Category Archive: 4) FX Trends
FX Daily, May 02: Dollar and Yen Heavy, Equities Trade Higher and Bonds Lower
The US dollar is sporting a softer profile against most of the major and emerging market currencies. The Japanese yen is the main exception. The greenback is rising against the yen for the fourth session and the sixth of the past seven. The dollar's gains against the yen coincide with the 10-12 bp recovery in the US 10-year yields over the past ten sessions.
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Weekly Speculative Positions (as of April 25): Bulls Take Charge of 10-year Note Futures, while Sterling Bears Hang On
The net short CHF position has risen to 17K contracts (against USD). The striking development among speculators in the futures market is the reversal of the record gross (and net) short Treasury note position two months ago.
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FX Daily, May 01: May Day Calm
Many financial centers are closed for May. Japanese markets were open today, but will be closed for three sessions beginning Wednesday for the Golden Week celebrations. The US dollar is narrowly mixed.
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FX Weekly Preview: Looking Through the FOMC Meeting as it Looks Past Poor Q1 GDP
US jobs and auto sales data may be more important than the FOMC meeting. Norway and Australia's central bank meets. Neither is expected to change policy. All three large countries that reported Q1 GDP figures last week - US, UK, France - disappointed expectations.
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FX Weekly Review, April 24 – 29: Dollar Remains the Fulcrum
Often the US dollar, as the numeraire, seems to be the main actor in the foreign exchange market. Other times, the dollar appears to be at the fulcrum between European currencies on one hand, and the dollar-bloc currencies on the other hand. Another way expressing this is whether there is a dollar-move underway or is it really more about the crosses.
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NAFTA Trade Update
The trade tensions between the US and Canada set the Canadian dollar to lows for the year. The dollar's downside momentum against the Mexican peso has eased. The Canadian dollar looks attractive not against the US dollar but against the peso.
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Longevity and Income
Rich people live longer than poor people in the US. This disparity undermines the progressive nature of Social Security. Disparity of income seems more important than the slowdown in growth in explaining why few US people are doing better than their parents at the age of 30.
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FX Daily, April 28: Markets Limp into Month End
Equity markets are stalling into the end of the month. MSCI Asia-Pacific Index is snapping a six-day advance, and the week's gain was sufficient to extend the advancing streak for the fourth consecutive month. The Dow Jones Stoxx 600 is trading off for the second consecutive session, after rallying for six consecutive sessions.
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FX Daily, April 27: Several Developments ahead of the ECB meeting
The ECB meeting and the press conference that follows it is the main event. However, it has had to compete with the Bank of Japan and Riksbank meetings, as well as the further reflection of the tax reform proposals by the Trump Administration yesterday.
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Draghi Does Nothing and Talks about It
Draghi confirms rate on hold and maintains easing bias. Growth risks are becoming more balanced. Inflation has yet to get on a sustained upward path.
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FX Daily, April 26: Dollar Stabilizes Ahead of Trump and ECB
The US dollar was marked down in response to the French election and saw some follow through selling yesterday, but the momentum had slowed, and now it is stalled. The greenback is posting upticks against nearly all the major currencies. There is a good reason to be cautious.
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Weekly Speculative Positions (as April 18): CHF Position Stands at same Level
The net short CHF position stands at 13K contracts (against USD). In the CFTC reporting period ending April 21, speculators to significant positions in the euro, sterling and the Mexican peso. Bulls and bears were took more exposure in the euro and sterling, while in the peso the former added on while later sought cover.
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FX Daily, April 25: Euro Consolidates Gains, Bond Market Sell-Off Continues
The US dollar is again at the fulcrum of the foreign exchange market. The dollar-bloc currencies are under pressure, along with the Japanese yen, while the European complex is posting modest gains. The euro is consolidating in the half cent below $1.09. Yesterday's marked up in early Asia saw the euro complete the 61.8% retracement of the losses since the US election, which was found near $1.0935
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Adam Button talks about the euro and Canadian dollar on BNN
In the aftermath of the first round of the French Presidential election, Adam Button from ForexLive stopped in at BNN to talk about the euro. He also spoke about the outlook for the Canadian dollar in light of new rules designed to cool the market.
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FX Daily, April 24: Dramatic Response to French Election
The results of the first round of the French election spurred a dramatic response in the capital markets. Our thesis that there is no populist-nationalist wave sweeping the world is supported by the previous results in Austria, the Netherlands, and now France.
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FX Weekly Preview: Politics and Economics in the Week Ahead
Provided Le Pen and Macron or Fillion make to the second round, the market response to the French election results may be short lived. BOJ, Riksbank and ECB meetings. Spending authorization and some announcement from the White House on tax policy are in focus as Trump's 100th day in office approaches.
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FX Weekly Review, April 17 – 22: Dollar Technicals Trying to Turn, but…
While the dollar index had another bad week with a 0.75% less, the Swiss Franc currency index could accumulate the corresponding gains. Main reason is that the EUR/CHF rose over 1.07.
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State of Dollar Bull Market
The dollar market is intact, despite the pullback here at the start of 2017. We have seen similar pullbacks in 2016 and 2015. Divergence remains the key driver.
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FX Daily, April 21: Markets Enter Consolidative Mode Ahead of Weekend
Neither the terrorist attack in Paris nor the strong eurozone flash PMI has managed to shake investors. Judging from the social media, many suspect that the terrorist attack plays into Le Pen's hands, but investors do not seem particularly concerned. The French interest rate premium over Germany has narrowed, and gold is flat. UK retail sales fell sharply, yet sterling is holding on to the bulk of this week's gains, which are the most here in 2017.
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