20th May 2019
Asian stocks are mixed this morning despite universally bad news on Friday about the US-China trade dispute. That suggests to me that the market has pretty much adjusted to the crisis.
17th May 2019
The world seems to be calming down despite the continuing US-China trade dispute. US stocks were up for the third day in a row, and Asian stocks are mixed this morning – China down but Japan up.
16th May 2019
Sterling continues to plummet. The polls for next week’s EU Parliament election show the Brexit party far ahead. Meanwhile, PM May has decided to bring her failed Brexit deal back to Parliament for yet another vote during the week of June 3rd. If at first you don’t succeed, try, try, try again, apparently.
13th May 2019
As usual, the US-China trade dispute is what’s moving the market today. Typical risk-off movement. The Shanghai stock market is down 1.6% at the time of writing, Tokyo is off 0.6%, and it’s no surprise that CHF and JPY are doing well and AUD and NZD aren’t.
10th May 2019
This week was a fine example of why it’s hard to make money in FX nowadays. Looking at the graph of how currencies moved over the week, it follows a clear “risk off” pattern: JPY and CHF gained while the commodity currencies fell. Then late Thursday, the mood improved and the laggards gained while the gainers lagged. There were few ways to make money trading on one’s view on individual currencies.
9th May 2019
Same same: stock markets down, AUD down, JPY up. However the large fall in AUD deserves some attention, particularly on a day when iron or futures in Singapore were up 1% to the hightest level of the year. It appears that speculators are still taking positions against the currency, perhaps in anticipation of some new insight from the Monetary Policy Statement (MPS) that’s due out overnight.
8th May 2019
My “first shall be last” paradigm broke down yesterday --- JPY, the 2nd-to-last currency when I wrote Tuesday morning, was indeed the best-performing currency today, but AUD, which was the best performing currency yesterday, did well today too -- #2. But we’re looking at the trade-weighted indices and so AUD’s good performance is probably more of a reflection of NZD’s bad performance after the Reserve Bank of New Zealand cut rates 25 bps, the first G10 central bank to take that step in this stage of the economic cycle.
7th May 2019
Stock markets continued to fall yesterday, and this morning in Asia they’re down further in early trading. But most of the damage to currencies was done in early Asian trading time yesterday in any case. Generally speaking, they recovered somewhat during European and US trading, and now it’s what we might call a “biblical market,” as in “first will be last and the last, first.” Just to refresh your mind, here’s the order of the currencies when I wrote this comment yesterday:
6th May 2019
The market got Trumped again – Trump tweeted threats to raise tariffs on Chinese goods next Friday, when trade talks were set to resume on Wednesday. Chinese officials now say they are thinking of cancelling the talks entirely. A great surprise for Chinese markets coming back after the holidays. The CSI 300 index is down 5.5% at the time of writing, Shanghai down 5.2%. The CNY also fell substantially (at least, substantially by the standards of the CNY).
3rd May 2019
Further repricing of Fed rate cut possibilities, plus talk of an impasse in US-China trade talks, sent bond yields higher and equity prices lower. That caused a typical “risk off” move in the FX market, with JPY gaining and the commodity currencies falling.