G10 FX Consolidates Amid US CPI, Canada Jobs, Geopolitical Tension
The G10 fx consolidation today looks constructive. Today's North American highlights including US March CPI and Canada's jobs data. Middle East ceasefire is frayed but intact ahead of the weekend negotiations. Hungary holds key election too. See https://t.co/ilDfPE14fW https://t.co/vM5PZMv4eI
Ceasefire's Rocky Start Dashes Initial Optimism
Rough Start to Ceasefire Curbs Yesterday's Enthusiasm: It seemed clear that yesterday’s euphoric reaction to the two-week ceasefire was exaggerated. Ceasefires often have been plagued with disputes and violations at the start. This one is no different.… https://t.co/Y2MeryYHcf https://t.co/2Lwkg8yq6W
Ceasefire Optimism Fades; Markets Wobble Amid Israel
Ceasefires often have a troubled start and this one is no different. It is complicated by Israel's action in Lebanon. Yesterday's exuberance was exaggerated and has been pared a little. Oil firmer, equities lower, yields higher. $USD in narrow...
Ceasefire Boosts Risk Appetite, Markets Rally, Oil Plummets
Ceasefire Lifts Animal Spirits: Risk appetites have been excited by the two-week cease fire in the Middle East. Stocks and bonds have rallied strongly. The precious metals are higher. May WTI is off more than 15%. June Brent is about...
Ceasefire Sparks Rally, Yet Risks Remain Without Details
Ceasefire rallied stocks and bonds. $USD was sent sharply lower and oil dropped sharply. North American traders may be reluctant to extend the risk-on rally without more details. It was seem counter-intuiti but the dramatic moves pose...
Dollar Flat vs G10, Krona Drops on Soft CPI
On the Edge of the Abyss: The dollar is mostly narrowly mixed against the G10 currencies. Leaving aside the Swedish krona, which has fallen nearly 0.75% on the back of an unexpected soft March CPI, the other G10 currencies are...
US Deadline, Ceasefire Odds Sway Risk Assets, Dollar
The US deadline draws close. It hangs over market activity. It remains binary. A ceasefire will boost risk assets and weigh on the greenback. The opposite is true, as well. Meanwhile, undaunted, the PBOC set the...
US Hormuz Deadline Extended, Markets Shift to Dollar, Oil
Cease-Fire Hopes Blunt US Ultimatum: The US deadline on Tehran for re-opening the Strait of Hormuz has subtly shifted until tomorrow. The holiday-thinned market initially bought dollars and oil and took risk off in response to the continued attacks and…...
Cease‑fire Hopes Lift Market, but Negotiators Remain Doubtful
Hope of a cease-fire between US/Israel and Iran has captured the imaginations of the holiday-thinned market today. The negotiators themselves reported are not optimistic. $USD gave back earlier gains and is posting a possible outside down day. See https://t.co/Km1zBLaVJG...
Middle East Conflict Still Drives Markets, WTI Near $112
Week Ahead: Its Still Mostly about the War: The Middle East war remains the dominant fundamental condition. There continues to be some indication that market participants are hopeful of a resolution soon. The May WTI contract settled near $111.55 last…...
Global Markets Eye War, CPI Data, and RBI Caps
Week Ahead: Still mostly about the war. US and China report March CPI. China's PPI may have emerged from deflation. Canada reports March jobs data. RBI is relying on cap controls to support INR, not...
Foreign Central Banks Boost Fed Holdings by $3.3 Bn
The week ending Wednesday was the first in six weeks that foreign central banks did not draw on their custody holdings (Treasuries and Agencies) at the Federal Reserve. In fact, their holdings increased by almost $3.3 bln. See https://t.co/VPY5kkVh5i
Escalation Risks Dampen Risk‑Taking, US Jobs Keep Dollar Flat
Risk of Escalation Discourages Risk Taking while US Jobs Report May Extend the Dollar's Narrow Ranges: The shroud of the Middle East war overhangs the Good Friday holiday. The attack on an Iranian bridge yesterday threatens a response in kind...
War Fears Curb Risk Ahead of US Jobs Data
Fear that the Middle East war escalates in the coming days, before full liquidity returns next Tuesday, will likely limit risk taking today. US jobs is the focus in early North America. Three US army generals lost their...
POTUS Speech Sours Market Sentiment Before Extended Holiday
POTUS's address deflated hope, sending ripples across the capital markets as positions adjusted ahead of what will be a long holiday for many beginning tomorrow and extending through Monday. Damage control by US today? See https://t.co/O5f5DvtTFW https://t.co/GYMWErQvSW
Billions in FX Options Expire Tomorrow Across EUR, JPY, AUD
Interesting FX Option Expirations Tomorrow 1.4 bln euros at $1.1650 $1.7 bln JPY159 and $1.5 bln at JPY160 A$1.14 bln at $0.6900.
