Economic Conditions

Fears of a quick sharp devaluation of the Chinese yuan, disrupting the global economy, sparking a currency war, have eased. For the second session, the yuan stabilized.  The central reference rate (fix) was CNY6.3969, having finished the Shanghai session before...

A fragile stability has returned to the Chinese currency and stocks.  With the help of the Social Democrats, the German parliament is likely to endorse Greece's third aid package, even if a rump of Merkel's CDU/CSU balk. The next adjustment...

The US dollar is narrowly mixed as we head into the weekend.  Global stock markets are also mixed.  Although the Nikkei was down, Chinese equities eked out a small gain.  The Shanghai Composite gained nearly 6% this week, the best...

The euro has rallied to new highs since mid-July, and after repeated attempts to convincingly break above JPY125, the dollar is retreating against the yen as well.   The euro reached almost $1.1160.  The next target is near $1.1200.  The dollar...

The US dollar was unable to sustain its pre-weekend gains despite an employment report generally recognized to be sufficient to keep the Federal Reserve on course to raise rates next month. However, the poor price action has not seen follow...

Investors seem to take for granted the easier monetary policy trajectories in the Eurozone and Japan. The debate has been over the timing of the normalization in the US and the UK.  Emerging talk recently said that the Bank of...

While the US jobs report has been among the most important economic releases in the monthly cycle, it takes on even more significance in the run-up to the September FOMC meeting.  The dollar has been trading in a narrow range. While...

There are three main talking points today:  1) The divergence in the trajectory of monetary policy, illustrated by Atlanta Fed's Lockhart yesterday, and to be tested today by the ADP private sector employment estimate;   2) The July service sector PMIs;...

Narrow ranges in the foreign exchange market continued for the most part, and the US dollar is a little softer.  The Reserve Bank of Australia did not talk the Aussie lower, and the data were better than expected.  This sent...

The US dollar is mostly confined to the pre-weekend trading ranges as participants prepare for this week's big events, which include the BOE meeting, minutes and new forecasts, and the US jobs report.  The main exception is the Canadian dollar,...

There are two events this week that will shape the investment climate potentially for the rest of the year.  The first is the Bank of England meeting. The following day is the US employment report.  There are two events this...

The US dollar is mostly firmer, with the dollar-bloc under-performing.  Month-end flows appear to be favoring the euro though the Swiss franc is also firmer.  While the dollar is within yesterday's ranges against the euro and yen, it is firmer...

The US dollar is broadly firmer in the wake of the FOMC statement, but there are some notable exceptions. The market appears reluctant to sell sterling ahead of next week's MPC meeting, where hawkish dissents are likely.  There will also...

The US dollar is mixed.  It is recouping some of yesterday's losses against the euro and yen but it is heavier against the other major currencies.  Short covering in the dollar-bloc that began yesterday extends, and the 0.7% preliminary increase...

Surveys suggest that a little more than 80% of the economists expect the Federal Reserve to hike rates in September.  The September Fed funds futures, the most direct market instrument, have only about a 50% chance discounted. Surveys suggest that...