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Fundamental drivers reassert themselves in currency markets

Good morning. After a series of early-week distractions, currency market drivers are shifting back toward economic fundamentals today, with mixed US data keeping yields within tight ranges and the Japanese yen becoming a key focal point ahead of a potential snap election. Equity futures are setting up for a negative open after modest losses in yesterday’s session, Treasury yields are holding firm across the curve, and the dollar is trading almost imperceptibly lower against a basket of its major counterparts. American consumers continued to engage in retail therapy in November. According to figures published by the Census Bureau this morning,...

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Currency markets stall as geopolitical narratives fade

Good morning. Foreign exchange markets are giving back the weekend’s moves as Venezuela-related geopolitical concerns recede, shifting attention to US macro conditions. The trade-weighted dollar is moving sideways after a restrained round trip, while traditional havens—the yen and Swiss franc—are coming under light selling pressure, leaving the British pound and Australian dollar slightly ahead. Ten-year Treasury yields are steady near 4.17 per cent, equity futures are pointing to a flat open, and cross-asset implied volatility remains subdued. Many of the biggest oil majors saw share prices rise yesterday, especially after Donald Trump suggested that the US might subsidise their efforts...

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Markets brace for Fed minutes and Nvidia earnings (and not necessarily in that order)

Markets are trimming risk this morning as participants brace for what could become a make-or-break moment in technology speculation and global capital flows. With artificial intelligence juggernaut Nvidia set to publish third-quarter earnings after the closing bell, equity futures are setting up for a positive open after four days of losses, ten-year Treasury yields are again clinging to the 4.12-percent mark, and the dollar is trading higher amid a lack of domestic catalysts in Canada and Europe. The world’s most valuable company has seen its market capitalisation tumble by roughly 7 percent from the peak a few weeks ago, and...

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Dollar inches higher as post-shutdown trading dynamics assert themselves

Foreign exchange markets are trading on a mixed footing this morning as the US government data backlog begins to clear and investors brace for a series of critical corporate earnings releases. Equity futures are pointing to a firmer open (although this may be a Pavlovian response to a ten-week winning streak on Mondays), and benchmark Treasury yields are creeping up ahead of appearances from Fed officials including Governors Jefferson and Waller later today. The dollar is outperforming pro-cyclical currencies like the Australian and Canadian dollars, holding its own against the British pound and euro—which are clinging to technical resistance levels...

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Shutdown hopes bolster risk appetite

The dollar is retreating and Treasury yields are slipping as the longest shutdown in American history shows signs of coming to an end. Trading volumes look light ahead of tomorrow’s holiday, but measures of risk appetite are improving and investors are moving out of safe havens like the Japanese yen and Swiss franc into economically-sensitive units like the Aussie, Canadian dollar, and Mexican peso after a group of Democrats crossed party lines to approve a bill that would provide funding through the end of January. Uncertainties still exist: a final vote in the Senate is needed to pass the measure...

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