Don't say you haven't been warned .... the Carry trade is almost full ref : "History

Don't say you haven't been warned .... the Carry trade is almost full ref : "History Says Emerging-Market Carry Trade Can Only End in Tears" , Bloomberg Markets Our thanks to Bloomberg for bringing us Bank of America Merrill Lynch's assertion that investment in the carry trade -- that ever-so-popular trading strategy that entails borrowing in low-interest currencies to invest in high-yielding ones -- is entering dangerous territory. Our thanks too for reminding us of Harvard economist Jeffrey Frankel's much-quoted observation that participating in the carry trade was "like picking up pennies in front of a steamroller". For those not involved, the concept of nicking comparatively small ret

You can't please 'em all ..... OPEC extends but the market is unimpressed ref :- "OPEC

Friday 26th May 2017 You can't please 'em all ..... OPEC extends but the market is unimpressed ref :- "OPEC Leaves Market Guessing on Exit Strategy After Oil Pact", Bloomberg Markets Last night OPEC announced that along with its non-OPEC partners it will extend the 1.8m barrels per day production cuts instituted at the start of the year by a further nine months to end-March 2018. The reaction has been interesting on a number of levels. The price reaction was an object lesson in market dynamics, but beyond that the decision has raised more questions than it answered. Immediately after the news broke, Brent Crude dropped 5% to $51.24. Those new to the markets might wonder if that's an entirel

Doveish Hawks ? Hawkish Doves ? The future's got a bit cloudier for the Fed ..... ref : "W

Doveish Hawks ? Hawkish Doves ? The future's got a bit cloudier for the Fed ..... ref : "Why a Hot Jobs Market means the Fed Is Facing a Sticky Summer" , Bloomberg Markets If you're wondering how the S&P 500 Index got to post a record close last night, you can put it down to the release of the minutes of the Fed meeting on May 2-3. At first glance, confirmation that the Fed Open Market Committee were keen to hike rates at their next gathering on June 14th would not seem to be overly bullish for stocks -- unless it represented a reaction to strong growth ..... which on this occasion, it doesn't. The Fed's stated intention to raise rates twice more this year starting next month is just about

A Green Light for the Euro, A Ray of Hope for Greece, and A Budget for the US ..... all the way from

Wednesday 24th May 2017 A Green Light for the Euro, A Ray of Hope for Greece, and A Budget for the US ..... all the way from Never-Never Land. Just time today to point you in the direction of three topics worthy of attention. All the major financial news outlets will have these covered, but we'll refer to the Financial Times for all three -- because it offers fine and insightful pieces in each case, obviously .... but also because we're pressed for time and it's easier that way. So..... Katie Martin in Short View (Companies and Markets) and Currencies Analysis (Markets & Investing) both take a look at the recent strength of the Euro, and wonder whether this stark reversal in prevailing se

At the risk of teaching Granny to suck eggs ...... ref :- " All quiet on the risky front &quot

At the risk of teaching Granny to suck eggs ...... ref :- " All quiet on the risky front " , Buttonwood in The Economist, Finance and Economics Apologies for using a fine old English expression in case it should provoke some unsettling mental images for some readers. You don't hear it much these days so for those unacquainted with the phrase it simply means to attempt to instruct someone on a topic that they already know well ....news that may come as a bit of a relief. Apologies too then if this brief look at volatility is just old hat to you, and pretty simple hat at that. But after we'd mentioned the Volatility Index, or VIX, a couple of times last week, it was suggested that some basic b

Questions they thought would never be asked , No. 374 : " What do we do first ? Stop buying boa

You know, there are still some old greybeards about struggling to come to terms with negative interest rates as a concept, never mind as central bank policy. It's a mad world all right, and it's hard not to have a little sympathy. In the grand scheme of things, it's not that long ago that a debate about whether the ECB could start raising its deposit rate of -0.4% before finishing its €60bn per month bond buying programme (it was €80bn, and is due to finish at the end of 2017) would have seemed like a conversation from a parallel universe..... an inverted one, naturally. Extraordinary events like the financial crisis, and the Eurozone crisis that followed a few years later, sometimes call fo

Anything going on besides Trump, and does anybody care ? Well, there's always the oil price ....

Yesterday we had a look at the effects that President Trump's "unorthodox" methods and actions were having on the US dollar. Well, let's face it we could write about Mr Trump every day, and often it's difficult not to. Today would be a case in point, such are the market anxieties provoked by the latest "revelations" of what of this particular leader of the free world may or may not have been up to. It's not just the dollar either, though the US unit did oblige with its biggest one day fall since July. US stocks had their worst day since September, and all the familiar "risk-off"safe-havens were in big demand : Jap Yen, highly-rated Government Bonds (esp. US Treasuries), Gold. It's no wonder

Is that it, then ? For the Dollar, is the Trump effect is officially over .....?

Wednesday 17th May 2015 Is that it, then ? For the Dollar, is the Trump effect is officially over .....? ref :- "Best Forecasters See No Reprieve for Dollar as Trump Woes Mount" , Bloomberg Markets Obviously we planned our time away to coincide with some of the quietest conditions of recent times ..... strong mind you, especially in stock markets, but calm. The VIX, which maps the volatility of S&P 500 options and is regarded as a wider measure of market volatility generally, settled at 9.77 on May 8th. That's the lowest level since 1993, no less. Of course the thumping but entirely predictable win for Emmanuel Macron in the French Presidential election has had a good deal to do with it, shu

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