Edit
) no-repeat top center;background-size:cover'>

Custody Holdings and The Dollar

December 18, 2009
As is well appreciated, the Federal Reserve competes with private sector banks in providing custody services to foreign central banks. The data is reported on a weekly basis, every Thursday. Yesterday the Fed reported that custody holdings rose by about $5 bln. That brings the Q4 increase to about $93.5 bln and the year-to-date figure to $432 bln.…
Custody Holdings and The Dollar Custody Holdings and The Dollar Reviewed by magonomics on December 18, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>
CNBC: King Dollar & Growth CNBC: King Dollar & Growth Reviewed by magonomics on December 18, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

What is Moving the Dollar? New Driver Around the Corner ?

December 17, 2009
There have been many developments in the past couple of weeks, including Dubai and Greek woes, generally stronger than expected US economic data, and further confirmation of the unwinding of the Fed's liquidity provisions that could help account for the dollar's broad based strength. It is up, since the Dec 1, almost 3.75% against the euro…
What is Moving the Dollar? New Driver Around the Corner ? What is Moving the Dollar? New Driver Around the Corner ? Reviewed by magonomics on December 17, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Basel Committee Clarifies, Contradicts Japan

December 17, 2009
Japanese media had intimated that there would be a long--decade or more--transition period to new capital requirement rules. This apparently was a factor behind the surge in Japanese banks shares yesterday, before consolidating today, for example. However, the BIS' Basle Committee on Banking Supervision indicated earlier today that the new cap…
Basel Committee Clarifies, Contradicts Japan Basel Committee Clarifies, Contradicts Japan Reviewed by magonomics on December 17, 2009 Rating: 5
Edit

Greece and the Euro Zone

December 17, 2009
The heightened concerns about the fiscal situation in Greece and by extension the other weak credits in the euro-zone may be a source of pressure on the euro, but more than likely it is simply encouraging foreign exchange participants to do what they wanted to do in any event and reduce market exposure, which means buy back short dollars, ahead of…
Greece and the Euro Zone Greece and the Euro Zone Reviewed by magonomics on December 17, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Dollar Rally

December 17, 2009
Some observers are linking the dollar's rally to yesterday's FOMC statement. We do not see much new in the statement. There was a minor modification of its description of growth, but the policy guidance remained the same. Conditions were such that interest rates could remain extraordinarily low for an extended period. One U.S. investment b…
Dollar Rally Dollar Rally Reviewed by magonomics on December 17, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Chile--OECD Membership, Rates Steady, CLP Outlook

December 16, 2009
Yesterday was an important day for Chile. After two years of campaigning and making reforms Chile was invited to join the OECD. It is the first South American country to join and second behind Mexico in Latam. Chile becomes the 31st member of the OECD. Measures Chile adopted to pave the ground for membership included reforming the management of Co…
Chile--OECD Membership, Rates Steady, CLP Outlook Chile--OECD Membership, Rates Steady, CLP Outlook Reviewed by magonomics on December 16, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

FX Ignores Larger than Expected Rise in Nov US IP

December 15, 2009
Industrial output rose 0.8% in November, the most in 3 months but the dollar largely seems unaffected. The dollar had strengthened sharply against most of the major currencies earlier but had begun seeing those gains pared and that has continued after the industrial output data.
Manufacturing output rose an impressive 1.1% after a 0.2% decline in …
FX Ignores Larger than Expected Rise in Nov US IP FX Ignores Larger than Expected Rise in Nov US IP Reviewed by magonomics on December 15, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Preview of FOMC

December 15, 2009
The Federal Reserve's last meeting of the year begins today and concludes tomorrow. We do not anticipate much change in the FOMC statement and even less of a change in the Fed funds target (or the discount rate, which at FT columnist suggests is part of a risk scenario that should be taken seriously).
Recent FOMC statements have come in three …
Preview of FOMC Preview of FOMC Reviewed by magonomics on December 15, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Papandreou Long on Rhetoric, Short on Details

December 14, 2009
So far it does not appear that Greek Prime Minister Papandreou has provided much insight into how he will reduce Greece's heavy debt burden. Public debt is about 113% of GDP this year and set to rise toward 120% next year.
The most important take away point is that key decisions will be made over the next three months and the pain will be dist…
Papandreou Long on Rhetoric, Short on Details Papandreou Long on Rhetoric, Short on Details Reviewed by magonomics on December 14, 2009 Rating: 5
Edit

