Category Archive: 4.) Marc to Market

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Week Ahead: Downward Data Surprise Stretch the US Dollar’s Momentum Indicators

2026-08-15

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2026-08-15

The combination of a loss of US jobs in July and softer inflation gauges, and an unexpected decline in July retail sales saw the derivatives market downgrade the chances that the three hawkish dissents last month will manage to convince their colleagues to hike rates at next month's FOMC meeting. The Fed funds futures finished …

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USD Trades Heavier and Look for North America to Follow Suit

2026-08-14

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2026-08-14

Tomorrow is the 55th anniversary of the end of Bretton Woods. R.I.P.  It was an economic agreement, pegging the dollar to gold and the other currencies to the dollar, and establishing the World Bank, and the International Monetary Fund. Ultimately, however, it was political in nature.  It was an exercise in the Golden Rule.  He …

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Becalmed FX Market

2026-08-13

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2026-08-13

The US dollar is mixed against the G10 currencies.  Despite yesterday’s constructive price action, there has been little follow-through buying today.  Mostly narrow ranges prevail.  While the Japanese government reported signaled acceptance of faster rate hikes, the greenback has held above JPY159 and the 10-year JGB yield edged higher. It has not fallen since last …

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US Dollar is Mixed Ahead of July CPI

2026-08-12

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2026-08-12

The US dollar is mixed.  It is mostly softer against the G10 currencies, though sterling, the Australian dollar, and Japanese yen are slightly firmer.  The greenback is a bit weaker against most of the emerging market currencies. Of note, the PBOC set the dollar’s reference rate at a new 3.5-year low, and the Mexican peso … Continue...

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Parallel Play or Joint Intervention?

2026-08-11

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2026-08-11

The Bank of Japan intervened in the foreign exchange market in late July. Initial indications put the operation at roughly JPY8.45 trillion, near $52.8 bln, as the dollar approached JPY164. The mechanics repeated a pattern seen in January. The Federal Reserve reportedly checked on rates, which is routine. What was not routine is that it did …

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Hope of Re-Opening the Strait of Hormuz Fades and Markets Test Resolve of Putting Floor Under the Yen

2026-08-11

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2026-08-11

US officials have been playing up the possibility of a near-term agreement with Iran.  The market remains skeptical and has extended the recovery in oil prices.  Brent futures are rising for a fifth session and reached $90 a barrel, a seven-day high. September WTI is up nearly $2 today, after rising nearly $4 yesterday and …

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Market Challenges US-Japan Resolve on Yen and Tehran Challenges US Resolve to Re-Open Strait of Hormuz

2026-08-10

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2026-08-10

The most important development today is the yen’s weakness. The dollar has approached JPY158.90 in the European morning, a new high for the month. Despite a hawkish sounding record of last month’s Bank of Japan meeting, the swaps market shaved the risks of a rate hike at next month’s meeting. The market is challenging the …

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Week Ahead: Soft CPI to Follow Disappointing US Jobs Report

2026-08-08

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2026-08-08

The market has not been comfortable since the Federal Reserve meeting at the end of July. Despite the lip-service paid to the Fed's price stability mandate, only three officials favored doing something (raising rates) about it. It was hardly a coincidence then that the media reported that people close to the Fed chair said that …

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August 2026 Monthly

2026-08-01

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2026-08-01

(My X account, @marcmakingsense) was hijacked.  The plumbing from the blog is still working but all other tweets are not me.  While I work with X to see if I can regain control of the account, I have created another, @CapitalMarc.  I am away this coming week but will have the next weekly out on … Continue reading »

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Greenback Consolidates after Being Rocked by the US Fed and Japan’s Ministry of Finance

2026-07-31

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2026-07-31

The Federal Reserve’s reluctance to take action despite pledges to respect the inflation target, which has not been met in over five years, put the dollar under pressure. Then yesterday, it appears that Japanese officials may have intervened in the foreign exchange market, and as was the case earlier this year, the Federal Reserve reported …

