Category Archive: 4) FX Trends

Main Author Marc Chandler
Marc Chandler
He has been covering the global capital markets in one fashion or another for more than 30 years, working at economic consulting firms and global investment banks. After 14 years as the global head of currency strategy for Brown Brothers Harriman, Chandler joined Bannockburn Global Forex, as a managing partner and chief markets strategist as of October 1, 2018.
My articlesMy offerMy siteAbout meMy books
Follow on:LinkedINTwitterSeeking AlphaAmazon
Filter archive by: Show All Show only Articles Show only Videos

Are Central Banks Exaggerating Deflation Risks?

2016-03-02

by

2016-03-02

Deflation is portrayed as the great economic scourge.  It exacerbates debt servicing costs and encourages consumers to defer purchases.  Central banks in Japan and Europe have responded with aggressive, unorthodox measures, often combining asset purchase programs with negative interest rates.   However, deflation is not very deep, and the measurement is not very precise.  In recent years, …

Read More »

FX Daily 03/02: Markets Take Another Step Away from the Edge

2016-03-02

by

2016-03-02

The angst that characterized the first several weeks of the year continues to dissipate.  Major equity markets are extending their two-week recovery into a third week. Immediate concerns about the US falling into a recession have eased.  The market have withstood some downward pressure on the Chinese yuan.  Late yesterday Moody's cut its outlook for China's credit …

Read More »

Great Graphic: Surplus Capacity is not the Same as Insufficient Aggregate Demand

2016-03-02

by

2016-03-02

Many economists argue that the key challenge is that of insufficient aggregate demand.  That is why world growth is slow.  Hobbled with debt, households have pulled back.  Business investment is weak.  Government dissavings has been offset by household and business savings.  The solution offered by some economists is a large public investment program. The G20 …

Read More »

Great Graphic: Gold Triangle–Continuation or Reversal Pattern?

2016-03-01

by

2016-03-01

During a period in which the zero bound no longer is the floor of interest rates, and many central banks continue to ease policy,  we have been watching gold a bit closer.   In early January, we noted that the technical pattern warned of breakout.  Our first objective was $1110-$1135. In early February, we updated our …

Read More »

FX Daily, 03/01: Markets Find Steadier Footing

2016-03-01

by

2016-03-01

It could have been a disaster.  US faltered yesterday, with the S&P 500 again struggling in the 1945-1950 area, and China's PMIs were weaker than expected.  However,  after initial weakness Asian shares turned higher.  The nearly 0.9% rise allowed the MSCI Asia Pacific Index to close at its best level in five sessions. European bourses …

Read More »

FAQ: UK’s Referendum on EU Membership

2016-02-29

by

2016-02-29

What is the issue?    The UK has long had a strained relationship with the EU and has never been comfortable with the ever increasing drive for greater integration and harmonization of rules and regulations coming from Brussels.  As the EU has ...

Read More »

Emerging Market Preview, First Week of March

2016-02-29

by

2016-02-29

  EM ended last week on a soft note, due to a variety of both external and internal factors.  Firm US data continue to support our call for resumed Fed tightening, and this gave the dollar a bit of a bid.  With the dollar gaining against the majors, this spilled over into generalized dollar gains … Continue reading »

Read More »

FX Daily, 02/29: Dollar Mixed, While Equities Skid

2016-02-29

by

2016-02-29

It seemed that it was only after Asian equity markets fell did reports begin suggesting disappointment with the G20 meeting.  The narrative followed the price action rather than the other way around.  Before that, at least, one newswire claimed China was the winner of at the G20 meeting.  Its currency policy was not criticized.  Many, …

Read More »

Baker’s Dozen: 13 Items that Should be on Your Radar Screen

2016-02-28

by

2016-02-28

The year has begun on a tumultuous note.  The Nikkei, DAX and S&P 500 all gapped lower the first day of the year. However, heightened anxiety has calmed as the fire appears to have burnt itself out, and equities have moved higher over the past two week. Three sources of stress have eased.  Investors are no longer … Continue reading...