Hope Fuels Risk Appetite, Weakens Dollar Amid Middle East Conflict
Hope Boosts Risk Appetites and Drags the Greenback Lower: Hope springs eternal, and the capital markets are trading on hope that the Middle East war ends shortly, even as missiles continue to be fired in the region. President Trump again...
Markets Hope for Middle East Peace, Expect Consolidation
The capital markets are being driven by hope that the Middle East war ends shortly. Markets are anticipatory. Still, they do not always get it right. Ahead of POTUS speech tonight, consolidation may be most likely scenario. https://t.co/6peh5F9uHH https://t.co/aae8efFiPO
Euro, Pound Near Key Levels as Billions in Options Expire
$Eur approaching $1.15. Between today and tomorrow around 6.5 bln euros of options expire. $GBP approaching $1.3250 where GBP650 mln options expire today. https://t.co/bSx6eAhEKQ
War Turmoil Drives Oil and Dollar Consolidation
Mixed War News Keeps Oil Firm and the Greenback Consolidating: War developments pulled in both directions, leaving investors on edge On the one hand, Iran struck an oil tanker, carrying Kuwait oil, in port in Dubai. On the other hand,...
Iran Attacks Ship, POTUS Okays Operation Wind‑down; Oil Steady
Iran struck a ship with Kuwaiti oil in a Dubai port and press reports POTUS told aides can consider winding down operation without securing Strait of Hormuz. Oil remains firm. Mkts uncertain. Large euro options at $1.15 expire today...
Dollar Gains, Yen Rises Amid Middle East Tensions
US Dollar's Advance Continues but Verbal Threats Lift the Yen: The Middle East war rages on. The Houthis have entered the fray and there is risk that it shuts the Bab El-Mandeb Strait. Aluminum and steel facilities have been reportedly...
USD Strengthens While JPY Pulls Back Amid BOJ Intervention
$USD is mostly firmer. $JPY is the notable exception. Escalated verbal intervention and news that the BOJ would consider a larger than usual rater move, have encouraged a pullback from around JPY160.40. NY may be less worried about intervention....
Iran Conflict Sends Shockwaves Far Beyond Middle East
April 2026 Monthly: Wars rarely stay where they start. The Israeli and American military campaign against Iran—the most direct confrontation with Tehran in decades—has sent shockwaves well beyond the Middle East. The fog of war obscures the tactical… https://t.co/LijXTqIYe6 https://t.co/goTuakZHDK
War Risks Clash with Aggressive Central Bank Pricing
New monthly drops. https://t.co/FItBCcQzTd Trade wars, kinetic wars, and anticipated policy responses ripple through the capital markets. Optimism of short war contrasts with pricing in aggressive CB policy. https://t.co/qPeHeyxa7a
USD/JPY Breaches 160, Eyes Potential 162 Breakout
For the first time since July 2024, $USD has pushed above JPY160. It almost reached JPY160.40, which we suggested was needed to confirm a breakout. The BOJ & MOF officials I have spoken with seem more sophisticated that draw an...
Dollar and Oil Hold Steady After Trump’s Iran Pledge
The Dollar and Oil are Bid: The dollar and oil remain firm. The market has a had muted reaction to President Trump’s announcement late yesterday that it will extend its pledge not to strike Iran’s energy infrastructure for ten days...
USD/JPY Near 160 as Risk Appetite Remains Cautious
Ahead of the weekend, amid the fog of war, risk appetites are restrained. Escalation to de-escalate? Is today the day the greenback pushes above $JPY160? PBOC sets $USD fix higher on weekly basis for the 1st time in...
Dollar Holds Steady as Stocks and Bonds Slip
Hope Wanes, USD Little Changed while Bonds and Stocks Weaken: The US dollar is trading in narrow trading ranges against the G10 currencies today, but the calm in the foreign exchange market belies stress in other parts of the capital...
Dollar's Strength Misread Despite Recent Index Gains
Thoughts on the Dollar: The dollar's resilience since the war began is not a mystery, but it is being misread. The Dollar Index has appreciated roughly 1.8% this month alone, following a modest 0.65% gain in February after January's 1.35%...
Markets Rally on Hope for US‑Israel Iran Peace Plan
Hope Lifts Stocks and Bonds: There continues to be hope in the capital and commodity markets that a US-Israel war on Iran can be brought to a conclusion soon. While news reports indicate that the US had drafted a 15-point...
USD Steadies on Hopeful Middle East Ceasefire Proposal
$USD is mostly consolidating with a slightly firmer bias after yesterday's late NY sell-off amid hope of a soon end to the war in the Middle East. US offers ceasefire proposal while sending more Marines and equipment to the...
Billions in FX Options Expire Tomorrow Across Major Pairs
Interesting FX options expiring tomorrow: $1.1605 for 1.8 bln euros, Thurs ~1.4 bln euros at $1.16. JPY160 for $885 mln A$1.4 bln at $0.6950. $420 mln at CAD1.3785 and $590 mln at CAD1.38. DTCC listed.
