Category Archive: 4.) Marc to Market

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FX Daily, April 7: Yen Continues to Climb

2016-04-07

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2016-04-07

The main feature in the foreign exchange market continues to be the surge of the Japanese yen.  A convincing explanation of the yen's strength seems elusive.  Until last week, which means through the fiscal year-end last month, Japanese fund managers have been buying foreign bonds at a near-record pace.  Foreign investors, for their part, have …

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Great Graphic: Head and Shoulders in Dollar-Yen

2016-04-06

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2016-04-06

The old head and shoulders pattern in the dollar against the yen is back in vogue.  We first pointed it out in the first week of January here. Recall the details.  The neckline is drawn around JPY116.30 and measuring objective is near JPY107.00....

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Dutch Referendum: Devil is not in the Details

2016-04-06

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2016-04-06

In what is possibly one of the under-appreciated political events of the year, the Netherlands holds a plebiscite today on an associational agreement with Ukraine that has already been approved by the Dutch parliament, the European Parliament and all other 27 EU members.   When stated so baldly, it is difficult to see what is at …

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FX Daily, April 6: Greenback Finds A Little Traction

2016-04-06

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2016-04-06

The US dollar is better bid today but remains largely in the ranges seen in recent days.  There a few developments to note, which together are lifting European equities after Asian equities softened.   First, the API oil inventory estimate showed an unexpected fall of 4.3 mln barrels.  An increase of half the magnitude was expected.  The …

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Talk of Secret Shanghai Agreement is a Distraction

2016-04-05

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2016-04-05

(I have been sick with pneumonia but am just about back.  I expect to resume my commentary tomorrow.  Here is my overdue monthly column for a Chinese paper.   Thanks to everyone for their support.) Conspiracy theories have run amok.  After sev...

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Great Graphic: Bottom Building on CRB Commodity Index?

2016-03-28

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2016-03-28

Marc Chandler shows that after the commodity currency Canadian Dollar, also the CRB Commodity index could have found a bottom. See here his Great Graphic on the CAD bottom buildung. See also the CAD resilience despite falling oil prices.

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Four Keys to The Week Ahead

2016-03-27

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2016-03-27

There are four events that will shape market psychology in the week ahead.  They are Yellen's speech to the NY Economic Club, US jobs data, eurozone March CPI and PMI, and Japan's Tankan Survey.   The broad backdrop is characterized by the rebuilding of risk appetites since the middle of February, though the MSCI emerging market … Continue reading...

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Weekly Speculative Position: Yen Longs Near Record Levels

2016-03-26

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2016-03-26

The most extreme speculative positioning, judging from the futures market is the long yen position.  The bulls added another 3.4k contracts, lifting the gross long position to 82.8k contracts.  The record was set in 2008 at 94.7k contracts.   The gross short position was trimmed by 4.5k contracts, leaving 29.5k.  It is the smallest gross short position …

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FX Review Week March 21- March 25

2016-03-26

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2016-03-26

The US dollar rose against all the major and most emerging market currencies last week. After selling off following the ECB and FOMC meetings, the dollar found better traction.  It was helped by widening interest rate differentials.  Regional Fed manufacturing surveys for March suggest the quarter is ending on a firm note.  With new orders rising, …

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Great Graphic: Has the Canadian Dollar Bottomed Out?

2016-03-24

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2016-03-24

We have been looking for a bottom in the US dollar against the Canadian dollar.  It is been difficult, but now it appears that the technicals are turning.  This Great Graphic, from Bloomberg, shows that the US dollar is moving above a trend line...

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Is that Buzzing Sound Helicopter Money?

2016-03-24

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2016-03-24

Helicopter money is the rage.  Central banks are talking about it.  Economists are debating it.  The media is rife with coverage.     While it sounds important, it is not precisely clear what helicopter money means. It appears to have originated with Milton Friedman.  In 1969, he wrote: "Let us suppose now that one day a helicopter … Continue reading »

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ECB, Corporate Bonds, and Credibility

2016-03-23

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2016-03-23

The euro's rallied shortly after the ECB announced numerous monetary measures that in their totality were more than expected.  Many saw this as proof that monetary policy had lost its effectiveness, and central banks have lost credibility.    R...

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Great Graphic: Brexit Fears Boost Sterling Put Buying

2016-03-23

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2016-03-23

The UK referendum is three months away.   Three-month options are a common benchmark for various market segments; from speculators, to fund managers to corporations.  Events over the past week have raised the risks that the UK votes to leave the EU. The market has responded forcefully today, and even if you only follow the spot …

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Brexit Risks Rising

2016-03-22

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2016-03-22

  Many banks suggested that Swiss Franc long is the trade to hedge against the Brexit risk.Therefore this text by Marc Chandler is quite important for Switzerland. An ill-conceived strategy undermined by mismanagement and bad fortune is increasing the risks that the UK votes to leave the EU in June.    Nearly everything that could, has …

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Great Graphic: 10-Year Break-Evens and Oil

2016-03-22

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2016-03-22

Until last September, the Federal Reserve seems to play down the market-based measures of inflation expectations, preferring the surveys that showed views were anchored.    At the September 2015 FOMC meeting where the Fed had been expected to tighten until the August turmoil, officials cited among other considerations, the decline in market-based measures of inflation expectations. …

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FX Daily, March 22: Terrorist Strike in Brussels Causes Market Angst

2016-03-22

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2016-03-22

A series of attacks at Brussels airport and metro casts a pall over the market.  The attacks come as Europe prepares what for many will be a long holiday weekend.  Gold, the dollar and yen seem to have been the beneficiaries.   Bonds are generally firmer and equities lower.   However, in late morning activity in London, …

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FX Daily: When a Quarter is Two Halves

2016-03-20

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2016-03-20

The year started off poorly, to say the least. Equity markets plunged from the get-go.  The Nikkei, DAX and S&P 500 gapped lower on the first trading day of the year.   Emerging markets and commodities were smashed.   Many economists blamed the Federal Reserve for hiking rates in mid-December.   Pundits warned that the seven-year bull … Continue...

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Weekly Speculative Positions: Pile into Sterling and Take Profits on Long Aussie

2016-03-19

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2016-03-19

After a relatively quiet period into the run-up to the ECB, speculative activity markedly increased in the CFTC reporting week ending the day prior to the conclusion of the FOMC meeting. Two speculative gross currency position adjustments stand out.  First, speculators appeared to have bought a record amount of sterling contracts.  The gross long position more …

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FX Daily, 03/19: Greenback Remains Technically Vulnerable

2016-03-19

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2016-03-19

The US dollar had a difficult week.  The price action after the ECB meeting had undermined the technical tone, and the dollar took another leg down after the FOMC moved closer to the market expectation by reducing the number of rate hikes the median official thinks will be appropriate this year from four to two. … Continue...

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