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The dollar was mixed in N.Y. trade on Friday, though EUR-USD traded to new three-week lows under 1.0570, before recovering some on short covering interest. USD-JPY opened on highs over 120.45, though made its way under 120.10 in subsequent dealings, before settling in near 120.20. Read more
The divergent paths of various central banks continues dominating news reporting and analysis. Analysts still expect the US to raise rates first, although the latest employment numbers and still low inflation rate gives the Fed ample maneuvering room. Read more
EUR-USD extended south to a new three-week lows under 1.0600, leaving a low at 1.0589 before finding some buoyancy. The move coincided with a fresh advance in the dollar's yield advantage to above 180 bp in the 10-year T-note versus Bund comparison, up from 178-179 bp earlier and from levels nearer 170 bp that were seen earlier in the week. Read more
EUR-USD settled to the upper 1.06s after diving to a three-week low of 1.0638 yesterday. The move was concomitant with a spike in the dollar's yield advantage to the 179 bp area in the 10-year T-note versus Bund comparison, up from levels nearer 170 bp that were seen earlier in the week. Read more
The dollar firmed up through the N.Y. session on Thursday, paced by EUR-USD losses. After opening over 1.0775, EUR-USD fell steadily through the session, basing at 1.0644. The theme has generally been one of divergent central banks following the FOMC minutes on Wednesday, where the for remains opened a crack for a June rate hike. Read more
Several of Canada’s central bankers have publicly stated that oil’s price drop will negatively impact their economy. Deputy Governor Timothy Lane was the first to do so. In a speech on January 13, he concluded that, “… lower oil prices are likely, on the whole, to be bad for Canada.” Bank of Canada Central Governor Poloz echoed this sentiment in a March 30 Financial Times interview, calling the net effect of oil's price drop on Canada’s economy “atrocious.” Recently issued economic indicators confirm these predictions. In the last two readings, the Markit Economics Canadian Manufacturing number has shown a contraction. Read more
EUR-USD traded to a new low for the month at 1.0731 despite news that Greece met IMF debt tranche repayment deadline (according to the WSJ at the time of writing). The dollar has remained firm in the wake of the FOMC minutes, which although showing mixed views among members provided markets a reminder that the Fed remains on track to an eventual tightening. Read more
EUR-USD is heavy once again, this time as the dollar finds broad support in the wake of the FOMC minutes to the recent Fed policy meeting, which although showing mixed views among members revealed that both Fed's Dudley and Powell mulled a rate hike as early as June. Read more
The dollar made its way modestly higher through the morning session, before making a final push higher after the FOMC minutes. The minutes were a mixed bag, showing a division on the timing of rate liftoff, not surprisingly. The minutes showed several Committee members wanting a June hike, others later in the year, and a couple thought the economic outlook wouldn't call for a tightening until 2016. Read more
This is an update on a comparison I have made previously. Since corporate profits are a long leading indicator for the economy, and the stock market is a short leading indicator, it stands to reason that, contrary to common wisdom, reported corporate profits lead the stock market, not visa versa. Since we have finished the first quarter, let's update this relationship. Read more