War Hopes Nudge Fed Futures Toward Tiny Cut
The hope of a short-end to the war on Iran sees the Fed funds futures market swing back to a (small chance) of a cut this year--2 bp--. It was around 7 bp of tightening before the weekend and 61...
Escalation Threat Sinks Markets, Boosts Dollar Amid Trump’s Iran Warning
Threat of Massive Escalation of the War Drags Financial Markets Lower, While Lifting the Greenback: After seemingly teasing the market ahead of the weekend that he was considering “winding down” military operations, President Trump issued Iran an… https://t.co/t3mysRChOd https://t.co/SLD6N1BncI
Impending Iran Conflict Sparks Market Sell‑off, Dollar Rally
We could be around 12 hours from a major escalation in the war on Iran. There is no appetite for risk. Bonds and stocks sold aggressively. Gold and silver offer no haven. The greenback is broadly higher....
War and Policy Outlook Shape FX and Capital Markets
Week Ahead: The War and Anticipated Policy Responses Drive the Capital Markets: There are two main drivers in the foreign exchange market: war and the anticipated monetary policy response. May WTI peaked on March 9 near $113.40. Last week, the...
Markets Bet War Short, Yet Expect Aggressive Central Banks
New weekly commentary here: https://t.co/V6x7cI6LT8 War and market speculation of the policy response ripples through the capital markets. Central paradox: Markets seem optimistic about duration of war but sees many central banks being extremely aggressive. https://t.co/xpvqmxf8k7
CNY Posts Lowest USD Fix Since April 2023
PBOC set the $USD fix today at its lowest level since April 2023. Since the war began, $CNY is the fourth best EM currency, trailing HKD and two high yielders in Latam. YTD, CNY it has only been bested by...
Swaps Market Overprices Central Bank Rate Hikes
The swaps mkt discounted slightly more than BOE 3 hikes this year. Surely that is exaggerated. The mkt has 70 bp of ECB hikes discounted. Despite the hawks trying to outflank Lagarde's moderate tone, that too seems a...
USD Rebounds After Over‑reaction; Short Positions Risky This Weekend
$USD was bought aggressively on a hawkish read of Powell's press conference on Wed and was sold harder yesterday in what seems to be an overreaction to the ECB and BOE. It has come back bid. Who wants...
Dollar Surge Fizzles: Limited Follow‑Through After Fed Hold
Limited Follow-Through Dollar Today After Yesterday's Surge: The US dollar rallied strongly during the Federal Reserve’s press conference yesterday as rates jumped in response to what was widely seen as a hawkish hold, especially given Chair Powell’s… https://t.co/L0b4ab2cDv https://t.co/JikD6d1Xxj
US 2‑yr Yield Surges, Inflation Breakevens Spike Post‑War
The US 10yr yield is up about 35 bp since the start of the war and the 2yr yield is up about 43 bp. The 2yr break even is up 57 bp to 3.38% and the 10yr breakeven is...
USD Spikes Post‑Fed, Central Banks Stay on Hold
$USD surged yesterday during the Fed's press conference. Follow-through buying has been limited today. BOJ, SNB, & Riksbank stood pat. BOE and ECB next but will also hold steady. War rages, and Brent made new highs,...
Hope Boosts Risk Appetite Ahead of BoC, FOMC
Hope Lifts Risk Appetites Ahead of the Bank of Canada and FOMC Meetings: There are three main talking points today. The first is the war. While it continues to rage, more oil is reportedly moving through the Strait of Hormuz...
Hope Boosts Stocks and Bonds Pre‑Fed
Hope seems to be lifting equities and bonds ahead of the Bank of Canada and Federal Reserve meetings. May WTI is lower but nearly $3 above lows. Hawkish hold may be more convincing from the Fed than the...
RBA Narrowly Hikes; Trump‑Xi Summit Delayed; China Curtails Fertilizer
RBA Hikes in a 5-4 Decision, Trump-Xi Meeting Postponed, Beijing Tightens Restrictions on Fertilizer: There have been three developments to note. First, President Trump’s trip to China has been postponed by at least a month. The White House linked it...
RBA Hike Ahead,
3 Developments: RBA hike, and mkt favors another one by mid-year. Trump-Xi meeting postponed by at least a month. Reason? War. Beijing tightens exports of fertilizer components. Oil firm but in yesterday's range. USD quiet. See https://t.co/QYsOxDPAlE...
Billions in FX Options Set to Expire Tomorrow
Notable FX options expiring tomorrow: 1.6 bln euros at $1.15 $720 mln at JPY158.40 A$430 mln at $0.7100 and A$485 at $0.7045 $685 mln at BRL5.20 $550 mln at CAD1.3645
WTI and Dollar Slip, Markets Hope Exit Ramps Amid Conflict
April WTI is trading lower as is the US dollar. The market still seems hopeful that exit ramps are found shortly, even though the conflict escalated over the weekend. Many are skeptical of the unexpected gains in PRC data....