Category Archive: 4.) Marc to Market

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FX Weekly Preview: Fed Can Look Through the Data Easier than the ECB and BOJ

2018-05-14

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2018-05-14

Geopolitical issues will continue to bubble below the surface for the capital markets. The fallout from the reimposition of US sanctions on Iran has apparently helped lift oil prices in the face of the rising dollar, which often acts as a drag. In the coming days, the US will take the symbolic step of moving its embassy to Jerusalem.

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FX Daily, May 11: Dollar Momentum Sapped, Near-Term Pullback Likely

2018-05-11

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2018-05-11

The US dollar pulled back following yesterday's slightly softer than expected CPI report and this likely marks the beginning of a new phase, with the dollar moving lower. Investors have learned over the past two weeks that neither wages nor consumer prices are accelerating. There is little reason in the recent string of data or official comments to suggest a more hawkish path for monetary policy (e.g., four rate hikes this year).

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FX Daily, May 10: Kiwi Tumbles on Dovish RBNZ, While Sterling Goes Nowhere Ahead of BOE

2018-05-10

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2018-05-10

The US dollar is consolidating in narrow trading against most of the major currencies as participants digest several developments ahead of what was expected to be the highlight today, the BOE meeting and US April CPI. The greenback's consolidation is giving it a heavier bias against most of the major currencies. The recently strong upside momentum has stalled, but the losses are modest and the euro and sterling are inside yesterday's ranges.

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FX Daily, May 09: Oil Prices Surge and Dollar Gains Extended Post Withdrawal Announcement

2018-05-09

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2018-05-09

The US dollar is broadly higher as the 10-year yield probes above 3.0%. Disappointing French industrial production and manufacturing data for March provided additional incentive, as if it were needed, to extend the euro's losses. The euro dipped below $1.1825. The single currency is off a cent this week after falling nearly two last week. A 38.2% retracement of the euro's gains since the beginning of last year is found a little above $1.1700 and...

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FX Daily, May 08: Dollar Races Ahead

2018-05-08

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2018-05-08

The US dollar's surge continues. The Dollar Index is testing the space above 93.00. A month ago it was below 90. It does not appear to require fresh developments. The market continues to trade as if there are short dollar positions that are trapped at higher levels and the briefest and shallow pullbacks are new opportunities to adjust positions.

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FX Daily, May 07: Greenback Starts Week on Firm Note

2018-05-07

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2018-05-07

The US dollar recovered from a softer tone in early Asia and is higher against nearly all the major and emerging market currencies as North American market prepare to start the new week. The news stream is light and investors remain on edge geopolitical concerns remain elevated. Oil prices are extending gains, and WTI is above $70 a barrel for the first time since November 2014. Alongside an inverse yield curve, a jump in oil prices typically...

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FX Weekly Preview: Geopolitics Becomes More Salient as Monetary Policy Plays for Time

2018-05-07

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2018-05-07

Say what one will, US President Trump is vigorously projecting what he believes are American interests. There is virtually no sign of the isolationism that many observers had anticipated. Indeed, as we have argued, the America First rejection of the League of Nations that Trump harkens back to was not isolationist as much as unilateralist. And the same is true of the Trump Administration.

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Look Past Disappointing Jobs Data, Luke

2018-05-05

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2018-05-05

The US jobs report was broadly disappointing. However, the Federal Reserve will look through it and investors should too. A June hike is still by far the most likely scenario. The US created 164k net new jobs in April, and when coupled with the 32k upward revision in March, it was near expectations.

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FX Daily, May 04: US Jobs-Not the Driver it Once Was

2018-05-04

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2018-05-04

The US dollar fell last month in response to the disappointing non-farm payroll report. However, in general, the jobs report is not the market mover that it was in the past. With unemployment is at cyclical lows of 4.1% and poised to fall further. Weekly jobless claims and continuing claims at or near lows in a generation, though over qualification is more difficult than previously.

