Sunset Market Commentary
Markets
At the start of the new week, global trading showed no clear, unequivocal trend across markets. Asian equities finished the month with modest losses despite the a solid China PMI confidence, both for the manufacturing and the services sector. This investor caution also spilled over into European trading. At...
Sunset Market Commentary
Markets
Today’s only market-moving remark came after an EU diplomat quoted by Reuters. It sent sterling lower with EUR/GBP heading towards 0.8950. The EU diplomat stated the obvious though by pointing out that only a few days are left for EU talks. “Without London taking the necessary decisions quickly, reaching...
Markets Turned into Consolidation, With Conflicting Signals
Markets, including stocks, gold and currencies, were generally bounded in consolidative mode last week. News regarding coronavirus vaccines failed to give sentiments another boost. Instead, investors are waiting for fresh inspirations. Dollar ended as the worst performing one, but stayed inside prior week's range, except versus Kiwi. Euro, and...
Expect US Treasury Rates to Rise and Curves to Steepen in 2021
The success of vaccine tests ; Australia's current strong growth story; and pivots around monetary policy are highly relevant to the market outlook.
The approach to monetary policy in Australia is changing. In his speech last Monday, the Governor neatly set out the four aspects of current policy.
The nature...
Sunset Market Commentary
Markets
The trading week ends on a fairly uneventful note. The rift opening up between US Treasury Secretary Mnuchin and the US Federal Reserve on claiming unspent resources scared (thin) Asian dealing, but didn’t resonate through the European and US session. European shares currently trade narrowly positive; whereas US counterparts...
Sunset Market Commentary
Markets
Asian market moves suggested yesterday’s minor risk-off setting would continue today. Equity markets started the day with a cautious bias but soon found a better bid. Investors find comfort in coronavirus curves showing first signs of topping out in countries including Germany, France, Spain and in Central-Europe which is...
US Retail Sales in Sight as Fed Prepares for Action
America’s latest retail sales data will hit the markets at 13:30 GMT Tuesday, and investors will look for clues on whether the Fed will pull the easing trigger again in December. With US infections spiraling out of control lately, Congress locked in a stalemate over more fiscal relief, and...
Sunset Market Commentary
Markets
It’s the same start to a different trading week. Last Monday, Pfizer/BioNTech announced that its Covid-vaccine prevents 90% of infections in a large study. Today, it’s up to US biotech Moderna to publish an even more astonishing 94.5% efficacy in clinical trials. We argued last week that the Pfizer...
Global Yields Decline Driven By Higher Infection Numbers And Comments From Fed, BoE And ECB
Market movers today
DKK. A first estimate of Q3 growth in Denmark with the GDP indicator.
Speeches. A few Fed speeches today but we do not expect much news. ECB's Weidman speaks at Bundesbank.
Rating. Fitch has France and Austria up for review. The Netherlands is up for review...
Sunset Market Commentary
Markets
Market euphoria after the promising Pfizer results earlier this week faded. Investors concluded that quite some good news might be discounted. Just call it a logical, technical correction. A workable vaccine will be a gamechanger for the economy, for fiscal and monetary policy and thus for markets. However, there...
Vaccine Spells Trouble for Big Tech But Old Economy Stocks Surge
Stocks around the world skyrocketed on news this week that the Covid-19 vaccine being developed by Pfizer and BioNTech is more than 90% effective in protecting against the virus. That’s a very impressive number when considering that it’s much higher than the most optimistic expectations and even more so...
New Zealand Dollar Rises after RBNZ, US Yield Resilient
New Zealand Dollar surges broadly today as markets see that RBNZ has less need to cut into negative next year. Kiwi's strength is somewhat taking Aussie higher too. On the other hand, Sterling is paring some of yesterday's strong gain while Dollar is following as second weakest for now....
Sunset Market Commentary
Markets:
European stock markets maintain yesterday’s huge gains on the back of Pfizer’s game-changing Covid-vaccine results. The outcome changes the market narrative. The next phase in the coronacrisis will likely be mass vaccination rather than a new wave of infections early next year. The EuroStoxx 50 for a second session...
Markets Mixed as Vaccine Boost Fades, Dollar Support by Yields
The forex markets turned mixed in Asian session today as the boost from coronavirus vaccine faded quickly. The close in US stocks overnight was rather disappointing and DOW ended up just 2.95%. NASDAQ has indeed closed with -1.53% loss. In the currency markets, Yen is trying to recover but...
Dollar strikes back as 10-yr yield breaks key resistance, Gold eyes key support
Dollar is trying to make a come back with strong rally in US treasury yield, as also confirmed by the steep fall in gold. 10 year yield is trading up 0.145 at 0.965 at the time of writing. Technically, the strong break of near term channel resistance is a...
