Soft CPI Pressure Swiss Franc
The CHF is amongst one of the worst performers on the day versus the dollar, plunging nearly 0.8% after reporting softer-than-expected CPI data. April prices came in at 0.3% y/y and only increased 0.1% m/m. With the SNB thought to be moving towards policy tightening, the sharp deceleration in prices may reintroduce the threat of [...]
Sterling Hit After Lackluster Economic Data
Sterling has taken a hit after worse than expected PMI data was released, followed up by a weak outlook by retailers for future sales. Manufacturing has been the bright spot in the UK economy, but today’s PMI at 54.6 was the weakest in 7 months, below expectations, and as well, the prior month’s figure was [...]
Dollar Slide Generates “Risk On” Trade
The US dollar is set to end the week on a whimper with the combination of month end selling and momentum taking the dollar to new lows. An acceleration of euro zone inflation reinforced the divide between the Fed and ECB policy and prompted the euro to move above $1.485, while the Swiss franc advanced [...]
Dollar Crumbles During a Volatile Week
The week began with a market swoon after S&P announced that it was placing the US on negative watch. Standard & Poor’s Ratings Services Inc. cut its outlook on the U.S. to negative, increasing the likelihood of a potential downgrade from its triple-A rating, as the path from large budget deficits and rising government debt [...]
Portugal Downgrade Shows S&P Behind the Curve
S&P cut Portugal one notch from BBB to BBB-, and comes just five days after it cut the rating from A- to BBB. Things have not changed that much in the last five days, which just proves the point that S&P is possibly behind the curve. The euro has remained firm, despite continued issues related [...]
Japanese Foreign Minister Resigns
Japan’s foreign minister Maehara resigned over the weekend over a funding scandal and this has negative implication for Japan’s fiscal position. Maehara had been tipped as a possible successor to Prime Minister Kan, but his resignation appears to weaken Kan’s hand.
The Euro Breaks to the Upside
The main event in the currency markets this week was the statement issued by the ECB, alerting markets participants that inflation was moving up at an unacceptable rate, and the ECB was not going to sit on the sidelines waiting for growth to gain traction before it began to fight inflation. European Central Bank President [...]
Interest Rates Continue to Drive Currency Movements
Equity markets continued to consolidate during the week, as Asian and Europe felt the pressure from higher interest rates, and US markets took a breather from the torrid upside pace. Commodities came under some pressure after the PBOC tightened interest rates for the second time in the past 2 months. The currency markets continued to [...]
Political Unrest Drives Markets
Political contagion hit the Egyptian market as riots and fight continued to spread across the capital. The Egypt equity markets have collapsed and are closed after erasing approximately 12 billion dollars within the last 2 trading days of the week. For the fourth consecutive day of street protests, as police used tear gas, bullets and [...]
UK GDP Very Disappointing
UK surprised the markets by reporting that Q4 10 GDP did not expand slowly as the consensus expected, but actually contracted by 0.5%. The economy last contracted in Q3 09. A full breakdown of the report is not made available until the next report in late February. However, the preliminary numbers suggest that the service [...]
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