Today’s Market News |
Key developments to markets on Tuesday: |
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The dollar on Monday rose to a fresh 26-month high, a further tightening of financial conditions that will be felt in domestic U.S. markets but especially in overseas asset prices.
Analysts at Goldman Sachs on Friday raised their dollar forecasts to include the euro falling below parity with the dollar within the next three to six months. With the euro slipping below $1.02 on Monday it wouldn’t be a shock if the parity break comes in the next six weeks.
The dollar has started the week on a strong footing. It has risen 14 out of the last 15 weeks, a remarkable run that has seen it appreciate 10% against its major G10 rivals. Emerging and Asian economies continue to feel the squeeze from dollar and Treasury yields.
Tuesday’s calendar in Asia is light, with Australian consumer confidence, Indian factory gate inflation figures and the latest Japanese trade and current account numbers the main events.
Japan’s yen remains under heavy selling pressure around 158 per dollar, close to the 160/dollar area that has previously prompted yen-buying intervention from Japanese authorities.
Policy decisions in Indonesia and South Korea, and a raft of Chinese economic indicators, should be the local catalysts for more market fireworks later in the week.
The annual Asian Financial Forum in Hong Kong continues. Speakers on Tuesday include the chairman of Alibaba, the managing director of China International Capital Corporation Limited, and CIOs at several major global investment funds.
