Entering text into the input field will update the search result below

Markets Mark Time, Dollar Consolidates Losses

Marc Chandler profile picture
Marc Chandler


  • USD is stable to firmer against most major currencies.
  • Light news stream; Chinese data stands out, but not helpful for Chinese shares, especially small-cap.
  • Industrial commodities are firm and oil is trying to expand advance for a sixth session.

After falling to new lows for the year against several major currencies in response to disappointing retail sales and uninspiring CPI before the weekend, the US dollar has begun the new week on a more stable note. It is firmer against nearly all the major currencies, though it is mixed against the emerging market currencies.

The greenback's gains have not been very impressive. Nor have they exceeded important technical levels. Short-term participants appear caught between the strong upside momentum by the major foreign currencies and concerns that a key driver, the ECB, may try to discourage the market from getting too far ahead of itself in tightening financial conditions.

Draghi can be expected to emphasize that the ECB extraordinary monetary policy is aimed at putting inflation on a sustainable and durable path toward its target (near but below 2%). It is using all the appropriate tools in its mandate to achieve its legal objective. As of last month, it judged that its goal was still not achieved and that the accommodative monetary policy would continue until its objective was reached.

The German 10-year Bund yield rose from 23 bps on June 26 to nearly 62 bps last week. It is at 57.5 bps today. The 50 bps was an important hurdle on the way up, capping yields in January and again in March and May. This will be an important area to watch as yields pull back. In comparison, Italy's 10-year yield rose from 1.87% to 2.35% in the same period. It is now at 2.25%.

While many, like ourselves, expect the ECB to continue to buy bonds well into next year, there is some thought being given to the possibility that as it reduces its purchases, the ECB will focus on some particular asset classes, like corporate bonds and asset

This article was written by

Marc Chandler profile picture
Marc Chandler has been covering the global capital markets in one fashion or another for 25 years, working at economic consulting firms and global investment banks. A prolific writer and speaker he appears regularly on CNBC and has spoken for the Foreign Policy Association. In addition to being quoted in the financial press daily, Chandler has been published in the Financial Times, Foreign Affairs, and the Washington Post. In 2009 Chandler was named a Business Visionary by Forbes. Marc's commentary can be found at his blog (www.marctomarket.com) and twitter www.twitter.com/marcmakingsense

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.