Tag Archives: newsletter

This Great Graphic, created on Bloomberg, depicts the CRB Index, a basket of commodity prices.   The technical picture has deteriorated, and the price action in the coming sessions is particularly important in determining outlook.   The CRB Index put in a double bottom.  On January 20 and February 11 lows were set just below 155.00.   The neckline of the double bottom was created in the rally between the two bottoms.  It is found near 168.00.   The measuring objective is found by...

It is widely recognized that the sharp depreciation of the Japanese yen has not lifted Japanese export volumes.  In December 2015, Japanese export volumes had fallen 4.4% year-over-year after rising 3.9% in December 2014 and 2.5% in December 2013.  These are a number of explanations for this counter-intuitive result given the yen's past depreciation.  First, global demand is weak.  Second, has adopted a direct investment strategy rather than an export-orientation.  For example, many of...

The US dollar is mostly lower as the North American session is set to begin.  The holiday in many centers, especially in Europe, has limited activity, and a few orders seemed to drive prices., which remain within the recent ranges.  The Japanese yen is the main exception.  The greenback's gains have been extended into the seventh session, the longest such streak since October.  The dollar neared JPY113.70, its best levels since the FOMC meeting.   However, local press reports denying that...

Gold went down (as the muggles would measure it, in dollars). It dropped almost 40 bucks. Silver fell almost 60 cents. Since silver fell proportionally farther than gold, the gold-silver ratio went up. Why do we keep reiterating that gold goes nowhere, that it’s the dollar which mostly goes down over long periods of time and sometimes up as in 2011-2015? Why do we insist that the dollar be measured in gold, and that gold cannot be measured in dollars the way a steel meter stick cannot be...

There are four events that will shape market psychology in the week ahead.  They are Yellen's speech to the NY Economic Club, US jobs data, eurozone March CPI and PMI, and Japan's Tankan Survey.   The broad backdrop is characterized by the rebuilding of risk appetites since the middle of February, though the MSCI emerging market equity index put in its low on January 20, as did the CRB Index.  The price of oil appeared to bottom then as well, but it retested the lows in mid-February and...

The most extreme speculative positioning, judging from the futures market is the long yen position.  The bulls added another 3.4k contracts, lifting the gross long position to 82.8k contracts.  The record was set in 2008 at 94.7k contracts.   The gross short position was trimmed by 4.5k contracts, leaving 29.5k.  It is the smallest gross short position since before Abe was elected in Prime Minister in 2012.  The net long yen speculative position rose to 53.3k contracts.  The record was...

The US dollar rose against all the major and most emerging market currencies last week. After selling off following the ECB and FOMC meetings, the dollar found better traction.  It was helped by widening interest rate differentials.  Regional Fed manufacturing surveys for March suggest the quarter is ending on a firm note.  With new orders rising, it is reasonable to expect the momentum to carry into Q2.   Nearly half of the regional Fed presidents spoke last week, and the general...

The US dollar rose against all the major and most emerging market currencies last week. After selling off following the ECB and FOMC meetings, the dollar found better traction.  It was helped by widening interest rate differentials.  Regional Fed manufacturing surveys for March suggest the quarter is ending on a firm note.  With new orders rising, it is reasonable to expect the momentum to carry into Q2.   Nearly half of the regional Fed presidents spoke last week, and the general...

The holiday shutters most markets today.   Several Asian markets were open, and equities were narrowly mixed, with Japan and China posting small gains.  Most of the other local markets, including Australia, Korea and Taiwan slipped.  The US dollar is trading with a firmer bias, but mostly, as one would expect, within yesterday's ranges.    Three observations are worth sharing.  First, within the modest movement today, sterling is the weakest of the major currencies, as it has been for...

While Forex banks, traders, and other institutions are being blamed for market rigging, the Swiss National Bank can publish reports about its own market rigging, but instead of being a scandal, it's economic data.  That's because the vast majority don't understand how the Forex markets work.  It's not insulting - it's a fact.  Currently there are hundreds of pending litigation cases against a plethora of Forex banks, traders, and other institutions - but none against a central bank.  Of...