Category Archive: 4.) Marc to Market
Great Graphic: Emerging Market Stocks
MSCI Emerging Market Index is up 12.25% here in Q1. The index is approaching long-standing technical objectives. Look for profit-taking ahead of quarter-end as fund managers rebalance.
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Five Keys to Understand Trump
The election of Donald Trump as the 45th President of the United States surprised many people, even seasoned political observers and astute investors. He failed to win the popular vote but did carry the electoral college, which is how the US elects its chief executive. His victory is a bit of a Rorshcach test, where people project the issues that allowed Trump to succeed, with different observers making different claims.
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FX Daily, March 31: Greenback Finishing Weak Quarter in Mixed Fashion
The US dollar fell against all the major currencies in the first three months of 2017. The weakness initially seemed to be a correction to the rally, which began before the US election last year. The dollar recovered in February, in anticipation of a hawkish Fed in March.
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Cool Video: “Turn Around Tuesday” Call in Early Asia Yesterday
I had time this afternoon, as I prepare for my TMA presentation tomorrow night here in Hong Kong, to find my clip from yesterday on CNBC, where I suggested the risk of a dollar recovery after it lost downside momentum in North America on Monday.
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Cool Video: Brexit, Europe and EU Challenges
Earlier today, I had the opportunity to discuss the outlook for sterling and the US dollar on Bloomberg TV with Rishaad Salamat and Haidi Lun. It is a momentous day with Article 50 of the Lisbon Treaty being formally triggered by UK Prime Minister May, nine months after what was, at least initially, a non-binding referendum.
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FX Daily, March 28: Prospects for Turnaround Tuesday?
The slide in the US dollar and US interest rates faded in the North American session on Monday. US participants also had a fairly relaxed initial response to news that after years of complaining, the Republicans could not agree on an alternative to the Affordable Care Act.
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FX Weekly Preview: After US Health Care, Now What?
The first quarter winds down. The dollar moved lower against all the major currencies. The best performer in the first three months of the year has been the Australian dollar's whose 5.8% rally includes last week's 1% drop. The worst performing major currency has been the Canadian dollar.
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FX Daily, March 24: Dollar Trying to Stabilize Ahead of the Weekend
The US dollar has been stabilizing over the past couple of sessions. This broad stability of the dollar is impressive because of the questions of the prospects of US President Trump's economic agenda. Expectations for tax reform and infrastructure spending have bolstered investor confidence and helped boost equity prices despite what appears to be stretched valuation.
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FX Daily, March 23: Some Thoughts about the Recent Price Action
The gains the US dollar scored last month have been largely unwound against the major currencies. The dollar's losses against the yen are a bit greater, and it returned to levels not seen late last November. The down draft in the dollar appears part of a larger development in the capital markets that has also seen the US 10-year yield slide 25 bp in less than two weeks. The two-year yield is off 17 bp.
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Status of US Pivot To Asia
Pivot still taking place, but without TPP, more militaristic. President Trump seems a little less confrontational toward China. China is unlikely to be cited as a currency manipulator in next month's Treasury report.
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FX Daily, March 21: Euro Recovery Continues, Posts New Six Week High Other Currencies Mixed
Growing confidence that Le Pen will not be the next president of France following the televised debate for which two polls showed Macron doing best has lifted the euro and reduced the French interest rate premium over Germany. The euro pushed through $1.0800 after initially dipping below yesterday's lows.
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FX Weekly Preview: Divergence Theme Questioned
Recent developments have given rise to doubts over the divergence theme, which we suggested have shaped the investment climate. There are some at the ECB who suggest rates can rise before the asset purchases end. The Bank of England left rates on hold, but it was a hawkish hold, as there was a dissent in favor of an immediate rate hike, and the rest of the Monetary Policy Committee showed that their patience with both rising price prices and the...
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Oil Supply Remains Resilient, Prices Heavy
Nearly half of OPEC's intended cuts are being offset by an increase in US output. The contango rewards the accumulation of inventories. The drop in oil prices probably weighs more on European reflation story than the US.
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FX Daily, March 17: Dollar Remains Heavy
The dollar is softer against most of the major currencies to cap a poor weekly performance. The Dollar Index is posting what may be its biggest weekly loss since last November. The combination of the Federal Reserve not signaling an acceleration of normalization, while the market remains profoundly skeptical of even its current indications, and perceptions that the ECB and BOE can raise earlier than anticipated weighed on the dollar. The PBOC...
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Trump: Unilateralism or Isolationism?
Many who think that the US is becoming isolationist are wrong. The thrust is now more about unilateralism. Unilateralism can lead to the US being more isolated.
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FX Daily, March 16: Greenback Consolidates Losses as Yields Stabilize
The US dollar remained under pressure in Asia following the disappointment that the FOMC did not signal a more aggressive stance, even though its delivered the nearly universally expected 25 bp rate hike. News that the populist-nationalist Freedom Party did worse than expected in the Dutch elections also helped underpin the euro, which rose to nearly $1.0750 from a low close to $1.06 yesterday.
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Federal Reserve Hikes, but Changes Little Else
Fed made mostly minor changes in the statement as it hiked the Fed funds rate for the third time in the cycle. The average and median dot for Fed funds crept slightly higher. There was only one dissent to the decision.
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FX Daily, March 15: Greenback Softens Ahead of FOMC
The US dollar is paring yesterday's gains as the market awaits the outcome of the well-telegraphed FOMC meeting. In recent weeks, the combination of data and official comments have swayed market, which had previously anticipated a hike in May or June.
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China’s NPC Ends with New Initiatives
China will make its mainland bond market more accessible. As China's portfolio of patents grows it will likely become more protective of others' intellectual property rights. PRC President Xi will likely visit US President Trump early next month.
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