Tag Archive: newsletter

Oil prices are reeling

2019-06-11

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2019-06-11

Oil Prices, 2018-2019
The escalation in trade tensions, the dimming of global growth prospects and a surge in US export capacity have pushed us to lower our oil forecasts.The recent plunge in prices suggests that oil is acting like a leading indicator of global economic growth, reflecting investors’ concerns that lasting trade disputes will dent future growth and risk pushing the world economy into recession.

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Gold To Reach 6 Year High Over $1,400 on Uncertain Outlook for Global Markets

2019-06-11

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2019-06-11

Gold Markets, 2009-2019
Gold is finally gaining the traction needed to boost prices to a level not seen since 2013 as concern mounts over increased trade war tensions and the global growth outlook. Bullion may touch $1,400 an ounce this year as investors hedge risk, according to Rhona O’Connell, head of market analysis for EMEA and Asia regions at INTL FCStone Inc.

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Irredeemable Currency Is a Roach Motel, Report 9 June

2019-06-10

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2019-06-10

In what has become a four-part series, we are looking at the monetary science of China’s potential strategy to nuke the Treasury bond market. In Part I, we gave a list of reasons why selling dollars would hurt China. In Part II we showed that interest rates, being that the dollar is irredeemable, are not subject to bond vigilantes.

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FX Daily, June 10: Collective Sigh of Relief Lifts Equities, Yields, and the Dollar

2019-06-10

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2019-06-10

Overview: A global sigh of relief that the US will not tariff all its imports from Mexico.  Equities are all higher, and the weekend demonstrations in Hong Kong over a bill allowing extraditions to the mainland for the first time did not deter investors from bidding up the Hang Seng over 2.3%, the most this year.  European equities are following suit. 

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FX Weekly Preview: US Policy Mix Flips and Will Take the Dollar with It

2019-06-10

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2019-06-10

There is a new game, afoot. For the last couple of years, it has been about normalizing policy. Even the Bank of Japan, which has never declared it was tapering, has gradually reduced the amount of government bonds it purchases. Countries like the US, or Canada in 2017, who could raise interest rates were rewarded with stronger currencies.

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All Of US Trade, Both Ways, And Much, Much More Than The Past Few Months

2019-06-10

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2019-06-10

US Imports of Goods from China, NSA 1989-2019
The media quickly picked up on Jay Powell’s comments this week from Chicago. Much less talked about was why he was in that particular city. The Federal Reserve has been conducting what it claims is an exhaustive review of its monetary policies. Officials have been very quick to say they aren’t unhappy with them, no, no, no, they’re unhappy with the pitiful state of the world in which they have to be applied.

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Janus Powell

2019-06-09

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2019-06-09

US Treasury Real Yields, 2007-2019
Again, who’s following who? As US Treasury yields drop and eurodollar futures prices rise, signaling expectations for lower money rates in the near future, Federal Reserve officials are catching up to them. It was these markets which first took further rate hikes off the table before there ever was a Fed “pause.”

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Monthly Macro Monitor – June 2019 (VIDEO)

2019-06-08

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2019-06-08

Alhambra Investments CEO reviews economic charts from the past month and his opinion of what they mean.

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Swiss government decides not to act on roaming charges

2019-06-08

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2019-06-08

The National Council, Switzerland’s parliament, rejected a motion to force Swiss mobile phone operators to remove EU roaming charges. 99 voted against, 78 for and 14 abstained, according to the newspaper 20 Minutes. In 2017, the European Union (EU) forced EU operators to stop charging their customers extra for calls made outside their home country but within the EU.

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A Surprise Move in Gold

2019-06-08

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2019-06-08

Gold, 30-year seasonal chart
Traders and Analysts Caught Wrong-Footed. Over the past week gold and gold stocks have been on a tear. It is probably fair to say that most market participants were surprised by this development. Although sentiment on gold was not extremely bearish and several observers expected a bounce, to our knowledge no-one expected this.

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FX Daily, June 7: Jobs Data and Tariffs Dominate

2019-06-07

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2019-06-07

Overview:  Global equities continue to recover from the recent slide.  Chinese and Hong Kong markets were on holiday today, but the MSCI Asia Pacific Index eked out a minor gain and ensured that its four-week slide ended.  Europe's Dow Jones Stoxx 600 is up about 0.7% through the European morning. 

