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, 02/25: Market Anxiety Heightened, Oil and Stocks Head Lower, Sterling Can’t Catch a Bid

2016-02-25

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2016-02-25

A confluence of factors are raising anxiety levels among investors, and it is being expressed in heightened volatility. The S&P 500 was turned back yesterday from the key 1945 level, and global equities are falling today.   The over-productio...

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FX Daily, 02/24: Dollar is Little Changed, US Leadership Awaited

2016-02-25

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2016-02-25

The foreign exchange market is unusually calm.  The US dollar is little changed against currencies.  While the selling pressure that took sterling below $1.39 and the euro below $1.10 has subsided, neither has been able sustain upticks.  The e...

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The Return of Moral Economy?

2016-02-25

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2016-02-25

The concept of moral economy was first used by 18th-century thinkers trying to make sense of the rising capitalist values.  In feudal society, a "fair price" was preferred over a free price especially for the necessities of the day.   The reci...

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Great Graphic: Trade-Weighted Look at Major Currencies

2016-02-24

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2016-02-24

When considering the impact of changing currency prices on an economy, trade-weighted measures are appropriate.  The Federal Reserve has cited the dollar's appreciation as a headwind on the economy and a depressant on prices. Given the moves in...

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Sovereignty and Brexit

2016-02-22

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2016-02-22

As the European Union grew, the unanimity in decision-making increasingly gave way to qualified majority voting.  This development took away an important weapon the UK deployed to pursue its national interest.  It use often to frustrate the collectivist decision-making in Brussels and exert its will for a broad union that preserved national sovereignty. National sovereignty is …

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Thoughts about the Price Action

2016-02-22

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2016-02-22

The US dollar has begun the week with a strong advance against sterling and the euro. Sterling's drop, the most in several years, is not a function of macroeconomic policy.  It is a function of Brexit and its endorsement by London Mayor Johnson....

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FX Daily, 02/22: Sterling is Pounded and Eurozone PMI Disappoints

2016-02-22

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2016-02-22

Global equities are beginning the last week of February on a firm note.  The MSCI Asia Pacific Index rose 0.75%, with China's markets gaining more than 2%, leading the way. European shares have followed suit.  The Dow Jones Stoxx 600 is up 1.7%...

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Emerging Market Preview: Week Ahead

2016-02-22

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2016-02-22

(from my colleague Dr. Win Thin) We think that it’s still too early to say whether Friday's price action was simply profit-taking ahead of the weekend, or the resumption of overall negative market sentiment.  We think the global backdrop rem...

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Re-Emergence of Divergence Helps Stabilize Markets

2016-02-21

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2016-02-21

The main driver of the investment climate is not so much the incremental economic data as the capital markets themselves. The market turmoil contributed to the tightening of financial conditions, which in turn heightened risks, which monetary of...

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Weekly Speculative Position: Dollar Bullish Speculators Still Hesitant

2016-02-21

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2016-02-21

The CFTC Commitment of Traders reporting week ending February 16 was short due to the US holiday.  This may have contributed to the small adjustments to speculative positioning in the currency futures.  It also may reflect the lack of convictio...

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Investor: Heal Thyself

2016-02-21

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2016-02-21

After a terrible first several weeks of the year, global capital markets stabilized in the past week.  Chinese markets re-opened after the extended Lunar New Year holiday and proved not to be disruptive.   Chinese equities did not decline to catch-up to the performance of global markets in its absence and instead gained 3% on … Continue...

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The World is not Ending (Yet), Panic To Subside

2016-02-14

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2016-02-14

Investors have become unhinged. The increased volatility and dramatic market moves challenge even the most robust investment strategies. This sets off a chain reaction of money and risk management that further amplifies the price action, like an...

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Weekly Speculative Positions: Speculators Continue to Press

2016-02-13

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2016-02-13

There are two broad developments in speculative positioning in the Commitment of Traders report in the week ending February 9.  First, the market turbulence saw speculators reduce exposure.  Of the 16 gross positions we track, 11 were reducing ...

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Daily FX, 02/13: Market Chaos Subsiding? Dollar Correction Over?

2016-02-13

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2016-02-13

The outlook for the dollar in the week ahead is not about economic data or the FOMC and ECB minutes.  It is about the stability of the global capital markets.  Many are looking for an event or official action that will stop the rout that is of historic proportions to start the year.   We too … Continue reading...

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What’s really roiling markets in 2016

2016-02-13

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Adam Button from ForexLive talks about what’s really causing the turmoil in markets this year and how the lack of understanding at central banks and among market participants is presenting opportunities.

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Don’t Forget the Golden Rule: He with the Gold Makes the Rules

2016-02-12

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2016-02-12

In response to the global crisis, central banks have adopted unorthodox policies.  They expanded their balance sheets and broken the zero bound of interest rates.  Many investors have been critical of the central bank action on principle, but what has changed recently is that market developments have provided fodder for the ineffectiveness in practice. Asset …

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Weekly Emerging Markets: What has Changed?

2016-02-12

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2016-02-12

In the EM equity space, Colombia (+0.3%), Chile (+0.2%), and Poland (-0.6%) have outperformed this week, while India (-6.6%), Czech Republic (-5.5%), and Hong Kong (-5.0%) have underperformed.  To put this in better context, MSCI EM fell -3.9% this w...

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A Bit of a Pre-Weekend Reprieve in Europe, but Return of China on Monday is Worrisome

2016-02-12

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2016-02-12

After another difficult Asian session that saw the Nikkei fell 4.8% (12.3% on the week), the capital markets against have stabilized in Europe.  Equity markets are mostly higher, with the Dow Jones Stoxx 600 up nearly 2% led by energy and financials. Oil prices are up a bit more than $1 a barrel though it … Continue...

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Seeing the Forest for the Trees

2016-02-11

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2016-02-11

The conundrum that everyone is wrestling with is the euro and yen's strength given their negative interest rates and prospect for even lower interest rates.   The divergence of monetary policy, even if the Fed is on hold for the rest of this year and next, should be dollar-positive. We have tried making sense of what … Continue reading...

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Daily FX, 02/11: Stocks Crater, Yen Soars

2016-02-11

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2016-02-11

The continued sell-off in global equities is the main driver of the capital markets.  It, along with the push lower in oil prices, are pushing core bond yields sharply lower. The US 10-year yield is nearing 160 bp having begun the year above 225 bp.    The 10-year gilt yield is at a new record low … Continue reading »

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