Tag Archive: U.K.

FX Daily, May 03: Ahead of US Jobs Report, the Greenback Remains Firm

2019-05-03

by

2019-05-03

Overview: The US April jobs data stand before the weekend, and the greenback is holding on to most of yesterday's gains as participants wait for the report. Equities in the Asia Pacific region were mixed without leadership from China and Japan, where the markets remain closed for the extended holiday. On the week, Australia's ASX was the worst performing.

Read More »

FX Weekly Preview: Three Highlights in the Week Ahead

2019-03-18

by

2019-03-18

Three events next week will shape the investment climate. The Federal Reserve meets and will update its forecasts and guidance. The British House of Commons may vote for a third time on the Withdrawal Bill before Prime Minister May heads of the EU Summit to ask for an extension of the UK leaving the EU. The eurozone sees the flash March PMI, with great hope that the green shoots of spring will be evident.

Read More »

FX Weekly Preview: For the Millionth Time, Markets Exaggerate

2019-01-07

by

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.

Read More »

After May’s divorce deal: the road ahead for Brexit

2018-11-17

by

2018-11-17

GBP/USD drops after Theresa May's cabinet approves the Eu divorce deal
But significant political challenges lie ahead before the 29 March deadline for Brexit. Sterling likely to be in the spotlight for several months.Theresa May’s cabinet has approved her divorce deal with the European Union (EU). A few cabinet secretaries have resigned, including Brexit Secretary Dominic Raab because the deal keeps the UK in a transitory ‘customs union’ with the EU, which in his view continues to give the EU too much influence on UK...

Read More »

FX Weekly Preview: Next Week’s Drivers

2018-09-24

by

2018-09-24

It is a testament to the Federal Reserves communication and the evolution of investors' understanding that we can say that the rate hike that the central bank will deliver is not as important as what it says. A rate hike is a foregone conclusion. According to the CME's model, there is about an 85% chance of December hike discounted as well.

Read More »

FX Weekly Preview: Dog Days of August Begin

2018-08-06

by

2018-08-06

With most of the major central bank meetings and important economic data out of the way, the dog days of August are upon us. In terms of drivers, it means that players will have to look elsewhere for inspiration and it means that market liquidy is likely not at its best.

Read More »

FX Weekly Preview: The Fed and More

2018-03-19

by

2018-03-19

The most significant event in the coming week is the first FOMC meeting under the Chair Powell. At ECB President Draghi’s first meeting he cut interest rates. He cuts rates at his second meeting as well, underwinding the two hikes the ECB approved under Trichet. At BOJ Governor Kuroda’s first meeting, an aggressive monetary policy was announced that was notable not only in its size, but also in the range of assets to be purchased under the...

Read More »

FX Weekly Preview: Changing Fortunes in the Capital Markets or Long Overdue Correction?

2018-02-05

by

2018-02-05

The chief development in the capital markets has been the sharp drop in equities after a significant rally since late last year and the rise in yields. The dollar had fallen alongside the exuberant appetite for risk assets. Anecdotal evidence supports the idea that the greenback was used as a funding currency to purchase those risk assets.

Read More »

FX Weekly Preview: Drivers and Views

2018-01-15

by

2018-01-15

It is not easy to recall another week in which there were so many potential changes to the broad investment climate. The relatively light economic calendar in the week ahead may allow investors to continue to ruminate about some of those developments. Here we provide thumbnail assessments of the main drivers.

Read More »

FX Weekly Preview: Events + Market = Potential for Combustible Price action

2017-11-27

by

2017-11-27

There are a number of events and economic reports in the week ahead that will help shape the investment climate in the weeks and months ahead. In recognition of the importance of initial conditions, let's briefly summarize the performance of the dollar and main asset markets.

Read More »

FX Daily, August 07: Outlaw Mondays

2017-08-07

by

2017-08-07

The US dollar is narrowly mixed to start the new week. Two main developments stand out. First, the dollar-bloc currencies are trading heavily. The Australian dollar is pushing lower for the fifth consecutive session. The greenback is advancing against the Canadian dollar for the sixth consecutive session. The New Zealand dollar is weaker for the fifth time in six sessions.

Read More »

FX Weekly Preview: Don’t Be Confused by the Facts or Why Neither the Data nor the Fed Will Alter Market Trends

2017-07-24

by

2017-07-24

FOMC is the highlight of the week. Early look at July inflation in Europe may see less pressure. Overall household consumption in Japan is rising, helped by robust labor market, but little new price pressures. The data this week is expected to confirm what many investors have come to assume.

Read More »

FX Daily, June 22: Greenback Goes Nowhere Quickly, While Yen Remains Bid

2017-06-22

by

2017-06-22

The summer doldrums begin early. The US dollar is little changed against most of the major currencies. Bond yields are mostly one-two basis points lower, and equity markets are mixed but with a downside bias. Oil prices slump more than 2% on Tuesday and again on Wednesday. This is weighing on bond yields and equities.

Read More »

FX Daily, May 05: Mixed Dollar Ahead of US Jobs Data and Fed Talk

2017-05-05

by

2017-05-05

The US dollar is narrowing mixed as the employment data, and Fed speeches are awaited. Six Fed officials speak today, including Yellen and Fischer. Regional Presidents Williams, Rosengren Evans and Bullard also speak. It will be the first flurry of speeches since the FOMC meeting.

Read More »

To The Asian ‘Dollar’, And Then What?

2017-04-27

by

2017-04-27

TIC - US Banking Data Claims On Foreigners, February 1979 - February 2017
The Bretton Woods system was intentionally set up to funnel monetary convertibility through official channels. The primary characteristic of any true gold standard is that any person who wishes can change paper claims into hard money. It was as much true in any one country as between those bound by the same legal framework (property).

Read More »

FX Weekly Preview: Politics and Economics in the Week Ahead

2017-04-24

by

2017-04-24

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.

Read More »

May’s Early Election Bid Sends Sterling on Roller Coaster

2017-04-20

by

2017-04-20

May calls snap election for June 8. Tories running 20 percent point lead over Labour. Next election would be in 2022, after the Brexit negotiations conclude.

Read More »

FX Daily, April 11: Dollar Pushed Lower in Subdued Activity

2017-04-11

by

2017-04-11

The US dollar has a slight downside bias today through the European morning. The market does not seem particularly focused on high frequency data, though sterling traded higher after an unchanged year-over-year reading of 2.3%, and the euro traded higher after a stronger Germany ZEW survey.

Read More »

FX Weekly Preview: A New Phase Begins

2017-04-10

by

2017-04-10

There were no celebrations; no horn or trumpets, nary a sound, but an important shift took place last week. The shift was signaled by two events. The first was the US strike on Syria, and the second was investors' willingness to look past Q1 economic data.

Read More »

How The West Has Been Selling Gold Into A Black Hole

2017-01-21

by

2017-01-21

Monthly Gold Withdrawn From Shanghai Gold Exchange Vaults vs Gold Price
In December 2016 Chinese wholesale gold demand, measured by withdrawals from the vaults of the Shanghai Gold Exchange (SGE), accounted for 196 tonnes, down 9 % from November. December was still a strong month for SGE withdrawals due to the fact the gold price trended lower before briefly spiking at the end of the month, and the Chinese prefer to buy gold when the price declines (see exhibit 1).

Read More »