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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Mixed Dollar as Eyes Turn to FOMC

2016-01-27

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2016-01-27

The US dollar is broadly mixed as attention turns to the FOMC statement later today.   The most important development has been the unexpectedly large oil inventory build reported by the API ahead of today's government estimate.   The 11.4 mln barrel build is the largest in nearly two decades.  To put the rise in perspective, consider …

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Great Graphic: World Equities and Oil

2016-01-27

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2016-01-27

Equities and oil continue to be moving in the same direction. During the first few weeks, they were moving down together and now up together.   It is frustrating for asset managers.   Large cap and small cap stocks moving together as if everything is being tarred with the same brush. We continue to try to tease … Continue reading...

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Getting a Handle on Italy’s Banks

2016-01-26

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2016-01-26

Reports indicating that Italy is close to establishing a bad bank prompted one wag to ask if  Italy does not already have enough.  The country may be better served by setting up a good bank. The sharp sell-of in shares of Italian banks this year is an important driver of G7-leading 12.4% slide in the … Continue reading »

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It may Feel Bad, but Its Different

2016-01-26

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2016-01-26

With equities sliding and oil pushing back below $30, it may feel like the resumption of moves in the first two and half weeks of the year, but it is different.  It is considerably more orderly.  The contagion from the equity and oil slide is mo...

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BOJ and TPP

2016-01-25

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2016-01-25

The Bank of Japan meets later this week.  We do not think that it will expand its already aggressive monetary policy stance.   Given the largely operational adjustments announced last month, it seems premature to expect substantive adjustment no...

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Greece is Still in a Hot Spot

2016-01-25

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2016-01-25

Greek Prime Minister Tsipras is celebrating the one-year anniversary of this election.  He offered Greek voters an opportunity to replace him last summer, but they stuck with him. Many economic issues remain unresolved. Pension reform promises to be a flashpoint between the Tsipras government and the official creditors.    Although the G10 has eleven members, official …

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Emerging Market Preview: Week Ahead

2016-01-25

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2016-01-25

Singapore reports December CPI Monday, and is expected at -0.7% y/y vs. -0.8% in November.  It then reports December IP Tuesday, and is expected at -6.8% y/y vs. -5.5% in November.  Q4 unemployment will be reported Thursday.  With deflation risks per...

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Recovery Pauses in Europe

2016-01-25

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2016-01-25

[unable to retrieve full-text content] Asia followed suit, extending the recovery seen in the last couple of sessions to end last week.  Equities rose as did oil prices.   The MSCI Asia-Pacific Index rose 1.2%, and the Nikkei posted its first back-to...

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Week Ahead: Picking Up the Pieces

2016-01-24

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2016-01-24

Whatever force had gripped the global capital markets since the start of the year has been broken.   This simple characterization is rich.  It is not clear if or what macroeconomic considerations were driving the markets.  The markets had taken the unsurprising Fed rate hike in mid-December in stride. The dramatic moves in the market did not …

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Weekly Speculative Positioning before the Reversal

2016-01-23

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2016-01-23

The latest Commitment of Traders report that covers the four sessions through January 19 saw speculators anticipating the continuation of the current moves.  Of the sixteen gross positions we track, only five were in reducing exposures.  Last week there was only six increased exposures. With the benefit of hindsight, we know that something changed a day …

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FX Outlook: New Phase has Begun

2016-01-23

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2016-01-23

The first two and a half weeks of the new year saw persistent selling of equities, commodities, and emerging markets.  In the foreign exchange market, the dollar-bloc and sterling were crushed.  The yen was the single biggest beneficiary, and spe...

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Europe’s Third Challenge

2016-01-23

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2016-01-23

ECB President Draghi made clear at yesterday's press conference that new risks have materialized and the central bank's job to reach its mandate is far from over. Current efforts may not suffice to achieve its legal prescribed mandate. Monetary policy will be reviewed and reassessed at the next meeting in March, when new staff forecasts … Continue...

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Emerging Markets: What has Changed

2016-01-22

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2016-01-22

In the EM equity space, Russia (+5.9%), Colombia (+2.0%), and Thailand (+1.8%) have outperformed this week, while Qatar (-6.8%), UAE (-5.1%), and the Philippines (-3.7%) have underperformed.  To put this in better context, MSCI EM rose 0.1% this week...

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Collective Sigh of Relief Ahead of the Weekend

2016-01-22

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2016-01-22

Like a car ignition that finally catches after several attempts, the global markets are building on the recovery seen in North America yesterday.   Asian stocks rallied, with the Nikkei leading the way with a 5.9% rally.  More modest 1.25% gain...

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Two Important Reforms

2016-01-21

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2016-01-21

There have been two important reforms announced, one in the EU and other in the IMF, that many investors may have missed due to the carnage in the markets.  While the economic challenges that Europe faces remain potent, the refugee problem appea...

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Draghi Drives Euro Lower

2016-01-21

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2016-01-21

Disclaime

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Fragile Calm Ahead of ECB Meeting

2016-01-21

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2016-01-21

The Asian equity markets failed to retain the early gains that had at least partially been fueled by the US equities recouping half of their losses.  The MSCI Asia-Pacific Index lost about 1.7% and finished at new 3.5 year lows.    European markets are posting minor gains, with the Dow Jones Stoxx 600 up about 0.25% … Continue reading »

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Cool Video: Canadian Dollar Discussion on BNN

2016-01-20

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2016-01-20

I had the privilege today to appear on Canada's Business News Network. It is a great source for information on the Canadian economy and markets.  I was interviewed by Michael Hainsworth. We discuss the Bank of Canada's decision not to cut rates...

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Great Graphic: Canadian Dollar Resilience in Face of 7% Drop in Oil

2016-01-20

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2016-01-20

This Great Graphic, composed on Bloomberg, shows two-time series.  The white line is the premium the US government pays to borrow over the Canadian government for two years.  The yellow line the US dollar against the Canadian dollar.   Even th...

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Is Atlas Shrugging in Davos?

2016-01-20

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2016-01-20

The World Economic Forum is underway in Davos.  The global capital markets are off to one of their worst years ever,  the threat of terrorism hangs over us, like the Sword of Damocles, GDP growth, except in a few countries, is not keeping pace with population growth.   As  2500 rich, powerful, and famous (mostly) … Continue reading...

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