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FX Daily, May 03: Respite to Dollar Short Squeeze

2018-05-03

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2018-05-03

The Australian dollar is higher for a second session. It has been helped today by stronger than expected data in the form of a larger than expected March trade surplus (A$1.57 bln vs. expectations for A$865 mln) and building permits up more than twice as expected (2.6% vs. 1.0%). Today is the first session since April 19 that the Australian dollar has risen above the previous day's high. Initial resistance is seen near $0.7550 and then $0.7580.

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FX Daily, May 02: Confident Fed Key to New Found Respect for the Dollar

2018-05-02

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2018-05-02

There is a brief respite in the powerful short squeeze that has fueled the dollar's dramatic recovery. The greenback which was nearly friendless a month ago now has many suitors. It is higher on the year against all the major currencies but the yen (~2.6%), the Norwegian krone (~1.6%) and sterling ~0.9%). It is virtually flat against the euro.

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FX Daily, May 01: Little Help on May Day

2018-05-01

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2018-05-01

Most of the world's financial centers are closed for the May Day holiday, but the lack of participation has not prevented the extension of the US dollar's recovery. The Dollar Index has traded above its 200-day moving average for the first time in a year.

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FX Daily, April 30: Merger Monday

2018-04-30

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2018-04-30

Three large corporate deals were announced. T-Mobile appears to have finally figured a way to secure Sprint. It is a $26.5 bln equity tie-up. Marathon Petroleum is reportedly taking Andeavor for $20 bln in cash and stock. Sainsbury is reportedly in advanced talks to buy Walmart's Asda chain for GBP7.3 bln (~$10 bln) in an equity and cash transaction.

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FX Weekly Preview: Next Week in Context

2018-04-30

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2018-04-30

A year ago, the Dutch and French elections signaled that UK referendum to leave the EU and the US election of Trump did not usher in a populist-nationalist epoch, such as the one that proceeded the last great financial crisis. The euro gapped higher and did not look back.

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FX Daily, April 27: Dollar Puts Finishing Touches on Best Week Since November 2016

2018-04-27

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2018-04-27

The US dollar's recent gains have been extended, and it is having one of its best weeks since November 2016. The Dollar Index is up 1.7% for the week, as US session is about to start. Though it took this week's gains to change market's narrative, the fact of the matter, as we have pointed out is that April is the third consecutive month in which the Dollar Index fell in only one week. That translates into rising 10 of the past 13 weeks.

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FX Daily, April 26: Euro Remains Soft Ahead of Draghi

2018-04-26

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2018-04-26

The euro made a marginal new low early in European turnover and held barely above the spike low on March 1 to $1.2155. So far, today is the first session since January 11 that the euro has not traded above $1.22. The euro stabilized as the European morning progressed, but there seems to be little real buying interest it ahead of Draghi's press conference following the ECB decision.

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Oil: Supply and Demand Drivers

2018-04-26

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2018-04-26

Oil prices have recovered more than 50% of the decline since the mid-September peak. The next retracement objectives are found near $82 a barrel for Brent and $76.5 for WTI basis the continuation futures contract. The immediate consideration is that supplies have tightened.

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FX Daily, April 25: Dollar Regains Luster, but Consolidation Likely Ahead of Key Events and Data

2018-04-25

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2018-04-25

The US dollar reversed lower yesterday after US yields softened and equities tumbled. However, the greenback has bounced back, and has extended its gains against the major currencies except the euro and sterling. The on-the-run and generic US 10-year yields are edging above 3%.

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FX Daily, April 24: Stalled US Rates Steal Greenback’s Thunder

2018-04-24

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2018-04-24

The US dollar looked set to launch a new leg higher, but rates stalled, which in turn is unleashing some mild corrective pressures. The US two-year yield has been unable to extend its increase beyond 2.50%, while the 10-year rate has stalled within a whisker of the 3% psychological threshold. The greenback's momentum did indeed carry it, but by late morning on the Continent, a consolidative tone was evident.

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Great Graphic: Aussie Tests Trendline

2018-04-24

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2018-04-24

It is not that the Australian dollar is the weakest currency this month. Its 0.4% decline puts it among the better performers against the US dollar. However, it has fallen to a new low for the year today. The losses have carried to a trendline drawn off of the early 2016 low near $0.6800.

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