Nov 2, 2023: The Japanese yen, the world’s third most-traded currency, is underperforming, facing similar challenges as the Turkish lira and Argentinian peso over the past decade, according to George Saravelos of Deutsche Bank AG (NYSE:DB). Key factors such as weak yields and external accounts are pushing down the yen’s value. This year, the yen’s losses against the dollar stood at 15%, while the lira and peso have dropped by 51% and 97%, respectively. Saravelos pointed out that record low real yields due to the Bank of Japan’s (BOJ) unique yield curve control and reluctance to raise interest rates have…
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Nov 3, 2023: The British pound is showing resilience ahead of the Bank of England’s (BoE) Monetary Policy Committee (MPC) November interest rate decision, which is expected to maintain the 5.25% rate, a prediction backed by over 90% of money markets and a majority of surveyed analysts. The BoE’s anticipated “high-for-longer” policy might bolster the pound against the euro’s previous gains, as it favors future tightening. The vote composition of the MPC and economic projections are steering this resilience. Market expectations are pivotal, especially if dovish MPC member Swati Dhingra votes for a rate cut, which could potentially destabilize the…
Nov 2, 2023: The oil bull has come up for gasping for air after October’s sinking of crude prices — and isn’t finding relief from a Federal Reserve indicating that current US interest rates may not be high enough to effectively curb inflation. The Fed is still quite some way from its 2% annual target for inflation, with latest data on US personal consumption expenditure standing at 3.4%. That suggested that another rate hike might come as early as December and was enough to send crude prices lower for a third day in a row. New York-traded West Texas Intermediate,…
Nov 1, 2023: The battered yen recovered some ground on Wednesday on threats of intervention from Japanese authorities, and as investors shifted focus to the Federal Reserve’s policy decision later in the day. The dollar was last down 0.33% at 151.24 yen, after more pointed-than-normal remarks from Japan’s top currency diplomat Masato Kanda. It hit a one-year high on Tuesday as the yen slid after the Bank of Japan redefined its 1% limit on 10-year government bond yields as a reference rate rather than a hard cap. The tweak underwhelmed many investors who had been expecting a stronger move away…
Nov 1, 2023: U.S. stock index futures drifted lower on Wednesday as longer-dated Treasury yields rose ahead of the Federal Reserve’s monetary policy decision at the end of its two-day meeting. The Fed is widely expected to keep interest rates unchanged but investors will focus on Fed Chair Jerome Powell’s conference at 1430 ET (1830 GMT) after the statement to gauge how long the central bank could keep rates elevated. Traders’ bets of a 25 basis point rate hike in December currently stand at 27.4%, as per CME Group’s (NASDAQ:CME) FedWatch tool. “We know that Jerome Powell won’t call the…
Nov 1, 2023: European stock markets edged higher Wednesday, with the focus squarely on the conclusion of the latest U.S. Federal Reserve policy-setting meeting. At 04:30 ET (08:30 GMT), the DAX index in Germany traded 0.2% higher and the CAC 40 in France climbed 0.2% and the FTSE 100 in the U.K. rose 0.1%. Cooling inflation boosts sentiment in EuropeSentiment has been boosted in Europe by Tuesday’s news that eurozone inflation dropped to its lowest level in over two years in October. Prices grew by 2.9% year on year in October, the slowest pace since July 2021, from 4.3% a…
Oct 31, 2023: Bitcoin’s recent surge to $35,000 can be attributed to four key factors: volume, implied volatility, market depth, and funding rates, according to data from the digital assets platform Kaiko. Amid a summer trading slowdown and reduced volatility, the market structure experienced a shift following rumors of a fake approval of a Bitcoin spot ETF tied to BlackRock (NYSE:BLK). Despite increased trading activity, Bitcoin liquidity has remained stable, with order books within 1% of the mid-price remaining steady. Kaiko anticipates near-term volatility to be minimal in the absence of a significant catalyst until December. However, an announcement from…
Oct 31, 2023: U.S. stock futures climbed higher Tuesday, continuing the previous session’s rally as investors awaited more corporate results ahead of the latest Federal Reserve meeting. By 06:50 ET (10:50 GMT), the Dow Futures contract was up 120 points, or 0.4%, S&P 500 Futures traded 9 points, or 0.2%, higher and Nasdaq 100 Futures climbed 10 points, or 0.1%. The main indices on Wall Street all closed over 1% higher on Monday, with the blue chip Dow Jones Industrial Average gaining over 500 points, or 1.6%, in its best trading day since early June. However, despite these gains, the…
Oct 31, 2023: European shares climbed on Tuesday, led by real estate and chemical stocks, with investors drawing comfort from a slew of corporate earnings beat, while focusing on major economic data releases throughout the day. The pan-European STOXX 600 was up 0.6% by 0930 GMT. However, the index was poised for its worst monthly performance since September 2022 on recession fears amid weak economic data and downbeat earnings updates. The benchmark index was also set to log its third straight monthly decline, down nearly 8% during the period. “I’m not reading too much into today’s gains, as to some…
Oct 31, 2023: Japan’s government confirmed on Tuesday that it did not intervene in the currency market to prop up the yen in the past month, data from the Ministry of Finance showed. The monthly Ministry of Finance data showed no spending on intervention between Sept. 28 and Oct. 27. Earlier this month, the Japanese currency had rebounded sharply by around 3 yen within minutes of softening beyond 150 to the dollar, a level seen by investors as a possible trigger for intervention. The yen’s weakening had been a source of concern as it raises energy costs and other expenses…
