Category Archive: 4.) Marc to Market

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Strategist Chandler Sees Dollar in Long-Term Correction

2017-07-31

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Jul.31 — Marc Chandler, head of currency strategy at Brown Brothers Harriman, examines the decline of the U.S. dollar and how the currency stacks up against the euro. He speaks on “Bloomberg Markets.”

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FX Weekly Preview: The Dollar may Need more than a Strong Employment Report

2017-07-31

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2017-07-31

For the US jobs data to rally the dollar, it needs to increase the likelihood of a Fed hike in September, a high bar. The BOE will stand pat, a 6-2 vote would likely be accompanied by a hawkish inflation report. The RBA will also hold rates steady, and of course, it would prefer a weaker currency.

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Great Graphic: CRB Index Hits 2017 Down Trendline

2017-07-30

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2017-07-30

The CRB Index gapped higher today and it follows a gap higher opening on Tuesday, which has not been filled. Today's gains lift the commodity index to a trendline drawn off the January and February highs and catches the high from late May. It intersects today near 181.35 and the high has been a little over 181.17.

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Dollar View: Discipline or Stubbornness

2017-07-30

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2017-07-30

Fundamental driver, divergence is still intact. The dollar's losses have barely met the minimum retracements of a bull market. Sentiment may be exaggerating the positive developments in Europe and the negative developments in the US.

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Great Graphic: What Is the Swiss Franc Telling Us?

2017-07-29

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2017-07-29

Swiss franc weakness is a function of the demand for euros. SNB indicates it will lag behind the other major central banks in normalization process. Easing of political anxiety in Europe is also negative for the franc.

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FOMC Sticks to Script: Balance Sheet Unwind to Begin “Relatively Soon” and USD Retreats

2017-07-29

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2017-07-29

Little new in FOMC statement. Seems consistent with a Sept announcement to begin reducing the balance sheet in Oct. USD sold off as if reflecting sentiment held in bay until the statement was out of the way.

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FX Daily, July 28: Dollar and Equities Closing Week on Heavy Note

2017-07-28

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2017-07-28

The US dollar is mostly lower, though one of the features of recent days has been the dramatic slide of the Swiss franc, and that is continuing today. The franc is off another 0.5% today, to bring its weekly loss to a sharp 2.5%. The euro finished last week near CHF1.1030 and is now near CHF1.1370; its highest level since the cap was lifted in mid-January 2015.

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Great Graphic: Surprise-S&P 500 Outperforming the Dow Jones Stoxx 600

2017-07-28

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2017-07-28

Many asset managers have been bullish European shares this year. European and emerging market equities are among the favorite plays this year. Surveys of fund managers find that the allocation to US equities is among the lowest in nearly a decade. The case against the US is based on overvaluation and being a crowded trade. Many are concerned about too hawkish of a Federal Reserve (policy mistake) or the lack of tax reform.

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FX Daily, July 27: Dollar Remains on the Defensive

2017-07-27

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2017-07-27

The US dollar is narrowly mixed after selling off following the FOMC statement. Sometimes the narrative explains the price action, and sometimes the price action explains the narrative. This seems to be the case of the latter. The dollar and interest rates fell, and so the Fed was dovish.

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Progress in St. Petersburg

2017-07-27

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2017-07-27

Expectations going into the OPEC monitoring meeting in St. Petersburg were low. The OPEC agreement to reduce output appeared to be fraying. June output appeared to have increased in several countries, and private sector estimates suggest output rose further in July. Russia expressed reluctance to extend the agreement further.

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FX Daily, July 26: Quiet Fed Day without Yellen

2017-07-26

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2017-07-26

By definition, the Federal Reserve Open Market Committee meeting is the highlight of the day. Without a press conference, and following last month's rate hike, there is practically no chance of a new policy initiative either on the balance sheet or the Fed funds target.

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FX Daily, July 25: Summer Markets Ahead of FOMC

2017-07-25

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2017-07-25

The global capital markets are subdued today; a dearth of fresh news and tomorrow's FOMC meeting are making for light activity and limited price movement. The US dollar is little changed against most of the major currencies. The net change on the day through most of the European morning is +/- 0.15%. The exception is the Norwegian krone and Swedish krona, which is about 0.25% stronger.

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FX Daily, July 24: Euro Recovers from Softer Flash PMI

2017-07-24

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2017-07-24

The euro made a marginal new high in early Asia, but participants rightly drew cautious ahead of the flash eurozone PMI. The flash PMI was softer than expected, and although the composite fell to six monthly lows, it is more a reflection of how steady it has been at elevated levels.

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FX Weekly Preview: Don’t Be Confused by the Facts or Why Neither the Data nor the Fed Will Alter Market Trends

2017-07-24

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2017-07-24

FOMC is the highlight of the week. Early look at July inflation in Europe may see less pressure. Overall household consumption in Japan is rising, helped by robust labor market, but little new price pressures. The data this week is expected to confirm what many investors have come to assume.

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FX Daily, July 21: Dollar Licks Wounds as News Stream Doesn’t Improve

2017-07-21

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2017-07-21

The euro has depreciated by 0.13 to 1.1043 CHF. ECB President Draghi did not argue forcefully enough at yesterday's press conference to dampen the enthusiasm for the euro. The initial dip was quickly bought and the euro chased above last year's high near $1.1615, and the gains have been extended to nearly $1.1680 today. The next target is the August 2015  near $1.1715 is near.

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Oil Update

2017-07-20

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2017-07-20

OPEC meets on July 24. Nigeria and Libya may be pressured to cap output although they were exempt from quotas. US exports and refining appear to be the driving force behind the 13.8 mln barrel decline in inventories. Mexico has reportedly made two large oil finds.

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FX Daily, July 19: Dollar Stabilizes on Hump Day, Awaits Thursday’s BOJ and ECB Meetings

2017-07-19

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2017-07-19

After being shellacked to start the week, the US dollar is being given a small reprieve today as investors await tomorrow's BOJ and ECB meetings. The US may also report a bounce back in housing starts (residential investment) after a three-month slide.

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Sterling, McCafferty, and BOE Policy

2017-07-19

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2017-07-19

BOE hawk is arguing for a sooner unwind of QE. He did not favor the renewed asset purchases after the referendum. Sterling has been meeting resistance near $1.30 for past two months.

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FX Daily, July 18: Dollar Dumped on Doubts on US Economic Agenda

2017-07-18

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2017-07-18

News of the defection of two more Republican Senators doomed the Senate attempt to replace and repeal America's national health care. The failure to replace the system dubbed Obamacare, despite the Republican majority in both legislative chambers and the executive branch raises questions about the broader strategy of the Administration and raises serious questions about the rest of its legislative agenda.

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