Latest news with #ECBGoverningCouncil
Globe and Mail
05-05-2025
- Business
- Globe and Mail
Dollar Retreats on Economic Uncertainty
The dollar index (DXY00) Monday fell by -0.52%. The dollar today gave up an early advance and turned lower on economic concerns after the Apr Dallas Fed manufacturing survey of general business activity index fell more than expected to a 5-year low. The dollar is also under pressure on concerns that the US-China trade war could drag on and weigh on US growth prospects after President Trump said the US would not lower tariffs on China unless 'they give us something substantial.' In addition, Monday's fall in the 10-year T-note yield to a 2-1/2 week low weakened the dollar's interest rate differentials. The dollar on Monday initially moved higher on comments from US Treasury Secretary Bessent, who said the US is working on bilateral trade deals with 17 key trading partners, not including China. The US Apr Dallas Fed manufacturing survey of general business activity index fell -19.5 points to a 5-year low of -35.8, weaker than expectations of -17.0. The markets are discounting the chances at 9% for a -25 bp rate cut after the May 6-7 FOMC meeting, down from a 30% chance last week. EUR/USD (^EURUSD) Monday rose by +0.49%. The euro on Monday recovered from early losses and moved higher after the dollar weakened. The euro initially moved lower Monday on some dovish ECB comments. ECB Governing Council member Villeroy de Galhau said the ECB has room to cut interest rates, and ECB Governing Council member Rehn said he sees downside risks in the ECB's March inflation forecasts. ECB Governing Council member Villeroy de Galhau said the ECB has room to lower interest rates as the trade war triggered by US tariffs will weigh on the global economy but won't affect the inflation trend in Europe. ECB Governing Council member Rehn said that due to the fallout from US tariffs, 'I find it reasonable to assume that there are downside risks to the inflation outlook in the ECB's March projections.' Swaps are discounting the chances at 100% for a -25 bp rate cut by the ECB at the June 5 policy meeting. USD/JPY (^USDJPY) Monday fell by -1.11%. The yen rallied on Monday due to short covering ahead of Thursday's BOJ policy meeting. Also, lower T-note yields on Monday were supportive of the yen. On the negative side, Monday's rally in the Nikkei Stock Index to a 4-week high reduced safe-haven demand for the yen. In addition, Monday's statement from the BOJ that it will purchase government bonds in May at the same pace as April was bearish for the yen as it damped speculation the BOJ, in a hawkish move, would cut its bond purchases. June gold (GCM2 5) Monday closed up +49.30 (+1.49%), and May silver (SIK2 5) closed down -0.005 (-0.02%). Precious metals prices on Monday settled mixed. Monday's weaker dollar and lower T-note yields supported precious metals prices. Gold also rallied Monday on dovish ECB comments. ECB Governing Council member Villeroy de Galhau said the ECB has room to lower interest rates, and ECB Governing Council member Rehn said there are downside risks to the ECB's March inflation outlook. Concern the US-China trade war will persist and undercut global economic growth is boosting safe-haven demand for gold and undercutting silver after President Trump said the US would not lower tariffs on China unless 'they give us something substantial.' Geopolitical risks in the Middle East are boosting safe-haven demand for precious metals as the Israel-Hamas and the US-Houthi conflicts continue.
