Category Archive: 4.) Marc to Market
FX Weekly Preview: Post-Brexit: Week One
The EU response to Brexit is important. The EU summit and the talks with Turkey are very important. Brexit leaders seem as surprised and unprepared for the results as anyone. And a preview on economic data for the week.
Read More »
Read More »
Cool Video: Early Thoughts on Brexit Implications with FT’s John Authers
The Financial Times' John Authers visited me at Brown Brothers Harriman to discuss the initial implications. The situation is very fluid and there are many moving pieces. In Chinese, the characters for crisis are "danger" and "opportunity."
Read More »
Read More »
Weekly Speculative Positions: Speculators Cut Currency Exposure ahead of FOMC, BOJ, and Brexit
The CFTC reporting week ending June 21 covers the day FOMC and BOJ meetings and ends two days before the UK referendum. The overarching theme was the reduction of exposure. This is not measured by net positions but by gross positions. Of the eight currencies we track, six saw a reduction of gross long positions and a six saw a reduction in the gross short positions.
Read More »
Read More »
FX Daily, June 24: Brexit Sends Shock Waves, SNB Intervenes
The UK's decision to leave the EU spurred a dramatic risk-off move through the capital markets. The dollar, yen, and gold soared. Equities and emerging market assets sold off hard. The SNB had to intervene.
Read More »
Read More »
FX Daily, June 23: R-Day is Here, but Can it Prove Anti-Climactic?
The UK's referendum is underway. The capital markets are
continuing the move that began last week with the murder of UK MP Cox.
The tragedy seemed to mark a shift in investor sentiment. Sterling
bottomed on June 17 just ahead...
Read More »
Read More »
The EU and Turkey: Unvarnished Truth and Stuffing
Turkey and the EU will begin negotiations over financial and budget reform.
It is one of 35 areas (chapters) of negotiations.
Turkey is no where close to joining the EU, for which it initially applied in 1987.
Read More »
Read More »
Cool Video: Chandler at CNBC on Brexit
Chandler on CNBC's Trading Block show to discuss how the market is positioned for the UK referendum. The markets are strongly anticipating the UK to vote to stay in the EU, even though polls remain very tight. Given that leveraged participants and speculators have rallied sterling more than nine cents from last week's lows.
Read More »
Read More »
FX Daily, June 22: Markets Consolidate as Table is Set for Referendum
There is a nervous calm in the capital markets today. The focus is squarely on tomorrow’s UK referendum. Brexit According to a BBC focus group, the leeave camp won the debate 39%-34%. The last polls show a contest that it too close to calls in that the results are within the margin of error. The … Continue...
Read More »
Read More »
More Thoughts on the Democratic Deficit
It is not just that the polls indicate that the outcome of the UK referendum is too close to call, but the mere fact that the referendum is being held in the first place is significant. It was not Labour, but the Conservative Party that brought the UK into the EU in the first place … Continue reading »
Read More »
Read More »
Great Graphic: UK Referendum–Turnout it Key
Younger age cohorts in the UK are more inclined to vote to stay in the EU than their elders. However, some suggested that this consideration is blunted by the fact that the younger people are less likely to vote.
Read More »
Read More »
European Politics Beyond the UK Referendum
Sterling is hovering around seven cents above last week’s lows as many short-term participants better position themselves for the UK to vote to say in the EU, even though many opinion polls show a statistical dead heat. The German Constitutional Court dismissed claims that the ECB’s Outright Market Transactions does not violate the German Constitution. …
Read More »
Read More »
Great Graphic: Age and Brexit
The betting and events markets have shifted more decisively than the polls in favor of the UK to remain in the EU. Sterling extended its rally from $1.4010 last Thursday to nearly $1.4785 today, as the market participants adjust positions. What is particular striking is that the asymmetrical perceptions of the personal impact of a … Continue...
Read More »
Read More »
If Sterling has Not Peaked, It has Come Pretty Close
Today's sterling rally is the largest since 2008.
The rally began with the murder of UK MP Cox.
Risk-reward favors a near-term pullback.
Read More »
Read More »
Bullard’s New Paradigm and the Federal Reserve
There is much to like in Bullard's new paradigm.
The problem is that it does not reflect the Federal Reserve's view or approach.
Policy emanates from the Fed's leadership, but be confused by the noise.
Read More »
Read More »
FX Weekly Preview: It is All about Europe
Major data this week:
German Constitutional Court ruling on OMT.
UK referendum.
EMU flash PMI.
ECB TLTRO II launch.
Yellen testifies before Congress, RBI Rajan to step down in early Sept.
Read More »
Read More »
Weekly Speculative Postion: After Jo Cox Speculators Bought Sterling Futures with Both Hands
In the days ahead of the murder of Jo Cox, a UK member of parliament, apparently for her support for remaining in the EU, speculators in the futures market scooped up sterling. While last week, speculators took long dollar positions against CHF, this barometer shifted this week towards long CHF.
Read More »
Read More »
FX Daily, June 17: Martyrdom of Cox Acts as Catharsis
The assassination of Jo Cox, a member of the UK parliament is a personal
and political tragedy. Her needless death provided an inflection
point. The suspension of the referendum campaigns and a steady stream of reports and speech...
Read More »
Read More »
How Germany Could Upset Europe before UK Referendum
The assassination of the Jo Cox has broken the powerful momentum in the markets. Investors recognize that the tragedy potentially injects a new element into consideration for the outcome of next week’s referendum. The campaigns will be resume over the weekend, and new polls will be available. Investors will place more weight on polls conducted …
Read More »
Read More »
FX Daily, June 16: Markets are Anxious, Yen Soars
The US dollar is higher against the major currencies but the Japanese yen and the New Zealand dollar. The dollar fell to new two-year lows against the yen to JPY103.55 before bouncing in the European morning back to JPY104.40. The...
Read More »
Read More »
Macro Thinking: FOMC, USD, and EU
The Federal Reserve modified its stance yesterday without changing rates. It is not just about how fast the Fed sees itself normalizing monetary policy but also where the level of the equilibrium rate. The FOMC statement, but especially the officials’ forecasts (dot plots) effective unwound the impact of the earlier Fed talk of the likely …
Read More »
Read More »