Category Archive: 4.) Marc to Market

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FX Daily, July 27: Yen Falls on Fiscal Stimulus, while Sterling and Aussie Can’t Sustain Upticks

2016-07-27

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2016-07-27

Swiss Franc: The Euro kept on climbing, after yesterday's rapid rise. The Swiss consumption indicator by UBS shows improvements. The indicator is still distant from the highs in 2012. At the time stronger growth in Emerging Markets and the weaker franc helped the Swiss economy.

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Oil and Economy Pull the Canadian Dollar Lower

2016-07-27

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2016-07-27

The decline in oil prices is a factor weighing on the Canadian dollar. US premium over Canada is rising, and may continue as the economies diverge. The general risk appetite is supportive for the Canadian dollar.

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Great Graphic: How the US Recovery Stacks Up

2016-07-27

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2016-07-27

The US recovery may have surpassed the 2001 recovery in Q2. Though disappointing, the recovery has been faster than average from a balance sheet crisis. Although slow, it is hard to see the secular stagnation in the data.

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FX Daily, July 26: Strange Day: Yen Soars , Swissie Falls

2016-07-27

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2016-07-27

The Swiss Franc strangely depreciated on a day, when the other safe-haven, the yen strongly improved. The euro went up to 1.0899 by 0.54%. The reason seems to be technical.

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Fed to Stand Pat, but Statement may be More Constructive

2016-07-26

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2016-07-26

The Fed's nervousness in June has likely largely eased on the back of better economic data and stable international climate. The Fed may reintroduce its risk assessment. Who are the possible dissents?

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European Banks Bad Loans and Coverage

2016-07-26

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2016-07-26

European banks are worrisome. EBA's stress test results will be out at the end of the week. Nonperforming loans are a separate issue, but also need to be addressed.

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FX Daily, July 25: Big Week Begins Slowly

2016-07-25

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2016-07-25

What promises to be a busy week has begun off slowly. The US dollar has been largely confined to its pre-weekend ranges against most of the major currencies. Equity markets are mostly firmer following the new record highs on Wall Street. The MSCI Asia Pacific Index eked out a small gain (0.1%), with losses in Japan, Taiwan, and Singapore offsetting gains elsewhere.

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Great Graphic: OIl Breaks Down Further

2016-07-25

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2016-07-25

With today's losses the Sept contract has retraced 50% of this year's rally. The oil glut has partly been transformed into a gasoline glut. US rig count is rising and output has increased two weeks in a row.

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European Bank Stress Test: Preview

2016-07-25

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2016-07-25

European bank stress test results will be released a couple hours before the US open on Friday. The focus is on Italy, but other countries' banks may also be identified as needing capital. Within the existing rules are allowances for exceptions. Everyone wants to follow the rules.

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FX Weekly Preview: BOJ and FOMC Meetings Featured in the Last Week of July

2016-07-25

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2016-07-25

A recent Reuters poll found about half of the 100 economists surveyed expect a hike in Q4, which really means December since the November meeting is too close to the national election. The other half is split between a Q3 rate hike (September) and some time in 2017. That said, two primary dealers anticipate no hike until the end of 2017.

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Weekly Speculation Positions: Bullish on Dollar and Dollar-Bloc

2016-07-23

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2016-07-23

Speculators made several significant position adjustments in the CFTC reporting period ending 19 July. They are more Bullish on Dollar and on the Dollar-Bloc currencies.

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FX Daily, July 22: Flash PMIs Show Brexit Impact Localized

2016-07-22

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2016-07-22

As the week draws to a close, there are three main developments in the capital markets. First, the profit-taking seen in US equities yesterday has continued in Asia and Europe today. The MSCI Asia Pacific Index and the Dow Jones Stoxx 600 in Europe are both off around 0.5%.

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FX Daily, July 21: Monetary Policy Expectations are Driving Foreign Exchange

2016-07-21

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2016-07-21

Monetary policy is said to have lost its impact on the foreign exchange market, as investors scratch their heads at the resilience of currencies with negative interest rates. Yet the price action in the action cannot be understood without recognizing the ongoing importance of monetary policy expectations.

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Effective Fed Funds and Money Markets

2016-07-21

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2016-07-21

Fed funds have been trading firmly. There are several reasons and one of them is the shift that is taking place in the US money markets. Still the risk of a Fed hike has increased, just as speculation increases of easing in other major centers.

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Draghi Does not Surprise and Euro Edges Away from $1.10

2016-07-21

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2016-07-21

Draghi does not show the kind of urgency many bank economists do over the shortage of bonds to buy. Draghi kept options open and suggested a review in September when new staff forecasts are available and more data will be seen. The euro firmed, mostly it seemed on sell the rumor buy the fact, and/or possibly some disappointment that no fresh action was taken.

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FX Daily, July 20: Sterling’s Jump Slows Dollar’s Ascent

2016-07-20

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2016-07-20

It is a bizarre turn of events. Just like the Game of Throne's Westeros is a map of the UK put on top of an inverted Ireland, so too do UK events seem to be a strange permutation of the pre-referendum views. Although sterling and interest rates have not fully recovered from the Brexit decision, equity markets have, and fear of contagion has died down.

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Great Graphic: Aussie Approaches Two-Month Uptrend

2016-07-20

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2016-07-20

Australian dollar is the second heaviest currency this week after a key downside reversal at the end of last week. It is approaching an uptrend line near $0.7450. Many perceive an increased likelihood that the RBA eases and many are reassessing chance of a Fed hike later this year.

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FX Daily, July 19: Dollar-Bloc Tumbles, but Euro and Yen Little Changed

2016-07-19

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2016-07-19

The US dollar is sporting a firmer profile today, but it is not the driver. Heightened speculation that Australia and New Zealand may cut interest rates next month is pushing those respective currencies more than 1% lower today.

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Dollar Bull Case Intact: It is All About the Perspective

2016-07-19

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2016-07-19

Our bullish dollar outlook was based on divergence and we judge it to still be intact.The Dollar Index has been trading broadly sideways since March 2015, but never did more than a minimum retacement of its arlier rally. The Dollar index is at it highest level since March today.

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European Court of Justice Ruling Weighs on Italian Banks

2016-07-19

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2016-07-19

ECJ uphold principle of bailing in junior creditors before the use of public funds. Italian banks shares snap a three-day advance. The EBA/ECB stress test results at the end of next week are the next big event.

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