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Stock Markets EM FX ended last week on a firm not, led by a huge MXN rally on Inauguration Day. We believe that the peso rally was largely driven by positioning and technicals, and so we view Friday’s gains as a correction since the fundamental outlook remains unchanged. Indeed, we think the broader EM rally will be short-lived too, as US interest rates remain elevated. The 10-year yield flirted with the 2.5% level,...

Summary: Investors will finally be able to focus on what the new US President does rather than what he says. The UK Supreme Court decision is expected, but it may not be the driver than it may have previously seemed likely. The dollar-yen rate does not appear to be driven by domestic variable as much as US yields and equities. Prices not real sector data may be the key for the euro. United States The US...

Bloomberg’s Anne Swardson, Zoe Schneeweiss, and Andre Tartar perfectly summed up the state of play right now during their discussion of the World Economic Forum’s annual get-together: “Never before has the gap between Davos Man and the real world yawned so widely.” As the world’s top executives, financiers, academics, and politicians make their way to Switzerland, Trump – who won’t have an official representative there...

20 Minutes. After reaching a historical low in the third quarter of 2016, rates started rising in the fourth quarter. Rate increases hit mortgage tenors of five and ten years. © Ashumskiy | Dreamstime.com - Click to enlarge Compared to Q3, fixed mortgage rates on loans of ten years went up an average 0.2% to 1.62% according to price comparison website Comparis.ch. Five year fixed rate loans went up from 1.08% to 1.14%....

Kindly be advised to have read my posts The Mechanics Of The Chinese Domestic Gold Market and The Great Physical Gold Supply & Demand Illusion before continuing. In December 2016 Chinese wholesale gold demand, measured by withdrawals from the vaults of the Shanghai Gold Exchange (SGE), accounted for 196 tonnes, down 9 % from November. December was still a strong month for SGE withdrawals due to the fact the gold...

Marc Chandler - Click to enlarge I was on Bloomberg’s Daybreak: Americas today. The issue at hand was about the dollar’s losses since the start of the year. I suggest that the correction actually began a day or so after the Federal Reserve hiked rates in mid-December.  I noted that the correction was not just about the dollar but also interest rates. I suggest that interest rates are still key. The US 10-year yield...

Summary Prime Minister Phuc said Vietnam will ease the limits on foreign ownership of banks this year. Russia’s government is working on measures to limit ruble volatility, including possible FX purchases. Turkey’s central bank start auctioning FX swaps to help support the lira. Brazil’s central bank resumed rolling over FX swaps. Brazilian Supreme Court Judge Zavascki was tragically killed in a plane accident. Chile’s...

Submitted by George Friedman and Jacob Shapiro via MauldinEconomics.com, What will the year ahead look like for Europe? 2017 will be another chapter in the European Union’s slow unraveling… a process that has been underway for over a decade. The EU is a union in name only. The transfer of sovereignty to Brussels was never total, and member states are independent countries… each with their own interests at stake....

Swiss Franc EUR/CHF - Euro Swiss Franc, January 20(see more posts on EUR/CHF, ) - Click to enlarge The Pound has recovered some its losses from early last week following the speech made by Prime Minister Theresa May which covered the Brexit issue. We could see further volatility going into next week though when the Supreme Court judgement is due to be released. Theresa May has already announced that she will...

This Great Graphic was tweeted by the Financial Time’s John Authers, who got it from @fathomcomment. The green line is the inversion of global trade (right-hand scale). The blue line is a trade-weighted average global tariff rate. What the chart shows is that since 1990, the decline in the average tariff coincided with an increase in trade (remember green line is inverted). However, the as chart illustrates, around the...