The Japanese yen (FXY) closed last week at 111.34 against the US dollar, compared to 111.28 in the previous week. The yen has bounced back from the the level of 110.84 it saw last week.
In recent weeks, we’ve witnessed volatile behavior in the markets (SCHB) due to political turbulence in the United States and increased investor impatience.
Optimism seeped into the global markets after a positive revision to the US 1Q17 GDP prior to the Memorial Day long weekend. Bond yields (BND) have risen marginally from their lows.
Regardless of the euro’s minor fall to 1.118 compared to 1.121 a week earlier, currency traders remained biased toward further gains in the shared currency.
Uncertainty returned to the British markets last week as investors worried about the close race between both parties in the upcoming UK elections scheduled for June 8, 2017.
The US dollar (UUP) has continued to lose its value with respect to its trading partners. The US Dollar Index fell 1.6% in the week ended May 26, 2017.
Market participants were caught by surprise when they read that the Federal Open Market Committee’s members were concerned about slowing growth in the US economy during 1Q17.
The yuan remains a focus of attention of the international community and a key risk for China’s macroeconomic stability in recent years.
Government bond yields in China are higher than its Asian counterparts such as South Korea and Singapore and much higher than major developed markets.
With the onset of reforms, foreign holdings in China’s onshore bond (EMB) (PCY) market is gradually increasing.
Many leading bond index providers are still not including China’s onshore bonds in their benchmark indexes due to various regulatory and operational concerns.
In the third and final phase of bond (EMB) reforms that began after 2015, the substantial activities of the market were open to global investors.
The opening of China’s onshore bond market (EMB) (PCY) was a gradual process that included a number of cautious measures.
In March 2017, Citi’s fixed income indexes decided to include onshore Chinese bonds (EMB) (PCY) in its three government bond indexes.
China’s onshore bond market (EMB), consisting of locally denominated and issued bonds, is larger than the offshore bond market.
Equity markets had a positive reaction to the FOMC’s meeting minutes in May. The S&P 500 Index (SPY) record another lifetime high of 2,405.58 on May 24.
The FOMC’s May meeting minutes were released on Wednesday. Now, markets (SPY) doubt if the Fed will hike interest rates in the June meeting.
This week’s data surpassed analyst expectations. Inflation for April came in at a healthy 2.7%.
The Japanese yen (FXY) closed at 111.28 last week after clocking in a low of 110.21 in the volatile week.
Economic data from the Eurozone continued to improve.