Russia’s Putin agreed to his Foreign Minister’s recommendation to continue diplomatic efforts with the West. European stocks are in red territory, but US stocks are opening flat. Traders await a slew of Fed speakers this week, expecting a hawkish tone following St. Louis Fed President Bullard’s call last week for faster rate hikes. US Treasury yields are higher, the 10YR moving back toward 2.00%. The safe havens -- US dollar, Japanese yen and Swiss franc -- are outperformers. Oil and gold are soft.
Economic News and Events:
Tuesday: US January PPI, Eurozone 4Q Employment & 4Q GDP, Canada Housing Starts
Wednesday: US January Housing Market Index, Retail Sales, Capacity Utilization, Industrial Production, FOMC minutes, Eurozone December Industrial Production, Canada CPI, China CPI
Thursday: US January Housing Starts, Feb-12th Initial Jobless Claims, Eurozone Dec Construction Output
Friday: US January Leading Economic Indicators, Canada Retail Sales
February 14, 2022
EUR/USD 1.1320 GBP/USD 1.3532 USD/CAD 1.2733 AUD/USD 0.7124 USD/JPY 115.53 USD/CNH 6.3548 USD/ILS 3.2595 USD/MXN 20.4231 USD/CHF 0.9261 USD/INR 75.6013 USD/BRL 5.2021 USD/SGD 1.3469 USD/DKK 6.5747 USD/SEK 9.3742 USD/NOK 8.8823
The dollar is in demand as a safe haven currency despite news that Putin will continue diplomacy with the West. An increasingly hawkish Fed is supporting higher bond yields leading to a weaker tech sector, and a firm US dollar.GBP
The UK pound is lower with little upbeat news besides today’s Putin story to support it. There is a full calendar this week of UK economic news.EUR
The euro is slightly lower on the back of a broad-based firm US dollar even as the upbeat Russia news inspired some euro buying. Traders await a large docket of economic data out of the eurozone this week. The slight hawkish turn by the ECB is expected to support the euro, but more gradually over the year than quickly in the near-term.CAD
The Canadian dollar is weaker on the back of higher US Treasury yields and soft oil prices. There is no economic data, but CPI on Wednesday will be watched closely.ASIA/PACIFIC
The Japanese yen moved little versus the dollar, but outperformed most other currencies from its role as a safe haven, a sign that the Russian-Ukraine crisis is not over.
This article is intended for U.S. audiences only.
©2023 SVB Financial Group. All rights reserved. Silicon Valley Bank is a member of the FDIC and the Federal Reserve System. Silicon Valley Bank is the California bank subsidiary of SVB Financial Group (Nasdaq: SIVB). SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, MAKE NEXT HAPPEN NOW and the chevron device are trademarks of SVB Financial Group, used under license.
The views expressed in this email are solely those of the author and do not reflect the views of SVB Financial Group, or Silicon Valley Bank, or any of its affiliates. This material, including without limitation the statistical information herein, is provided for informational purposes only. The material is based in part upon information from third-party sources that we believe to be reliable, but which has not been independently verified by us and, as such, we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on in making an investment or other decisions. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation or offer, or recommendation, to acquire or dispose of any investment or to engage in any other transaction.
Foreign exchange transactions can be highly risky, and losses may occur in short periods of time if there is an adverse movement of exchange rates. Exchange rates can be highly volatile and are impacted by numerous economic, political and social factors, as well as supply and demand and governmental intervention, control and adjustments. Investments in financial instruments carry significant risk, including the possible loss of the principal amount invested. Before entering any foreign exchange transaction, you should obtain advice from your own tax, financial, legal, accounting and other advisors, and only make investment decisions on the basis of your own objectives, experience and resources.