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Federal Reserve’s Thunder and no Rain Weighs on Dollar

2026-07-30

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2026-07-30

The decision to standpat on a 9-3 vote at the FOMC yesterday looked like a hawkish hold but it seemed like the more Chair Warsh affirmed the central bank’s commitment to achieving the inflation target, the more short-term interest rates and the dollar fell. The expected year-end effective Fed funds rate fell 15 bp from …

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Hump Day: War and the FOMC

2026-07-29

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2026-07-29

New hostilities in the Middle East have lifted oil prices for the first time in four sessions and is snapping the three-day decline in European and US bond yields. The US dollar is mostly narrowly mixed against the G10 currencies.  Softer than expected CPI has reduced the perceived chances the Reserve Bank of Australia will … Continue...

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Oil Falls Further, China Claims Chip Break-Through, and Market Contemplates Fed Hike Tomorrow

2026-07-28

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2026-07-28

There are three developments to note today. First, the lack of hostilities in the Middle East has oil prices continue to unwind this month’s surge. This has also taken some pressure off major bond markets. Second, reports that China has started to mass produce its own chipmaking tools and has developed DUV lithography tools that …

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Pause in Middle East Hostilities Spark Stock and Bond Market Rally

2026-07-27

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2026-07-27

There is one major driver in the capital markets today: A sharp drop in oil prices as the US and Iran have inexplicably not attacked for the past three nights. There is speculation in the press that the US decision was partly motivated by concerns over diminishing supplies of air defenses (e.g., Patriot interceptors) after the two-week assault, but the Trump administration played this down.

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Week Ahead: War, Tariffs, and Three G10 Central Bank Meetings

2026-07-25

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2026-07-25

The escalation of the Middle East war sent oil prices sharply higher and pulled interest rates up, too. September WTI rose by more than 10% for a three-week increase of more than 25%. Neither side seems prepared to back down. However, judging by the largest spread this year (~$11) between the September WTI and the …

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Oil Pulls Back, Takes Some Pressure off Interest Rates, Leaves the Greenback Slightly Softer

2026-07-24

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2026-07-24

The price of crude oil is consolidating today after yesterday’s surge and this has taken some pressure off bond markets after several countries, including the US, saw 10-year yields rise to new highs for the year. The pullback in yields is also occurring despite unexpectedly strong preliminary July PMIs. Nevertheless, there are reports that suggest …

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Yen Sold to New 40-Year Lows, while PBOC Sets Dollar’s Reference Rate at a 3-Year Low

2026-07-23

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2026-07-23

The foreign exchange market is quiet, and the US dollar is trading with a firmer bias. The widening Middle East war has lifted September WTI to $90 and October Brent to $93.

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USD is Little Changed as Oil Jumps

2026-07-22

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2026-07-22

While there is much consternation from the American pundits and think tanks about China’s shock as it dominates auto manufacturing and value-added manufacturing, the two shocks from the US are more pressing for investors. First, The IEA says this is the biggest disruption in the oil market in history. The war in Middle East is escalating …

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Aided by China, Equities Bounce Back, and the Canadian Dollar Recovers from the Drop on US Threat of 50% Tariffs

2026-07-21

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2026-07-21

The US dollar is mostly softer against the major and emerging market currencies. The yen is an exception, and the market is pushing the dollar closer to the 40-year high recorded at the start of the month near JPY162.85. Oil prices are firm as the de-escalation efforts are proving tricky. Meanwhile, reports that Beijing is …

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Markets in Wait and See Mode

2026-07-20

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2026-07-20

The capital markets are off to a mostly quiet start today, with Japanese markets closed and mixed signals from the Middle East after the war expanded over the weekend. Crude oil prices initially rallied but have come back off. The line-up of the new UK government is awaited. The tech sell-off continued in Asia but … Continue reading »

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