Crisis? What Crisis? it's just another Monday morning...

ref :- General , and "Rajoy wrongfoots separatists" , the Financial Times There's been quite a lot of chat in 2017 about the market's sangfroid -- it's apparent ability to shrug off developments that instinctively one feels ought to be causing it more stress. There are those that would argue that what appears to be remarkable resilience is only possible against the supportive background of ultra-easy monetary policy, and this period of historically low volatility should be a worry in itself. They may well be right -- sooner or later they're bound to be -- but harbingers of doom have generally had an expensive time of it of late, market-wise. Take Catalonia for example, an existenti

There's a Euro story, and there's a Dollar story ..... but most of all there's a Euro /

Friday 27th October 2017 There's a Euro story, and there's a Dollar story ..... but most of all there's a Euro / Dollar story ..... ref :- General One of the dangers when writing pieces about markets is that however valid one's ruminations may or may not be, things can change so quickly as to make them instantaneously obsolete. Such is the case today as in Madrid the Spanish parliament votes on the imposition of direct rule over Catalonia (very likely), and Catalan President Carles Puigdemont and the parliament in Barcelona decide whether to stick or twist. This guy is really in a difficult place, facing an intransigent Madrid and an absence of support from anywhere outside of Catalonia

What's the latest on the headline issues ?  ..... the ECB Taper, a BoE hike, and jockeying for t

Wednesday 25th October 2017 The real significance of the ECB's timetable for winding down the final stages of its QE bond purchasing programme is that we get to hear the end-date, according to the WSJ. With the current arrangements in place until the end of the year, predictions for the programme's finale in 2018 have ranged from €60bn per month for 6 months (too big a total given the scarcity of available bonds ?), to €20 per month for 12 months. Current consensus is comfortably in the middle of both size and time scales -- €30 per month for 9 months. The date when the programme finally finishes is crucial because the ECB have repeatedly said that it won't start raising rates until "well

"Fed-proof" trade sounds just lovely ..... but it's not to be confused with "fail

Tuesday 24th October 2017 ref :- "Bond Traders Are Piling Into a Fed-Proof Bet" , Bloomberg Markets Vying for the position of the biggest question hanging over markets at the moment (probably neck-and-neck with the pace of the ECB's QE tapering, expected to be announced on Thursday) is the identity of the next Fed Chairman, and his or her likely monetary policy. President Trump is expected to announce his appointment by the end of next week (though it could be sooner) and a reminder of the leading runners and riders might be in order : Janet Yellen : the current Chair of course, who got a fearful shellacking from Donald Trump in his campaign rhetoric for easy monetary policies but although

Slower for longer ? This ECB tapering look like it's going to take a while .....

Thursday 19th October 2017 ref :- " ECB eyes slow stimulus taper to keep lid on euro" , The Financial Times We were only saying on Monday that plainly a good many players were viewing the slight pullback in EUR / USD from it's highs just above $1.20 set last month as little more than a breather in the uptrend rather than a reversal. With EUR / USD trading today at $1.1835 near the top of its recent range, the euro is giving the impression of wanting another go on the upside despite some factors that one might normally expect to undermine the common currency. Foremost among them is the Spain / Catalonia affair which FX traders seem happy to ignore for the time being even though for some of

"There are two times in a man's life when he should not speculate : when he can't affor

Monday 16th October 2017 Like Oscar Wilde , Mark Twain was a font of pithy quotes but we can't agree with him entirely on this one, or at least we're pleased that not everyone else does. Where would the markets be without speculators ? And where would we all be without markets ? We would counter any claim that our's might be a nakedly self-serving point of view by stressing that while markets cannot function without speculation, it should only be undertaken with enormous care and discipline and be backed by eminently plausible rationale -- just as our punts always have been. In a piece this morning on hedge funds and how they're placing their bets at the moment, Reuters pointed out that ac

What's up, what's coming up, and a curious claim from ..... well, who else could it be ?

