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Category Archive: 4.) Marc to Market

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Bank of England Crushes Sterling

2017-08-05

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2017-08-05

Sterling reached a new 11-month high against the dollar earlier today, but the dovish take away from the Bank of England has seen sterling reverse lower. It has now fallen below the previous day's low, and a close below there (~$1.3190) would confirm the bearish key reversal pattern. Support near the week's low just below $1.3100 is holding, and if that goes, the $1.30 level can be tested. A break of $1.2930, the low from the second half of July...

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Constructive US Jobs, but Where Do the Euro Bulls make a Stand?

2017-08-04

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2017-08-04

The US created 209k jobs in July and jobs growth in June was revised higher (+9k) to 231k. The underemployment rate was unchanged at 8.6%. The unemployment rate ticked down to 4.3%, matching the cyclical low set in May. This is all the more impressive because the participation rate also ticked up (62.9% from 62.8%).

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FX Daily, August 04: Does the Employment Report Matter?

2017-08-04

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2017-08-04

There are some chunky option strikes that could come into play today. There are 920 mln euros struck at $1.1850 that expire today. There are A$523 mln struck at $0.7950 expiring today. There are $680 mln struck at CAD1.2550 that will be cut.

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FX Daily, August 03: Dollar-Bloc Currencies Turning, but Euro Downticks Limited

2017-08-03

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2017-08-03

The high-flying dollar-bloc currencies may be a preliminary sign market change. The US dollar is gaining on the Canadian dollar for the fourth consecutive session. It is probing resistance we identified in the $1.2620 area. The US dollar has not traded above its 20-day moving average since the Fed hiked rates on June 14. It is found today near CAD1.2625.

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Cool Video: Dollar Drivers on Bloomberg

2017-08-03

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2017-08-03

There were three talking points. First was the observation that while the President took credit for the record stock market, the strength of the economy, the low unemployment rate, and business confidence, there was no mention of the dollar, which poised to close lower for its seventh consecutive month.

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FX Daily, August 02: Euro Climbs Relentlessly, While Greenback is Mixed

2017-08-02

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2017-08-02

The euro's strength is surely partly a reflection of US dollar weakness, but it is also a reflection of the improved sentiment among investors. The initial dollar losses at the start of the year was largely a correction that is common after a Fed hike. This is more or less what happened at the start of 2016 as well, following the Fed hike in December 2015.

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FX Daily, August 01: The Most the Dollar Can Hope for on Turn Around Tuesday is Consolidation

2017-08-01

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2017-08-01

After taking a step lower in the North American session yesterday, the dollar is consolidating today. The euro is holding above $1.18, and the dollar held JPY110.00. Global equities are mostly higher, while bonds are mixed. Asia-Pacific yields were mostly higher, while European rates are a little lower. The US 10-year yield is flat just below 2.30%.

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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 Daily, July 31: Monday Morning Blues

2017-07-31

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2017-07-31

The euro is up by 0.15% to 1.1385 CHF. The US dollar is enjoying a respite from the recent selling, but its gains have been shallow, and will likely prove brief. The upticks have been concentrated in the recently high-flying dollar-bloc currencies, and sterling. The tone appears to be more consolidative than corrective, and month-end adjustment provides an additional wrinkle.

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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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