Category Archive: 4.) Marc to Market

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FX Daily, June 29: Fragile Calm Ahead of Quarter-End

2016-06-30

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2016-06-30

Sterling is firmer, but quarter-end considerations seem to be the key driver. Poor Japanese retail sales keep focus on policy response likely next month. New Zealand and Australian dollars are leading today's advance against the US dollar.

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The Worst is Yet to Come–Don’t be Seduced by the Price Action

2016-06-29

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2016-06-29

The two-day bounce in sterling seems technically driven rather than fundamental. The Brexit decision has set off a unfathomable chain of events whose impact and implications are far from clear. The economic hit on the UK may spur a BOE rate cut, even if not QE, as early as next month.

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FX Daily, June 28: Markets Stabilize on Turn Around Tuesday

2016-06-29

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2016-06-29

The global capital markets are stabilizing for the first time since the UK referendum. It is not uncommon for markets to move in the direction of underlying trends on Friday's; see follow-through gains on Monday, and a reversal on Tuesday. That is what is happening today.

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How Exceptional are Conditions?

2016-06-28

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2016-06-28

If conditions are exceptional, isn't BOJ intervention more likely? If conditions are exceptional, the ban on European government supporting banks might not be valid. Italy is leading the charge in Europe.

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Great Graphic: Sterling Monthly Chart and Outlook

2016-06-27

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2016-06-27

Sterling's losses are not simply a product of thin liquidity or panic. Both main political parties are in disarray just when strong leadership is needed. The rough projection pre-vote of what could happen on Brexit suggests $1.20-$!.2750.

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FX Daily, June 27: Post-Referendum Confusion Continues

2016-06-27

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2016-06-27

Sterling has been sold beyond the panic low seen when it became clear that UK voters were choosing to leave the EU though nearly every economists warned of at least serious short- to medium-term negative economic implications.

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UK Seeks Divorce, Rajoy Needs a Shotgun Marriage

2016-06-27

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2016-06-27

Center-right PP won the Spanish election. Anti-EU forces were setback. Rajoy needs a coalition partner.

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FX Weekly Preview: Post-Brexit: Week One

2016-06-26

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2016-06-26

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.

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Cool Video: Early Thoughts on Brexit Implications with FT’s John Authers

2016-06-26

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2016-06-26

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."

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Weekly Speculative Positions: Speculators Cut Currency Exposure ahead of FOMC, BOJ, and Brexit

2016-06-25

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2016-06-25

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.

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FX Daily, June 24: Brexit Sends Shock Waves, SNB Intervenes

2016-06-24

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2016-06-24

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.

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FX Daily, June 23: R-Day is Here, but Can it Prove Anti-Climactic?

2016-06-23

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2016-06-23

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...

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The EU and Turkey: Unvarnished Truth and Stuffing

2016-06-23

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2016-06-23

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.

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Cool Video: Chandler at CNBC on Brexit

2016-06-23

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2016-06-23

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.

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FX Daily, June 22: Markets Consolidate as Table is Set for Referendum

2016-06-23

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2016-06-23

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...

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More Thoughts on the Democratic Deficit

2016-06-23

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2016-06-23

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 »

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Great Graphic: UK Referendum–Turnout it Key

2016-06-22

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2016-06-22

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.

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European Politics Beyond the UK Referendum

2016-06-21

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2016-06-21

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. …

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Great Graphic: Age and Brexit

2016-06-21

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2016-06-21

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...

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If Sterling has Not Peaked, It has Come Pretty Close

2016-06-20

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2016-06-20

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.

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