by
Marc Chandler
My articles My siteAbout meMy booksMy videos
Follow on:TwitterLinkedIN
Seeking Alpha

I joined Ben Lichtenstein, host of the morning futures program at TDAmeritrade.  It is in the futures market that I began my career, and where I gained respect for local traders, who do not have a large institutional backing such as a bank or hedge fund, and are trading their own capital, and taking the risk often from those institutional participants.  There is truly a David vs. Goliath drama being played out with asymmetries of information and depth of capital resources.  I learned the lesson again in my nearly 15 years at Brown Brothers, the last of the partnership banks, were having skin in the game was a source of pride, confidence, and prudence.

I have found less tunnel vision in the futures market and more willingness to look across the capital and commodity markets than in the banks, where turfs and fiefdoms often dominate the organization.  Ben epitomizes this characteristic and can move easily between financials, commodities, currencies, fundamentals, and technicals.

We began by talking about the new stimulus and appropriations bill that was just signed by President Trump.   The stimulus was a compromise, and the Democratic Party wants more, and this is in part why the Georgia senatorial elections early next month are so important.   Still, I am mortified that our representatives had a few hours to digest the 5000+ page appropriations bill before voting on it.  This is a fairly common practice, and it is both the cause and effect of our dysfunctional political system.

While reiterating my dollar bearish outlook for 2021, I suggest that an upside dollar correction into the first part of next year is possible.  It is oversold technically, and the fiscal stimulus will underscore the growth differentials that favor the US early next year.  I also worry that the virus is out of control in both the US and Europe, but the US has rolled out the vaccine quicker, and Europe may have not ordered sufficient amounts of the Pfizer and Moderna vaccines.

Looking into next year, I highlight two political developments in Europe that are not going to be found on many economic calendars.  The Scottish election is in the spring.  We should expect a strong showing by the Scottish Nationalist Party, which continues to advocate another referendum to secure Scotland’s independence.  This is partly the cost of leaving the EU.  Ironically, some SNP officials use similar arguments as the UK did to support Brexit, while UK officials recycle the arguments of the Remain camp in advocating the benefits of the union. The other political event is the German election in October.  Merkel became German Chancellor in 2005 and will step down at the end of this term.  She has been a master statesperson and seen off many domestic and international rivals.  She was instrumental in the recent compromise with Poland and Hungary that allowed the EU budget and the 750 bln-euro stimulus funded by a common bond offering.  A vacuum opens.

Here is the link to the almost 10-minute video clip.

You Might Also Like

Cool Video: Forces Driving the Dollar and Downplaying Claims Sterling is an Emerging Market Currency

2020-06-30

From my remote location in Ocean Grove (next to Asbury Park of Bruce Springstein fame), I joined Martin Soong and Sir Jegarajah for a brief interview as the Asia session was about to begin the new week. A three-minute clip of the interview can be found here.

Cool Video: Dollar, Trade, and China on TDA Network

2020-07-07

I began my career as a reporter on the floor of the Chicago Mercantile Exchange, covering the currency futures and short-term interest rate futures for a news wire. Among other things, I learned that often, the locals, people trading with their own money and wits, would take the opposite side of trades of the institutional players.

Cool Video: Gold and the Dollar

2020-07-25

I have been talking with Neils Christensen, editor at Kitco news, for several years about the dollar, gold, and my read of the capital markets more broadly.  We had a chance to discuss recent developments yesterday. I began my career at a small newswire, and Kitco reminds me of it.

Cool Video: TD Ameritrade with Ben Lichtenstein

2020-08-20

With the dollar continuing to trend lower, it was time to check again with Ben Lichtenstein at TD Ameritrade.  It was a privilege to join him today to discuss the drivers. I sketched out my views that the greenback’s two legs, growth and interest rate differentials have been knocked from under it.

Cool Video: CNBC-Asia–Brexit, Sterling, the Euro, and Dollar

2020-12-14

I had the privilege to join Sri Jegarajah at CNBC Asia at the start of today’s Asia Pacific session.  We had a broad chat about the dollar, Brexit, and the euro.  He gave me the opportunity to sketch out my views:1.  The dollar’s entered a cyclical decline, and the "twin deficit" issue will likely frame the narrative. 

FX Daily, July 14: Turn Around Tuesday Began Yesterday

2020-07-14

Overview: Turn around Tuesday began yesterday with a key reversal in the high-flying NASDAQ. It soared to new record highs before selling off and settling below the previous low. The S&P 500 saw new four-month highs and then sold-off and ended on its lows with a loss of nearly 1% on the session. Asia Pacific shares fell, led by declines in Hong Kong and India.

August Survey Data and Beyond

2020-08-17

Economists are often lampooned because of their inability to forecast changes in the business cycle. But the pandemic helped them overcome the challenge this time. A record contraction in Q2 was anticipated before in March. Similarly, economists generally expected the recovery after the March-April body blow.

FX Daily, August 31: Month-End Gyrations and the Fed’s Ad Hocery

2020-08-31

Markets are searching for direction at month-end. Asia Pacific shares outside of Japan lower. Berkshire Hathaway confirmed taking a $6 bln stake in Japanese trading companies over the past year, and the pullback in the yen helped lift shares.  The MSCI Asia Pacific Index rose 2% last week.