Markets are Skeptical of Greece, but Short-End Attractive

December 14, 2009
The markets await the speech by Greek Prime Minister Papandreou that will detail how he intends to address the fiscal woes that have created a bit of a crisis in Greece. The 2-year note yield has risen 175 bp over the past month, and 15 bp today to yield 3.05%, this is more than twice the German 2-year yield (1.23%) and half again as high as Irela…
Markets are Skeptical of Greece, but Short-End Attractive Markets are Skeptical of Greece, but Short-End Attractive Reviewed by magonomics on December 14, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Independent Pressure on the Turkish Lira

December 11, 2009
As the dollar rallies on constructive economic news, emerging market currencies are being hit by a wave of profit-taking. However there is independent pressure on the Turkish lira. The Constitutional Court just banned the main pro-Kurdish political party for links to militants and 37 members have been banned from politics for five years. The immed…
Independent Pressure on the Turkish Lira Independent Pressure on the Turkish Lira Reviewed by magonomics on December 11, 2009 Rating: 5
Edit

Returning to the Scene of an Accident

December 11, 2009
The market overreacted to the recent U.S. jobs report and while expectations of Fed policy have returned to status quo ante, the dollar has not. We suspect the dollar is therefore vulnerable to a renewed near-term setback. The yen is obviously exceptional and the dollar has already surrendered its job-induced gains. We would also discount sterling…
Returning to the Scene of an Accident Returning to the Scene of an Accident Reviewed by magonomics on December 11, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Yen Carry Trade by Unlikely Candidates

December 10, 2009
Speculators appear to be playing the yen from the long side. (Read more about the yen carry trade here.) The Commitment of Traders data showed near-historically extreme net long position prior to the middle of last week when the yen was sold off hard. Even if some of the speculative longs were cut, they likely remain net long yen.
Over the last co…
Yen Carry Trade by Unlikely Candidates Yen Carry Trade by Unlikely Candidates Reviewed by magonomics on December 10, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Watch Tomorrow's Report on US Business Inventories

December 10, 2009
The US reports the October business inventory data tomorrow. Economists are likely waiting for the report before revising Q4 GDP forecasts. Previously the consensus was coming in around 3% GDP for Q4 and the risk is that estimates are revised higher.
A little more than half of the business inventory raw data is known. Wholesale inventories released…
Watch Tomorrow's Report on US Business Inventories Watch Tomorrow's Report on US Business Inventories Reviewed by magonomics on December 10, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Turkey's Central Bank Intends to Roll Over Debt Holdings

December 10, 2009
Turkey's central bank holds about TRY8 bln in domestic debt that expires next year and indicated it will buy about TRY8 bln of government paper to replace it. It will begin buying TRY100 mln in twice a week auctions beginning on Dec 23 and continuing through June. It will buy TRY5 bln through this process. It will be focused on the 1-5 year pa…
Turkey's Central Bank Intends to Roll Over Debt Holdings Turkey's Central Bank Intends to Roll Over Debt Holdings Reviewed by magonomics on December 10, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

The Future of the Carry Trade

December 04, 2009
The Japanese yen has been suffered the most in the wake of news that fewer Americans lost their jobs in November. There has been a debate in the market over what would happen when the dollar carry trade was exited. One camp thought the the end of the dollar carry trade would be marked by renewed crisis and the unwind of the risk trade. The other c…
The Future of the Carry Trade The Future of the Carry Trade Reviewed by magonomics on December 04, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Fed Funds and The Dollar

December 04, 2009
The much stronger than expected US jobs data has triggered a large sell-off in the US debt market and is sparking sharp losses in European bonds as well. Of particular interest is the dramatic sell-off in the Fed funds futures as the market reassesses the trajectory of Fed policy in light of evidence of light at the end of the tunnel of long and d…
Fed Funds and The Dollar Fed Funds and The Dollar Reviewed by magonomics on December 04, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

