Category Archive: 4.) Marc to Market

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Swiss Franc Net Shorts Getting Reduced

2016-10-08

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2016-10-08

Last week SNB Q3 window cleaning that led to a big CHF net short position. This week this changed again. Both longs and shorts on CHF increased, but the net short position fell.

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FX Daily, October 07: Sterling Stabilizes After Harrowing Drop, Now Jobs

2016-10-07

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2016-10-07

FX Performance, September 7, 2016
Sterling again steals the limelight. In early Asia, sterling inexplicably dropped nearly eight cents in minutes (to ~$1840), and on some platforms, may have traded below $1.1380. It almost immediately rebounded but has not resurfaced above $1.2480.

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US and Canada Jobs: Sill Strong Enough for a Rate Hike

2016-10-07

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2016-10-07

The US grew 156k jobs in August, missing the median estimate by about 16k. The July series was revised up by 16k. The unemployment and participate rate ticked up 0.1% to 5.0% and 62.9% respectively. Hourly earnings rose 0.2% to lift the year-over-year rate to 2.6% from 2.4%. The average work week increased to 34.4 hours from 34.3.

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FX Daily, October 06: The Dollar is Firm in Quiet Market

2016-10-06

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2016-10-06

FX Performance, October 06 2016 Movers and Shakers
The US dollar is advancing against the major and most emerging market currencies. Activity is subdued and ranges are narrow. We share four observations about the price action. First, the euro has been unable to sustain upticks even after Germany reported a jump in industrial orders three-times more than the median estimate (1.0% vs. 0.3%).

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Canadian Dollar: A Little Less About Oil, a Little More about Rates

2016-10-06

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2016-10-06

Canadian Dollar and Oil
The Canadian dollar's link to oil has loosened. Its sensitivity to interest rates has increased. Lumber issue is coming to a head shortly.

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FX Daily, October 05: Euro Remains Firm Despite Dubious Tapering Story

2016-10-05

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2016-10-05

FX Performance, October 05 2016 Movers and Shakers
After the sudden rise to 1.0973 the EUR/CHF is falling again. The volatiliy is related to the CHF speculative postion, that suddenly was Short CHF. Traders that moved with the SNB Window Dressing for Q3 are closing their shorts again.

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Why Portugal Matters

2016-10-05

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2016-10-05

DBRS reviews its investment grade rating of Portugal on Oct 21. A cut in its rating would have far reaching implications. A cut in the outlook is more likely than a cut the rating.

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FX Daily, October 04: Sterling’s Slide Continues, EUR/CHF Soars Again

2016-10-04

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2016-10-04

FX Performance, October 4, 2016
UK Prime Minister May's comments at the Tory Party Conference over the weekend played up the risk of what has been dubbed a hard Brexit and triggered a slide in sterling saw it fall to new 30-year+ low against the dollar just below $1.2760. The EUR/CHF has soared again. Later during the day, it has even achieved 1.0970.

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Cool Video: Bloomberg TV-Dollar Supercycle and Brexit

2016-10-04

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2016-10-04

Marc Chandler and Dollar and Exogenous Shocks
I reiterated my long-standing view that the euro is going to retest its record lows before the Obama Dollar Rally is over. I warn that the UK's quest to regain sovereignty is an illusion. I announce that my new book will be published in early December or early January.

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The Yen in Three Charts

2016-10-04

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2016-10-04

The dollar is taking out a several month downtrend against the yen. The correlation between the yen and the S&P 500 has broken down. The US 2-year premium over Japan has steadily risen.

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FX Daily, October 03: May’s Confirmation Sends Sterling Lower

2016-10-03

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2016-10-03

FX Performance, October 03 2016 Movers and Shakers
Sterling has a bad case of the Monday blues. Even the moon looks distraught. Prime Minister May has confirmed earlier suggestions that she will trigger Article 50 to formally begin its divorce proceedings from the EU at the end of Q1 17. Several officials have already hinted this time frame, though many have been skeptical that Article 50 would be triggered at all, given the complexities of the issues.

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FX Weekly Preview: Next Week’s Two Bookends

2016-10-02

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2016-10-02

The start of next week will likely be driven by Deutsche Bank's travails and dollar funding pressures, which may or may not be related. The end of the week features the US monthly jobs report. Despite being a noisy, high frequency time series subject to significant revisions, this report like none other can drive expectations of Fed policy.

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Weekly Speculative Positions: Speculators Closing their CHF Longs

2016-10-01

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2016-10-01

  Marc Chandler speaks of the volatility of the CHF speculative positioning. For us this was window dressing by the SNB that wants to improve the quarterly results. Traders react to the strong market movement caused by the SNB and they close their long CHF positions. If it was really the SNB, we will see on Monday

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Renzi and the Italian Referendum: Disruption Potential Minimized

2016-10-01

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2016-10-01

Italian Prime Minister has set the date for the constitutional referendum as late as practically possibly. It will be held on December 4. The issue is the perfect bicameralism that gives as much power to the Senate as the Chamber of Deputies. Renzi's argument is that the political reform is necessary to make Italy governable. Italy has had 63 governments since the end of WWII. In order to address the economic challenges the country faces, political...

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FX Daily, September 30: SNB Intervenes to Polish Q3 Results

2016-09-30

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2016-09-30

FX Performance, September 30 2016 Movers and Shakers
True to its recent habit, the US dollar is finishing the week on a firm note. On the month, though, the greenback has fallen against most of the majors, but sterling, the Canadian dollar, and the Swedish krona. Global equities are trading heavily, and investors' angst is lending support to bond markets.

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Divergence: Norway and Sweden

2016-09-30

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2016-09-30

Twins
Sweden has one of the weakest of the major currencies this year. Norway has one of the strongest of the major currencies this year. The key driver is divergence of monetary policy and that divergence is likely continue into next year.

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FX Daily, September 29: Dollar Quietly Bid, while Market is Skeptical of OPEC Deal

2016-09-29

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2016-09-29

FX performance, September 29 Movers and Shakers
The US dollar has firmer against most major and emerging market currencies. It remains well within its well-worn ranges, which continue to be narrow. A notable exception today is the yen's weakness. While the majors are mostly off marginally and now more than 0.3%, the yen is 0.75% lower. That puts the greenback at a six-day high (~JPY101.75) at its best.

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Quick Look at Why the September Jobs Data will Likely Be Strong

2016-09-29

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2016-09-29

There are several economic data points that suggest a healthy gain in jobs in September. College educated unemployment is 2.5% with high school graduate unemployment at 5.5%. The jobs report we expect is consistent with a Fed hike in December.

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Great Graphic: Growth in Premiums of Employer-Sponsored Health Insurance

2016-09-29

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2016-09-29

Cumulative Premium Increases for Covered Workers with Family Coverage
Upward pressure on US consumer prices is stemming from two elements. Rents and medical services. Due to the differences the composition of the basket of goods and services that are used, the core personal consumption deflator, which the Fed targets, typically lags behind core CPI.

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FX Daily, September 28: Dollar Mostly Firmer, but Going Nowhere Quickly

2016-09-28

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2016-09-28

FX Performance 2016, September 28 Movers and Shakers
The US dollar is enjoying a firmer bias today, but it remains narrowly mixed on the week. It is within well-worn ranges. Of the several themes that investors are focused on, there have not significant fresh developments. In terms of monetary policy, both Draghi and Yellen speak today. The former is behind closed doors with a Germany parliamentary committee.

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