Category Archive: 4.) Marc to Market

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FX Daily, October 13: Dollar Edges Higher, though US Rates Soften

2016-10-13

FX Performance, October 13 2016 Movers and Shakers

The EUR/CHF remains in the range of 1.0815 to 1.0980. The SNB usually intervenes below 1.0850. I am expecting that speculators are reducing their CHF short positions. More tomorrow.

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IMF’s Reserve Data: Dollar Share Little Changed, Yen Share Jumps, Helped By Valuation

2016-10-13

by Marc Chandler

2016-10-13

The increase in the yen's share of reserves was flattered by the yen's 9% appreciation. The dollar and euro's share of reserves were stable. Chinese integration has seen the share of unallocated reserves fall. Starting with Q3 data, (available end of March 2017) will break out the yuan's share of reserves.

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High Court Hears UK Constitutional Challenge

2016-10-13

by Marc Chandler

2016-10-13

Regardless of outcome early next week, the High Court's decision will likely be appealed. The issue is the role of parliament. The greater the role, the greater the risk of a delay, but also a better chance to minimize a hard Brexit.

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FX Daily, October 12: May Concedes to Parliament, Sterling Rises after Pounding

2016-10-12

by Marc Chandler

2016-10-12

FX Performance, October 12 2016 Movers and Shakers

News that UK Prime Minister May has accepted that Parliament should vote on her plan for exiting the EU stopped sterling's headlong slide. Sterling had been pounded for roughly 8.5 cents since the start of the month including the last four sessions. The idea that parliament, where the Conservatives enjoy a slim majority, is less enthusiastic about Brexit may mean a less acrimonious divorce.

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Sterling: Has the Breaking Point been Reached?

2016-10-12

by Marc Chandler

2016-10-12

Sterling's decline is not longer coinciding with lower rates. Sterling's decline is boosting inflation expectations. If the inflation expectations are realized (Sept CPI next week), it will quickly erode what ever competitive gains there may have been.

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FX Daily, October 11: The Dollar Remains Bid

2016-10-11

by Marc Chandler

2016-10-11

FX Performance, October 11 2016 Movers and Shakers

The US dollar is bid against all the major and most emerging market curerncies. An important driver is the backing up of US rates. The two-year yield, which is particularly sensitive to Fed policy is at it highest levbel since early June (~86 bp). The US 10-year yield is five basis points hihger today at 1.77%, which is the highest in four months.

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Great Graphic: Euro is Approaching Year-Long Uptrend

2016-10-11

by Marc Chandler

2016-10-11

The year-long euro uptrend comes in near $1.1035, just below the August lows. The technical are fragile, but the euro is below its lower Bollinger Band. The fundamental driver seems to be the backing up of US rates, and widening premium over Germany.

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FX Daily, October 10: Dollar after the Second Debate

2016-10-10

by Marc Chandler

2016-10-10

FX Performance, October 10 2016 Movers and Shakers

The US dollar has started the new week on a firm note. The light news stream and holidays in Japan, Canada and the United States make for a subdued session. Notable exceptions to the dollar's gains are the Canadian dollar and Mexican peso. Both currencies appear to have been. underpinned by US political developments, the main feature of which is the implosion of the Trump campaign.

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FX Weekly Preview: The Week Ahead: It’s Not about the Data

2016-10-09

by Marc Chandler

2016-10-09

High frequency economic reports will be not be among the key drivers of the capital markets in the week ahead.The light schedule, consisting mostly of industrial production in Europe, inflation for Scandinavia, and US retail sales, will have minimal impact on rate expectations.

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Great Graphic: US-German 2-Yr Differential and the Euro

2016-10-09

by Marc Chandler

2016-10-09

The US premium over Germany is at its widest since 2006. This is despite a small reduction in odds of a hike in December. There are many forces are work, but over time, the widening differential will likely give the dollar better traction.

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Swiss Franc Net Shorts Getting Reduced

2016-10-08

by Marc Chandler

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

by Marc Chandler

2016-10-07

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

by Marc Chandler

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

by Marc Chandler

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

by Marc Chandler

2016-10-06

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

by Marc Chandler

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

by Marc Chandler

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

by Marc Chandler

2016-10-04

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

by Marc Chandler

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

by Marc Chandler

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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