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EUR

Out Like a Lamb

The month of March is set to end on a quieter note as banking concerns ease, the dollar stabilizes, and volatility measures subside. Treasury yields are steady ahead of new consumer spending data and an update in the Federal Reserve’s preferred inflation indicator, equity futures are strengthening, and risk-sensitive currencies are edging higher – suggesting that investors could be positioning for a generalized bear market bounce in early April. Mexico’s peso remains relatively unmoved after the Banxico delivered a widely-expected rate hike and shifted its forward guidance in a firmly data-dependent direction. After telegraphing the intention to do so at last month’s...

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Will the China PMIs surprise?

• Calm markets. Perceived financial stability risks continue to fade. Equities higher, while the USD has lost some ground.• Sticky German inflation. European yields and EUR rise as German inflation falls back less than expected. Eurozone inflation is released tonight.• AUD mixed. AUD up a little against the USD, but remains under pressure against EUR, GBP, and NZD. China PMIs due during todays Asian trade. Another night of relatively calm market conditions, as perceived financial stability risks continue to fade. Equities were higher across Europe and the US. The major indices rose by another 0.5-1.3%, though ‘hawkish’ rhetoric from several...

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End of the line for the RBA?

• Positive sentiment. US and European equities higher with another night of no new news helping sentiment improve. This has weighed on the JPY.• Will it last? More macro/market aftershocks from the very aggressive hiking cycles are likely over coming months. US earnings expectations look too high.• RBA pause. AUD remains on the back foot. The step down in AU inflation has solidified the case for the RBA to hold steady at next weeks meeting. Another night of no new news on the banking front has helped sentiment continue to improve. Although the moves across the different markets have differed...

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Risk-Taking Rebounds as Rates Volatility Falls

As month-end flows begin to dominate price action in the financial markets, equity futures are preparing for a modest rally at the open, with bank shares and technology indices poised for the biggest gains. Treasury yields are little changed, the dollar is 0.3 percent higher, and other majors are turning in a mixed performance. Implied volatility levels remain relatively elevated as participants hedge themselves against another scare, but term structures are looking interesting: pricing suggests traders expect next week’s US data releases to trigger market movement, but ranges are then expected to tighten in the period preceding decisions from the Bank of...

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No new news is good news

• Positive vibes. No new news on the banking front has supported risk sentiment. Bond yields have moved higher, with oil & base metal prices firmer.• Softer USD. Despite the upswing in US yields the USD has drifted lower. AUD & NZD have been boosted by the more positive risk appetite.• AU data pulse. Retail sales were sluggish. CPI indicator for February due today. A larger pull-back in annual growth could open the door to a RBA pause next week. Mixed fortunes across markets overnight, although there has been a relative sense of calm with no new news regarding the...

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