Category Archive: 4.) Marc to Market

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FX Daily, August 11: Geopolitical Tensions Remain Elevated into the Weekend

2017-08-11

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2017-08-11

There has been no apparent attempt by either North Korea or the United States to ease the rhetorical flourishes that have made global investors nervous. Risk assets were liquidated, and the funding currencies, particularly the Japanese yen and Swiss franc were bought back. The yen gained nearly 1.6% this week, ahead of the US session, while the Swiss franc gained 1.3%.

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FX Daily, August 10: Tensions Remain Elevated, Dollar Firms

2017-08-10

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2017-08-10

It is difficult to walk back the saber-rattling rhetoric. US Secretary of State Tillerson tried to defuse the situation, which had appeared to ease nerves in North America yesterday. However, references to the modernization of US nuclear forces, a multi-year project begun last year, spurred a fresh threat by North Korea to fire four intermediate range missiles near Guam in week's time.

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FX Daily, August 09: North Korea lets EUR/CHF Collapse

2017-08-09

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2017-08-09

The bellicose rhetoric from the US and North Korean officials is the main driver today. We would qualify that assessment by noting that first, the market moves are rather modest, suggesting a low-level anxiety among investors. Second, pre-existing trends have mostly been extended. Turning to Asia first, the Korea's equity market fell 1.1%. The Kospi has fallen for the past two weeks (~2.2%).

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Great Graphic: Unemployment by Education Level

2017-08-08

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2017-08-08

The US reports the monthly jobs data tomorrow.  The unemployment rate stood at 4.4% in June, after finishing last year at 4.7%.  At the end of 2015 was 5.0%.  Some economists expect the unemployment rate to have slipped to 4.3% in July. Recall that this measure (U-3) of unemployment counts those who do not have a job but are looking for one. 

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FX Daily, August 07: Outlaw Mondays

2017-08-07

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2017-08-07

The US dollar is narrowly mixed to start the new week. Two main developments stand out. First, the dollar-bloc currencies are trading heavily. The Australian dollar is pushing lower for the fifth consecutive session. The greenback is advancing against the Canadian dollar for the sixth consecutive session. The New Zealand dollar is weaker for the fifth time in six sessions.

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FX Weekly Preview: Moving Toward September

2017-08-07

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2017-08-07

The technical and fundamental case for the euro has weakened. Rate differentials have begun moving back in the US favor. France's Macron and Japan's Abe have sunk in the polls lower than Trump.

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Great Graphic: Italy-It is Not Just about Legacy

2017-08-06

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2017-08-06

Global Financial Crisis, 1995 - 2016
A little while back I was part of a small exchange of views on twitter. It was about Italy. I was arguing against a claim that Italy's woes are all about its past fiscal excesses. It is not just about about Italy's legacy.

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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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