Category Archive: 4.) Marc to Market

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FX Weekly Preview: The Week Ahead featuring the Battle for 7.0

2019-05-20

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2019-05-20

The strategic objective is to integrate China into the world economy. The liberal international solution was trade, investment flows, and cultural exchanges. The rise of nationalism and China's own willingness to flaunt the international rules are defeating the strategy.

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FX Daily, May 17: China Questions US Sincerity

2019-05-17

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2019-05-17

Since the presidential tweets on May 3, the US had the initiative in the negotiations with China, but today, China has pushed back. It is cool to the idea promoted by the US that trade talks will resume shortly. Now it may take the Trump-Xi meeting at the end of next month to restart talks. This, coupled with US sanctions on Huawei banning imports from it and sales to it, threatens to disrupt business and this took a toll on Chinese, Taiwanese and...

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FX Daily, May 16: US Struggles to Strike a Less Strident Tone

2019-05-16

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2019-05-16

Overview: Retail sales and industrial production disappointed in both the US and China prior to the end of the tariff truce, declared by the US in a series of presidential tweets on May 5.  The reaction function of the US to the drop in equities was to play down tensions on three fronts.  First, a US team is expected to return to Beijing in the coming weeks. 

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The Thumbnail Sketch of the Euro You are Looking For

2019-05-16

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2019-05-16

Here is an overview of the broad macro considerations for the euro, with some thoughts about the price action, including volatility. It is shared not so much as an argument as a sketch the considerations that drive a view.

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FX Daily, May 15: Angst Continues

2019-05-15

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2019-05-15

Overview: Disappointing Chinese April data spurred speculation that more stimulus will be forthcoming and bolsters hopes that a trade deal with the US by the end of next month helped Asian Pacific equities advance for the first time this week.  Indonesia, which reported a record trade deficit on the back of collapsing exports (-13.1% year-over-year in April, nearly twice the decline expected after a 10% fall in March) kept the pressure on its...

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Why China Finds it Difficult to Weaponize the Yuan and US Treasuries

2019-05-15

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2019-05-15

It looks so easy on paper. China can sell its holding of US Treasuries and/or weaken the yuan to offset the tariffs and boost exports. It is the first and easy answers from strategists, journalists, and some academics. Often times, it is presented a novel idea; as if diplomats, investors, and policymakers have not thought it.

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FX Daily, May 14: Too Weak to Muster Much of a Turnaround Tuesday, Markets See Small Reprieve

2019-05-14

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2019-05-14

OECD Gauge hits Lowest Level
President Trump's willingness to meet China's Xi at the G20 meeting at the end of next month and his "feeling" that an agreement will still be found seemed sufficient to break the momentum that had swept through the capital market.

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FX Daily, May 13: Investors Still Looking for New Balance

2019-05-13

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2019-05-13

The end of the tariff truce between the US and China has discombobulated investors. They had been repeatedly that a deal was close and there had even been talk at the US Treasury about where Trump and Xi should meet to sign the agreement. Now China was given around a month to capitulate to US demands or face a 25% tariff on their remaining exports to the US.

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FX Weekly Preview: Trade, the Dollar, and the Week Ahead

2019-05-13

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2019-05-13

China is isolated on trade. No one supports its trade practices. The idea that China was going to "naturally" evolve to be more like the US, or Europe for that matter, was always fanciful and naive. The emergence of China, as Napoleon warned two centuries ago, would make the world shake.

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FX Daily, May 10: Waiting for the Other Shoe to Drop

2019-05-10

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2019-05-10

Overview:  Contrary to hopes and expectations, the US made good on the presidential tweet and raised the tariff on around $200 bln of Chinese goods from 10% to 25%.  Trump indicated that the process that will levy a 25% tariff on the remaining Chinese imports has begun. Also contrary to expectations, Chinese officials did not detail their response, though it is expected to be forthcoming.

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FX Daily, May 09: De-Risking as US-China Trade Talks Resume

2019-05-09

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2019-05-09

The end of the tariff truce between the US and China continues to dominate investment considerations. The truce was often cited in narratives explaining the recovery of equities from the Q4 18 slide. Ahead of the midnight US tariff hike, global equities are being smashed. Korea's Kospi was off 3%, and Hong Kong's Hang Seng was shed 2.4%. Shanghai lost 1.5%.

