With the media playing up the US dollar’s negatives, one would think speculators are short the greenback like there is no tomorrow. Yet a review of the Commitment of Traders report that covers the week through last Tuesday, August 4, shows that this is not really the case. Below the speculative positioning of four currency …
Speculative Positioning in Selected Currency Futures Read More »
From my remote location in Ocean Grove (next to Asbury Park of Bruce Springsteen fame), I joined Martin Soong and Sri Jegarajah for a brief interview as the Asia session was about to begin the new week. A three-minute clip of the interview can be found here. I suggest that there are two main drivers …
There have been three general issues that the macro-fundamental picture has revolved around this year: trade, growth, and Brexit. On all three counts, conventional wisdom seems unduly optimistic, and this may have helped dampen volatility. A series of signals suggest that the US and China remain far apart in trade negotiations. The US wants China …
Is Conventional Wisdom Too Optimistic? The Week Ahead Read More »
The week ahead will help shape the investment climate for the remainder of the year. The highlights include three central bank meetings (Federal Reserve, Bank of Japan, and the Bank of Canada). Among the high-frequency data, the US and the eurozone report the first estimates of Q3 GDP, and the US October jobs data and …
Fed’s Mid-Course Correction to be Challenged while ECB Resumes Bond Purchases Read More »
Before Prime Minister Johnson submitted the withdrawal bill that he had negotiated with the EU, a Tory-backed bill to not consider it until the implementation bill is approved, carried by a 322-306 margin. The disgruntled Democrat Unionist Party’s 10 votes made the difference, but there were also 10 independent Conservative MPs, who had lost the whip …
Trade, central bank policy, and Brexit dominated the investment climate in September. The US-Chinese trade conflict stopped escalating. Although face-to-face talks are planned in October and the list of exemptions from the punitive tariffs has increased (US soy and pork, for example, are now exempt as are 10 components of Apple’s Mac Book Pro from …
We have argued that the road to an orderly Brexit remains arduous and that sterling had entered an important technical area ($1.2500-$1.2530). At the same time, see the dollar as having approached the upper end of its broad trading range against the yen. One of the important drivers lifting the dollar was the dramatic rise …
Great Graphic: Views Distill to Short Sterling Long Yen Opportunity Read More »
The most striking thing about last week’s price action was the surge in US yields. The 10-year yield jumped about 34 basis points, the most in three years and returned to levels not seen since August 2 (1.90%). A deluge of investment-grade corporate bonds and US Treasuries ($78 bln auctioned to lukewarm reception), coupled with …
The October 31 deadline for the UK to leave the EU is less than 100 days away. The new Prime Minister is beginning to convince others that that UK will, in fact, leave at the end of October. PredictIt.Org shows the odds of the UK leaving has risen to almost 50% from about a 33% …
Overview: Summer in the northern hemisphere contributing to the subdued activity in the global capital markets. The MSCI Asia Pacific index stalled after a four-day advance, with Japanese, Chinese, and Australian equities offsetting gains in Taiwan, South Korea, and India. Europe’s Dow Jones Stoxx 600 is flattish, struggling to extend its three-day rally. US shares …