New Overnight Developments Abroad - Daily Update
Continuing Rise of Long-Term U.S. Bond Yields Lifts Dollar but Depresses Equities
March 8, 2021
The 10-year Treasury yield’s uptrend that began from 0.89% in mid-December has been extended another three basis points to 1.60%. The senate approved a $1.9 trillion pandemic relief package along partisan lines over the weekend, and investors are concerned that U.S. inflation will exceed the Fed’s expectations in both the short and long run. Bond […] More
Foreign Exchange Insights and Next Week
Next Week’s Menu: March 6-12, 2021
March 5, 2021
Central Banks: Monetary policies will be reviewed in Canada, Serbia, Peru and at the European Central Bank. ECB President Lagarde, Bank of Canada Governor Macklem, Bank of England Governor Bailey, and Reserve Bank of Australia Governor Lowe are some of the central bankers speaking publicly next week. Events and Holidays: The Chinese National People’s Congress […] More
New Overnight Developments Abroad - Daily Update
Fed’s Inaction on Rising Long-Term Interest Rates Sends Dollar Higher
March 5, 2021
Investors had been hoping to hear some voiced protest against the steepening U.S. yield curve from Fed Chairman Powell’s speech yesterday, but it wasn’t to be. Powell expressed a lack of worry about the development, while reaffirming that Fed tightening is years away even if U.S. employment and price growth outpaces the path assumed by […] More
Deeper Analysis
And There It Is.. New Political Leadership Tempted to Depreciate the Dollar
March 4, 2021
An extensive article appearing on the front page of the New York Times business section two days ago and entitled To Revive Manufacturing, Weaken the Dollar? cites several economic policy advisors in the Biden administration being in favor of a carefully controlled slide in the dollar. One theme running through their thinking is the assertions […] More
Central Bank Watch
Central Bank Rate Hike in Ukraine Wasn’t Expected
March 4, 2021
Above-target inflation in Ukraine inspired officials at the National Bank of Ukraine to hike their policy interest rate by 50 basis points to 6.5%. The move was unexpected and the first tightening since a 50-basis point advance to 18.0% in September 2018. Officials had eased five times by a total of 450 basis points in […] More
New Overnight Developments Abroad - Daily Update
Dollar Up, Equities and Bond Yields Lower, and U.S. Capitol on Alert
March 4, 2021
March 4th was the day U.S. presidents were inaugurated until the 1930s, and there’s internet chatter suggesting a possible reprise of the January 6th attack on the Capitol. Widely anticipated geopolitical traumas rarely seem to happen as planned. A notable exception occurred July 1, 1997, the day that Hong Kong reverted to Chinese rule. That […] More
New Overnight Developments Abroad - Daily Update
Service Sector PMI Surveys and a Whole Lot More Data This Wednesday
March 3, 2021
The dollar overnight rose 1.0% against the Mexican peso, 0.5% relative to the New Zealand dollar, 0.4% versus the Aussie dollar, 0.3% against sterling 0.2% on a trade-weighted basis and 0.1% versus the yen and loonie. Sterling has remained steady on net, by contrast, continuing a pattern of comparative strength since the start of this […] More
New Overnight Developments Abroad - Daily Update
Reminders that Covid’s Negative Effect on Economic Activity Isn’t Going Away Quickly
March 2, 2021
Yesterday was a good day from a data release point of view, and equities rallied around the world. Today’s news has been more sobering. German retail sales, which had tumbled 9.1% in December but been forecast to be fairly flat in January, instead took a further 4.5% dive and recorded an even greater year-on-year slide […] More
Deeper Analysis
U.S. Manufacturing Advantage Narrows Relative to Euroland
March 1, 2021
Whereas the Institute of Supply Management’s monthly purchasing managers index, a measure of operating conditions where values above 50 imply increasing degrees of improvement and vice versa, increased 2.1 points in February to robust 60.8, the IHS-compiled euro area PMI climbed 3.1 points to 57.9. Consequently, the difference between those two data series narrowed by […] More
New Overnight Developments Abroad - Daily Update
Equity and Commodity Prices Up Amid Favorable Manufacturing News and Start of New Month
March 1, 2021
The dollar advanced overnight by 0.5% against the Swiss franc, 0.3% relative to the euro, and 0.2% versus the yen, sterling and in trade-weighted terms. Covid cases and deaths slowed yesterday, and Johnson & Johnson’s vaccine has been approved for distribution. Being the first day of the month, a slew of manufacturing purchasing manager surveys […] More