Globe and Mail
27-03-2025
- Business
- Globe and Mail
Dollar Declines and Gold Jumps to a Record High on US Auto Tariffs
The dollar index (DXY00) Thursday fell by -0.21%. The dollar was under pressure Thursday due to President Trump's announcement Wednesday evening of 25% tariffs on US auto imports, which may undercut US economic growth. The dollar also fell on Thursday's dovish economic news, which showed that US Q4 personal consumption and the Q4 core PCE price index were revised lower. Losses in the dollar were limited by stronger-than-expected US economic news, including the GDP revision, weekly jobless claims, and Feb pending home sales. US weekly initial unemployment claims fell -1,000 to 224,000, showing a slightly stronger labor market than expectations of an increase to 225,000. US Q4 GDP was revised upward by 0.1 to +2.4% (q/q annualized), stronger than expectations of no change at 2.3%. Q4 personal consumption was revised downward to +4.0% from the previously reported +4.2%, and the Q4 core price index was revised lower to +2.6% from the previously reported +2.7%. US Feb pending home sales rose +2.0% m/m, stronger than expectations of +1.0% m/m. The markets will focus on Friday's Feb personal spending report (expected +0.5% m/m) and the Feb personal income report (expected +0.4% m/m). Also, the Feb core PCE price index, the Fed's preferred inflation gauge, is expected to rise +0.3% m/m and +2.7% y/y. Finally, on Friday, the revised March University of Michigan US consumer sentiment index is expected to remain unchanged at 57.9. The markets are discounting the chances at 16% for a -25 bp rate cut after the May 6-7 FOMC meeting. EUR/USD (^EURUSD) Thursday rose by +0.40% after recovering from a 3-week low. Short covering emerged in the euro Thursday on hawkish comments from ECB Governing Council member Wunsch, who said the ECB should consider holding interest rates steady at its next meeting due to US trade policy complications. The euro Thursday was undercut by weaker interest rate differentials as the 10-year German bund yield fell to a 3-week low. Eurozone Feb M4 money supply rose +4.0% y/y, stronger than expectations of +3.8% y/y and the fastest pace of increase in 2-1/4 years. ECB Governing Council member Wunsch said the ECB should consider holding interest rates steady at its next meeting due to US trade policy complications. Swaps are discounting the chances at 75% for a -25 bp rate cut by the ECB at the April 17 policy meeting. USD/JPY (^USDJPY) Thursday rose by +0.37%. The yen on Thursday dropped to a 3-1/2 week low against the dollar after President Trump imposed 25% tariffs on US auto imports, which may derail economic growth and keep the BOJ from raising interest rates. Also, higher T-note yields Thursday weighed on the yen. Losses in the yen were limited after the 10-year Japan JGB bond yield rose to a 16-year high Thursday of 1.596%, strengthening the yen's interest rate differentials. April gold (GCJ2 5) Thursday closed up +38.50 (+1.27%), and May silver (SIK2 5) closed up +0.861 (+2.52%). Precious metals settled moderately higher on Thursday, with April gold posting a contract high and nearest-futures (H25) gold posting a record high of $3,071.30 an ounce. Silver also posted a 12-year nearest-futures high. Precious metals jumped Thursday on a weaker dollar and increased safe-haven demand after President Trump expanded tariffs and imposed a 25% tariff on US auto imports. Precious metals also gained after the US 10-year breakeven inflation rate rose to a 1-month high Thursday, boosting demand for precious metals as an inflation hedge. In addition, geopolitical risks in the Middle East are boosting safe-haven demand for precious metals as Israel continues airstrikes across Gaza, ending a two-month ceasefire with Hamas, and as the US continues to launch strikes on Yemen's Houthi rebels. Higher T-note yields Thursday were bearish for precious metals. Also, hawkish comments from ECB Governing Council member Wunsch weighed on precious metals when he said the ECB should consider holding interest rates steady at its next meeting. In addition, gains in silver are limited as Wednesday's action from President Trump to impose 25% tariffs on US auto imports threatens to spark a trade war that will derail global economic growth and industrial metals demand.
