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.

FX Weekly Preview: The Week Ahead is not about the Week Ahead

It's the last week of August. Several economic reports will be released in the coming days. They include the US deflator of consumer expenditures that the Federal Reserve targets, China's PMI, and the eurozone's preliminary August CPI. It is not that the data do not matter, but investors realize the die is cast.

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USD/CHF: Value of CHF calls hits highest since March 2018

Risk reversals on Swiss Franc (CHF1MRR), a gauge of calls to puts, dropped to the lowest level in 17-months, indicating the investors are adding bets to position for a rise in the Swiss currency. The USD/CHF one-month 25 delta risk reversals fell to -1.41 – a level last seen in March 2018.

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G7 to Deliver a Nothing Burger

A Bloomberg article about the weekend G7 meeting says, "multilateralism is dead."  An op-ed in the Financial Times suggests that the most important political alliance may be "rejuvenated" at the G7 meeting.  The truth is likely found somewhere in between. 

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FX Daily, August 23: Market has Second Thoughts on Magnitude of Fed Cuts Ahead of Powell

Powell speech at Jackson Hole stands before the weekend.  Equities in Asia and Europe are finishing the week on a firm tone.  Most markets in the Asia Pacific region closed higher today, and the MSCI Asia Pacific Index snapped a four-week slide.  European bourses are edging higher, and the Dow Jones Stoxx 600 is poised to end its three-week air pocket.

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FX Daily, August 22: Tick Up in EMU PMI Does Little, Waiting for Powell

Overview:  Soft data in Asia and the continued decline in the yuan (six days and counting) prevented Asian equities from following the US lead from yesterday when the S&P 500 advanced by 0.8%.  European shares are paring yesterday's 1.2% advance despite an unexpected gain in the EMU flash PMI.  US shares are little changed in the European morning.

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FX Daily, August 21: European Stocks Snap Back, Market Hopeful Italian Election can be Delayed

The end of the US equity three-day advance yesterday weighed on Asia Pacific shares today.  Most benchmarks fell.  Better than expected trade data helped Thailand buck the trend.  A firmer tone emerged in the European morning, and the Dow Jones Stoxx 600 has recouped yesterday's losses and more.  It was led higher by consumer discretionary, energy, and industrials.

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FX Daily, August 20: Marking Time Ahead of PMI and Powell

Overview:  Global equities and bonds are firmer in quiet turnover, and the dollar is narrowing mixed in narrow ranges.  The big events of the week, the eurozone flash PMI and Powell's speech at Jackson Hole still lie ahead.  The MSCI Asia Pacific Index rose for the third consecutive session, led by Korea and Australia's 1%+ gains. 

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FX Daily, August 19: China’s Rate Reform Helps Markets Extend End of Last Week Recovery

Overview: China announced some changes in its interest rate framework that is expected to lead to lower rates.  This helped lift equity markets, which were already recovering at the end of last week from the earlier drubbing.  Chinese and Hong Kong shares led the regional rally with 2-3% gains.  The Nikkei gapped higher for the third time in six sessions, and the first two were followed by lower gaps. 

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FX Weekly Preview: A Vicious Cycle Grips Markets

The capital markets are in their own doom loop. Poor data from Germany and China, coupled with the escalation of the US-China trade dispute and rising tensions in Hong Kong spur concerns about the risks of a global recession. Interest rates are driven lower, and curves flatten or go inverted, spurring more concern about the outlook. The problem is that it is not clear how this vicious cycle ends.

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First a European recession, then everywhere else

Adam Button from ForexLive outlines about how a drop in the euro will lead to cascading consequences for the global economy. LET'S CONNECT! Facebook ► http://facebook.com/forexlive Twitter ► https://twitter.com/ForexLive Forexlive Homepage ► http://www.forexlive.com/

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First a European recession, then everywhere else

Adam Button from ForexLive outlines about how a drop in the euro will lead to cascading consequences for the global economy. LET’S CONNECT! Facebook ► http://facebook.com/forexlive Twitter ► https://twitter.com/ForexLive Forexlive Homepage ► http://www.forexlive.com/

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FX Daily, August 16: Markets Take Collective Breath Ahead of the Weekend

Overview:  The global capital markets are ending the tumultuous week calmly, but it is far from clear that is will hold long.  Next week's flash PMIs have potential to disappoint, and there is risk of new escalation in the US-China trade conflict as the PRC threatens to take action to countermeasures to the new US tariffs.

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FX Daily, August 15: Animal Spirits Lick Wounds

Overview:  It took some time for investors to recognize that the scaling back of US tariff plans was not part of a de-escalation agreement. There was an explicit acknowledgment by US Commerce Secretary Ross that there was no quid pro quo. The US tariff split was more about the US than an overture to China. 

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FX Daily, August 14: Markets Paring Exaggerated Response to US Blink

The US cut its list of Chinese goods that will be hit with a 10% tariff at the start of next month by a little roe than half, delaying the others until the mid-December. This spurred a near-euphoric response by market participants throughout the capital markets. However, as the news was digested, it did not seem as much of a game-changer as it may have initially.

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USD/CHF technical analysis: Greenback jumps and settles above 0.9726 as tariffs gets delayed

USD/CHF is trading off 2-month lows below the main daily simple moving averages (DSMAs). US equity markets are rising sharply as US tariffs are to be delayed to December 15. The news was perceived as risk-on, sending safe-haven CHF, JPY and gold down.

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FX Daily, August 13: Investors Remain on Edge

Overview:  The confrontation in Hong Kong and the fallout from the Argentine primary over the weekend join concerns the conflict between the two largest economies and slower growth to force the animal spirits into hibernation.  Global equities remain under pressure.  Japan's Topix joined several other markets in the region to have given up its year-to-date gain. 

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USD/CHF technical analysis: Greenback under pressure below 0.9700 as sellers challenge June lows

CHF is up as Wall Street indices start the week in the red. The level to beat for bears are at the 0.9675 and 0.9660 levels.

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FX Daily, August 12: Yen Remains Bid, While Macri’s Loss in Argentina Weighs on Struggling Mexican Peso

Overview: China again tried to temper the downside pressure on the yuan, and this appears to be helping the risk-taking attitude. Many centers in Asia were closed today, including Japan and India, though most of the other equity markets advanced modestly, including China, Korea, and Australia. Europe's Dow Jones Stoxx 600 opened firmer but is staddling little changed levels unable to stain any upside momentum.

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FX Weekly Preview: Macro Deterioration

The US-China tensions remain the dominant driver of investor risk appetites. President Trump has repeatedly accused China of manipulating its currency on twitter, and finally Treasury Secretary Mnuchiin acquiesced after China failed to prevent the dollar from rising above CNY7.0.

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USD/CHF technical analysis: Greenback stable near 0.9755 as US stocks recover

The demand for the Swiss franc decreases as Wall Street indices are gaining strength. The level to beat for bulls are at 0.9790 and 0.9815 level.

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