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.
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FX Daily, March 30: Monday Blues

2020-03-30

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2020-03-30

Overview: Risk appetites remain in check as the spread of the coronavirus is leading to more and longer shutdowns.  Asia Pacific equities fell with Australia, the notable exception.  Its benchmark rallied a record 7%, encouraged by additional stimulus measures.

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FX Daily, March 27: Nervousness Ahead of the Weekend

2020-03-27

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2020-03-27

Overview: Officials appear to have persuaded investors that they have put into place measures that will cushion the economic blow and ensure that the financial system continues to function. After seemingly goading officials into action, investors are choosing not to resist. Moreover, there is a recognition that many programs are scalable.

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FX Daily, March 26: Rumor Bought, Fact Sold

2020-03-26

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2020-03-26

Overview: Speculation that the US Senate would pass the large stimulus bill worth around 10% of US GDP is thought to have fueled a bounce in equities in recent days. The bill was approved and will now go to the House, where a vote is expected tomorrow. If the rumor was bought, the fact has been sold. The first to crack was the Asia Pacific region.

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SNB sets up refinancing facility and deactivates counter-cyclical buffer

2020-03-25

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2020-03-25

There is no upper limit for virus fund. Drawdowns can be made at any time. Says interest rates to correspond to the SNB policy rate (-0.50%). Will be available from tomorrow.

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FX Daily, March 25: Relief, but…

2020-03-25

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2020-03-25

Overview: Global equities are marching higher. While the Dow Jones Industrials posted its biggest advance since 1933, the US is lagging behind other leading benchmarks. The MSCI Asia Pacific advanced, led by Japan's Nikkei's 8% gain. It was third consecutive gain, during which time the Nikkei has rallied 17%. Europe's Dow Jones Stoxx 600 is up about 3.5% after bouncing 8.4% yesterday.

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FX Daily, March 24: Relief Bounce On Tuesday, but Turn Around not Secure

2020-03-24

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2020-03-24

Overview: Bottom-picking, after officials step up efforts and some optimism creeps in, is helping lift spirits today. As one looks at the equity bounces, it is important to remember that among the biggest rallies take place in bear markets. Nearly all the bourses in Asia-Pacific rallied, led by a 7% advance by Japan's Nikkei and an 8%+ surge in South Korea's Kospi. Most other markets were up 2%-5%.

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Conference Call Replay

2020-03-24

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2020-03-24

Here is the link for the replay of the conference call I hosted earlier today.  I shared two ways in which this crisis is different from what we have seen in the last generation.  Unlike the Great Financial Crisis, the tech bubble, and the S&L Crisis, the current crisis did not begin in the financial sector, but the real economy.   

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FX Daily, March 23: Greenback Demand Not Satisfied by Swap Lines

2020-03-23

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2020-03-23

Overview: In HG Wells' "War of the Worlds," the common cold repelled a Martian invasion. Now, a novel coronavirus is disrupting everything and everywhere. Global equities continue to get hammered, though the apparent relative resilience of Japan may have spurred some buying of Japanese equities.

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Can central banks keep plugging leaks in the dam?

2020-03-20

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Adam Button from ForexLive talks about the coronavirus crisis in markets and how it's affected the Canadian dollar. "What’s happened is a US dollar funding crunch. The world runs on US dollars and there have been no other safe havens so everyone has been piling into the dollar. The relative stability of the loonie – as tough as that is to believe – is a good sign for the Canadian financial system. We’re not seeing the level of panic moves...

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Can central banks keep plugging leaks in the dam?

2020-03-20

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Adam Button from ForexLive talks about the coronavirus crisis in markets and how it’s affected the Canadian dollar. “What’s happened is a US dollar funding crunch. The world runs on US dollars and there have been no other safe havens so everyone has been piling into the dollar. The relative stability of the loonie – …

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FX Daily, March 19: ECB’s Bazooka Support Bonds but not the Euro

2020-03-19

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2020-03-19

Overview: It is not just that the dollar soared while stocks and bonds continued to plunge. The dollar's strength is, in effect, a powerful short-covering rally. It was used to fund a great part of the global circuit of capital. The circuit of capital is in reverse now, and the funding currency is being bought back. The dollar's strength is a function of the sell-off of other assets.

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FX Daily, March 18: Bonds Join Equities in the Carnage

2020-03-18

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2020-03-18

Overview: A new phase of the market turmoil is at hand. Bonds are no longer proving to be the safe haven for investors fleeing stocks. The tremendous fiscal and monetary efforts, with more likely to come, have sparked a dramatic rise in yields. Meanwhile, equities are getting crushed again.

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FX Daily, March 17: Even Turn Around Tuesday is Flat

2020-03-17

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2020-03-17

Overview:  While the markets are not as disorderly as they have been, the tone is fragile, and the animal spirits have been crushed.  Australian stocks fell more than 10% last week and dropped another 9.7% yesterday before rebounding by almost 6% today to be one of the few Asia Pacific equity markets to rise.  The Nikkei eked out a small gain, but the broader Topix rose 2.6%.

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FX Daily, March 16: Monday Blues: Fed Moves Bigly and Stocks Slump

2020-03-16

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2020-03-16

Overview: The Federal Reserve and central banks in the Asia Pacific region acted forcefully, but were unable to ease the consternation of investors. The Reserve Bank of New Zealand cut key rates by 75 bp. The Bank of Japan appears to have doubled its ETF purchase target to JPY12 trillion, and the Reserve Bank of Australia is preparing for new measures that will be announced Thursday.

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Coronavirus: Why more black swans are coming

2020-03-13

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Adam Button, currency analyst at ForexLive talks about the outlook for global markets and the many, mounting risks. Most people are overly focused on the first-order risks from coronavirus but the second-order effects are what's going to swamp sentiment -- even more than it is already. Adam talks about where the Canadian dollar is headed and where to hide. LET'S CONNECT! Facebook ► http://facebook.com/forexlive Twitter ►...

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Coronavirus: Why more black swans are coming

2020-03-13

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Adam Button, currency analyst at ForexLive talks about the outlook for global markets and the many, mounting risks. Most people are overly focused on the first-order risks from coronavirus but the second-order effects are what’s going to swamp sentiment — even more than it is already. Adam talks about where the Canadian dollar is headed …

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FX Daily, March 12: Trump Dump as Market Turns to ECB

2020-03-12

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2020-03-12

Overview: After the Bank of England and the UK Treasury announced both monetary and fiscal support, the focus turns to the ECB, but the proximity of the US Congressional recess (next week) without strong fiscal measures being in place sucked the oxygen away from other issues. President Trump's national address in the Asian session failed to reassure investors.

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FX Daily, March 11: US Over-Promises and Under-Delivers, while BOE Steps Up with 50 bp Rate Cut

2020-03-11

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2020-03-11

Overview: The S&P 500 and Dow Jones Industrials sold off after the higher open and briefly traded below yesterday's lows. Investors seemed disappointed that the Trump Administration was not ready with specific policies after Monday's tease that had initially helped lift Asia Pacific and European markets earlier on Tuesday. This sparked a sharp decline in Europe into the close.

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FX Daily, March 10: Markets Stabilize after Body Blow

2020-03-10

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2020-03-10

Overview:  It appears after a few days of miscues, US officials struck the right chord, and the global capital markets seemed to stabilize shortly after the US session ended.  President Trump's press conference today is expected to spell out in greater detail relief for households and businesses.  Asia Pacific equities rallied, led by a 3% surge in Australia.

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