Globe and Mail
27-03-2025
- Business
- Globe and Mail
Dollar Falls as Tariffs Spark Growth Concerns
The dollar index (DXY00) today is down by -0.13%. The dollar is under pressure due to President Trump's announcement Wednesday evening of 25% tariffs on US auto imports, which may undercut US economic growth. The dollar also fell on today's dovish economic news, which showed that US Q4 personal consumption and the Q4 core PCE price index were revised lower. Losses in the dollar were limited by stronger-than-expected US economic news, including the GDP revision, weekly jobless claims, and Feb pending home sales. US weekly initial unemployment claims fell -1,000 to 224,000, showing a slightly stronger labor market than expectations of an increase to 225,000. US Q4 GDP was revised upward by 0.1 to +2.4% (q/q annualized), stronger than expectations of no change at 2.3%. Q4 personal consumption was revised downward to +4.0% from the previously reported +4.2%, and the Q4 core price index was revised lower to +2.6% from the previously reported +2.7%. US Feb pending home sales rose +2.0% m/m, stronger than expectations of +1.0% m/m. The markets will focus on Friday's Feb personal spending report (expected +0.5% m/m) and the Feb personal income report (expected +0.4% m/m). Also, the Feb core PCE price index, the Fed's preferred inflation gauge, is expected to rise +0.3% m/m and +2.7% y/y. Finally, on Friday, the revised March University of Michigan US consumer sentiment index is expected to remain unchanged at 57.9. The markets are discounting the chances at 16% for a -25 bp rate cut after the May 6-7 FOMC meeting. EUR/USD (^EURUSD) today is up by +0.23% after recovering from a 3-week low. Short covering emerged in the euro today on hawkish comments from ECB Governing Council member Wunsch, who said the ECB should consider holding interest rates steady at its next meeting due to US trade policy complications. The euro today was undercut by weaker interest rate differentials as the 10-year German bund yield fell to a 3-week low. Eurozone Feb M4 money supply rose +4.0% y/y, stronger than expectations of +3.8% y/y and the fastest pace of increase in 2-1/4 years. ECB Governing Council member Wunsch said the ECB should consider holding interest rates steady at its next meeting due to US trade policy complications. Swaps are discounting the chances at 75% for a -25 bp rate cut by the ECB at the April 17 policy meeting. USD/JPY (^USDJPY) today is up by +0.22%. The yen today dropped to a 3-1/2 week low against the dollar after President Trump imposed 25% tariffs on US auto imports, which may derail economic growth and keep the BOJ from raising interest rates. Also, higher T-note yields today are weighing on the yen. Losses in the yen are limited after the 10-year Japan JGB bond yield rose to a 16-year high today of 1.596%, strengthening the yen's interest rate differentials. April gold (GCJ2 5) today is up +34.00 (+1.12%), and May silver (SIK2 5) is up +0.478 (+1.40%). Precious metals today are moderately higher, with April gold posting a contract high and nearest-futures (H25) gold posting a record high of $3,061.80 an ounce. Silver also posted a 1-week high. Precious metals jumped today on a weaker dollar and increased safe-haven demand after President Trump expanded tariffs and imposed a 25% tariff on US auto imports. Precious metals also gained after the US 10-year breakeven inflation rate rose to a 1-month high today, boosting demand for precious metals as an inflation hedge. In addition, geopolitical risks in the Middle East are boosting safe-haven demand for precious metals as Israel continues airstrikes across Gaza, ending a two-month ceasefire with Hamas, and as the US continues to launch strikes on Yemen's Houthi rebels. Higher T-note yields today are bearish for precious metals. Also, hawkish comments from ECB Governing Council member Wunsch weighed on precious metals when he said the ECB should consider holding interest rates steady at its next meeting. In addition, gains in silver are limited as Wednesday's action from President Trump to impose 25% tariffs on US auto imports threatens to spark a trade war that will derail global economic growth and industrial metals demand.
Globe and Mail
25-03-2025
- Business
- Globe and Mail
Dollar Edges Lower on Waning US Consumer Confidence
