NASDAQ-Adv: 3,193 Dec: 1,434 NYSE-Adv: 3,268 Dec: 919 (Source: Nasdaq)

Barclays said on Wednesday global mutual funds investors could sell equities worth a further $350 billion this year, unless fears of recession diminish, due to an uncertain macro backdrop and monetary policy tightening. Investors have been selling equities in the wake of rising inflation, prompting economies to hike interest rates. Russia’s invasion of Ukraine added to the inflationary pressures amid a surge in energy and commodity prices, increasing costs to companies as it hurt their valuations along with volatility in global financial markets. Barclays said equity outflows amounted to an ...

USD: Risk sentiment remains the primary driver, but downside risks are smaller now The shockwaves that originated from the slump in US tech stocks yesterday seem to have been absorbed without too much trouble by global equity markets, although more signs of sentiment instability did take some steam off the rally in pro-cyclical currencies. The dollar has found some stabilisation after a negative start to the week and should, for now, continue to trade primarily in line with swings in global risk sentiment. Yesterday, new home sales in the US ...

Stock markets and the dollar moved cautiously higher on Wednesday before the latest Federal Reserve meeting minutes, while New Zealand’s dollar soared as its central bank joined those now aggressively jacking up interest rates. Nerves about a global recession were jangled on Tuesday by weak U.S. housing market data, but European and Asian trading saw the mood gradually strengthen. Hints of more stimulus from China and a tick up in German consumer morale lifted Europe’s STOXX 600 0.6% early on after MSCI’s main Asian indexes rose around 0.5% overnight. Oil ...

NASDAQ-Adv: 1,379 Dec: 3,316 NYSE-Adv: 1,869 Dec: 2,381 (Source: Nasdaq)

In recent days, ECB officials have become more vocal with their concerns about the weak euro. French central bank governor, Villeroy de Galhau, pointed out that a weaker euro would undermine the ECB’s goal of price stability. ECB executive board member, Isabel Schnabel, was quoted saying that the ECB was closely monitoring the impact of the weaker euro on inflation. This is in stark contrast with the minutes of the ECB meeting in April when the exchange rate was only mentioned four times. There was also market speculation that major ...

Shares slid worldwide on Tuesday as disappointing company earnings and fears about slowing global economic growth punctured the mini-rally of the last few trading days. Nasdaq futures NQc1 lost 2%, with traders blaming an earnings warning from Snap SNAP.N which saw shares in the Snapchat owner tumble 28%, while S&P 500 futures ESc1 slipped 1.25%. That followed a 1.2% fall in MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS, while the benchmark STOXX index of European shares .STOXX fell 0.92%. All major sectors fell, with utilities .SX6P and commodity-linked ...

The dollar hit a fresh one-month low on Tuesday as the euro extended gains while a broad selloff in stock markets failed to boost the U.S. currency’s safe haven appeal. Against a basket of its rivals =USD, the dollar fell 0.3% to 101.79, its lowest level since April 26. The euro EUR=EBS, which was the stand-out gainer on Monday after European Central Bank President Christine Lagarde indicated negative interest rates, a euro zone feature for eight years, will most likely be gone by the end of summer, extended gains. The ...

Our BEER model The recent increase in G10 FX volatility and dollar strength has raised questions about whether some currencies have reached more stretched levels of mis-valuation. Our approach to look at medium-term valuation is based on stripping out the shorter-term, market-related factors (such as interest rate differentials) and focusing on the economic fundamentals. Our Behavioural Equilibrium Exchange Rate (BEER) model estimates the real medium-term fair value of G10 currencies using productivity, terms of trades (the price of exports divided by the price of imports), current account balances (as % ...

Overseas funds that invest in Chinese yuan-denominated bonds saw record weekly outflows last week, pointing to accelerated selling by foreigners as U.S. bond yields rise and the yuan weakens. According to Refinitiv Lipper, overseas mutual funds and exchange traded funds that invest in bonds denominated in Chinese yuan saw net sales of $2.3 billion in the week ended May 18, the highest ever weekly outflow. Foreign investors have sold Chinese-yuan denominated bonds aggressively in the past three months, bringing down their total holdings to $558 billion at the end of ...

NASDAQ-Adv: 2,725 Dec: 1,903 NYSE-Adv: 3,008 Dec: 1,239 (Source: Nasdaq)

If the U.S. Federal Reserve were to take its political cue at face value and focus solely on putting inflation back in its box, already battered financial markets could get much uglier and investors don’t appear prepared for it. While the decision is never that clearcut for Fed policymakers with dual price stability and full employment mandates, there’s little doubt the Fed and other Western central banks are under enormous public pressure to prioritize control of the worst cost of living squeeze in 40 years. That may change if or ...

USD: Still feeling the long squeeze European stocks are higher and US equity futures are pointing to a positive start to the week, as global risk sentiment continues to drive the majority of FX moves amid strong volatility. This morning, the Australian and New Zealand dollars are leading the rally against the dollar on the back of risk-on sentiment and yet another strong day for the Chinese yuan. Reports that President Biden is considering lifting some of the tariffs on China are also helping. We doubt the Australian election had ...

Asian stocks weakened on Monday as investors worried inflation and rising interest rates would hamper the global economic outlook and China’s COVID-19 situation weighed on sentiment, with tech firms particularly hit. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.3% as the region’s major markets traded in the red. Oil rose and gold extended its recent gains. However, U.S. and European markets appeared to shrug off the gloomy Asian mood with the pan-region Euro Stoxx 50 futures up 1.35%, German DAX futures 1.4% higher and FTSE futures climbing ...

Asian currencies overcame early market Asian FX edges higher as dollar weakens on China growth hopes pressure to edge higher against a tepid U.S. dollar on Monday, while the Singaporean dollar rose to a 2-1/2-week high after data showed the city-state witnessed its fastest rise in core inflation in a decade. South Korea’s won and the Taiwanese dollar rose 0.3% and 0.1%, respectively, while the Thai baht and Philippine peso traded flat. The dollar weakened against major currencies, following its first weekly loss in nearly two months, as investors cut ...