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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The Death of a Business Cycle

2019-01-17

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2019-01-17

How do business cycles end? In the US, conventional wisdom is that they are murdered by the Federal Reserve. It is too slow to raise rates and then goes too quickly. This view is espoused by numerous well-respected economists and policymakers. President Trump's criticism of the Federal Reserve is anchored by such views.

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FX Daily, January 16: Markets are Eerily Calm

2019-01-16

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2019-01-16

Overview: There is an eerie calm over in the capital market through the European morning today despite some ostensibly worrisome developments.  While many, like ourselves, expect UK Prime Minister May to survive a vote of confidence, it hardly clarifies the outlook. 

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Cool Video: Brexit–Now What?

2019-01-16

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2019-01-16

Marc Chandler CNBC
I joined Wilf Frost, and Sara Eisen on the CNBC set at the NYSE shortly after the House of Commons delivered an unprecedented defeat to UK Prime Minister May. Catherine Mann (Citi) and Christopher Smart (Barings). The guests generally agreed that a delay in Brexit was likely.

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FX Daily, January 15: New Phase Begins with UK Vote

2019-01-15

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2019-01-15

Several of the equity benchmarks are flirting with six-week highs, including MSCI Asia Pacific Index and the Emerging Markets Index. The Dow Jones Stoxx 600 is trying to extend its advancing streak for a third week, something not done since July.

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FX Daily, January 14: Dismal Chinese Trade Data Sets Tone

2019-01-14

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2019-01-14

Overview:  China's exports and imports were weaker than expected, though the trade surplus swelled to its widest in a couple of years. The implications have undermined equities and weighed on risk appetites more broadly. Nearly all the Asia-Pacific markets were lower except Japan and the Dow Jones Stoxx 60o in Europe is off 0.5% near midday to snap a four-day advance.

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FX Weekly Preview: Europe Moves to the Center Ring

2019-01-14

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2019-01-14

In recent weeks, the macro story focused on the shifting outlook for Fed policy and the Sino-American trade relationship. There is unlikely to be further progress on either issue in the week ahead. The Fed won't raise interest rates until toward the middle of the year at the earliest.

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Two Takeaways from ECB Record

2019-01-12

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2019-01-12

The record of the ECB's December meeting was released, and there are two takeaways. The first is that officials may have been more concerned with the deteriorating situation than they let on at the time. Apparently, paring near-term growth forecasts was seen as a sufficient signal that risks were increasing. This allowed Draghi to maintain the "broadly balanced" risk assessment.

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FX Daily, January 11: Trade Optimism and the Recovery in Oil Boosts Risk Appetites

2019-01-11

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2019-01-11

Overview:  Optimism on trade talks between the US and China coupled with the biggest rally in WTI in two years (11%+) have helped keep the equity market recovery intact. The MSCI Asia Pacific Index rose today, the eighth time in the past ten sessions, while the Dow Jones Stoxx 600 in Europe is closing in on its second consecutive weekly advance. 

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FX Daily, January 10: Equity Bounce Stalls while the Greenback Steadies at Lower Levels

2019-01-10

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2019-01-10

Equities, bonds and the dollar are consolidating the moves seen earlier this week. This means equities are trading heavy and bonds firmer. The euro is paring gains that carried it to its best level (~$1.1570) since mid-October.  After stalling near JPY109 in the last two sessions, the greenback slumped to almost JPY107.75 before finding a better bid. 

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FX Daily, January 09: Equities Continue Recovery, Greenback Remains Heavy

2019-01-09

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2019-01-09

Overview:  Global equities have extended the New Year rally. The MSCI Asia Pacific Index advanced for the fifth consecutive session and the 10th in the past 11.  The Dow Jones Stoxx 600 in Europe is rising for the second consecutive session, something it has managed to do only one other time in the past month.  The S&P 500 is off to one of its best starts in years. 

