Category Archive: 4) FX Trends
FX Daily, February 15: Stocks Jump, Bonds Dump, and the Dollar Slumps
The significant development this week has been the recovery of equities after last week's neck-breaking drop, while yields have continued to rise. The dollar has taken is cues from the risk-on impulse from the equity market and the sales of US bonds more than the resulting higher yields. Asia followed US equities higher.
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FX Daily, February 14: Investors Remain Uneasy even as Equities Stabilize
There is an unease that continues to hang over the market. It is as if a shoe fell last week, and most investors seem to be waiting for the other shoe to drop. It is hard to imagine the kind of body blow that the equities took last week without some kind of follow through and knock-on effects. Moreover, the focus today on US CPI may prove for nought.
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Great Graphic: Stocks and Bonds
The relationship between stocks and bonds does not appear to have changed much. It is difficult to eyeball correlations. Question the meaning of a chart that has two time series and two scales and.
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FX Daily, February 13: Tuesday’s Two Developments
There are two important developments today. First, the recovery in the global equity markets is being challenged. Second, the yen has strengthened across the board, and is now at its best levels against the dollar since last September's low. The MSCI Asia Pacific Index extended Monday's recovery with another 0.5% gain. However, looking closer, the momentum faltered.
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FX Daily, February 12: Equity Markets Find Firmer Footing, Dollar Softens
The most important development today has been the stability in the equity markets after last week's meltdown. The recovery from new lows in the US before the weekend set the tone for today's moves. Tokyo markets were on holiday, and the MSCI Asia Pacific Index excluding Japan snapped a seven-day slide with a nearly 0.6% gain.
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Weekly Technical Analysis: 12/02/2018 – USD/JPY, EUR/USD, GBP/USD, WTI Oil Futures, USD/CHF
The USDCHF pair trading settles below the previously broken support that appears in the image, while stochastic provides negative overlapping signal on the four hours time frame, which supports the continuation of our bearish trend expectations in the upcoming sessions, reminding you that our next target at 0.9254.
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FX Weekly Preview: Recovering from Too Much of a Good Thing?
Too much of a good thing is bad. That, in a nutshell, is an important insight that Hyman Minsky offered about the financial sector, but has broader application. The low volatility that has been a characteristic of the capital markets for the past few years spurred financial innovation to profit from it.
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The five big 20th century problems are solved
It was a rough week in global markets so it’s a good time to take a step back and look at the ultra-long term. Adam Button from ForexLive talks about how being bearish in the big picture is insanity because mankind has already solved so many problems. All the main challenges of the 1900s have … Continue reading...
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FX Daily, February 09: Equity Sell-Off Extends to Asia, but More Muted in Europe
The 100-point slide in the S&P 500 and the 1000-point drop in the Dow Jones Industrials yesterday spurred more bloodletting in Asia. The 1.8% drop in the MSCI Asia Pacific Index (for a 6.7% loss for the week) may conceal the magnitude of the regional losses. At one point the CSI 300 of the large Chinese mainland shares was off more than 6% before closing off 4.3% (and 10% for the week). The H-shares index was down 3.9% and 12% for the week.
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Great Graphic: FX Vol Elevated, but Still Modest
With the substantial swings in the volatility of equities that have captured the imagination of journalists and punished investors who bought financial derivatives that profited from the low vol environment, we thought it would be helped to look at the implied volatility of the leading currencies against the US dollar. The Great Graphic looks at the three-month implied volatility for the euro (white line), the yen (yellow line), and sterling (green...
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Oil glut threatens Canadian dollar
Adam Button from ForexLive appeared on BNN on February 8, 2018 to talk about the outlook for the Canadian dollar and two other currencies that will benefit from a strong global economy.
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FX Daily, February 08: Dollar Firms, While Equities Search for Stability
The swings in the equity markets are subsiding, bond yields are firm and the US dollar is extending its recovery. Although US equities closed lower, the MSCI Asia Pacific Index snapped a four-day drop by posting a 0.25% gain. However, the MSCI Emerging Markets Index is off nearly as much, though the range was modest. European markets are also lower, and the range for the Dow Jones Stoxx 600 is the smallest in more than a week.
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Great Graphic: Major Currencies Year-to-Date
This Great Graphic was created on Bloomberg. It shows five major currencies against the US dollar this year. To avoid giving a misleading impression, the currencies are index to start this year at 100 and all the currencies are quoted in the European style of how many dollars the currency purchases. These kinds of charts are not so much for trading, but they help illustrate the relative moves that can be masked by nominal price changes.
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Chandler Says Yield Curve Is One of the Best Predictors of the Economy
Feb.07 -- Marc Chandler, global head of currency strategy at Brown Brothers Harriman, discusses the bond market and which yield curve he focuses on. He speaks with Tom Keene and Francine Lacqua on "Bloomberg Surveillance."
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FX Daily, February 07: Guns and Butter May Resolve US Legislative Logjam
After a volatile session in North America, the major equity indices closed higher. In fact, the 1.75% rise in the S&P 500 was the best since November 2016. Asian equities stabilized, and the MSCI Asia Pacific Index was able to eke out a small gain. The European markets are moving higher is also posting early gains and the Dow Jones Stoxx 600 is about 0.45%, which threatens to snap the seven-day slide. However, the main challenge now is that the S&P...
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Marc Chandler Says BOE Is Comfortable on Hold
Feb.07 -- Marc Chandler, global head of currency strategy at Brown Brothers Harriman, discusses the upcoming Bank of England rate decision. He speaks on "Bloomberg Surveillance."
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Cool Video: Bloomberg Double Feature–BOE Meeting and the Yield Curve
The Bank of England meets tomorrow. Although no one expects a move, it has little to do with the recent market volatility. The FTSE 100 is poised to snap a six-day 7%+ slide. The FTSE 250 fell for seven consecutive sessions through yesterday, shedding 5.75% in the process. The UK's 2-year yield slipped about seven basis points from last week's close to58 bp before recovering to 63 bp today, around the middle of this week's range.
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US Trade Balance is Deteriorating, Despite Record Exports
The US trade deficit swelled in December, and the $53.1 bln shortfall was a bit larger than expected. It was the largest deficit since October 2008. For the 2017, the US recorded a trade deficit of goods and services of $566 bln, the largest since 2008. The deterioration of the trade balance may be worse than it appears. There has been significant improvement in the oil trade balance. In 2017, the real petroleum balance was just shy of $96 bln, the...
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