Category Archive: 4.) Marc to Market

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FX Daily, August 11: Sterling Struggles to Find a Bid, While RBNZ Can’t Knock Kiwi Down

2016-08-11

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2016-08-11

Once again, EUR/CHF reverses in the middle of the week. A part from technical reasons, the weak French CPI (+0.4% YoY) and Italian CPI (-0.2% YoY) exercised downwards pressure on the euro. The US dollar has found steadier footing today after trading heavily yesterday. There are two main themes. The first is sterling’s heavy tone.

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Two Things I Learned Looking for Something Else

2016-08-11

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2016-08-11

LIBOR continues to rise. The relative calm of the markets will likely end next month. The last four months of the year are jammed with key events that have potential to disrupt the markets.

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Cool Video: CNBC Asia–Mostly about the Redback and Greenback

2016-08-11

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2016-08-11

I was invited to appear on CNBC Asia Rundown show with Pauline Chiou. We discuss the Chinese yuan on the anniversary of last summer's unexpected devaluation. I suggest that most of the things that get observers excited, like the internationalization of the yuan, or the Hong Kong-Shanghai link or, perhaps by the end of the year,a Hong Kong-Shenzhen link are really Chinese machinations that are the result of its contradictions.

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FX Daily, August 10: FX Consolidation Resolved in Favor of Weaker US Dollar

2016-08-10

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2016-08-10

European bourses are mixed, and this is leaving the Dow Jones Stoxx 600 practically unchanged in late-European morning turnover. Financials are the strongest sector (+0.4%), and within it, the insurance sector is leading with a 0.8% advance and banks are up 0.4%. The FTSE's Italian bank index is up 1.4% to extend its recovery into a fifth session.

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Great Graphic: Bullish Emerging Market Equity Index

2016-08-10

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2016-08-10

Liquidity rather than intrinsic value seems to be driving EM assets. MSCI EM equity index looks constructive technically. The chart pattern suggests scope for around 13% gains from here.

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No Fines for Iberia, but Remedial Action Demanded and Possible Loss of Some ESI Funds

2016-08-10

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2016-08-10

Spain and Portugal need to make some relatively small budget adjustments or will be denied some transfer payments. Spain's political situation is fluid, but another window of opportunity to break the logjam is at hand. The euro seems immune to these fiscal developments; some retracement objectives are in sight.

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FX Daily, August 09: Sterling Slips to a Four-Week Low, EUR/CHF still trending up

2016-08-09

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2016-08-09

In an otherwise uneventful foreign exchange market, sterling's slide for its fifth consecutive session is the highlight. It was pushed below $1.30 for the first time since July 12. Initial resistance for the North American session is seen near $1.3020, while the $1.2960 area corresponds to a minor retracement objective.

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Bernanke’s Advice: More Emphasis on Data, Less on Fed Guidance

2016-08-09

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2016-08-09

Bernanke reviews the changes in the long-term dot plots. There as been a clear trend toward lower long-term growth, unemployment and Fed funds equilibrium. The full adjustment may not be over.

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Great Graphic: Oil Recovery Extends

2016-08-08

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2016-08-08

Oil prices extend last week's rally. Last week's rally was driven by the fall of gasoline inventories. Today's advance was helped by speculation over next month's IEA meeting.

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China: Political and Economic Developments

2016-08-08

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2016-08-08

Balance of power in China between "princleling and youth league may be at risk. Foreigners have stopped up their purchases of onshore CNY bonds. Tensions are rising between China and Japan and China and South Korea.

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FX Weekly Preview: Light Economic Calendar Week Allows New Thinking on Macro

2016-08-07

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2016-08-07

Policy outlook is clear: ECB and BOJ review next month, FOMC still looking for opportunity. Inventory cycle making quarterly US GDP forecasting difficult, but it looks like re-acceleration still the more likely scenario than recessions. Why didn't European bank stress tests results have more impact?

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Weekly Speculative Positions: Record Sterling Shorts, Net Short in Swiss Francs

2016-08-06

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2016-08-06

For a period that included a BOJ and FOMC meeting and the US GDP, speculators in the currency futures were unusually quiet.  Summer holidays with family may be more important. Of the 16 gross currency futures speculative positions we track, 12 of them were less than 5k contracts. There was only one gross position adjustment more than 10k contracts.  Euro bears covered …

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US Jobs Surprise, Canada Disappoints

2016-08-06

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2016-08-06

Underlying concerns about US labor market ease after two robust reports. Sept Fed views will not change much. Canada’s data is disappointing, BOC optimism may be challenged.

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FX Daily, August 05: US Jobs Data on Tap, but Don’t Expect Miracles

2016-08-05

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2016-08-05

The focus is squarely on the US employment data today, ahead of which the capital markets are mostly consolidating yesterday's Bank of England inspired moved. The Australian and New Zealand dollars, alongside sterling, which is up about half a cent after losing two yesterday.

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FX Daily, August 04: The BOE Owns Today, but Tomorrow is a Different Story

2016-08-05

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2016-08-05

The Swiss Franc appreciated today against the euro. Given that the Bank of England started monetary easing, this slight appreciation is unexpectedly weak - reason was probably intervention. The SNB intervention level should be around 1 billion francs. Numbers revealed in next week's sight deposits.

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Carney Gets Ahead of Market Expectations; Sterling Slumps, Gilts Soar

2016-08-04

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2016-08-04

BOE cuts rates and expands QE. Door is open to more easing. Sterling stabilizes after selling off 2 cents.

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FX Daily, August 03: Consolidation Featured

2016-08-03

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2016-08-03

The US dollar is consolidating yesterday's losses. The greenback's upticks have thus far been shallow and unimpressive, except perhaps against the New Zealand dollar, which is off 0.8% ahead of next week's RBNZ meeting. Softer than expected labor cost increase reinforces the conviction that a 25 bp rate cut will be delivered next week.

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Gorilla or Elephant, Chinese Surplus Capacity is the Challenge

2016-08-03

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2016-08-03

China's excess capacity is one of the most formidable challenges the China and the world face. Unexpectedly, China's steel industry reported a profit in H1 16. M&A for industry rationalization and foreign markets seem to be the main ways China is trying to address the excess capacity.

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FX Daily, August 02: Greenback Slides Despite RBA Rate Cut and 7-year Low in UK Construction PMI

2016-08-03

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2016-08-03

The US dollar is offered against the major currencies, but appreciating against many emerging market currencies, include the South African rand and Turkish lira. Oil prices are trying to stabilize with Brent near $42 and WTI near $40, but the recent losses continue to weigh on the Malaysian ringgit and the Mexican peso.

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