Dollar

Reports of Dollar's Demise Are Greatly Exaggerated

Aug 19, 2024 3 min read paid

The strength of the US dollar has been a key feature of the post-pandemic bull market. Approaching Jackson Hole, the greenback has been falling. It is now up just 0.5% ytd versus 4.6% seven weeks ago (chart). Is this the start of a new weaker dollar regime? Unlikely. The DXY is still up 10% over the past three years, and it wouldn't surprise us if

Ed Yardeni

Bonds, Oil, Copper, Gold & The Dollar

Jun 10, 2024 3 min read

On a regular basis, we like to check on the correlations among the fixed income, commodity, and foreign currency markets. Here are a few of our observations: (1) Bonds. The 10-year US Treasury bond yield has normalized, fluctuating in a range roughly between 4.00% and 5.00% (chart). That's where it traded for a few years prior to the Great Financial Crisis. The same can be

Ed Yardeni

Tight Fed Fueling Foreign Stock Market Rallies?

May 8, 2024 3 min read paid

In the past, the major foreign central banks often followed the Fed's lead. This time, they aren't waiting for the Fed to ease before doing so themselves. That's boosting the foreign exchange value of the dollar as well as many overseas stock markets. Consider the following: (1) The Swedish Riksbank cut its official rate by a quarter-point today, to 3.75% from 4.

Ed Yardeni

Oil Is Well

Aug 22, 2023 2 min read paid

Reuters reported today that the major US oil and gas producers spent more on payouts to shareholders last year than on exploration and development, according to an Ernst & Young report. By reducing capital spending, the industry is reducing its costs, contributing to upward pressure on oil and gas prices, and increasing its dividends and buybacks as profits swell. Of course, plenty of other factors are influencing prices as well.

Ed Yardeni

Foreigners Buying Lots of US Bonds

Feb 15, 2023 1 min read paid

Foreigners purchased a record $1.6 trillion in US securities over the 12 months through December (chart). That's an impressive US net capital inflow that was generally bullish for the dollar last year and offset the Fed's QT paring of its bond portfolio. Net foreign purchases of US bonds totaled a record $1.2 trillion last year as follows: Treasury notes & bonds ($927 billion), Government

Ed Yardeni

Why Is Gold Shining Again?

Jan 24, 2023 1 min read

Gold is a commodity priced in dollars. Like other commodities priced in dollars, the gold price is inversely correlated with the trade-weighted dollar (chart). The former has been rebounding since late last year as the dollar has been weakening on expectations that the Fed is almost done raising interest rates. The price of gold tends to track the underlying trend in commodity prices (chart). So its recent rebound suggests

Ed Yardeni

Foreigners Still Piling Into US Dollar & Bonds

Nov 16, 2022 1 min read

The 10-year US Treasury bond yield dropped sharply from 4.25% on October 24 to 3.72% today. Recent CPI and PPI readings suggest that inflation is peaking, though it clearly remains high. Furthermore, Fed officials seem to agree that the federal funds rate needs to be raised closer to 5.00%. Then they intend to keep the federal funds rate at the terminal rate for a prolonged period

Ed Yardeni

The Dollar, Commodities, Bonds & Stocks

Jul 5, 2022 1 min read paid

What's weighing on the price of oil? We are watching the age-old adage at work: The best cure for high oil prices is high oil prices, which have depressed the global economy, as evidenced by the recent freefall in the price of copper and now the price of a barrel of crude oil. Another contributor to the weakness in oil prices and other commodity prices is the

Ed Yardeni

Stay Home vs. Go Global

Jun 13, 2022 1 min read paid

The Stay Home investment strategy is underperforming the Go Global alternative so far this year in local currencies. On the other hand, the ratio of the US MSCI to the All Country World (ACW) ex-US MSCI in dollars (rather than local currencies) remains on a solid upward trend (charts below).

Ed Yardeni

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