The dollar index (DXY00) on Tuesday fell by -0.10%. The dollar Tuesday fell from a 2-1/2 week high and posted modest losses. The dollar is also under pressure on reports that US reciprocal tariffs scheduled to be imposed on April 2 would be more targeted than widespread tariffs originally threatened, easing inflation concerns that could allow the Fed to keep cutting interest rates. The dollar remained lower on US economic news that showed Mar consumer confidence fell to a 4-year low, and Feb new home sales rose less than expected. Hawkish comments from Fed Governor Kugler limited losses in the dollar when she said she supports holding interest rates steady for "some time." The US Jan S&P CoreLogic composite-20 home price index rose +4.67% y/y, below expectations of +4.80% y/y but the fastest pace of increase in 5 months. US Feb new home sales rose +1.8% m/m to 676,000, weaker than expectations of 680,000. The Conference Board's US Mar consumer confidence index fell -7.2 to a 4-year low of 92.9, weaker than expectations of 94.0. The US Mar Richmond Fed manufacturing survey of current conditions fell -10 to -4, weaker than expectations of 1. Fed Governor Kugler said she is "paying close attention to the acceleration of price increases and higher inflation expectations, especially given the recent bout of inflation in the past few years," and she supports holding interest rates steady for "some time." This week's attention will focus on Wednesday's report on Feb capital goods new orders nondefense ex-aircraft and parts (expected +0.2% m/m). On Thursday, Q4 GDP is expected to be unrevised at +2.3% (q/q annualized), and Mar pending home sales are expected +1.0% m/m. On Friday, Feb personal spending is expected +0.5% m/m, and Feb personal income is expected +0.4% m/m. Also, the Feb core PCE price index, the Fed's preferred inflation gauge, is expected +0.3% m/m and +2.7% y/y. Finally, on Friday, the revised Mar University of Michigan consumer sentiment index is expected to remain unchanged at 57.9. The markets are discounting the chances at 16% for a -25 bp rate cut after the May 6-7 FOMC meeting. EUR/USD (^EURUSD) Tuesday fell by -0.07%. The euro gave up an early advance Tuesday and fell to a 2-1/2 week low on dovish comments from ECB Governing Council member Villeroy de Galhau, who said the disinflation trend in Europe is "solid" and the ECB has scope for further interest rate cuts. The euro Tuesday initially moved higher and garnered support after the German Mar IFO business climate survey rose to an 8-month high. Also, hawkish comments Tuesday from ECB Governing Council members Kazimir and Muller boosted the euro when they said they could not rule out a pause to the ECB's interest rate cuts. Eurozone Feb new car registrations fell -3.4% y/y to 854,000 units, the largest decline in 5 months. The German Mar IFO business climate survey rose +1.4 to an 8-month high of 86.7, right on expectations. ECB Governing Council member Villeroy de Galhau said the ECB has scope for further interest rate cuts due to a "solid trend" of disinflation in Europe. ECB Governing Council member Kazimir said the ECB "is already now in the neutral rate zone," and he can't rule out a pause in interest rate cuts. ECB Governing Council member Muller said he "can't rule out a pause in the ECB's rate cutting," and any further rate cuts will depend on the nature of the tariffs that the US is due to announce soon. Swaps are discounting the chances at 69% for a -25 bp rate cut by the ECB at the April 17 policy meeting. USD/JPY (^USDJPY) Tuesday fell by -0.53%. The yen recovered from a 3-week low against the dollar Tuesday and posted moderate gains. Higher Japanese government bond yields have strengthened the yen's interest rate differentials and are supporting the yen after the 10-year JGB bond yield climbed to a 16-year high Tuesday of 1.587%. Gains in the yen accelerated after T-note yields gave up an early advance and turned lower. April gold (GCJ2 5) Tuesday closed up +10.30 (+0.34%), and May silver (SIK2 5) closed up +0.737 (+2.20%). Precious metals settled moderately higher on Tuesday due to a weaker dollar. Precious metals also have support on hopes that US reciprocal tariffs scheduled for April 2 would be more targeted than previously expected, which eases concerns about inflation and could allow the Fed to keep cutting interest rates, a dovish factor for precious metal. Tuesday's slump in US March consumer confidence to a 4-year low is a dovish factor for Fed policy and bullish for precious metals. Ramped-up geopolitical risks in the Middle East are also boosting safe-haven demand for precious metals as Israel continues airstrikes across Gaza, ending a two-month ceasefire with Hamas, and as the US continues to launch strikes on Yemen's Houthi rebels. In addition, fund buying of gold supports prices after long gold positions in ETFs rose to a 17-month high Monday. Hawkish central bank comments Tuesday were bearish for precious metals. Fed Governor Kugler said she supports holding interest rates steady for "some time." Also, ECB Governing Council members Kazimir and Muller said they cannot rule out a pause in the ECB's interest rate cuts.
