Tag Archives: 4) FX Trends

There is one major driver in the capital markets today: A sharp drop in oil prices as the US and Iran have inexplicably not attacked for the past three nights. There is speculation in the press that the US decision was partly motivated by concerns over diminishing supplies of air defenses (e.g., Patriot interceptors) after the two-week assault, but the Trump administration played this down. Crude oil prices are off 7-8% and this encouraged further unwinding of the...

The foreign exchange market is quiet, and the US dollar is trading with a firmer bias. The widening Middle East war has lifted September WTI to $90 and October Brent to $93. Interest rates are firm and 10-year benchmark rates in a few European countries, and the United States are at new highs for the year. These developments overshadow today’s ECB meeting, for which there is practically no chance of a hike after last month’s move. Still, there is not reason to expect...

While there is much consternation from the American pundits and think tanks about China’s shock as it dominates auto manufacturing and value-added manufacturing, the two shocks from the US are more pressing for investors. First, The IEA says this is the biggest disruption in the oil market in history. The war in Middle East is escalating and the disruption has lifted September WTI to its highest level since mid-June and encourages investors and policymakers to look...

In recent weeks, while Russia's war on Ukraine continues and Beijing continues to harass its neighbors, the U.S. tariff threats and doubts that its defense commitments will be sustained, have emerged as the most significant challenge for businesses, investors, and policymakers. These tariffs are aimed at protecting domestic industries, forcing a re-shoring of production, and raising revenue. If, and when implemented, the tariffs can be expected to impact economic...

Sorry for the disruption of the regular commentary.  Still, the monthly will be posted tomorrow.  There is a key divide in the market.  One camp sees the US tariff threats as bluster and a negotiating tactic.  The other camp, which I find myself in, thinks something more serious is happening.  The US voted against Europe and with Russian and Iran at the UN for the first time in 45 years on European issues.  Martin Wolf, the erstwhile economic editor at the Financial...

Sorry for the disruption of the regular commentary.  Still, the monthly will be posted tomorrow.  There is a key divide in the market.  One camp sees the US tariff threats as bluster and a negotiating tactic.  The other camp, which I find myself in, thinks something more serious is happening.  The US voted against Europe and with Russian and Iran at the UN for the first time in 45 years on European issues.  Martin Wolf, the erstwhile economic editor at the Financial...

(Business travel disrupts the commentary for the next two days.  New monthly drops March 1.)  Overview: A growth scare, perhaps spurred by the Philadelphia Fed's non-manufacturing activity survey and the sharp drop in Conference Board's consumer confidence measure, sparked a sharp drop in US yields, a sell-off in US equities and a weaker US dollar. There is a fragile stability today. The greenback is firmer but mostly within yesterday's ranges against the G10...

(Business travel disrupts the commentary for the next two days.  New monthly drops March 1.)  Overview: A growth scare, perhaps spurred by the Philadelphia Fed's non-manufacturing activity survey and the sharp drop in Conference Board's consumer confidence measure, sparked a sharp drop in US yields, a sell-off in US equities and a weaker US dollar. There is a fragile stability today. The greenback is firmer but mostly within yesterday's ranges against the G10...

Overview: The US 10-year yield has fallen to a new two-month low near 4.33% today, ahead of the $70 bln sale of five-year notes, following strong demand at the two-year floating note sale yesterday. The 200-day moving average is near 4.25%. The 10-year yield peaked in mid-January near 4.80%. The dollar initially rallied on President Trump's acknowledgement that tariffs on Mexico and Canada were still on track, though another official was quoted on the wires...

Overview:  The dollar is offered. Neither the 227k rise in nonfarm payrolls, nor the above 3% Q4 growth that the Atlanta Fed sees the economy tracking, or the uptick in November CPI expected to be reported on Wednesday has been sufficient to dampen speculation of a rate cut next week. The futures market has a nearly 88% chance discounted. The antipodean currencies and Scandis are leading the move, ostensibly encouraged by the pro-growth signals from China's...