Bank of Canada Holds Rates, Telegraphs Readiness to Cut
30 July, 2025
After a series of rate cuts, the Bank of Canada decided to leave interest rates unchanged for a third consecutive time this morning, but signalled a willingness to cut rates again if inflation stabilises and the economy continues its underperformance. As was widely expected, the overnight rate was left at 2.75 percent after seven consecutive cuts were delivered between June 2024 and March of this year,...
US Economy Rebounds, But Underlying Indicators Point to Slowdown Ahead
30 July, 2025
The world’s biggest economy staged a snappish recovery in the second quarter as tariff front-running effects were unwound, but signs of moderating growth were clearly visible, suggesting that momentum is falling off. Real gross domestic product climbed at a 3-percent seasonally-adjusted annual pace from April through June, reversing a -0.5-percent drop in the first three months of the year, and topping...
Currency Traders Turn Cautious As Event Risks Multiply
29 July, 2025
The US dollar is gaining as investors turn more cautious ahead of a raft of important economic data releases and central bank decisions through the remainder of the week. In a pattern familiar to aficionados of the ‘dollar smile’ theory, the greenback is climbing on continued outperformance in the US economy, a firming in rate expectations for the Federal Reserve, and a dimming growth outlook in other...
Dollar Climbs On Trade Deal With EU, Traders Brace For Havoc Ahead
28 July, 2025
The dollar is outperforming all of its major counterparts after the US reached a trade deal with the European Union, reducing uncertainties facing businesses and investors on both sides of the pond. Treasury yields are ticking higher, equity futures are pointing to modest gains at the open, and measures of implied volatility are pushing higher as traders brace for an intense and tumultuous week. The...
Let's make a deal
27 July, 2025
• Dealmaker. Trade optimism supported US equities & USD at end of last week. AUD & NZD drifted a little lower. EUR ticked higher this morning.• US/EU deal. Over weekend US/EU announced a 15% tariff framework. Deal is similar to US/Japan. More ‘stability’ but economic headwinds remain.• Event Radar. Q2 AU CPI due (Weds). In the US this week earnings season continues, Q2 GDP &...
Earnings and Trade Optimism Spreads, Boosting Risk Assets
24 July, 2025
Risk-sensitive assets are looking buoyant this morning as perceived tail risks recede and investors turn more optimistic on the direction of global growth. The US dollar is up slightly, Treasury yields are inching higher, and major American stock indices are climbing ahead of the North American open after series of strong corporate earnings releases in recent days, coupled with a drumbeat of trade...
Risk Appetite Improves On US-Japan Trade Deal
23 July, 2025
A modest improvement in risk appetite is washing across markets after a trade deal between the US and Japan proved less economically-damaging than feared. The dollar and Treasury yields are holding steady, North American stock indices are printing gains at the open, and risk-sensitive units like the Australian and New Zealand dollars are climbing against their peers. In a social media post last night,...
Intra-Day Volatility Falls As Newsflow Grinds To A Halt
22 July, 2025
Currency markets are turning in a mixed performance this morning amid an utter lack of new volatility catalysts. The dollar is holding steady in line with placid Treasury yields, most major currencies are trading within 20 basis points of yesterday’s close, and the yen is giving back some of yesterday’s gains after Prime Minister Ishiba’s governing coalition suffered losses in the weekend’s election....
Positive vibes
21 July, 2025
• Upbeat tone. No news has been good news. US equities rose, while bond yields & USD slipped back. AUD a bit higher at start of new week.• RBA guidance. RBA meeting minutes out today. Governor Bullock speaks later in the week. Will the RBA support expectations looking for multiple cuts?• Data flow. Global PMIs due later this week. US corporate earnings also in focus with over 100 companies in S&P500...
Yen Climbs, Dollar Retreats As Data-Light Week Kicks Off
21 July, 2025
Amid a quiet start to the week, the Japanese yen is finding modest support even after Prime Minister Shigeru Ishiba’s governing coalition lost its majority in the Upper House, suggesting that currency markets had largely priced in the outcome ahead of yesterday’s vote. The Liberal Democratic Party—dominant in Japanese politics for all but five of the past seventy years—shed 16 of the 66 seats it defended,...