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Tag Archives: Federal Reserve

FX Weekly Preview: Same Three Drivers in the Week Ahead but Changing Tones

Three themes have dominated the investment climate: US-China tensions, Brexit, and the policy response to the disinflationary forces. None have been resolved, which contributes to the uncertainty for businesses, households, and investors. However, the negativity that has prevailed is receding a little. It begins with the most substantive progress on Brexit in months, but also entails a possible new tariff truce between the US and China. Indeed, we irreverently...

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FX Daily, October 9: Hope is Trying to Supplant Pessimism Today

Swiss Franc The Euro has risen by 0.35% to 1.0912 EUR/CHF and USD/CHF, October 9(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates Overview: The 1.5% drop in the S&P 500 and the deterioration of US-China relations and the prospects of a no-deal Brexit failed did not carry over much into today’s activity. Asia Pacific equities were mostly a little lower, though China and India bucked the regional trend, while Korea was...

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FX Weekly Preview: China Returns, ECB Record, Fed Minutes and the Week Ahead

Many high-income countries experienced little growth but strong price pressures in the 1970s. Since the mainstream economics said the two were mutually exclusive, a new term had to be created, hence stagflation. Fast forward almost half a century later, and mainstream economists are still having a problem deciphering the linkages between prices and economic activity, such as inflation and employment. Theory needs to accommodate the new facts. Theory is being...

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FX Daily, October 2: Greenback Shows Resiliency, Stocks Don’t

Swiss Franc The Euro has risen by 0.66% to 1.0928 EUR/CHF and USD/CHF, October 2(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates Overview: Shockingly poor ISM data sent shivers through the market on Tuesday and hand the S&P 500 its biggest loss in five weeks and took the shine off the greenback. The S&P 500 reached a five-day high before reversing course and cast a pall over today’s activity. All the markets were...

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FX Weekly Preview: Forces of Movement at the Start of Q4 19

United States The world’s largest economy appears to have grown by about 2% in Q3 at an annualized pace, the same as in Q2, and in line with what many Fed officials understand to be trend growth. The strength of the US labor market underpins consumption, the powerful engine of the US economy. The latest readings of both the labor market and consumption will highlight the economic data in the week ahead. The strength of the recent housing data (starts and sales)...

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Treasury Bond Backwardation, Report 22 Sep

Something happened in the credit market this week. A Barron’s article about it began: “There have been disruptions in the plumbing of U.S. markets this week. While the process of fixing them was bumpy, it was more of a technical mishap than a cause for investor concern.” Keep Calm and Carry On So, before they tell us what happened, they tell us it’s just plumbing, it’s been fixed, and that we should not be concerned. The article asserts that the reasons for the...

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FX Daily, September 20: UK and India Provide Excitement Ahead of the Weekend

Swiss Franc The Euro has fallen by 0.25% to 1.0932 EUR/CHF and USD/CHF, September 20(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates Overview: A word of optimism on a Brexit deal has sent sterling to its best level in two months. Corporate tax cuts sparked a more than 5% rally in Indian stocks as the week draws to a close. The MSCI Asia Pacific Index snapped a four-day losing streak to pare this week’s decline.  Europe’s...

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FX Daily, September 19: Investors Looking for New Focus

Swiss Franc The Euro has fallen by 0.22% to 1.0975 EUR/CHF and USD/CHF, September 19(see more posts on EUR/CHF, USD/CHF, ) - Click to enlarge FX Rates Overview: Central bank activity is still very much the flavor of the day, but investors are looking for the next focus. The Bank of Japan and the Swiss National Bank stood pat, while Indonesia cut for the third consecutive time and the Hong Kong Monetary Authority and Saudi Arabia quickly followed the Fed. Brazil...

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FX Daily, September 18: FOMC Meets Amid Money Market Pressures

Swiss Franc The Euro has risen by 0.05% to 1.10 EUR/CHF and USD/CHF, September 18(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates Overview: News that Saudi Arabia was able to restore 40%-50% of the oil capacity lost by the weekend strike coupled with the Fed’s efforts to offset the squeeze in the money markets are allowing the global capital markets to trade quietly ahead of the conclusion of the FOMC meeting. Equities...

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FX Weekly Preview: Six Things to Watch in the Week Ahead

The prospect of a third trade truce between the US and China helped underpin the optimism that extended the rally in equities. Bond yields continued to back-up after dropping precipitously in August, led by a more than 30 bp increase in the US yield benchmark. The Dollar Index fell for the second consecutive week, something it had not done this quarter. United States The Federal Reserve’s meeting on September 18 is the most important calendar event in the week...

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