Forex Live – The Premier Source of Financial News for Professional Traders

2022-04-26

Central banks have taken off the gloves in the fight against inflation. They’ll win but global growth will lose out.

The market is no longer convinced that global central banks can tame inflation without a major hit to growth. Maybe that’s not a recession but it’s a much slower growth paradigm than assumed.

We’re now pricing in terminal rates at the highest levels since before the financial crisis and the risks from there remain to the upside.

Initially, I expect the Bank of Canada to be as hawkish as the Fed but the housing market is structurally different in Canada and far more vulnerable to rising rates. That will cap how high the BOC can go.

The odds of a nightmare scenario for the Canadian housing market are rising. What could happen is the Canadian housing market begins to

2022-03-22

For months, the Canadian dollar has been stuck in a push-and-pull from rising commodity prices, sinking risk appetite and a broadly rising US dollar. The loonie is now almost right in the middle of the range it’s carved out in the past nine months but factors are lining up for a break; with one big caveat.

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2022-03-04

Overview:  The capital and commodity markets are becoming less orderly.  The scramble for dollars is pressuring the cross-currency basis swaps.  Volatility is racing higher in bond and stock markets.  The industrial metals and other supplies, and foodstuffs that Russia and Ukraine are important providers have skyrocketed.  Large Asia Pacific equity markets, including Japan, Hong Kong, China, and Taiwan fell by 1%-2%, while South Korea, Australia, and India managed to post modest gains today.  Europe’s Stoxx 600 is off more than 2.5% to bring this week’s loss to a little more than 6%. 

2022-02-16

Adam Button from Forexlive talks with BNN in an educational segment about the risks around currency exposure, particularly for the Canadian dollar. In the same way that bad stock trades suddenly morph into long-term investments, currency trades can turn into hedges at the worst possible time. There are plenty of opportunities in trading currencies but don’t mix the two. I’m a big fan of having multiple accounts at multiple brokers and one of the reasons is to keep that mental separation from investing, trading and hedging.

2021-12-06

The absence of negative developments surrounding Omicron over the weekend appears to be helping markets stabilize today after the dramatic moves at the end of last week.  Asia Pacific equities traded heavily, and among the large markets, only South Korea and Australia escaped unscathed today. 

2021-11-27

The new covid variant and quick imposition of travel restrictions on several countries in southern Africa have injected a new dynamic into the mix.

2021-11-22

Overview:  The US dollar has come back bid from the weekend against most currencies following the talk by a couple of Fed governors about the possibility of accelerating the tapering at next month’s FOMC meeting.  The weekend also saw protests against the social restrictions being imposed by several European countries in the face of a surge in Covid cases.  The Swedish krona, yen, and sterling are the weakest, while the dollar-bloc currencies are resisting the greenback’s tug. Most of the freely accessible and liquid currencies among emerging market currencies, including Russia, Hungary, South Africa, and Mexico, are heavy. At the same time, the Turkish lira recoups a little of the ground lost last week, and the Chinese yuan shrugged off apparently warnings from the PBOC to post its first