Category Archive: 4.) Marc to Market

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Cool Video: Bloomberg Surveillance: Dollar to trend higher

2016-05-23

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2016-05-23

Returning from a two-week business trip to Asia, I was invited to appear on Bloomberg Surveillance with Tom Keene and Francine Lacqua.  Check out the video clip here. Key Points My key points include,the driver now is changing perceptions of the trajectory of Fed policy and the reemergence of divergence.  I suggest that “real news” …

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FX Daily May 23

2016-05-23

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2016-05-23

The capital markets are off to a mixed start to start the last week of the month.  Asian shares were mostly higher, though the Nikkei shed 0.5%.  European shares are also higher, extending the three-week high seen last week.  The US dollar is...

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FX Week Ahead: Evolving Investment Climate

2016-05-22

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2016-05-22

The US dollar’s weakness in recent months, despite negative interest rates in Europe and Japan likely had many contributing factors. These factors include shifting views of Fed policy, weaker US growth, the recovery in commodity prices, including oil, gold and iron ore, and market positioning.

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Sentiment Shift Evident in Speculative Adjustment in Currency Futures

2016-05-21

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2016-05-21

Speculative positioning in the currency futures began to adjust before the latest signals from the Federal Reserve about the prospects for a summer hike and the widening of interest rate differentials.  In the CFTC reporting week ending May 17, the day before the FOMC minutes were released speculators mostly reduced gross long currency positions and added …

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Daily FX, May 20: Divergence Reasserted, Extends Greenback’s Recovery

2016-05-21

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2016-05-21

The combination of stronger US economic data and signals from the Federal Reserve that it is looking to continue the normalization process helped the dollar extended its recovery.  The dollar posted a significant technical reversal against many of the major currencies on May 3.  The Dollar Index rose for its third week, as the greenback climbed …

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FX Daily, May 19: FOMC Minutes Extend Dollar Gains

2016-05-19

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2016-05-19

We felt strongly that the FOMC minutes would be more hawkish than the statement that followed the meeting, and we were not disappointed.  However, our caveat remains:  the minutes dilute the signal that emanates from the Fed’s leadership, Yellen, Fischer, and Dudley.  The latter two speak in the NY morning.  Fischer and Dudley’s comment will be scrutinized …

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Cool Video: CNBC Asia–Rare Double Feature

2016-05-18

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2016-05-18

My two week trip to Asia is winding down.  I had the privilege of being on CNBC in Asia earlier today and discussed the markets with Martin Soong from Singapore.     There were two segments.  The first segment (here) is about two minutes long and focuses on about Japan.  The second segment (there) is 3.5 … Continue reading »

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FX Daily, May 18: Greenback Recovers as Rate Support is Enhanced

2016-05-18

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2016-05-18

Apart from GBP, the US dollar is rising against all the major currencies today.  The Australian dollar is retracing a sufficient part of its recent gains to suggest that the current phase of the US dollar’s recovery is not over. Given that the Aussie topped out a week before the other major currencies, it is reasonable …

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Cool Video: Chatting with Bloomberg’s Angie Lau in Hong Kong

2016-05-17

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2016-05-17

As the second week of this Asian business trip gets underway, I am in Hong Kong.  I was on Bloomberg TV in the Asian morning to discuss market developments with Angie Lau. The 4.5 minute discussion covers a number of topics, including the outlook for Fed policy, the BOJ, dollar outlook and game theory.   … Continue...

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FX Daily, May 17: The Meaning of Sterling and Aussie’s Advance Today

2016-05-17

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2016-05-17

The US dollar is mostly weaker today.  It appears to be consolidating the gains scored since the reversal on May 3. Sterling and the Australian dollar are leading the way early in Europe.   The Australian dollar’s gains appear more intuitively clear.  The minutes from the recent RBA meeting indicated that it was a closer decision.  This …

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Brief Look at the Start of the New Week’s Activity

2016-05-16

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2016-05-16

The most notable thing is not what has happened, but what has not happened.  The market has not responded to the soft Chinese data over the weekend.  Chinese equities began softer but recovered fully and the Shanghai Composite closed on its highs.  The MSCI Asia Pacific Index is snapping a two-day losing streak with a … Continue reading...

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Are Dollar Fundamentals Lagging the Technical Improvement?

2016-05-15

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2016-05-15

The US dollar extended its recovery that began on May 3.  Its technical condition remains constructive, even though up until now, the gains are still consistent with a modest correction rather than a trend reversal.   The details of the employment report, if not the headline, coupled with the 1.3% increase in retail sales, have boosted …

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Weekly Speculative Positions: Significant Position Adjustments

2016-05-15

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2016-05-15

The US dollar staged an impressive reversal against many of the major foreign currencies on May 3. In the following week, speculators in the currency futures market made significant adjustment in their holdings. We identified a change in the gross position in the currency futures of 10k contracts or more to be significant.  In the week …

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Dollar’s Technical Tone Improves, but No Breakout (Yet)

2016-05-15

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2016-05-15

The US dollar continued the recovery begun May 3 and rose against most of the major currencies over the past week.  A nearly 3.5% rally in oil prices, the fifth weekly gain in the past six weeks (a $9.5 advance over the period), helped the Norwegian krone turn in a steady performance.  The Canadian dollar’s 0.2% … Continue...

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Daily FX, May 13: Toward a New Mouse Trap

2016-05-13

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2016-05-13

The Great Financial Crisis has exposed a deep chasm in economics and economic policy.  No single institution is this crystallized more than at the Bank of Japan. The former Governor, Shirakawa brought policy rates to nearly zero to combat deflation. His successor, Kuroda, took the central bank in the completely other direction. He has introduced three …

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FX Daily, May 12: Yen Recovers After Being Thrown for 2 percent

2016-05-11

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2016-05-11

The Japanese yen is recovering from two-day two percent decline.  The yen is the strongest of the majors today, rising about 0.6%.   The greenback initially extended its gains marginally in early Tokyo before the selling pressure emerging.  Th...

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FX Daily May 11: A Few Thoughts from Asian Business Trip

2016-05-10

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2016-05-10

Sometimes the mountain looks clearer from the plain the summit to paraphrase a American-Lebanese poet.   The dollar appears to have entered a new phase on May 3.  On that day, it reversed higher against the euro, yen, and sterling for lows not seen in a while.     It is tempting to construct a fundamental … Continue reading »

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Dollar Drivers in the Week Ahead

2016-05-08

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2016-05-08

The key issue facing the foreign exchange market is whether the modicum of strength the US dollar demonstrated last week is the beginning of a sustainable move.  It is possible that the market is again at a juncture in which the price action will...

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Weekly Speculative Positions: Cutting Longs in Yen and Swiss Franc

2016-05-07

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2016-05-07

Speculators in the futures market continued to pare short foreign currency positions but were cautious about expanding long positions in the CFTC reporting week ending May 3.  In fact, two of the three largest adjustments were the cutting of gross long Japanese yen and Australian dollar positions. Yen Speculators took profits on 11.8k contracts of …

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Key Dollar Developments Include Bottoming against the Dollar-Bloc

2016-05-07

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2016-05-07

The US dollar rose against all the major currencies last week. The importance of the price action does not lie with the magnitude or the breadth of the advance. Instead, the two takeaway technical observations are 1) the seemingly one-way market for euro and yen ended and 2) the dollar-bloc currencies appear to have put … Continue reading...

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