Category Archive: 4.) Marc to Market

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FX Daily, January 04: Rising Equities and Slumping Dollar Greet the New Year

2021-01-04

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2021-01-04

Overview:  The first day of the New Year, but it feels a lot like last year.  The dollar is under pressure, and equities are higher.  Outside of Japan and Malaysia, The MSCI Asia Pacific Index extended last week's 3.6% gain. It has not rallied for seven consecutive sessions.

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January Monthly

2021-01-04

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2021-01-04

It might not feel like a New Year, as the pandemic continues to ravage most countries. On top of the human toll, the economic fallout will continue to depress activity in the first part of 2021.  However, policymakers throughout the G7 provided more stimulus in late 2020 and extended many emergency facilities well into the New Year.

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Inflating Inflation Expectations

2020-12-31

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2020-12-31

Rising prices feature in many economic forecasts for the US.  It is seen as part of the reflation meme as the vaccines roll out.  There seem to be three threads to the discussion.  The first is practically mathematically certain.  Economists refer to it as the base effect.  As the pandemic struck and the economy shut down, prices fell.  Headline CPI fell by 0.4% in March 2019, by 0.8% in April, and another 0.1% in May.  The PCE deflator, which the...

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Cool Video: A Look Ahead to 2021

2020-12-24

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2020-12-24

I joined Ben Lichtenstein, host of the morning futures program at TDAmeritrade.  It is in the futures market that I began my career, and where I gained respect for local traders, who do not have a large institutional backing such as a bank or hedge fund, and are trading their own capital, and taking the risk often from those institutional participants. 

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The Dollar’s Evolving Outlook

2020-12-23

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2020-12-23

The foreign exchange market sees an average daily turnover of something on the magnitude of $6.6 trillion a day.  In a week, the turnover is sufficient to more than cover world trade for a year.  It is the largest of the capital markets.  Trends in the currency market can last for years.  

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FX Daily, December 21: Happy Holidays

2020-12-21

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2020-12-21

No daily commentary until the New Year, but watch this space for thematic pieces over the next two weeks. Here is to a safe, healthy, and prosperous 2021. Thank you for your support.  

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FX Daily, December 17: Dollar Thumped

2020-12-17

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2020-12-17

Overview: The prospects of a UK-EU deal and US stimulus continue to underwrite risk appetites and weigh on the dollar.  Equity markets are moving higher.  Led by Australia and China, the MSCI Asia Pacific Index rose to new record highs, while Dow Jones Stoxx 600 in Europe is at its best level since February.

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FX Daily, December 16: Greenback Slides Ahead of FOMC as Optimism Underpins Risk Appetites

2020-12-16

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2020-12-16

Overview:  The S&P 500 snapped a four-day downdraft helped by optimism over the progress toward fiscal stimulus and some hope that a new trade deal can still be negotiated between the UK and EU.  Europe reported better than expected PMIs.  Equities are broadly higher, as are interest rates, while the dollar slumps. 

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FX Daily, December 15: The Bulls are Emboldened

2020-12-15

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2020-12-15

The S&P fell for the fourth consecutive session yesterday, the longest losing streak of the quarter, and this seemed to encourage profit-taking in the Asia Pacific region today.  The MSCI Asia Pacific Index slipped for the second consecutive session, and even confirmation of the Chinese recovery failed to lift the Shanghai Composite. 

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Cool Video: CNBC-Asia–Brexit, Sterling, the Euro, and Dollar

2020-12-14

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2020-12-14

I had the privilege to join Sri Jegarajah at CNBC Asia at the start of today's Asia Pacific session.  We had a broad chat about the dollar, Brexit, and the euro.  He gave me the opportunity to sketch out my views:1.  The dollar's entered a cyclical decline, and the "twin deficit" issue will likely frame the narrative. 