What's up, what's coming up, and a curious claim from ..... well, who else could it be ? ref :- General, and "Trump just claimed stock market gains actually offset national debt", CNBC Just very briefly ...... The Dollar and US Treasury yields have been marked a bit lower as markets study the minutes of last month's Federal Reserve meeting, released last night. The only slight surprise is the level of debate between members as to whether the forces that are holding inflation at lower levels than might be expected are temporary, or representative of a more fundamental change in how these things work. We know that even if they all acknowledge that factors like technology, globalization and de

It's not much of a conspiracy theory as conspiracy theories go, but is this the Fed's hidden

ref :- "Is the Fed wary of sub-2 percent Treasury yields ?" , Jamie McGeever of Reuters Markets Bloomberg are running a piece today ("Central Bankers Fare Better When They Are Tight Lipped") that highlights the case being made by two economists from the Swiss National Bank (SNB) that increased communication from central bankers has only served to confuse markets, rather than make things clearer for them. You've got to laugh at SNB officials criticizing the practice of "forward guidance" : "So Mr Lustenburger and Mr Rossi, you're not fans of central bankers pointing investors in a certain direction, then ? Who'd have thought it ?" Forgive the sarcasm .... let's just say that officials from

The next Fed Chair, and why the markets care ..... ref :- "How Bonds Will Trade Trump's Fe

On September 29th, President Trump said that he would be announcing "in two or three weeks" his decision as to who will chair the Federal Reserve after Janet Yellen's current term expires in February. By our reckoning, even though in theory the president has until the end of the year to make his choice, we'll hear who's going to be in the top job by the end of next week. Whoever it is, we wish them luck ..... and if anyone was thinking that the position of Fed Chairman was somehow just the most high-profile representative of a committee-based, policy-making body, and therefore that the selection will not be hugely influential "market-wise", we would urge them to think again. Up to five of th

Looking past the Hurricanes on Jobs Day...

ref :- General Just passing through today but since we happen to be next to a keyboard just as September's US Employment data is being released, we'll offer the briefest, and most jerky, of knee-jerk reactions. Non-farm payrolls : expected +85,000, actual -33,000 Unemployment rate : expected 4.4%, actual 4.2% Average hourly earnings (m-on-m) : expected +0.3%, actual 0.5% These look a little contradictory ..... the NFP number is weak for sure, but the headline rate an d especially the earnings data is strong. The reason that the payrolls number is at odds with the headline rate can be put down to the hurricane(s) effect on

You might just as well flip a coin ..... a gold one, naturally.

Thursday 5th October 2017 You might just as well flip a coin ..... a gold one, naturally. ref :- " Higher rates and low inflation test gold's mettle" , Analysis / Commodities , Markets and Investing, The Financial Times It wasn't the pretty picture of gold ingots and jewellery on the back of the FT that caught our eye this morning -- rather, it was the two little charts tacked alongside. Not that they reveal anything the world doesn't already know : 1) because it's quoted in dollars, a strong dollar (that makes the mettle more expensive for investors not based in the US currency) is BAD for the market price; and 2) So too are higher rates, which makes gold less attractive to investors be

Tell me again ...what makes a safe haven ?

Tuesday 3rd October 2017 ref :- "Havens are not always a place of safety" , Currency Analysis in the Financial Times There's a danger that we might just be rehashing old ground here ("and when has that ever bothered you before", they cried) , but blame it on Kim Jong Un. There have been enough people requesting a clarification of what markets are looking for in a safe haven to warrant another visit. In essence, the conversation always starts something like : "N. Korea has shown that it has the capacity to build increasingly large nuclear bombs, right ? And they've also shown that they've got the missiles to deliver them, yes ? Now they're flexing their muscles by lobbing those missiles over

Sterling contemplates the prospect of blood and back-stabbing.... Yup, it's the Tory Party Confe

ref :- "Sterling sinks to three-week low on economy, Tory conference" , Reuters Markets With the kind of regularity that makes such episodes seem inevitable, the UK's ruling Conservative party sinks into bouts of infighting that are never less than damaging, electorally-speaking. Every now and again, usually after an extended period in office, these degenerate into something truly suicidal. As we head into the week of the party conference it does look as though there's a decent chance that the Tories could once again shoot themselves not so much in the foot, but squarely in the side of the head. As ever Europe, and the egos of one or two of the major players in that debate, will at the heart

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