Read More »

Weekly Speculative Positions: Small Changes

2016-02-27

by

2016-02-27

The position adjustment among speculators in the currency futures market were minor in the reporting week that ended February 23.  There was only one gross adjustment we regard as significant (more than 10k contracts).  The Mexican officials sprung a bear trap and forced speculators to cover.  There were 15.8k gross short peso in speculative hands that …

Read More »

FX Daily, 02/27: Are the Dollar Bulls Retaking the Initiative?

2016-02-27

by

2016-02-27

As systemic anxiety eased, the US dollar got better traction. The dollar-bloc currencies managed to hold their own as cross positions were unwound.    Major bourses posted gains for the second consecutive week.  With the recent advance, several markets, including the S&P 500, FTSE and Sweden, China, Korea, and Taiwan are now positive on the month.    …

Read More »

Weekly Emerging Markets: What has Changed?

2016-02-26

by

2016-02-26

(from my colleague Dr. Win Thin)

Read More »

Liberty and the 500 Euro Note

2016-02-26

by

2016-02-26

The internecine pitch battle between ECB President Draghi and the man who may very well be his successor, Bundesbank President Weidmann opened a new front this week.  It is over the future of the 500 euro note.   Practically, every initiative by Draghi has been resisted by the Bundesbank.  Sometimes it puts the Bundesbank at odds with …

Read More »

FX Daily, 02/26: Global Markets Trying to End Week on Upbeat

2016-02-26

by

2016-02-26

The US S&P 500 closed above 1950 for the first time since January 6.  Global equity markets are broadly higher in response.  At the same time, ahead of the G20 meeting, the world's second and third-largest economies have signaled additional...

Read More »

G20 Meeting is no Jedi Council

2016-02-25

by

2016-02-25

The G20 finance ministers and central bankers will meet in Shanghai starting tomorrow.   From some quarters, there is a sense of urgency.  The IMF, for example, is likely to cut its world GDP forecast of 3.4% this year.  That forecast is not even two months old.  The tightening of global financial conditions, exemplified by the sharp … Continue...

Read More »

FX Daily, 02/25: Market Anxiety Heightened, Oil and Stocks Head Lower, Sterling Can’t Catch a Bid

2016-02-25

by

2016-02-25

A confluence of factors are raising anxiety levels among investors, and it is being expressed in heightened volatility. The S&P 500 was turned back yesterday from the key 1945 level, and global equities are falling today.   The over-productio...

Read More »

FX Daily, 02/24: Dollar is Little Changed, US Leadership Awaited

2016-02-25

by

2016-02-25

The foreign exchange market is unusually calm.  The US dollar is little changed against currencies.  While the selling pressure that took sterling below $1.39 and the euro below $1.10 has subsided, neither has been able sustain upticks.  The e...

Read More »

The Return of Moral Economy?

2016-02-25

by

2016-02-25

The concept of moral economy was first used by 18th-century thinkers trying to make sense of the rising capitalist values.  In feudal society, a "fair price" was preferred over a free price especially for the necessities of the day.   The reci...

Read More »

Great Graphic: Trade-Weighted Look at Major Currencies

2016-02-24

by

2016-02-24

When considering the impact of changing currency prices on an economy, trade-weighted measures are appropriate.  The Federal Reserve has cited the dollar's appreciation as a headwind on the economy and a depressant on prices. Given the moves in...

Read More »

Sovereignty and Brexit

2016-02-22

by

2016-02-22

As the European Union grew, the unanimity in decision-making increasingly gave way to qualified majority voting.  This development took away an important weapon the UK deployed to pursue its national interest.  It use often to frustrate the collectivist decision-making in Brussels and exert its will for a broad union that preserved national sovereignty. National sovereignty is …

Read More »