Currency markets are in what can only be described as a state of flux at the moment. Leaving aside the yen, which has risen for the past seven consecutive sessions, we’ve seen the dominant trends of the past few weeks partially reversed (or at least stalled), making the bigger directional movements far harder to call....

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We’ve seen a modest reversal in the yen overnight after the move below 110 on USDJPY appeared to trigger a wave of stops to below the 108 level as longer-term positions were shaken out of the market. Comments from Finance Minister Aso overnight referred to the undesirability to rapid yen movements, referring to recent movements...

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The brief push below the 110 level on USDJPY yesterday takes it to an 18 month low and has spurred on chatter that the BoJ may choose to intervene to weaken its currency. The price action in the market suggests that currently this is not seen as a major threat, but there can be little...

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The Aussie finds itself former in the wake of the RBA decision overnight, where there was no surprise to see rates kept unchanged. There was a longer reference to the exchange rate in the accompanying statement, where the RBA stated that the rise in the Aussie “could complicate the adjustment underway in the economy”. This...

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We jump into the new quarter with both feet today, Friday’s US Employment Report induced volatility now behind us. It’s notable that the initial gains after the data have been partially unwound (dollar index), with the dollar weakness most prevalent against the yen, with USDJPY below the 111.50 in early European. The main mover overnight...

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There’s a reason why #NFPGuesses trends on Twitter on payroll day, because that’s what they are for the most part, guesses. Some people spend an inordinate amount of time forecasting the various components and there’s probably some mileage in it, but then come revisions to the prior months and most of the good work is...

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Fed Chair Yellen yesterday unwound most of the dollar rally seen since mid-March, with her surprisingly dovish speech placing a greater note of caution on the outlook for interest rates in the US. This pushed the US 2 year yield back down to levels prevailing at the beginning of the month and the broader dollar...

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The sustained rally in the dollar seen over last week came to a halt yesterday, the dollar index ending its run of 6 consecutive sessions of gains. This was predicated in part on signs that Fed officials were becoming more confident on the ability of the economy to shoulder a further increase in rates this...

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The dollar has been in the ascendency over the past four sessions and finds itself firmer again overnight. We’ve seen a slow creep of interest rate differentials in favour of the dollar, with the 2 year bond spread (US versus Germany) having moved 7bp in favour of the US (greater carry for long dollar positions)...

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Suffice to say it was not an easy day in markets yesterday given the tragic events unfolding in Brussels. Whilst the human cost is enduring, the impact on financial markets tends to be transitory. Yesterday we saw a modest flight to safety in markets, with core bond yields falling, peripheral yields generally steady to higher....

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