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Speculative positioning in the currency futures began to adjust before the latest signals from the Federal Reserve about the prospects for a summer hike and the widening of interest rate differentials.  In the CFTC reporting week ending May 17, the day before the FOMC minutes were released speculators mostly reduced gross long currency positions and added to gross short positions.   There were a few exceptions.  Speculators added less than 500 contracts to the gross long euro position...

The combination of stronger US economic data and signals from the Federal Reserve that it is looking to continue the normalization process helped the dollar extended its recovery.  The dollar posted a significant technical reversal against many of the major currencies on May 3.  The Dollar Index rose for its third week, as the greenback climbed against all the major currencies but sterling (+0.9%).   Sterling was aided by some polls indicating a shift toward the Remain camp.  The...

The Philippine central bank moved to an interest rate corridor Saudi Arabia is preparing to sell its first global bond ever Transport Minister Yildirim, a close ally of President Erdogan, will become Turkey’s new Prime Minister The new Brazil cabinet continues to take shape with a market-friendly bias In the EM equity space, South Africa (+2.2%), Singapore (+1.1%), and Taiwan (+1.0%) have outperformed this week, while UAE (-3.4%), Brazil (-2.2%), and Colombia (-2.0%) have underperformed....

  Scratching the Surface Problems, as people commonly perceive them, require solutions. Broken shoelaces must get fixed.  Regrettably, in today’s democracy this means the candidate who offers the most fixes – in the form of goodies – to the most people wins the election. The Gallup poll reported earlier this week that 18 percent of U.S. adults believe the “economy in general” is the most important problem facing the country.  This was followed by 13 percent who believe “dissatisfaction...

Expanding in Ireland DUNMORE EAST, Ireland – We came down the coast from Dublin to check on our new office building. For this visit, we wanted to stay somewhere different than we normally do. So we chose a small hotel on the coast, called the Strand Inn. Irish landscape with alien landing pads. Even the guys from Rigel II have heard about Ireland’s corporate tax rate. Photo credit: Tourism Ireland It is an excellent place for seafood and soda bread on a rainy day. Later, you can go to the...

Shinzo Abe and Haruhiko Kuroda, professional yen assassins Photo credit: Toru Hanai / Reuters Policy-Induced Contrition in Japan As we keep saying, there really is no point in trying to make people richer by making them poorer – which is what Shinzo Abe and Haruhiko Kuroda have been trying to do for the past several years. Not surprisingly, they have so to speak only succeeded in achieving the second part of the equation: they have certainly managed to impoverish their fellow Japanese...

  Smart Money Fleeing Stocks DUBLIN – The Dow dropped 180 points on Tuesday – or about 1%. And another clever billionaire says he is looking elsewhere for profits. Reuters: “Activist investor Carl Icahn on Monday said there was a chance the stock market could suffer a big decline, saying valuations are rich and earnings at many companies are fueled more by low borrowing costs than management’s efforts to boost results. “I am very cautious on equities today. This market could easily have...

What do financing your retirement as well as finding affordable healthcare and the possibility of losing your job all have in common with each other? Easy, at least for an American, these days. Those are the top three worries that we wake up to in this country and that 60% of people believe are very much more than just nightmares gone wrong. They could become reality and it would seem that women are more concerned in particular. It’s healthcare that is on everyone’s lips and it’s been like...

The Federal Reserve really wants to raise rates, but they do not dare as the consequence of interrupting an unprecedented level of capital misallocation is too grave to face head on. So our money masters continue their low interest rate policy; pulling society further and further into a capital structure that cannot be sustained long term. In other words, scare capital is consumed in order to feed the present structure of production. Low rates thus cement what cannot be upheld and the...

We felt strongly that the FOMC minutes would be more hawkish than the statement that followed the meeting, and we were not disappointed.  However, our caveat remains:  the minutes dilute the signal that emanates from the Fed’s leadership, Yellen, Fischer, and Dudley.  The latter two speak in the NY morning.  Fischer and Dudley’s comment will be scrutinized for confirmation of the hawkish read of the FOMC minutes.  Yellen speaks at Harvard at the end of next week.  Her comments at the...