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FX Daily, May 08: Markets Trying to Stabilize

2019-05-08

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2019-05-08

Overview:  It is taking investors a bit more than two sessions to find its footing after being the unexpected end of the tariff truce between the US and China struck last December. Asia Pacific equities tumbled after the S&P 500 shed nearly 1.7% yesterday, the third largest decline in 2019, but Europe's Dow Jones Stoxx 600 is consolidating near yesterday's lows.

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FX Daily, May 07: Markets Steady as China Pushes Forward

2019-05-07

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2019-05-07

Overview: News that the US tariff escalation did not scupper trade talks with China has helped the global capital markets stabilize today.  China's Vice Premier Liu He is still leading a delegation to the US.  Most Asian equities recouped part of yesterday's losses, including China, Hong Kong, Taiwan, Australia, and Singapore.  Japanese and Korean markets were closed on Monday and bore some selling pressure today.

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FX Daily, May 06: Trump’s Tariff Tweets Help Investors Discover Volatility

2019-05-06

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2019-05-06

Reports that a US-China deal could be struck by May 10 before the weekend left investors ill-prepared for the presidential tweets yesterday that announced that the US was ending the tariff truce. Trump indicated that the 10% tariff on $200 bln of Chinese goods would be lifted to 25% at the end of the week and that the remaining $325 bln of Chinese goods that have not been subject to an extra levy, will be slapped with a 25% tariff soon.

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FX Daily, May 03: Ahead of US Jobs Report, the Greenback Remains Firm

2019-05-03

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2019-05-03

Overview: The US April jobs data stand before the weekend, and the greenback is holding on to most of yesterday's gains as participants wait for the report. Equities in the Asia Pacific region were mixed without leadership from China and Japan, where the markets remain closed for the extended holiday. On the week, Australia's ASX was the worst performing.

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FX Daily, May 02: Dollar Consolidates Fed-Inspired Recovery

2019-05-02

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2019-05-02

Overview:  The US dollar is consolidating yesterday's post-Fed rally, and this is giving it a slightly heavier tone today.   Equities are mostly lower and Europe's Dow Jones Stoxx 600 is off about 0.5% in late morning turnover, which if sustained would be the largest decline in three weeks.  The S&P 500 posted a potential key reversal yesterday by setting new record highs and then closing below the previous session's low.

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FX Daily, May 01: No Help on May Day, which is also Fed Day

2019-05-01

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2019-05-01

The May Day holiday has shut most markets in Asia and Europe, making for subdued market action. Equity markets that are open, like Australia and the UK, advanced and US shares are trading higher helped by Apple's upbeat forecasts and sales that beat expectations.

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FX Daily, April 30: Dollar Pares more Gains as EMU GDP Surprise

2019-04-30

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2019-04-30

Overview: The S&P 500 set a new record high and close yesterday, but the lift to global markets was not strong enough to overcome the disappointing Chinese PMI.  Although Chinese equities traded higher on ideas that the news will spur additional stimulative measures, other Asian markets were mixed. 

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Cool Video: Q1 US GDP Optics may Mark Near-Term Peak in Divergence Theme

2019-04-30

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2019-04-30

I joined Tom Keene and Francine Lacqua to talk about US GDP with David Riley from BlueBay Asset Management. Here is a link to a 2.5-minute clip. The initial estimate of Q1 US growth was well more than nearly anyone expected. The details were underwhelming as the consumption was halved and the GDP deflator was halved. Final private domestic sales, which strips away inventories, trade, and government spending rose 1.3%, the least more than five years.

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Marc Chandler on the Fed and Financial Instability

2019-04-29

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Subscribe to our podcast here: https://www.financialsense.com/subscribe Financial Sense Newshour speaks to Marc Chandler about the Fed’s role in the business cycle. He says the last three economic downturns were not caused by the Fed but by financial instability. Listen to the full show to also hear from Jonathan Krinsky on the multitude of crosscurrents and …

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