Tag Archives: FX Trends

There is something for everyone in today’s US jobs report, and at the end of the day, it is unlikely to sway opinion about the direction and timing of the next Fed move. The greenback itself may remain range bound after the initial flurry. On the other hand, the disappointing but noisy Canadian data underscores the risk of a more dovish slant to the central bank’s neutral stance next week. United States Nonfarm...

Summary Italian banks have done worse that European banks. Italian banks outperformed Germany banks from end of H1 12 through H1 15. US banks and financials more broadly have outperformed Europe. Italian banks were struggling before the UK referendum.  The result drove down interest rate, which keeps margins under pressure. The prospects of weaker growth as a result of Brexit means that demand for credit...

Swiss Franc Click to enlarge. Brexit Amid a better if not strong risk appetite, sterling has rallied two cents from yesterday’s lows near $1.28 to poke through the $1.30 level in the European morning. Click to enlarge. United Kingdom It was helped by an industrial production report that was better than expected. Industrial and manufacturing output fell 0.5% in May. This was around half of the expected decline...

Summary Don’t be fooled, the yuan has fallen more against its basket that against the dollar this year. It is not clear what China means by stable. Market forces appear to be moving in the same direction as officials wish. Here are two Great Graphics that portray two time series: the dollar-yuan exchange rate and the yuan against a trade-weighted basket.  The first chart comes from a highly reputable...

Forex has been the big banks secret gold mine, supporting their other losing operations (like normal banking business, lending, etc.).  To a large extent this has been unraveling, and this SIBOR lawsuit is another attack on their risk free profit center (FX).  Read the entire lawsuit released by Elite E Services here in full.  More than 50 unknown defendants and about 20 known FX banks are named in the case, submitted...

Swiss Franc Once again the SNB was heavily intervening and the pound fell against both euro and CHF.Thanks to SNB interventions, the Euro did not even dip under 1.08. Click to enlarge. Brexit What a difference a few days make.  Many saw last week’s equity market advance a sign that Brexit anxiety was overdone. However, quarter-end position adjustments appear to have been misread.  Equity markets are falling now....

Summary The IMF identified three banks that posted the most significant systemic risks. It has been overshadowed by new pressure on Italy’s banks, and. Three UK commercial real estate funds have been frozen to prevent redemptions. The conventional narrative has it backward. It worries about the threats to stability emanating from the periphery in Europe.  Policymakers, investors, and economists still refer to...

  Swiss Franc and SNB interventions It was another day of heavy SNB interventions. The central bank kept the euro nearly stable. As we explained before, she recycled sterling inflows in CHF into euros. Based on the magnitude of the GBP decline against EUR (see below), we estimate 2 to 4 bn CHF interventions. Click to enlarge.   Brexit The British pound has been hammered to fresh lows just above $1.3115. The euro is...

Summary Sterling has fallen to $1.3050. Two real estate funds have suspended trading (liquidation). Constitutional crisis over who has authority to trigger Article 50 may have begun. Sterling is continuing to move lower. It has tested the $1.3050 area in the North American morning, having been under pressure through the Asian session and the European morning.  That the UK economy is slowing down, materially, as...

Summary Inflation expectations fall in Japan. UK construction PMI fell sharply before Brexit. The Australian dollar recovers from the dip as investors await more results. It is not clear that Brexit has sparked a wave of nationalism or anti-EU sentiment. FX Rates Monday, while Americans were celebrating the original Brexit, the US dollar drifted lower. The Australian dollar fully recovered from electoral...