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FX Daily, December 14: Brexit Deal Hopes Lift Sterling

2020-12-14

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2020-12-14

The fact that the UK and EU negotiators are still talking is seen as a constructive development and has spurred a sharp bounce in sterling.  It traded below $1.3150 before the weekend and is pushing above $1.3400 in the European morning. 

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FX Daily, December 11: Brexit Fears Weigh on Sterling

2020-12-11

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2020-12-11

Overview:  The odds of a UK-EU agreement and new stimulus before year-end in the US have faded and are sapping risk appetites ahead of the weekend.  Although most Asia Pacific equity markets gained, China and Australia were notable exceptions, European shares are heavy, and the Dow Jones Stoxx 600 is near three-week lows. 

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FX Daily, December 10: Brexit and US Stimulus are Unresolved as Attention Turns to the ECB

2020-12-10

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2020-12-10

Overview:  US threats to break-up Facebook and the stalled stimulus talks spurred profit-taking in US shares yesterday and is dampening enthusiasm today.  The MSCI Asia Pacific Index fell for the third time this week, and Europe's Dow Jones Stoxx 600 is little changed. 

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FX Daily, December 9: Hope Burns Eternal

2020-12-09

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2020-12-09

The market is hopeful today. The Johnson-von der Leyen dinner is seen as evidence that both sides see one more opportunity, and sterling is among the strongest currencies today. Hopes of a $900 bln+ fiscal stimulus package in the US helped stir animal spirits and lift US stocks to record highs yesterday.

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FX Daily, December 8: Consolidative Moment as Markets Wait for Fresh Developments

2020-12-08

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2020-12-08

EUR/CHF and USD/CHF, December 8
Overview:  Three brinkmanship dramas continue to play out.  The UK-EU trade talks have reportedly made little progress and may have even moved backward, according to some reports, over the past two days.  The EU and Poland, and Hungary will be butting heads at the leaders' summit that begins Thursday.  The US federal spending authorization is exhausted at the end of the week.

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FX Daily, December 7: Holy Mackerel Will UK-EU Talks Really Flounder?

2020-12-07

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2020-12-07

Overview:  Optimists see the belabored talk between the UK and EU as providing for a dramatic climax of a deal, while the pessimists warn that the divergence is real.  Sterling opened three-quarters of a cent lower in early turnover and is now off around two cents. 

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FX Daily, December 4: The Employment Report may not Give Greenback much of a Reprieve

2020-12-04

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2020-12-04

After wobbling late yesterday on what appears to be old news from Pfizer about a disruption of the vaccine's supply chain, equity markets have recovered, and risk appetites remain intact.   With more than 1% gains in South Korea's Kospi and Taiwan's Taiex, the MSCI Asia Pacific benchmark secured its fifth consecutive weekly gain. 

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FX Daily, December 03: Euro Rally Stalls while Brexit Concerns Trip Sterling

2020-12-03

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2020-12-03

falling money
The selling pressure that drove the dollar lower yesterday has abated, and the greenback is paring yesterday's loss, though the dollar-bloc currencies are showing some resilience. EC negotiator Barnier briefed ministers that the same three issues that have bedeviled the trade talks with the UK remain unresolved (fisheries, level playing field, and a conflict resolution mechanism).

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FX Daily, December 2: Euro Rally Stalls while Brexit Concerns Trip Sterling

2020-12-02

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2020-12-02

The selling pressure that drove the dollar lower yesterday has abated, and the greenback is paring yesterday's loss, though the dollar-bloc currencies are showing some resilience. EC negotiator Barnier briefed ministers that the same three issues that have bedeviled the trade talks with the UK remain unresolved (fisheries, level playing field, and a conflict resolution mechanism).

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FX Daily, December 1: No Follow-Through After Month-End Adjustments

2020-12-01

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2020-12-01

The near-record rallies seen in the major equity markets in November may have contributed to the month-end drama yesterday. There has been no follow-through activity. Stocks bounced back, and the US dollar is heavy, with few exceptions.

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