Category Archive: 4.) Marc to Market

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FX Weekly Preview: Politics to Overshadow Economics in the Week Ahead

2016-09-25

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2016-09-25

The major central banks have placed down their markers and have moved to stage left. There are the late-month high frequency data, which pose some headline risks in the week ahead. The main focus for most investors will be on several political developments. The first US Presidential debate is wild card, in the sense that the outcome is unknown. In recent weeks, the polls have drawn close. In early August, Nate Silver’s fivethirtyeight.com, the gold...

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FX Daily, September 23: It is Friday and the Dollar is Firmer Again

2016-09-23

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2016-09-23

FX Performance September 23, 2016 Dukascopy Movers and Shakers
As Nassim Taleb instructed, we should not be fooled by randomness. If you see six red results in a row at a roulette table, do not conclude the game is rigged. If you flip a coin, and it is tails six consecutive times, the contest is not necessarily rigged.

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FX Daily, September 22: Swiss Franc Strongest Currency Again

2016-09-22

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2016-09-22

Movers and Shakers, September 22,
Once again the Swiss Franc was the strongest. The EUR/CHF depreciated to 1.0875. As said yesterday, the reasons: the Fed and the strong Swiss trade balance.

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FX Daily, September 21: BOJ Can’t Weaken Yen, Fed keeps Rates Unchanged, CHF Stronger

2016-09-21

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2016-09-21

The EUR/CHF accelerated its decline since yesterday's strong Swiss trade balance data. The second reason was certainly the Fed decided to keep rates unchanged. We know that the Swiss Franc has similar "counter-dollar" status as gold.

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FX Daily, September 20: The Swiss Franc Continues To Rise.

2016-09-20

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2016-09-20

Movers and Shakers, September 20
The trade balance express if a currency is overvalued or not. The Swiss trade surplus is constant or rather rising, hence the Swiss Franc is correctly valued or rather undervalued. And the franc continues to appreciate.

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FX Daily, September 19: Dollar Begins Important Week on Softer Note

2016-09-19

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2016-09-19

The US dollar, which finished last week on a firm note, is under pressure to start the new week that features Bank of Japan and Federal Reserve meetings. The slighter stronger August CPI reading helped lift the greenback ahead of the weekend, but investors continue to see a low probability of a Fed hike this week.

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Great Graphic: Median U.S. Income per Presidents

2016-09-19

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2016-09-19

How Median Income Changed Under Each President
Median household income was higher in 2015 than in 2008, but still below 1999 peak in real terms. The bottom fifth of households by income have just recouped what was lost. Income growth did best under (Bill) Clinton and Reagan, including for top 5%. Origin of strong dollar policy means it will not be used as a trade weapon and it hasn't since Bentsen.

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FX Weekly Preview: Punctuated Equilibrium and the Forces of Movement

2016-09-18

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2016-09-18

Shifting intermarket relationships pose challenge for investors. The market is convinced the Fed will not raise rates. Greater uncertainty surrounds the BOJ; there seems less willingness to shock and awe.

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Yellow Lights are Flashing

2016-09-16

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2016-09-16

Bonds are not rallying despite poor US data. Greater chance that Trump gets elected than the Fed hikes next week. Berlin may be more important than Bratislava.

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FX Daily, September 14: Precarious Stabilization

2016-09-14

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2016-09-14

Movers and Shakers, September 14
Swiss ZEW expectations came in better than expected. The value was +2.7 instead of expected negative value. The US dollar advanced yesterday and is in narrow ranges with a mostly softer bias today. The exception is the Japanese yen. Japanese press have reported that more negative rates are under consideration may have contributed to the weakness of the yen.

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Great Graphic: Net Mexican Migration to the US–Not What You Might Think

2016-09-14

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2016-09-14

Net migration from Mexico 2009 to 2014
Net migration of Mexicans into the US has fallen for a decade. The surge in Mexican migration into the US followed on the heels of NAFTA. Although Trump has bounced in the polls, and some see this as negative for the peso, rising US interest rates and the slide in oil price are more important drivers.

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Thoughts on the Price Action

2016-09-14

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2016-09-14

Global interest rates are rising. Something important is happening. It appears to be dollar positive.

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FX Daily, September 13: Much Noise, Weak Signal

2016-09-13

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2016-09-13

The last ECB meeting and Dragh's hawkish comments is for us the main reason of the euro strength, this despite stronger Swiss GDP growth.

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FX Daily, September 12: Markets Off to a Wobbly Start

2016-09-12

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2016-09-12

20160912 Movers and Shakers
The EUR/CHF retreated today together with falling stock prices. When investors sell their stocks and move into cash, then the Swiss Franc very often appreciates. This is the safe haven effect: cash in Swiss Franc is perceived as more secure.

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FX Weekly Preview: Capital Markets in the Week Ahead

2016-09-11

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2016-09-11

Global bonds and global stocks ended last week on a weak note and this will likely carry into this week's activity. The Bank of England meets, but the data may be more important. Oil and commodity prices more generally look vulnerable, and this coupled with higher yields sapped the Australian ad Canadian dollar in the second half of last week.

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Weekly Speculative Postions: CHF net long positions down from 8.2K down to 1.5K

2016-09-10

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2016-09-10

The Swiss Franc depreciated this week again. The euro rose to 1.960. One reason is the reduction in net long CHF speculative position from 8.2K to 1.6K contracts. Given the weak ISM non-manufacturing PMI, it remains unclear. why speculator now move into the dollar.

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FX Daily, September 9: Ahead of the Weekend

2016-09-09

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2016-09-09

The US dollar is lower against all the major currencies this week as North American participants close it out. On the day, the dollar is consolidating swings yesterday and is narrowly mixed.Bond yields are higher and equities are mostly lower. The euro has finished lower the last three Fridays. The streak may end today. The euro has found support nearly $1.1260, and the intraday technicals favor a move higher in the US morning.

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FX Daily September 8: Draghi Says Little, Door Still Open for More

2016-09-08

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2016-09-08

In the last two days, the euro moved upwards against CHF. Given that Swiss GDP was stronger than the one in the euro zone, this is surprising. But we must recognize that Draghi could be the reason. Inflation forecasts of 1.2% in 2017 and 1.8% in the euro zone would mean the ECB hikes rates maybe in 2018 or 2019. I personally do not believe it, given that wage inflation in Italy or Spain is clearly under 1%. This is lower than Swiss wage inflation...

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FX Daily, September 07: Dollar Stabilizes, but Hardly Recovers

2016-09-07

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2016-09-07

Disappointing industrial output figures from Germany and UK are helping stabilize the US dollar after yesterday's shellacking. Investors have been fickle about the prospects for a rate hike this month, and the unexpected dramatic slide in the service spurred a downgrading of such expectations, and a flight out of the dollar. It was not simply a quest for yields, though that was part of it. Surely the yen and euro's strength is not a function of...

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