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The dollar majors remained in fairly narrow ranges, though there has been some movement. AUD-USD logged a one-week high of 0.7609, while USD-JPY logged a five-week high at 112.07 before turning lower, to around 111.70. The retreat in USD-JPY came after the U.S. Read more
The dollar slipped early on the back of a disappointing durables report, taking EUR-USD to eight session highs of 1.1219 from opening lows near 1.1180. The pairing later eased into 1.1176 lows after the London close. USD-JPY dipped from 111.70 to 111.36 lows after the data, though later printed 111.90, a one-month high. Read more
OVERVIEW FX markets remain subdued, but global stocks are broadly higher. Theresa May has secured the support of the DUP party, giving her a narrow and fragile majority in parliament. UK annual consumer lending growth slowed to 5.1% in May, down sharply from 6.4% in April. The British Bankers Association reported a further dip in the number of mortgages approved last month to 40,347. U.S. Read more
The dollar perked some after edging out fresh lows against a number of currencies, including sterling and the commodity units. USD-JPY was a driver, with the yen itself coming under broader pressure amid a risk-on backdrop, with stock markets across Asia and Europe rallying today. Read more
The dollar has traded steady-to-softer so far in early-week trading, though USD-JPY is an exception, with the pair nudging to a two-session high of 111.38 as the yen came under a phase of selling. Stock markets have rallied in Asia, aided by a 1%-plus gain in oil prices, gaining for a third consecutive session, which has given an incentive to short the Japanese currency. Read more
There is good and bad news in this week’s macro headlines. On the bullish side, the World Bank has increased their latest global growth forecast, which they project to reach 2.7% by the end of the year. This is consistent with the increased levels in the Markit PMIs that started in 4Q16. Read more
This week, the Conference Board released their latest leading and coincident indicators. They were up .3% M/M while the 6-month rolling average was +2.3%. But while 9 of 10 indicators increased, there’s been an industrial weakness for the last 7 months: The average workweek of production workers, new consumer goods orders, and manufacturers’ new orders of non-defense goods have all been weak for the last 7 months. Read more
May data this week included new and existing home sales, both of which increased, and the Index of Leading Indicators, which was also positive. Read more
For what seems like forever, the Fed has been saying they are using a 2% inflation target. Given this expansion’s weak growth, this seems to be a fair and appropriate number. But intuition can be deceiving. The San Francisco Federal Reserve has issued several reports showing the natural rate of interest to be right around 0% -- which tells us the natural rate of inflation is probably below 2%. Read more
