bag
President-elect Biden unveiled his bag of stimulus goodies this morning, with an impressive headline figure of USD1.90 trillion. None of it appears to be funded by tax increases, so another torrent of bond issuance is on the way. By my rough reckoning, the US has spent nearly USD4 trillion...
Euro’s Decline Continues as Italy Yields Jump, Dollar and Yen Mixed
Euro's broad based decline continues today, dragging down the Swiss Franc, and to a lesser extent Sterling too. Italy bench yield jumps sharply on increasing risk of fresh elections in the summer. On the other hand, commodity currencies continue to be strong, as supported by overall solid risk sentiments....
The Dollar’s Rise Resumes
Dovish Fed Governors cap dollar's gains
A plethora of Federal Reserve Governors, notably Harker, Brainard and Clarida, along with some successful bond auctions, managed to cap the rise in US yields overnight, with the 10-year now over ten basis points of its recent highs. Harker said that the Fed would...
Asian Equities Mixed Today
Wall street upbeat, but China markets down
Asian equity markets are mostly higher across the region after a mostly upbeat session from Wall Street overnight. Slightly lower US yields and expectations of a larger than expected Biden-led stimulus package have boosted sentiment along with impressive China trade data. It is...
The Return Of The Queen
The Trump impeachment vote was overshadowed by momentous scenes at 0530 this morning in South Jakarta, as Queen Cricket returned to her palace. The unannounced royal trip, lasting two nights, led to frantic searches of the wider realm by her servants. Her feline highness announced her arrival loudly at...
Will The Announcement Of Big Stimulus Be Enough To Block The Corrective Decline In US Yields?
Markets
Media headlines yesterday focused on the impeachment procedure against US president Trump in the US House of Representatives. For markets there was little high profile news to react to. After a cautious start, the S&P (0.23%) and the Nasdaq (0.43%) closed with modest gains as was the case for...