Business

Dollar goes down as do yields, yen

Published

2 years ago

Farwa

After last week’s clear-out in the bond market, investors are back to trading near-term rate expectations.

With an eye on Wednesday’s US inflation data, traders in Asia nudged both yields and the dollar a whisker lower on Tuesday.

Two-year and ten-year Treasury yields are back below 5% and 4%, respectively.

News aided stocks, with Alibaba (9988.HK) extending gains on hopes that a $984 million fine for Ant Group signalled the end of a years-long crackdown that has hammered the Chinese tech sector.

US Treasury Secretary Janet Yellen’s visit to Beijing seemed also to meet low expectations, with few signs that testy relations are getting better but also little suggestion they’re getting worse.

The yen is in the driver’s seat in foreign exchange markets, as investors pull back on high-yielding bets in emerging markets that have been funded by cheaply borrowed yen.

Such trades are placed by selling yen for dollars and then dollars for emerging-market currencies such as the peso or the real, so reversing them requires selling dollars for yen. The yen has risen to the strong side of 141 per dollar for the first time in three weeks.

Elsewhere in Asia the extension of a support package for China’s property sector helped Hong Kong developers. The Hang Seng (.HSI) rose 1.5%.

The events calendar is relatively bare until US CPI data on Wednesday and US earnings later in the week, although final German inflation figures and British jobs data are due later on Tuesday.

Economists expect UK unemployment to hold at 3.8%, which is likely to add upward pressure on wages and interest rates.

That seems to be lending speculative support to the British currency, with sterling longs near their highest in five years and the spot price touching a 15-month top in the Asia session.

Key developments that could influence markets on Tuesday:

British jobs data
Final German CPI

Business

E&P Companies Will Invest $5 Billion in Pakistan’s Petroleum Industry

Published

14 hours ago

Farwa

Over the next three years, local and foreign companies involved in Pakistan’s oil and gas exploration and production sector have shown a strong desire to invest more than $5 billion in the nation’s energy sector.

Recent changes to the Petroleum Policy and the implementation of an exclusive tight gas policy, which provide better incentives and a more investor-friendly regulatory framework, are credited with the increase in investor confidence.

These strategic changes are expected to boost domestic energy production, open up new avenues for growth, and draw large amounts of both domestic and foreign investment.

Business

With inflation slowing, the SBP is anticipated to lower the policy rate for the eighth time in a row.

Published

15 hours ago

Farwa

Businesspeople anticipate another reduction in the policy rate when the State Bank of Pakistan’s (SBP) Monetary Policy Committee (MPC) releases the updated rate.

The interest rate for the upcoming two months will be announced by the central bank. It is still unclear if the rate will stay the same or be lowered to reflect stakeholder expectations.

According to experts, the policy rate will be lowered in order to further boost the nation’s economic sector.

Interest rates may be lowered for the seventh time in a row if the inflation rate declines significantly more than anticipated.

In its last six sessions, the MPC had cut the policy rate by 10 percent. In January 2025, it decreased the rate by one percent to 12pc.

12PC POLICY RATE

In January, the State Bank of Pakistan (SBP) announced cut in key policy rate by 100 basis points (bps) to 12 percent from 13pc in line with expectations of the business community.

The policy rate, which had been at 22 percent since June 2024, was slashed by 1,000 basis points to 12 percent.

The SBP governor said the decision was taken with careful consideration. “Although inflation is expected to decline next month (February), core inflation remains a pressing concern,” he stated.

Ahmed highlighted strong remittance inflows and robust export growth as key factors supporting the current account.