Stocks Ready for Upside Breakout, But Yen Crosses Seem Not Agreeing
Politics aside, stock investors were the biggest winners of US presidential elections, while Dollar holders were the losers. The greenback ended as the worst performing one, followed by Yen by a wide margin. Australian Dollar shrugged of RBA easing and ended as the strongest, leading other commodity currencies. European...
Weekly Economic and Financial Commentary: Parsing Economic Data while Awaiting Election Results
U.S. Review
Parsing Economic Data while Awaiting Election Results
As of this writing, the outcome of the U.S. presidential election is undecided. Joe Biden, however, appears likely to become president based off of his growing lead in several key states.
Total payrolls rose by 638K in October. Growth continues to...
Week Ahead – The Calm after the US Election Storm
It’s a relatively quiet week coming up for global markets as the election dust settles. The main event will be the RBNZ policy meeting, though frankly, the real driver for most currencies and stocks may be the ‘aftershock’ effects of the election. There’s also a slew of economic data,...
Sunset Market Commentary
Markets
Investors already forgot about yesterday’s FOMC meeting by the time of the European opening bell. Justifiably so given the US central bank’s unsurprising message. They remained sidelined, obviously pointing to downside risks stemming from rising COVID-infections which eat into US savings. Fed Chair Powell renewed his call on fiscal...
Sunset Market Commentary
Markets
Today’s trading is a copy-paste of yesterday with stocks and (US) core bonds gaining in lockstep, both under the assumption of a lame duck presidency at least for the next two years. Biden looks set for the White House (if he as expected wins in Nevada) but will have...
BOE’s QE Expansion Exceeds Expectations as Economy Heads for Double Dip
While leaving the Bank rate unchanged at 0.1%, BOE raised the size of asset purchases (QE) by +135B pound to 875 pound. Both decisions were made unanimously. The expansion came in larger than we had anticipated. The staff also revised lower GDP growth outlook, now expecting the economy to...
Sunset Market Commentary
Markets
The US election results are still being counted as we speak. Markets whipsawed amid the slew of incoming results, from assuming a solid Biden victory (betting odds stood at somewhere around 70% at the start) followed by a Trump comeback (Biden odds slumped to 20%) to back to the...
Sunset Market Commentary
Markets
Markets enjoyed an outright risk-on session as US citizens are heading to vote for a new president and part of Congress. Last week, market uncertainty on the potential impact of the second corona wave and on the outcome of the US presidential election were enough a reason for investors...
Key Levels to Watch as US Presidential Election Looms
Global equities tumbled notably last week, partly as coronavirus spread was hitting new record highs. Also of the same importance, US investor had lightened up their positions in preparation for the Presidential elections. Yen and Dollar surged broadly to end as the strongest one. Euro was the worst performing,...
Weekly Economic and Financial Commentary: Renewed Questions Surrounding Global Recovery
U.S. Review
GDP Bounces Partway Back in Q3
Real GDP jumped a record 33.1% during Q3, beating expectations. A 40.7% surge in consumer spending drove the gain. However, real GDP is still 3.5% below pre-pandemic levels.
Initial jobless claims dropped to 751k for the week ending October 24, the lowest...
Sunset Market Commentary
Markets
A string of dissatisfying US tech earnings triggered a sharp sell-off in US after-market hours yesterday. The risk-off repositioning for the first time this week rolled-over into Asian dealings and into the European open as well (about 1% lower). Q3 GDP growth figures in Europe were all better than...
Sunset Market Commentary
Markets
There were plenty of eco data in the Europe and the US. Most were better than expected. EMU economic confidence stabilized while a modest decline was expected. Italian confidence data also held up well or even improved (manufacturing). German labour data also improved further. German inflation was the exception...
BOC Recalibrated QE with Focus on Long-term Bonds. Downgraded Growth for 2021
BOC left the policy rate unchanged at 0.25% in October. The central bank explicitly noted that the policy rate will stay unchanged at least until 2023. Meanwhile, it announced to “recalibrate” the QE program, reducing weekly purchases “gradually” to at least CAD 4 billion and turning the focus to...
Sunset Market Commentary
Markets
Asian stocks showed resilience this morning with China and South Korea even closing in green as the virus isn’t the dominant factor for regional markets anymore. This clearly contrasts with the US and even more so with Europe. Virus curves are rising at an ever accelerating pace. European governments...
Euro Tumbles on Coronavirus and Lockdown, Yen Riding Higher
European majors are all trading broadly lower today on worsening coronavirus spread and return to lockdowns. Mild risk aversion keeps the Japanese Yen afloat but it's outperformed slightly by Aussie, after slightly stronger than expected Australian CPI reading. Dollar is mixed for the moment, benefitting little from risk aversion....