British Pounds Takes a Tumble on Soft Mfg. PMI

The British pound has started the New Year with sharp losses. In the North American session, GBP/USD is trading at 1.2626, down 0.82%.

Dollar Loved the Combination of Higher Yields and Some Risk Aversion

The dollar loved the combination of higher yields and some risk aversion with the trade-weighted greenback rallying from 101.42 to 102.20. Technically, DXY stays trapped in the downward trend channel since early November. EUR/USD fell from 1.1045 to 1.0942. A firmer floor below core bond yields could help a more firm bottoming out pattern in the dollar as well.

EUR/USD Stabilizes After Slide, FOMC Minutes Loom

The euro has steadied on Wednesday after sustaining sharp losses a day earlier. In the European session, EUR/USD is trading at 1.0932, down 0.08% and its lowest level since December 21.

British Pound Starts New Year's With a Tumble

The British pound is steady on Wednesday after sharp losses a day earlier. In the European session, GBP/USD is trading at 1.2632, up 0.11%.

Sunset Market COmmentary

Interest rate markets tried to build on last week’s ‘U-turn’ after the accelerated decline in yields triggered by the December Fed policy announcement. Corporates and sovereigns are eager to use lower funding costs to frontload at least part of their 2024 financing needs, with new bond issuance taking a solid start.

Risk Rally on Pause, Dollar Rebounds as NFP Report Awaited

The soft landing narrative completely took hold of the market towards the end of 2023, spurring a risk rally that pushed Treasury yields to multi-month lows and Wall Street to all-time highs. This renewed optimism for the US economic outlook came about from Fed officials flagging the possibility of a policy pivot in the not too distant future.

Will European Inflation Prints Support Rate Cut Narrative?

Today, focus will be on inflation data coming out of Germany and France, which should indicate the direction of the euro area inflation released tomorrow.

New Vigor on Bond Market Curtailed Dollar's Momentum

New vigor on the bond market curtailed the dollar’s momentum with the trade-weighted greenback halting its ascent near first resistance around 102.50. EUR/USD closed at 1.0922 from a start at 1.0942. Stock markets failed to profit from the change of tide with key European indices losing up to 1.5% and US benchmarks sliding up to 1.2% (Nasdaq). EUR/GBP slid from 0.8671 to 0.8617 on an underperformance of UK gilts (yields rising by up to 5 bps at the front end of the curve).

Australian Dollar Stabilizes on Solid Chinese PMI

The Australian dollar has steadied on Thursday and is trading at 0.6732 in the European session, up 0.02%. This follows a four-day slide in which the Aussie fell 1.6%. Later in the day, the US releases unemployment claims and the ADP employment report, which comes just one day ahead of US nonfarm payrolls.

Euro Rebounds after FOMC Meeting, Geman CPI Rises

The December policy meeting was highly significant as the Fed made a major pivot. After months of sticking to its script of ‘higher for longer’, the Fed threw in the towel and signalled that it expected to cut rates three times in 2024. This was a major shift in policy and sent the US dollar lower and the equity markets higher in the aftermath of the meeting.