Forget about the dollar rally, the opposite now

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Forget about the dollar rally, the opposite now

SEPTEMBER 21, 2021

As in a basketball game of sorts, the U.S. dropped the ball, and the equity markets were there for the rebound. 

Overview

Following sessions of concern and decline, global stocks had a bit of a revival as the Stoxx Europe 600 advanced by over 1.0%, and futures gained prior to the bell-ring here. Investors are reassessing what the real estate debt crisis means to the recovery, especially as countries like the U.S. announced re-opening borders for overseas travelers.

Traders feel that the fundamentals of the economy are still looking more solid, and the hope is not lost on the remainder of the year closing with a good enough bounce-back for markets not to plummet, much less go into recession. The biggest worries of the day are Yellen’s comments over the debt ceiling and the need for Congress to step up while also trying not to keep dragging on spending.  We shall see also how the Fed thinks as they begin their 2-day meeting. Announcement and presser at 2 PM tomorrow.

What to Watch Today…

  • No major economic events scheduled for today

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Q2 2021 Bloomberg Win

EUR  

The Euro recuperated a bit of its value as swings have been making traders question the currency’s long-term direction. The European Central Bank will need to address inflation as the Europeans are paying very high energy prices. More importantly, this weekend is the beginning of a new administration in Germany as the country goes into general elections for Prime Minister. Expect plenty of analysis out there about what a post-Angela Merkel EU will behave like as the pandemic also marked a major turning point for Europe as they turn the page on the next phase of integration: fiscal.

CAD  

The Canadian Dollar is now trading over half a percent better than it did yesterday as the results have come in and Justin Trudeau has managed to be elected for a third term, but without the super majority he thought possible. Canada, our northern neighbor, has survived the pandemic better than most and Trudeau saw his situation as one where he could push for more support for his political agenda. While the challenge to it seemed swift and there were fears Trudeau had shot himself in the foot by calling for elections, the PM’s party proved to be still quite popular. Expect good things for the economy as hopefully thing continue to progress, while also benefit for CAD short-term based on higher demand to come for winter and higher energy costs in Europe.

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