17/02/2025 09:24

The Australian Dollar vs. Japanese Yen (AUDJPY)

The “Aussie” has struggled against the Japanese Yen since the aggressive “Carry Trade” unwind last July, which saw a more than 17% fall in a few weeks—when crowded trades unwind, the results are often dramatic.

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17/06/2024 08:49

Currencies

The Greenback bounced last week as the Fed pushed their timing of interest rate cuts further down the road, although ironically, the softer inflation data did support a more dovish approach to rates. However, with the Eurozone becoming increasingly fixated on the French elections, the $US did enjoy a small “safety bid”, which was enough to see the currency rally back above the 105 level as it continues to rotate in the same range as the last 18 months.

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20/05/2024 09:14

Currencies

The Greenback fell away last week after the CPI inflation numbers led to credit markets pricing in two or three rate cuts in the next nine months. This renewed dovish stance, after April's hiccup, is bearish towards the $US as monies parked in the US will start to deliver a lower yield, lessening the demand for dollars.

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13/05/2024 09:19

Currencies

The Greenback remained around 105 last week. We expect much of the same ahead of Wednesday's CPI inflation print. A number much below 3.4% will be perceived to open the door for Fed cuts, which will push down the US dollar. The US dollar has remained in the same 100-107 trading range for the last 18 months, and although we’re net bearish, it will need to see a meaningful decline in inflation before we’re likely to retest last year's 100 swing low.

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22/04/2024 09:10

Currencies

The Greenback tested a fresh 2024 high on Friday, aided by its “safe haven” status, but there was no follow-through, and if anything, it looked tired. The short-term gyrations of the US dollar are still likely to be determined by ongoing news flow out of the Middle East, and it's likely to take a while before markets return to normal. As we said last week, volatility is likely to persist this FY.

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28/03/2024 09:39

Global Markets

US stocks experienced a mixed session overnight, with the small-cap Russell 2000 index the standout performer, closing up +1.8% as a degree of performance rotation continues. The much-lauded “Magnificent Seven” struggled into Easter as it felt like some profit-taking was in the air, e.g. Nvidia (NVDA US) -2.5%, Netflix (NFLX US) -2.7%, and Meta Platforms (META US) -0.4%. Conversely, Merk & Co (MRK US) gave the old-fashioned index its biggest boost, gaining ~5% after the regulator approved its therapy for adults suffering from a rare lung condition. The blue-chip index is close to breaking 40,000 for the first time, and with the likes of Apple, Intel and Caterpillar also pushing ahead, it feels like a matter of time.

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25/03/2024 08:41

Currencies

The Greenback found some support last week following the FOMC, and it surprisingly moved in the opposite direction to US bond yields. It appears the FX market focused on the pushback of rate cuts through 2025/6 as the US economic data remains strong. In a similar fashion to several other financial markets, the US dollar has consolidated over the last 18-months as it searches for direction, with a couple of false moves in both directions already under its belt.

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18/03/2024 09:07

Currencies

The $US found some support last week following the solid economic releases, but at this stage, we believe it's just a case of the “interest rate cut can” being kicked down the road as opposed to taken off the table, e.g. swap traders have moved from June to July with their call for the first cut by the Fed. We wouldn’t be surprised to see this pushed back a little further, but ultimately, we believe the $US will face a headwind from rising bonds and falling rates.

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29/01/2024 08:26

Currencies

The $US continues moving in tandem with bond yields hence, if we are correct in 1Q, it’s a buy around 100 and sell nearer to 105. We remain ultimately bearish about the $US, but it has already fallen over 13% from its late 2022 high, and a few more months of consolidation is our preferred scenario.

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08/12/2023 09:20

Global Markets

US stocks were led higher by Google, as most of us call it after they released Gemini, the “largest and most-capable AI model” it has ever built. Advanced Micro Devices (AMD US) surged ~10% after pledging its new accelerator chips will run AI software faster than rival products. On the sector level, Energy was the only noticeable pocket of weakness, falling ~0.6% on an otherwise strong day for stocks.

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