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Keep Fitch’s Warning in Perspective

2019-01-09

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2019-01-09

meh
The global head of Fitch's sovereign ratings warned that the continued US government shutdown could jeopardize the AAA-status the rating agency grants America. It spurred little market reaction (and for good reason).

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FX Daily, January 8: Dollar Steadies, but Weakly for Turn-Around Tuesday

2019-01-08

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2019-01-08

Overview: The global capital markets remain calm after the surge in volatility seen over the last couple of weeks. Asian equities were mixed, with the Japanese, Australia and Indian shares gaining, but other large regional markets, like China, South Korea, and Taiwan fell. European equities are firmer. Benchmark bond have edged higher. 

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FX Daily, January 07: Recovery Falters in Europe

2019-01-07

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2019-01-07

Overview:  The combination of robust US jobs and wage growth, more comforting words from Powell and a strong rally US stocks before the weekend helped lift Asian markets today and underpinned risk-taking appetites.  However, renewed protests in France (and Hungary) coupled with weak German factory orders have prevented European bourses from fully participating in the equity recovery. 

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FX Weekly Preview: For the Millionth Time, Markets Exaggerate

2019-01-07

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2019-01-07

The S&P 500 fell more than 12% in a few weeks. The 10-year Treasury yield fell nearly 40 bp. There were cries that the sky was falling. A recession is imminent, we are warned by prognosticators. The Fed went ahead and raised interest rates on March 21, 2018, and the S&P 500 proceeded to gap lower the next day and continued to sell-off the following day. Investors did not like the unanimous decision.

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Apple, China, Yen, and US Jobs: Welcome to 2019

2019-01-04

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2019-01-04

The New Year is off to an auspicious start.  The Japanese yen, the third most actively traded currency behind the dollar and euro, got caught in a vortex of a retail short squeeze, algos, and who knows what else.  The US dollar plunged from around JPY109 to a slightly below JPY105 in a few minutes a little more than an hour after US markets closed yesterday.  

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Why the FX flash crash happened

2019-01-03

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Adam Button from ForexLive talks about the wild moves in the forex market on January 3, 2019 and what caused them. Apple warned about problems with the rising US dollar and Adam explained the issues with global uncertainty and how it will all shake out. LET’S CONNECT! Facebook ► http://facebook.com/forexlive Twitter ► https://twitter.com/ForexLive Forexlive Homepage …

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A Word on Q3 COFER-It Might not be What You Think

2019-01-02

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2019-01-02

Foreign Exchange Reserves by Currency, Q1 2016 - Q3 2018
The IMF offers the most authoritative report on central bank reserves on a quarterly basis with a quarter lag.  The report, the Currency Composition of Official Foreign Exchange Reserves (COFER), covering Q318 has been released.  It may be have been overlooked during the holidays, but if and when the pundits see it, the leading takeaway is that the dollar's share of global reserves fell below 62% for the first time five years.

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Technical Musings about the Euro and Dollar Anchored by Macro

2018-12-30

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2018-12-30

Tunafish
The $1.1475-$1.1550 is an important area for the euro.  Many bulls see a rounded bottom being carved and a break above it would be embraced as a confirmation. The lower-end corresponds to the 100-day moving average. Such a bottom pattern, if confirmed, would project toward $1.1800 the high in H2 18. On the downside, the low from H2 18 was near $1.1200.  This is just above a key (61.8%) retracement of the January 2017-February 2018 rally. 

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Week Winding Down on Firm Note, but Wild Ride may Not Be Over

2018-12-29

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2018-12-29

The biggest reversal in the S&P 500 since 2010, allowing it to string the biggest two-day rally in three years helped lift Asian and European shares today. All the Asia-Pacific equity markets advanced today but Japan, where the strength of the yen saw the Nikkei and Topix buck the move. European equities.

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Some Thoughts on What is Happening

2018-12-28

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2018-12-28

Elephant
People do not just disagree on what should and will happen, but they disagree on what has happened. As William Faulkner instructed: "The past is not dead. Actually, it's not even past. This is clear in the narratives about the sharp drop in equity markets.

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