Globe and Mail
25-03-2025
- Business
- Globe and Mail
Dollar Slips on Weakness in US Consumer Confidence
The dollar index (DXY00) today is down by -0.13%. The dollar today fell from a 2-1/2 week high and is moderately lower. Uncertainty over President Trump's tariff plans has sparked long liquidation in the dollar. The dollar is also under pressure on reports that US reciprocal tariffs scheduled to be imposed on April 2 would be more targeted than widespread tariffs originally threatened, easing inflation concerns that could allow the Fed to keep cutting interest rates. The dollar remained lower after US Mar consumer confidence fell to a 4-year low, and Feb new home sales rose less than expected, The US Jan S&P CoreLogic composite-20 home price index rose +4.67% y/y, below expectations of +4.80% y/y but the fastest pace of increase in 5 months. US Feb new home sales rose +1.8% m/m to 676,000, weaker than expectations of 680,000. The Conference Board's US Mar consumer confidence index fell -7.2 to a 4-year low of 92.9, weaker than expectations of 94.0. The US Mar Richmond Fed manufacturing survey of current conditions fell -10 to -4, weaker than expectations of 1. Fed Governor Kugler said she is "paying close attention to the acceleration of price increases and higher inflation expectations, especially given the recent bout of inflation in the past few years," and she supports holding interest rates steady for "some time." This week's attention will focus on Wednesday's report on Feb capital goods new orders nondefense ex-aircraft and parts (expected +0.2% m/m). On Thursday, Q4 GDP is expected to be unrevised at +2.3% (q/q annualized), and Mar pending home sales are expected +1.0% m/m. On Friday, Feb personal spending is expected +0.5% m/m, and Feb personal income is expected +0.4% m/m. Also, the Feb core PCE price index, the Fed's preferred inflation gauge, is expected +0.3% m/m and +2.7% y/y. Finally, on Friday, the revised Mar University of Michigan consumer sentiment index is expected to remain unchanged at 57.9. The markets are discounting the chances at 16% for a -25 bp rate cut after the May 6-7 FOMC meeting. EUR/USD (^EURUSD) today is up by +0.04%. The euro recovered from a 2-1/2 week low today and is slightly higher. The euro garnered support today after the German Mar IFO business climate survey rose to an 8-month high. Also, hawkish comments today from ECB Governing Council members Kazimir and Muller boosted the euro when they said they could not rule out a pause to the ECB's interest rate cuts. Eurozone Feb new car registrations fell -3.4% y/y to 854,000 units, the largest decline in 5 months. The German Mar IFO business climate survey rose +1.4 to an 8-month high of 86.7, right on expectations. ECB Governing Council member Kazimir said the ECB "is already now in the neutral rate zone," and he can't rule out a pause in interest rate cuts. ECB Governing Council member Muller said he "can't rule out a pause in the ECB's rate cutting," and any further rate cuts will depend on the nature of the tariffs that the US is due to announce soon. Swaps are discounting the chances at 67% for a -25 bp rate cut by the ECB at the April 17 policy meeting. USD/JPY (^USDJPY) today is down by -0.56%. The yen recovered from a 3-week low against the dollar today and is moderately higher. Higher Japanese government bond yields have strengthened the yen's interest rate differentials and are supporting the yen after the 10-year JGB bond yield climbed to a 16-year high today of 1.587%. Also, strength in stocks has curbed safe-haven demand for the yen. Gains in the yen are limited today due to higher T-note yields. April gold (GCJ2 5) today is up +25.80 (+0.86%), and May silver (SIK2 5) is up +0.855 (+2.59%). Precious metals today are moderately higher. Today's weaker dollar is a supportive factor for metals. Precious metals also have support on hopes that US reciprocal tariffs scheduled for April 2 would be more targeted than previously expected, which eases concerns about inflation and could allow the Fed to keep cutting interest rates, a dovish factor for precious metal. Today's slump in US March consumer confidence to a 4-year low is a dovish factor for Fed policy and bullish for precious metals. Ramped-up geopolitical risks in the Middle East are also boosting safe-haven demand for precious metals as Israel continues airstrikes across Gaza, ending a two-month ceasefire with Hamas, and as the US continues to launch strikes on Yemen's Houthi rebels. In addition, fund buying of gold supports prices after long gold positions in ETFs rose to a 17-month high last Friday. Hawkish central bank comments today are bearish for precious metals. Fed Governor Kugler said she supports holding interest rates steady for "some time." Also, ECB Governing Council members Kazimir and Muller said they cannot rule out a pause on the ECB's interest rate cuts.
