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The dollar IS the story; Gold confounds, Brexit rabbit hole; EUR punished

Posted on March 29th, 2019

  The dollar IS the story EUR punished for negative yields Chasing Brexit down a rabbit hole Gold confounds Bitcoin at an interesting juncture   The dollar IS the story The story in global financial markets is dollar strength.  We can come up with rationalisations, but the point is that dollar strength is driving developments […]

Brexit indicative votes may boost GBP

Posted on March 27th, 2019

GBP  is chopping in a relatively narrow range around 1.32 as the market struggles to interpret the increasingly frantic developments in UK politics. The GBP strengthened from its recent lows last week after the EU agreed to provide another two weeks for the UK to decide on a path, until 12 April.  This appears to […]

Gold may rise on lower real yields; Canada leads fall in real yields; Australian inflation expectations slump

Posted on March 23rd, 2019

  The broad decline in global bond yields and curve flattening suggest that the market has become more concerned about weak global economic growth. The fall in yields is at odds with the rise in equity and commodity prices this year, but the later may have lost upward momentum. Safe haven currencies, gold and JPY, […]

Brexit sucking up oxygen from the FX market

Posted on March 14th, 2019

  Brexit fear diminishing boosting GBP and other currencies Eurozone IP rebounds, the first sign of stabilisation Pressure increases for a rate cut in Australia   Quick overview We can see a case for GBP to rise towards 1.40 helping recoveries in EUR and AUD, and weakening the USD more broadly.  But the outlook for […]

US economic deterioration a risk for the dollar

Posted on March 7th, 2019

The strength in the USD in recent weeks belies what appears to be a run of poor economic reports pointing to a significant slowdown in Q1, possible stalling. The US trade data suggest that US exporters have suffered a significant slowdown, as bad, or even worse than many other countries. US employment indicators show that […]

Bank of Canada go into extended pause

Posted on March 7th, 2019

The Bank of Canada has significantly downshifted its guidance on rates to one that resembles the US version of patience, and a long pause. Its policy guidance (last) paragraph began with the “Governing Council judges that the outlook continues to warrant a policy interest rate that is below its neutral range.” On 9 January it […]

Gold diverging from the USD

Posted on February 15th, 2019

US Retail sales shockingly weak, but are being dismissed.  Unemployment claims are softer, but consumer confidence may be holding up. EUR continues to sink on weak data (IP and GDP), but employment data has been more stable. Chinese trade data recovers, although still lower from earlier in 2018. US imports to China plummet, China exports […]

Interview with TDAmeritrade – USD, EUR & GBP

Posted on February 14th, 2019

See this link to the interview:

Spotlight on RBA Lowe; time to drop bias to hike

Posted on February 6th, 2019

The Speech by RBA Governor Lowe today (Wednesday) will be under a bright spotlight as the market looks for further colour after the policy statement yesterday.  Crucially the audience will be wanting to know if Lowe still thinks the next move in rates is likely to be higher. Hand on heart it is now hard […]

Thoughts on EUR, AUD, GBP and USD

Posted on January 31st, 2019

January 31st, 2019 EUR – bank problems, CPI risk, stronger real yield spread, stable sovereign risk. USD – lower real yields, payrolls unlikely to help the dollar. GBP – Brexit uncertainty extended, no deal risk lingers, but still very low. AUD – commodities stronger, commodity currencies strong, trade talks sound positive, global risk factors have […]