Author: FX

SPX weeklyClosing changes:S&P 500 -0.5%DJIA -0.5%Nasdaq Comp -0.4% Russell 2000 -0.2%Toronto TSX Comp +0.5%On the week:S&P 500 -2.3%DJIA -0.5%Nasdaq Comp -2.8% Russell 2000 -1.2%Toronto TSX Comp -1.4%July was a great month for stocks but August has gotten off to a slow start. The market looked like it would turn today as yields fell but that ultimately wasn’t enough. US yields end the day 10-15 bps lower across the curve.Still, this is the first substantial weekly decline since March so the bulls can’t exactly complain. Source link

Bank of America (BofA) outlines three primary reasons why dips in the USDJPY exchange rate are likely to be both shallow and short-lived. Despite the Bank of Japan’s (BoJ) recent adjustments to its Yield Curve Control (YCC), BofA maintains its expectation for USDJPY to rise to 147 by September.Key Points:Unlikely Capital Repatriation: BofA does not foresee Japanese investors repatriating capital in the current fiscal year due to the recent YCC tweaks. This lack of repatriation is attributed to the preparation investors undertook last fiscal year in anticipation of BoJ’s policy normalization.No Indication of Multiple Rate Hikes: Despite the BoJ’s recent…

Share: Data released on Friday showed the Canadian economy lost 6,400 jobs in July, against consensus of a 21,100 increase. Analysts at CIBC point out there were further signs of loosening within the Canadian labour market in July, with a slight dip in employment contributing to another uptick in the unemployment rate.They warn that a reacceleration in wage growth may lead the Bank of Canada (BoC) to believe that labour market conditions haven’t loosened enough yet. Key quotes:  “The reacceleration in wages and still low unemployment rate mean that today’s data are unlikely to convince the Bank of…

Share: GBP/JPY retreated towards the 181.00 area and cleared most of its weekly gains.  Investors continue to digest BoE’s decision on Thursday.  Governor Ueda committed that the BoJ will be more flexible with the 10-year JGB. On Friday, the JPY traded mixed against most of its rivals, mainly because of Governor Ueda’s from the Bank of Japan (BoJ) on widening the tolerance of the 10-year JGB. On the other hand, the GBP trades flat after the Bank of Englan monetary policy decision on Thursday. The GBP traded mixed agains most of its rivals following Thursday’s BoE decision. Overall,…

This bull market started with tech and it might die with tech.Amazon shares surged higher today on strong cloud revenue but Apple posted slowing sales, including of the iPhone and that has led to a heavy round of profit taking. Shares are down 4.6%.The entire summer run-up in Apple has now been erased and the fear is that we could get a deeper retracement, perhaps to the 38.2% or 50% levels of the one-way trade that started at the turn of the year. That would imply a further 7-12% decline.Apple daily chartHere is a sense of how revenues have trended…

It was a mixed week for our strategies as we took on a risk-on bias on the high probability we’d see further signs of a peak in the global rate hike cycle. But broad risk sentiment was net negative this week, and it wasn’t until we switched our stance that we saw a couple of arguably positive outcomes from Wednesday and Thursday discussions. EUR/AUD 30-min Forex Chart by TV On Monday, we decided to do work on EUR/AUD ahead of the fast approaching monetary policy statement from the Reserve Bank of Australia. Market expectations right before the release shifted hawkish…

The US dollar has recovered some of the selling after non-farm payrolls as equities give back gains. Notably, Treasury yields remain near the lows of the day, led by a 13 bps fall in 7-year notes.The dollar has been dragged around by fixed income this week but its stocks behind this move. The S&P 500 is now up just 4 points on the day at 4506 from a high of 4540.The dollar bounce is strongest against commodity currencies but the euro is starting to move as well.EURUSD 10 mins Source link

JPMorgan economists now no longer expect a US recession ‘this calendar year’. This is one of those instances where it becomes abundantly clear that the consensus has moved from recession…to mild recession…to soft landing…to no landing. I still think there’s room for optimism in risk assets because so much money that was on the sidelines is looking for a dip to buy but we’re likely past the easy money phase.Here’s the note: Source link

Share: Analysts at Rabobank see the US Dollar appreciating against the Euro and the Pound over the next few months. They point out that the relative resilience of the US economy suggests that it will be some time before monetary policy is eased. Key quotes:  “Fitch’s decision to downgrade the US credit rating has turned attention to next week’s Treasury supply, though the USD’s safe haven appeal suggests that impact from the Fitch decision is likely to be limited.” “Fed policy remains in the driving seat. While we expect that Fed funds have likely peaked, a higher for…

Share: Mullen held its shareholder meeting on August 3 but it is unclear whether the company received enough votes for another reverse stock split. July US Nonfarm Payrolls surprised to the downside – weighing on the US Dollar but supporting stocks. S&P 500 and NASDAQ 100 both gain in early Friday trade Mullen Automotive (MULN) stock slumped nearly 10% on Friday despite the broader averages advancing at a healthy clip. The poor showing comes a day after MULN stock added 12%, closing at $0.1365.  The US Nonfarm Payrolls data came in below expectations. This was largely seen as positive by the equity market as…