There is a lot of stewing over the UK Brexit referendum, undermining the GBP, dragging down the EUR a bit, supporting gold and JPY, and possibly even AUD and EM currencies as investors presume the safest place is out of UK assets and even Eurozone assets until this mess is sorted out. A vote to […]
Rate hike expectations in the USA have been pushed well-out; a full hike is not fully discounted by the market for over a year and a half. However, last week jobless claims were below 270K for a second week in a row, weekly consumer confidence continues to hold up and the core CPI rose further […]
Currency markets may remain in a choppy trendless state for the time being. Low negative rate policies in the Eurozone and Japan, preclude us from buying their currencies. The USD has a weaker trend for the moment as the market considers a prolonged period of stable rates in the US. Global investor confidence also remains constrained […]
As Australia heads towards its May budget and a federal election later this year, debate over tax policy is heating up. The need to come up with fiscal plan is front and center in the wake of a collapse in commodity prices after it squandered the resources windfall. The debate is coalescing around reducing tax […]
In stepping back for a moment to assess what exactly is hurting global investor confidence, it is not as easy as it seems to put a finger on the source or extent of the problem and, therefore, what might restore confidence. There is a wide degree of global market uncertainty at this time that in […]
The USD/JPY has plunged below its previous lows since November 2014. The next major support is the levels preceding the Oct-2014 BoJ QQE phase two policy easing (USD/JPY around 110). The fall comes despite the short term yield advantage for the USD/JPY rising to its widest margin in many years. The key driver is higher […]
All major equities are again below the lows in 2015 after a dead-cat bounce sending another body-blow to global investor confidence. Bottom fishers will be tentative and choppy bearish markets are likely to persist. Financials (led by Europe) are leading the falls in equities; regulatory pressure implemented in the wake of the global and Eurozone […]
Our bias is to fade this period of correction in the USD. It is hard to judge how far it can go, so we will watch and wait for now. Notwithstanding the pull-back in US rate hike expectations, the sharp divergence in major countries’ central bank policies has been maintained, with further policy easing measures […]
In the current environment of doubts in the value of any currency, doubts in the value of industrial commodities and doubts in financial assets in a relative low growth world facing financial stability risks, gold returns to the fore as an alternative store of value. Gold has been in a downtrend since 2011 in a […]
The RBA has tilted policy more dovish. It sees “reasonable prospects” compared to December where “prospects had firmed”. It hinted it will be watching the data carefully in coming months to judge whether a cut in rates may be appropriate. It said, “New information should allow the Board to judge whether the recent improvement in […]