Category Archive: 4.) Marc to Market

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Observations from the Speculative Positioning in the Futures Market

2015-12-05

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2015-12-05

1.  Given the large moves in prices shortly after the CFTC reporting period ended on 1 December renders the latest Commitment of Traders report more dated than is usually the case. 2.  The Thanksgiving holiday that closed US markets reduced par...

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Once Unleashed, Corrective Forces Dominate

2015-12-05

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2015-12-05

The market's disappointment with the ECB unleashed pent-up corrective forces in the foreign exchange market.   This leg up in the dollar began in mid-October.  Through the day before the ECB, the euro was the weakest of the major currencies, losing 7.5% against the dollar.  The yen and sterling shed a little less than half as …

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Emerging Markets: What has Changed

2015-12-05

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2015-12-05

(from my colleague Ilan Solot) 1) The Chinese yuan will be in the SDR.  2) Brazil had one of the most important weeks of the year, and possibly of its history.  3) Russia enacted sanctions against Turkey, while Turkey got a deal from the EU.  4) Moody’s raised Russia’s credit-rating outlook to stable from negative.  … Continue reading...

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Jobs Data Keeps Fed on Track to Hike

2015-12-04

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2015-12-04

After the ECB's disappointment yesterday market nerves were shattered, but the largely as expected US jobs data may help the focus return to the underlying fundamental fact.  The ECB just eased policy.  Not as much as the market expected, and t...

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From the ECB’s Failure to Communicate to US Jobs to Confirm Fed Signals

2015-12-04

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2015-12-04

The only way to explain the largest swing in the euro in six years yesterday is to appreciate the disconnect between what was expected and what was delivered by the ECB.  Draghi's urgency and commitment to do "what it must" fanned expectations, a...

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ECB Fireworks

2015-12-04

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2015-12-04

Market participants knew that volatility would rise today with the ECB meeting.  What they got was far worse than could have been anticipated.   It started with a report on the Financial Times a few minutes before the ECB's official announceme...

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Draghi’s Day to Deliver

2015-12-03

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2015-12-03

The much anticipated ECB meeting is at hand.   Yesterday's disappointing eurozone CPI figures only fanned the anticipation. Today the service PMI was softer than expected at 54.2, down from 54.6.   What will Draghi do?  There are four moving...

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Is Grexit Back on the Table?

2015-12-02

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2015-12-02

Defying the expectations a few months ago, Greece remained in the Economic and Monetary Union.  It recently succeeded in implementing sufficient reforms to earn another tranche of aid.   However, the entire exercise exhausted whatever trust the...

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The Wait is Nearly Over, and the Dollar Catches a Bid

2015-12-02

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2015-12-02

The anticipation is nearly over.  The softer than expected preliminary EMU inflation figures encourages expectations for the more aggressive range of actions by the ECB tomorrow.  Draghi has claimed that movement toward the inflation target was to...

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Great Graphic: Canadian Growth and Rate Expectations

2015-12-01

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2015-12-01

Canada reported its monthly GDP estimate for September, and at the same time, provided its first estimate of Q3 GDP.   The Great Graphic, created on Bloomberg, shows both time series. The monthly GDP is depicted by the yellow line and the quart...

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Dollar Trades Heavier, Key Events Awaited

2015-12-01

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2015-12-01

The US dollar is trading with a heavier bias today amid some last minute position squaring ahead of the key events of the week, which are stacked in the second half.  The ECB meeting and US jobs data are the two most important events in a jam pa...

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Cool Video: CNBC Discussion about China and the SDR

2015-12-01

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2015-12-01

I had the privilege of being on CNBC to discuss the significance of China being included in the IMF's Special Drawing Right. Here is the link to the discussion.  The decision was announced shortly after the interview on CNBC.  It was largely a foregone conclusion that China would join.  Besides the confirmation, the new news … Continue reading...

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Great Graphic: Decline of U.S. Participation Rate Explained

2015-11-30

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2015-11-30

The decline in the labor force participation rate helps explain the substantial decline in the US unemployment rate over the past couple of years.  That decline has helped bring the Federal Reserve to the point that a December rate hike is thought to be extremely likely barring a significant disappointment at the end of the …

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Emerging Markets: Preview of the Week Ahead

2015-11-30

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2015-11-30

(from my colleagues Dr. Win Thin and Ilan Solot) This is set to be one of the most important weeks of the year. EM is likely to take a backseat between the ECB monetary policy decision, the OPEC meeting and the US jobs report. That said, there are several potential sources of idiosyncratic risk to … Continue reading »

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Dollar Edges Higher Ahead of Month-End and Key Events

2015-11-30

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2015-11-30

The US dollar remains firm against most of the major currencies to start what promises to be a critical week for investors.  There are two main considerations.  The first is the last minute position adjustments ahead the key events that begin with the IMF's SDR decision later today, running through the start-of the month data …

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Seven Events Next Week that will Shape the Investment Climate

2015-11-29

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2015-11-29

The week ahead is among the most important of the year.  Rarely is there such a confluence of events in a short period that will have far-reaching implications for investors that are known ahead of time and have been discussed so extensively. ?...

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How Dangerous are Technical Conditions for Dollar Bulls?

2015-11-28

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2015-11-28

Anticipating a yawning divergence of monetary policy between the world's largest central banks, market participants continued to drive the dollar higher over the past week.  In fact, the greenback appreciated against all the major and emerging market currencies except the Malaysian ringgit and South Korean won.     Next week is one of the most eventful …

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France’s Revival or Politics Trumps Economics

2015-11-27

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2015-11-27

With the ECB poised to take additional steps down the unorthodox monetary policy route, financial and economic forces are as potent as ever.  However,  there is a subtle shift taking place that few seem to recognize.  It is the re-emergence of...

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Dollar Rides High into Month-End

2015-11-27

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2015-11-27

The US dollar is firm against the major currencies and nearly all the emerging market currencies as well to close out the week (and month) Participants are clearly focused on next week's events, and in particular, the prospect of additional easi...

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Table is Set, Dollar Consolidates

2015-11-26

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2015-11-26

The US dollar remains firm, even if it has eased from its seven-month high against the euro and five-year high against the Swiss franc recorded yesterday.  The US October personal consumption expenditure was disappointing, and prompted some downward revision to Q4 GDP forecasts. The Atlanta Fed estimates that Q4 GDP is tracking 1.8% rather than …

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