Category Archive: 4.) Marc to Market

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FX Weekly Preview: Trade and Data Driving Markets

2018-07-02

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2018-07-02

US President Trump is intent on disrupting the post-WWII arrangement that prioritized and ideological conflict over economic rivalries. Last week, it was reported that Trump told his counterparts at the G7 summit that NATO was as bad as NAFTA. NATO's annual meeting is July 12.

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FX Daily, June 28: US Dollar Remains Firm, Sends Yuan, Rupee, Sterling and Kiwi to New 2018 Lows

2018-06-28

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2018-06-28

The US dollar is consolidating its gains against most of the major currencies, but the underlying strength remains evident. Several major and emerging market currencies are at new lows for the year, including sterling and the New Zealand dollar, but also the yuan, rupee, and the rupiah.

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FX Daily, June 27: Renminbi Slide Continues and Oil Extends Surge

2018-06-27

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2018-06-27

The US dollar is mostly firmer today, though has slipped back below the JPY110 level, as lower yields and equities support the Japanese yen. The main story in the foreign exchange market today is the continued slide in the Chinese renminbi. The decline is the sharpest since the 2015 devaluation.

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FX Daily, June 26: Trade Tensions and Approaching Quarter-End Cast Pall Over Markets

2018-06-26

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2018-06-26

The global capital markets have stabilized today after yesterday's rout in equities, softer yields, and US dollar. The implementation of US tariffs on China and China's retaliatory tariffs on the US is still ten days off. The immediate focus is on actions expected to curb the technology transfer.

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FX Weekly Preview: Trade Tensions and EU Summit Highlight Q2’s Last Week

2018-06-25

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2018-06-25

We argue there are three major disruptive forces that are shaping the investment climate: the US policy mix in relative and absolute terms, the escalation of trade tensions, and immigration. In the week ahead, trade issues may eclipse the US policy mix, and immigration will compete with the economic and financial agenda at the European heads of state summit at the end of the week.

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FX Daily, June 22: BOE Spurs Dollar Pullback

2018-06-22

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2018-06-22

The Bank of England's hawkish hold yesterday, spurred by three dissents in favor of an immediate hike, changed the near-term dynamics in the foreign exchange market.  Both the euro and sterling fell to new lows for the year before reversing higher.  Yesterday's gains are being extended today. 

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FX Daily, June 21: Dollar Driven Higher

2018-06-21

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2018-06-21

The half-hearted and shallow attempts by the currencies to recover appear to be emboldening the dollar bulls today,  The greenback is higher against all major and emerging market currencies today.  Demand for dollars is strong enough to offset the broader risk-off environment that is pulling stocks and core yields lower that is usually supportive of the yen. 

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FX Daily, June 20: Fragile Stability

2018-06-20

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2018-06-20

The day began out with equity losses in Asia before a sharp recovery, perhaps initiated in China. The MSCI Asia Pacific Index was up a little more than 0.5%. The Shanghai Composite fell more than 1% before closing 0.25% better.

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FX Daily, June 19: America First Clashes With Made in China 2025

2018-06-19

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2018-06-19

The escalation of trade tensions between the world's two largest economies is scaring investors, who are liquidating equities and buying core bonds.  The dollar and yen are the strongest of the major currencies.  The Swiss franc is mostly steady as it too is benefiting from the unwinding of risk trades.

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FX Daily, June 18: Politics and Economics Weigh on European Currencies

2018-06-18

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2018-06-18

The US dollar is rising against most of the major and emerging market currencies. The prospects of escalating trade tensions and the divergence of policy that was confirmed by the major central banks are disrupting the markets. Norway's central bank meets later this week.

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FX Weekly Preview Warning: Treacherous Week Ahead

2018-06-18

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2018-06-18

All three of the major central banks met last week and confirmed that monetary policy would continue to diverge for at least another year. The clarity of the trajectory of monetary policy reduces the impact of high-frequency economic data.

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FX Daily, June 15: Dollar Slips While Escalating Trade Tensions may Roil Markets

2018-06-15

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2018-06-15

The Dollar Index edged higher to its best level this year before turning down as market attention shifts from central banks to trade tensions. Reports confirm that the US will go ahead with the 25% tariff on $50 bln of Chinese goods and provide some specificity today. The final list is expected to be similar to the goods that had been identified in the preliminary list, with an emphasis on electronic goods, apparently on ideas that they may have...

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FX Daily, June 14: Dollar Punished Ahead of ECB

2018-06-14

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2018-06-14

The US dollar is slumping against all the major currencies in the aftermath of the hawkish Federal Reserve. In fact, the inability of the greenback to hold on to the gains scored in the initial reaction to the Fed's hike, optimism on the economy, and the signal of hikes in September and December, foretold today's push lower.

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FX Daily, June 13: Dollar Edges Higher Ahead of FOMC

2018-06-13

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2018-06-13

The US dollar is trading firmly as the FOMC decision looms. In many ways, the actionable outcome of this meeting has hardly been in doubt this year. By all accounts, the Fed will deliver its second hike of the year today.

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FX Daily, June 12: US-Korea Summit Fails to Impress Investors

2018-06-12

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2018-06-12

The US dollar initially rallied in early Asia ahead of the US-North Korea summit but has subsequently shed the gains and more. As North American dealers return to their desks, the dollar is lower against nearly all the major currencies, but the yen and Canadian dollar. 

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FX Weekly Preview: Busy Week Ahead

2018-06-11

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2018-06-11

The week ahead is eventful. The Federal Reserve, the European Central Bank, and the Bank of Japan hold policy meetings. This would make for a busy week by themselves, but there is more. Trade tensions are likely to escalate further, if the US, as scheduled provides a list of $50 bln of Chinese goods that will face another 25% tariff for intellectual property violations.

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Dollar and Yen Rise Amid Heightened Anxiety

2018-06-10

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2018-06-10

With what promises to be an acrimonious G7 meeting, from which the isolated US President will depart early, and a broadening pressure in emerging markets, the US dollar turned better bid late yesterday and is recovering further today.

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Europe’s Woes Multiply

2018-06-08

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2018-06-08

The Markit group that provides many of the PMI surveys noted with today's reports that the eurozone outlook has "darkened dramatically." This makes for a poor backdrop for the ECB, which meets next week. However, with price pressures recovering from the Easter-related distortions, the ECB is still on track to finish its asset purchases at the end of the year. This seems largely taken for granted.

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Greenback Corrects Lower

2018-06-08

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2018-06-08

The consensus narrative is that with rising inflation it is understandable that next week's meeting is live and that the confirmation of such has lifted the euro to ten-day highs, dragging the dollar broadly.  However, to accept this is to accept the debasement of language.  Until now, we dubbed central bank meeting that could result in action as "live."  For example, given that the Fed has not changed interest rates since the hiking cycle began in...

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More Color on Japanese Capital Flows and the Euro

2018-06-07

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2018-06-07

The euro put in a low on May 29 a little above $1.15. That is nearly a 10.5 cent decline since the three-year high was set in mid-February. The thing that is difficult for investors and analysts to get their head around is that the speculators in the futures market, who as seen as proxies for trend-followers and momentum traders, continue to carry large euro exposure.

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