Category Archive: 4.) Marc to Market

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Draghi Does Nothing and Talks about It

2017-04-27

Draghi confirms rate on hold and maintains easing bias. Growth risks are becoming more balanced. Inflation has yet to get on a sustained upward path.

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F A C E Interview April 26th 2017 Marc Chandler

2017-04-26

by Marc Chandler

Marc Chandler being interviewed by Dale Pinkert during the F.A.C.E. Webinar.

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FX Daily, April 26: Dollar Stabilizes Ahead of Trump and ECB

2017-04-26

by Marc Chandler

2017-04-26

The US dollar was marked down in response to the French election and saw some follow through selling yesterday, but the momentum had slowed, and now it is stalled. The greenback is posting upticks against nearly all the major currencies. There is a good reason to be cautious.

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FX Daily, April 25: Euro Consolidates Gains, Bond Market Sell-Off Continues

2017-04-25

by Marc Chandler

2017-04-25

The US dollar is again at the fulcrum of the foreign exchange market. The dollar-bloc currencies are under pressure, along with the Japanese yen, while the European complex is posting modest gains. The euro is consolidating in the half cent below $1.09. Yesterday's marked up in early Asia saw the euro complete the 61.8% retracement of the losses since the US election, which was found near $1.0935

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FX Daily, April 24: Dramatic Response to French Election

2017-04-24

by Marc Chandler

2017-04-24

The results of the first round of the French election spurred a dramatic response in the capital markets. Our thesis that there is no populist-nationalist wave sweeping the world is supported by the previous results in Austria, the Netherlands, and now France.

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FX Weekly Preview: Politics and Economics in the Week Ahead

2017-04-24

by Marc Chandler

2017-04-24

Provided Le Pen and Macron or Fillion make to the second round, the market response to the French election results may be short lived. BOJ, Riksbank and ECB meetings. Spending authorization and some announcement from the White House on tax policy are in focus as Trump's 100th day in office approaches.

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State of Dollar Bull Market

2017-04-22

by Marc Chandler

2017-04-22

The dollar market is intact, despite the pullback here at the start of 2017. We have seen similar pullbacks in 2016 and 2015. Divergence remains the key driver.

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FX Daily, April 21: Markets Enter Consolidative Mode Ahead of Weekend

2017-04-21

by Marc Chandler

2017-04-21

Neither the terrorist attack in Paris nor the strong eurozone flash PMI has managed to shake investors. Judging from the social media, many suspect that the terrorist attack plays into Le Pen's hands, but investors do not seem particularly concerned. The French interest rate premium over Germany has narrowed, and gold is flat. UK retail sales fell sharply, yet sterling is holding on to the bulk of this week's gains, which are the most here in 2017.

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FX Daily, April 20: Dollar and Yen Push Lower

2017-04-20

by Marc Chandler

2017-04-20

With the exception of the yen, the US dollar is lower against all the major currencies. US Treasury yields are firm, extending yesterday's rise a little. This may help keep the dollar straddling JPY109, but unwinding long yen cross positions is helping underpin the other major currencies. The Dollar Index is making a new low for the week and appears poised to test support around 98.85-99..00.

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May’s Early Election Bid Sends Sterling on Roller Coaster

2017-04-20

by Marc Chandler

2017-04-20

May calls snap election for June 8. Tories running 20 percent point lead over Labour. Next election would be in 2022, after the Brexit negotiations conclude.

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More Thinking about Trade as Pence and Ross Head to Tokyo

2017-04-19

by Marc Chandler

2017-04-19

Pence and Ross may "feel out" Abe for interest in a bilateral trade agreement. The US enjoys a small trade surplus with countries it has free-trade agreements. Ownership-based framework of the current account and value-added trade suggest the US trade imbalance is not a significant problem.

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FX Daily, April 18: US Dollar Consolidates Yesterday’s Gains

2017-04-18

by Marc Chandler

2017-04-18

The US dollar is consolidating the gains scored late in the US session yesterday in response to a Financial Times interview with US Treasury Secretary Munchin who seemed to play down the strategic importance of Trump's recent complaint about the greenback's strength.

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FX Daily, April 17: Markets Trying to Stabilize in Holiday-Thin Activity

2017-04-17

by Marc Chandler

2017-04-17

Financial centers in Europe are closed for the extended Easter holiday. Australian and New Zealand markets were also closed. The drop in US 10-year Treasury yields in early Asia, with a brief push below 2.20%, appears to have kept the dollar under pressure. As the North American market prepares to open, the dollar is softer against the all major currencies and many emerging market currencies.

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Monetary Policy is Important, but US Fiscal Stance Moving Center Stage

2017-04-17

by Marc Chandler

2017-04-17

Monetary policy is off the table for at least the next two months. Several fiscal issues are coming to a head. Despite the GOP majority in Congress and White House, brinkmanship cannot be ruled out.

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FX Weekly Preview: What to Watch in the Week Ahead

2017-04-17

by Marc Chandler

2017-04-17

Many observers misunderstood US President Trump's "American First" rhetoric. Trump's earlier writings show that this is not a reference to the 1940s effort to keep the US out of WWII, with its isolationist tint. Rather, Trump's use goes back to the original use by President Harding in the 1920s. It was a rejection of the Wilsonian multilateralism (e.g. League of Nations) and a robust defense of unilateralism.

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Decoupling of Oil and US Interest Rates

2017-04-16

by Marc Chandler

2017-04-16

US yields have trended lower as oil prices have trended higher. The correlation between the 10-year breakeven and oil has also weakened considerably. Technicals readings are getting stretched, but no compelling sign of a top.

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Euro’s Record Losing Streak Against the Yen

2017-04-15

by Marc Chandler

2017-04-15

The euro has fallen for 11 consecutive sessions against the yen. Interest rates, US and German in particular, seem to be the main driver. Technicals are stretched, but have not signaled a reversal yet.

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Cool Video: Making Sense of the New Administration

2017-04-15

by Marc Chandler

2017-04-15

I was on Bloomberg TV earlier today, chatting with David Gura about how to try to make sense of new Trump Administration. I suggest that the decision-making style and practical concerns have created two wing to the Administration. There is a populist-nationalist wing that is home to America First ideas.

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FX Daily, April 14: Holiday Markets Remain on Edge

2017-04-14

by Marc Chandler

2017-04-14

The holiday-induced calm in the capital markets conceals a high degree of anxiety. The investment climate has been challenged by heightened geopolitical risk and unusual complaints about the US dollar's strength from the sitting US President. While sending an "armada" toward the Korean peninsula, the US ordered a missile strike against Syria in retaliation for the use of chemical weapons and dropped the largest bomb in the world on Afghanistan.

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Trade Notes: China and Prospects for a New Executive Order

2017-04-14

by Marc Chandler

2017-04-14

China's trade concessions seem modest, but little discussion of US concessions. Reports suggest Trump is set to sign a new executive order to investigate trade practices in steel, aluminum, and maybe household appliances. Trade imbalances and floating currencies are not mutually exclusive.

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