Tag Archives: Interest rates

This Great Graphic was created on Bloomberg. It shows two times series. The yellow line and the left-hand scale show the euro’s exchange rate against the dollar for the past year.  The white line depicts the spread between the US two-year and 10-year yield. I show the curve this way to be more intuitive with the euro rather than the 10-2 yr curve. To be clear as the curve has flattened the white line rises.   Despite me...

This Great Graphic was created on Bloomberg. It shows two times series. The yellow line and the left-hand scale show the euro’s exchange rate against the dollar for the past year.  The white line depicts the spread between the US two-year and 10-year yield. I show the curve this way to be more intuitive with the euro rather than the 10-2 yr curve. To be clear as the curve has flattened the white line rises.   Despite me...

 As I so often write, we still talk about 2008 because we aren’t yet done with 2008. It doesn’t seem possible to be stuck in a time warp of such immense proportions, but such are the mistakes of the last decade carrying with them just these kinds of enormous costs. It has been this way from the beginning, even before the beginning as if that was possible. The Great Financial Crisis has no official start date, but we...

Summary: The dollar’s downside momentum faded today, but it has not shown that it has legs. Watch 96.45 in the DXY and $1.3055 in sterling. The US 2-year note yield is low, given expectations for overnight money. The US premium needs to widen. The US dollar’s downside momentum faded today. While one should not read much into it, it could be an early sign that the market has discounted the recent news stream,...

It wasn’t a very good two weeks for economic data with the majority of reports disappointing. Most notable I think is that the so called “soft data” is starting to reflect reality rather than some fantasy land where President Trump enacts his entire agenda in the first 100 days of being in office. Politics is about the art of the possible and that is proving a short list for now. Republicans can’t agree among...

Summary: US yields have trended lower as oil prices have trended higher. The correlation between the 10-year breakeven and oil has also weakened considerably. Technicals readings are getting stretched, but no compelling sign of a top. Rising oil prices traditionally boost inflation expectations and US interest rates. The May futures contract for light sweet crude oil is up today for the sixth consecutive...

Swiss Franc EUR/CHF - Euro Swiss Franc, April 14(see more posts on EUR/CHF, ) Source: Investing.com - Click to enlarge FX Rates The holiday-induced calm in the capital markets conceals a high degree of anxiety. The investment climate has been challenged by heightened geopolitical risk and unusual complaints about the US dollar’s strength from the sitting US President. While sending an “armada” toward the Korean...

Swiss Franc EUR/CHF - Euro Swiss Franc, April 11(see more posts on EUR/CHF, ) - Click to enlarge GBP/CHF The Swiss Franc could be in for a particularly volatile with the recent developments in Syria and now North Korea. Both the Swiss Franc and US dollar generally perform very well in times of global economic and political uncertainty as their status as safe haven currencies becomes apparent once again. The...

The idea that interest rates have nowhere to go but up is very much like saying the bond market has it all wrong. That is one reason why the rhetoric has been ratcheted that much higher of late, particularly since the Fed “raised rates” for a third time in March. Such “hawkishness” by convention should not go so unnoticed, and yet yields and curves are once more paying little attention to Janet Yellen. When Mohamed...

Looking back on late 2015, it is perfectly clear that policymakers had no idea what was going on. It’s always easy, of course, to reflect on such things with the benefit of hindsight, but even contemporarily it was somewhat shocking how complacent they had become as a global group. In the US, the Federal Reserve “raised rates” for the first time in a decade on the same day they released industrial production figures...