December and the Dollar

December 04, 2009
Cognitive dissonance is when one holds contradictory beliefs simultaneously. This is the condition investors are in when they believe in regular patterns in the markets and the efficient market theory.
‘Tis the Season The largely unregulated foreign exchange market has an average daily turnover last officially estimated (BIS 2007) at $3.2 trillion.…
December and the Dollar December and the Dollar Reviewed by magonomics on December 04, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Strong Canada Jobs Data Says Nothing About US

December 04, 2009
Canada reported much stronger jobs data than the market expected, sending the Canadian dollar broadly higher. However, the strong showing in Canada should not be seen as a hint or signal of what to expect from the US.
Canada grew 79.1k jobs in November, of which 38.6k were full time jobs. The consensus had look for a modest 15k rise after a 43.2k …
Strong Canada Jobs Data Says Nothing About US Strong Canada Jobs Data Says Nothing About US Reviewed by magonomics on December 04, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Japanese Treasury Holdings

December 03, 2009
In the past we recommended that Japan consider using its massive reserve holdings to support the domestic economy. In particular we suggested selling 1/4 of their reserves and to finance domestic consumption. In early 2008, in response to our op-ed piece in the Financial Times, the IMF quickly argued that it did not think that Japan needed fiscal …
Japanese Treasury Holdings Japanese Treasury Holdings Reviewed by magonomics on December 03, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Mexican Peso New Highs for 2009

December 03, 2009
An upward revision in the central bank of Mexico's inflation forecasts announced yesterday propelled the peso to new highs for the year on ideas that the new forecasts are a signal of a rate hike early next year. We suspect the market, which the non-commercials (speculators) in the futures market held as of last week a net 89k long contracts, …
Mexican Peso New Highs for 2009 Mexican Peso New Highs for 2009 Reviewed by magonomics on December 03, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Daimler Joins the Move to US

December 02, 2009
We have noted that the combination of the chronically weak dollar, strong productivity gains, and the threat of protectionism will likely encourage foreign companies to boost their productive capacity in the United States. A couple of Japanese auto producers have already made recent moves in this direction. Today, Germany's Daimler said it wil…
Daimler Joins the Move to US Daimler Joins the Move to US Reviewed by magonomics on December 02, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Data and Policy Mix Frustrate Attempts to Stabilize BRL

December 02, 2009
Brazil has reported FIPE inflation and Oct industrial production figures today. The former did not rise as much as expected and the latter was a stronger than expected. FIPE calculation of CPI rose 0.29% in Nov. The consensus was for a rise of 0.32%-0.34%. In Oct, it rose 0.25%. The important point here is that Brazilian inflation appears to be ba…
Data and Policy Mix Frustrate Attempts to Stabilize BRL Data and Policy Mix Frustrate Attempts to Stabilize BRL Reviewed by magonomics on December 02, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Gulf Leaders Summit--Small Step toward Monetary Union

December 01, 2009
Yesterday we noted reasons to be skeptical of a single currency for several Latam currencies under Venezuela's leadership. We can be only slightly more optimistic about the near-term possibilities of a monetary union in the Gulf.
A Gulf leaders summit began today. Two political issues were on the opening agenda: support for Saudi Arabia over t…
Gulf Leaders Summit--Small Step toward Monetary Union Gulf Leaders Summit--Small Step toward Monetary Union Reviewed by magonomics on December 01, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

Behind Better than Expected German Jobs Data

December 01, 2009
Germany reported today that November unemployment fell 7k instead of rising 5-10k as the market expected. This is the fifth consecutive month that the number of unemployed has fallen in Germany. It offers a stark contrast to the US jobs picture, where another net 125k are expected to have lost their jobs last month. But does it ?
There are two dri…
Behind Better than Expected German Jobs Data Behind Better than Expected German Jobs Data Reviewed by magonomics on December 01, 2009 Rating: 5
Edit
) no-repeat top center;background-size:cover'>

More Thinking About the Japan and the Yen

December 01, 2009
The Bank of Japan announced a new liquidity facility today of roughly JPY10 trillion in three month loans to commercial banks. The BOJ came under pressure from the DPJ government and BOJ Governor Shirakawa can be forgiven if he does not see much of a difference between the pressure brought to bear by the previous LDP government and the new DPJ adm…
More Thinking About the Japan and the Yen More Thinking About the Japan and the Yen Reviewed by magonomics on December 01, 2009 Rating: 5
Subscribe to: Posts ( Atom )
Powered by Blogger.