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Is the Tech Bubble Bursting?

2019-06-07

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2019-06-07

Acceleration of Technological Adoption Curves 1867-2017
There are two other trends that don't attract quite the media attention that soaring profits do. Is the decade-long tech bubble finally popping? Tech bulls are overlooking the fundamental reality that the drivers of Big tech's phenomenal growth--financialization and expansion into mobile telephony-- are both losing momentum.

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Swiss regulator fines banks over improper forex trading

2019-06-07

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2019-06-07

The Swiss Competition Commission (COMCO) has fined five international banks for their involvement in the formation of cartels that manipulated the foreign exchange market. COMCO fined Barclays, Citigroup, JPMorgan, the Royal Bank of Scotland (RBS) and the MUFG Bank a total of CHF90 million ($90.6 million) for “anti-competitive arrangements between banks in foreign exchange spot trading”.

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Gold Hits 10 Week High At $1,328/oz as Trade Wars Spur Safe Haven Demand

2019-06-07

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2019-06-07

Gold in USD – 1 week (GoldCore.com)
Gold has consolidated on yesterday’s gains and is marginally higher as risk aversion creeps back into markets. Gold rose 1.5% yesterday to its highest level in more than three months. Concerns that trade wars look set to escalate globally and fears that President Trump’s threat of tariffs on Mexico will hurt the global economy are spurring safe haven demand.

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FX Daily, June 6: US Tariff Threats on Mexico Compete with ECB for Attention

2019-06-06

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2019-06-06

Overview: The implications of President Trump's assessment that there has not been "nearly enough" progress in negotiations with Mexico that would avert the tariff on June 10 competing for investors' attention, which had been squarely today's ECB meeting. Minutes before Trump spoke Fitch cut its sovereign rating for Mexico to BBB from BBB+, while Moody's cut its outlook to negative from stable.

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Why has euro inflation stayed so low?

2019-06-06

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2019-06-06

Euro Area - HICP Inflation, 2010-2019
Weak inflation data pose a conundrum, both in terms of the growth outlook and the ECB’s policy stance. We believe the ECB will stay on hold in 2020.The euro area headline flash Harmonised Index of Consumer Prices (HICP) dropped to 1.2% year on year in May from 1.7% the previous month.  Core inflation fell by 50bp to 0.8% y-o-y.

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A dovish Fed could become even more so

2019-06-06

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2019-06-06

Economic momentum has weakened of late, while core inflation has underwhelmed
Trade, inflation expectations and economic data could well spark ‘insurance’ rate cuts by the Fed in the coming months.We now believe that the Federal Reserve (Fed) could deliver two ‘insurance’ rate cuts of 25bps in coming months (up to now, we expected rates to be on hold in 2019-2020). We see three drivers that could dictate the exact timing of these cuts:

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Bitcoin: What is the Best Day of the Week to Buy?

2019-06-06

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2019-06-06

BTC average daily performance
Shifting Patterns. In the last issue of Seasonal Insights I have discussed Bitcoin’s seasonal pattern in the course of a year. In this issue I will show an analysis of the returns of bitcoin on individual days of the week. It seems to me that Bitcoin is particularly interesting for this type of study: it exhibits spectacular price gains, it is a very new instrument and it is unregulated. Moreover, it trades around the clock, even on weekends.

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Plastic bag use continues to drop 

2019-06-06

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2019-06-06

Consumption of single-use plastic bags in some 30 Swiss food retailers has dropped 86% since they introduced a small charge in 2016. The charge of CHF0.05 (an American nickel) per bag was introduced voluntarily under a sectoral agreement in response to a parliamentary move that would have banned single-use plastic bags.

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FX Daily, June 05: Dollar Remains on Back Foot

2019-06-05

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2019-06-05

Overview: The Federal Reserve's patience never excluded a rate cut should conditions warrant. The acknowledgment of this without signaling a change its stance is being seized upon to justify aggressive pricing of rates. At the same time, there has some tempering of trade anxiety on the margin that is also constructive. Asia and European equities were pulled higher after the strongest rally in several months in the US. 

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