Multiple upside risks for US bond yields

Posted on January 18th, 2018

In our post on Monday (The white trashing of the US dollar), we suggested that it may be too late and dangerous to sell the USD that is falling in the face of a rising yield advantage, tax cuts that should help boost the already solid recovery path in the USA, late in its economic […]

The white trashing of the US dollar

Posted on January 16th, 2018

The US dollar rout of 2017 has so far continued into 2018, despite a rising US interest rate advantage and tax reform that should help power the US economy.  The dollar looks to be in a bear market and will not easily regain its mojo.  Perhaps it’s better to consider the broader implications of a […]

Forget bitcoin; the real bubble is global equities

Posted on December 19th, 2017

There is something of a disconnect between US equities, firing up on tax reform, and the USD and US bond yields struggling to gain traction.  Some of the recent weakness in the USD appears to be related to political uncertainty, embodied in a sinking Trump approval rating, despite tax reform.  Trump’s net approval rating hit […]

Rotation from Gold to Bitcoin

Posted on December 8th, 2017

Bitcoin has exploded higher in recent weeks as futures trading draws near, slated for next week on the CME, and other mainstream financial products, like ETFs, are widely expected.  If it does grow in stature as a store of value, its fair value is conservatively $50,000 in our view.  It may not be a coincidence […]

USD: political risk proxy / US stocks: tax reform proxy

Posted on December 2nd, 2017

There has been a wide divergence between the performance of US equities and the USD in the last year, accelerating in the last month.  The USD also has underperformed US rates and yields.  It appears that equities have responded positively to the faster pace of progress on tax reform, while the USD has responded more […]

Bitcoin – bubble or growing pains?

Posted on November 30th, 2017

We believe bitcoin is not a bubble, but is growing into a role as an important financial instrument that will be used as a significant store of value for global wealth.  Its whippy meteoric rise may be growing pains rather than an irrational mania.    Emotional debate There is a lot of emotion in the […]

AUD may suffer a redux of the old economy blues

Posted on November 21st, 2017

Around two decades ago AUD was languishing at record lows labelled an old economy left out by the ‘new IT economy.’  It feels a bit like its happening all over again.  Australia’s interest rate advantage has slipped, and its equity market is under-performing.  On Monday, US 2yr swap rates rose to a cyclical high and […]

IT disruption driving up Asia EM currencies, GBP risk builds, AUD yield advantage gone

Posted on November 17th, 2017

Investors are pursuing gains in equity markets; in particular, EM markets that are big exporters of IT goods.  These capital flows are tending to drive currencies; Asian EM currencies are out-performing other EM regions.  The USD is tending to weaken as the US growth outlook is moderate and no more special than other economies.  The […]

Political risk for a number of currencies (AUD, NZD, GBP and CAD)

Posted on November 14th, 2017

It is getting harder to know where to turn with political risk in the UK palpable. A dual citizenship debacle in Australia, NAFTA negotiations hanging over the CAD outlook, a significant change in policy direction in New Zealand, German coalition negotiations, and political uncertainty has never been far from mind in the US in the […]

Diverging EM assets and currencies, Global investor jitters, AUD Vulnerable

Posted on November 10th, 2017

The USD has strengthened since September after trending down for the first eight months of the year.  Its gains have stalled in recent weeks, and the jury is out as to whether it will revert to its weaker trend earlier in the year or push on.  The rebound in the USD since September has some […]