• Friday’s moves reverse as market considers they went too far
– Fed funds rate expectations regain half of Friday’s losses, 10yr bond yields a bit more
– Dollar rises against almost every currency it fell against Friday, falls against the one currency it rose against (RUB)
– No obvious trigger for the reversal, just a sense the move was overdone
– Rise in stocks despite higher rates shows confidence in US recovery = USD-bullish
– I still expect repricing of rate expectations to support USD going forward
• Watch out for “polar vortex” headed to US
– We could be in for more unseasonably cold weather in US, like last winter
– Cold could damage crops, push oil prices higher
• Today:
– Japan: Sep current account surplus unexpectedly rose, but USD/JPY moved up
– Eurozone, UK: No major indicators
– Sweden: Riksbank releases minutes of its Oct policy meeting, when it unexpectedly cut its repo rate to zero
– US: Government closed for Veteran’s Day. NFIB small business optimism expected to rise slightly.
– New Zealand: RBNZ releases Financial Stability Report overnight
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