Tag Archive: U.S. Treasuries

FX Weekly Review, July 11 – July 15: It is not About the Dollar, but About Other Currencies

Our weekly review of currency movements, with focus on the Swiss franc. This week: The US dollar is easily the most traded currency, and despite the plethora of other currencies, it is on one side of nearly 90% of all trades. Yet the movement in the foreign exchange market presently is not so much driven by the dollar as it is by other currencies.

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FX Daily, July 13: Sterling and Yen Momentum Slows

The two main developments in the foreign exchange market this week in recent days has been the opposite of what has transpired over the past several weeks. Sterling moved higher quickly. The yen moved down just as fast. Over the past five sessions through late-morning levels, sterling has gained 2.5% while the yen has shed 2.8%.

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FX Weekly Review, July 04 – July 08: Further SNB Interventions, Good Dollar Week

In the Brexit month, the Swiss franc index clearly underperformed the dollar index. The major reason is that the dollar is seen as a better safe-haven than the Swiss Franc, possibly because Swiss sales are affected more when British demand falls.

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ETF Securities Reports Biggest One-Day Gold Inflow Since Financial Crisis

It never ceases to amaze how vastly different the investment styles of gold paper vs physical traders are: while we have documented previously how the latter tend to buy progressively more the lower the price (as traditional "buy low, buy more lower" investing would suggest), "investors" in gold paper-derivatives such as ETFs and ETPs are quite the opposite: in fact, they rarely buy until someone else is buying and generating momentum.

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FX Weekly Review: June 27 – July 01: Swiss Franc Strength Reversed

Week after Brexit.: The Swiss franc (-0.3%) and the yen (-0.5%) were the worst performers, as so-called safe haven buying was reversed. But the Swiss Franc index is still stronger in the last month than the dollar index.

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FX Weekly Review: June 20 – June 24: Dollar Appreciates with Brexit

The dramatic reaction to the UK decision to leave the European Union has changed the technical condition in the foreign exchange market. The EUR/CHF peaked shortly before the Brexit referendum, when traders were anticipating a yes. It found its trough when the No was published. Then the SNB intervened.

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Down Go the Hopes and Dreams of Three Generations

On Wednesday, Janet Yellen pressed on the broken buttons again. After the two day FOMC meeting, the Fed Chair announced they’d continue pressing the federal funds rate down to just a ¼ to ½ percent – effectively zero. What type of insanity is this? If she keeps it up, and whole thing doesn’t implode, the yield on the 10-Year Treasury note could also slip below zero…along with the hopes and dreams of three generations of retirees.

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FX Daily, June 17: Martyrdom of Cox Acts as Catharsis

The assassination of Jo Cox, a member of the UK parliament is a personal and political tragedy.  Her needless death provided an inflection point.  The suspension of the referendum campaigns and a steady stream of reports and speech...

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Saudi-Arabia: Peg or Banking Crisis?

During the reign of the mighty petro-dollar standard, it was necessary for major oil exporters to recycle their dollar holdings back into the dollar-based financial system to maintain their self-imposed exchange rate pegs. US government bonds are the...

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Gold Stampede

  Stampeding Animals The mass impulse of a cattle stampede can be triggered by something as innocuous as a blowing tumbleweed.  A sudden startle, or a perceived threat, is all it takes to it set off.  Once the herd collectively begins charging in one...

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What Drives Government Bond Yields?

For us the five major drivers of government bond yields are: Inflation expectations and inflation: The by far most important criterion. High inflation expectations must be compensated via higher bond yields. The main driver behind inflation expectations is the wage development, this is the form of inflation that typically persists. Price inflation follows inflation expectations with a certain lag. Wealth: The higher the wealth of a country, the...

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The Six Major Fundamental Factors that Determine Gold and Silver Prices

Gold and silver are the most complicated assets to price. Stocks, currencies, commodities mostly depend on their fundamental data, supply and demand. Gold and silver, however, are priced indirectly.

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(6.2) The Ultimate Carry Trade: U.S. Banks Buying Treasuries



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Inflation Expectations = Real GDP Growth = Ten-Year Treasury Yields – 0.5%?

Inflation expectations drive the Fed's and markets behaviour. Bond yields adjust, often but not always, with an inflation premium against short-term rates.

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ECB Measures Background: How to Reduce German Competitiveness and Talk down the Euro

In our view, the ECB measures of June 2014 want to increase German lending, spending, salaries and inflation. Finally they target a reduction of German competitiveness. The ECB wanted to talk down the euro but will not succeed. We explain why the measure are bullish for the euro. We expect EUR/USD of 1.40 in the … Continue...

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Real Yields Differentials as Driver of the CHF Exchange Rate



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The Fed Will Remain Gold’s Strongest Supporter For Years

In the early 1980s the Fed stopped the wage-price spiral and destroyed the gold price. Today main-stream economists have discovered that rising company profits compared to stagnating wages could an issue for the U.S. economy. For us this implies that the ultimate Fed goal will be to increase wages and inflation. Consequently the Fed has become the biggest supporter of gold and silver prices.

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