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Six Weeks that Could Shake the World

May 31, 2018
The first five months of the year have plenty of unwelcomed surprises for investors. Volatility throughout the capital markets rose, despite the continued net expansion of central bank balance sheets, as the reduction of the Fed's balance sheet is offset by continued buying by the Bank of Japan and the European Central Bank.Existential risk in…
Six Weeks that Could Shake the World Six Weeks that Could Shake the World Reviewed by Marc Chandler on May 31, 2018 Rating: 5
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Don't Confuse Calmer Markets with Resolution

May 31, 2018
The global capital markets that were in panic mode on Tuesday stabilized yesterday, and corrective forces have carried into today's activity.  However, the underlying issues in Italy and Spain are hardly clarified in the past 48 hours.  Moreover, the US push on trade is intensifying again.  The temporary exemptions for the EU, Canada, and Mexi…
Don't Confuse Calmer Markets with Resolution Don't Confuse Calmer Markets with Resolution Reviewed by Marc Chandler on May 31, 2018 Rating: 5
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Great Graphic: Euro Bulls Stir but Hardly Shaken

May 30, 2018
When one trades futures, one declares whether one has an underlying business need, in which case one is considered a commercial.  If no underlying business need exists, one is classified as a non-commercial, which in the vernacular of the market is a speculator. 
This first Great Graphic, created on Bloomberg, shows the net speculative euro positio…
Great Graphic: Euro Bulls Stir but Hardly Shaken Great Graphic: Euro Bulls Stir but Hardly Shaken Reviewed by Marc Chandler on May 30, 2018 Rating: 5
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FAQ: What Happened to Rome?

May 30, 2018
Italian capital markets are having a spasm that by some measures is more acute than was experienced during the 2011-2012 sovereign crisis period.  We suspect the reprieve being experienced today--after a move historic proportions yesterday--will be short-lived. Market participants see the greatest existential risk to the eurozone since before the …
FAQ: What Happened to Rome? FAQ: What Happened to Rome? Reviewed by Marc Chandler on May 30, 2018 Rating: 5
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Italian Reprieve, Euro Bounces, Trade Tensions Rise

May 30, 2018
After what could be described as a 15-sigma event yesterday in the Italian bond market, a reprieve today has seen the euro recover a cent from yesterday's lows.  While the political situation in Italy is worrisome, many observers suspect that the new banking rules exacerbated the illiquidity that explains outsized moves.  Italy's 10-year b…
Italian Reprieve, Euro Bounces, Trade Tensions Rise Italian Reprieve, Euro Bounces, Trade Tensions Rise Reviewed by Marc Chandler on May 30, 2018 Rating: 5
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Fed Still On Track to Hike Rates Next Month

May 29, 2018
Investors are seeing turmoil in the capital markets and a decline in US interest rates, including at the short-end.  Some are suggesting that market has become less confident of Fed hike next month. Our work suggests this is premature and the  Fed funds futures market continues to nearly fully discount a hike at the conclusion of the FOMC meeting …
Fed Still On Track to Hike Rates Next Month Fed Still On Track to Hike Rates Next Month Reviewed by Marc Chandler on May 29, 2018 Rating: 5
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Emerging Market Preview: Week Ahead

May 29, 2018
(from my colleague Dr. Win Thin)

EM FX has started the week mixed.  Some relief was seen as US rates stalled out last week, but this Friday’s jobs number could be key for the next leg of this dollar rally.  On Wednesday, the Fed releases its Beige book for the upcoming June 13 FOMC meeting, where a 25 bp hike is widely expected.  We believe EM FX …
Emerging Market Preview: Week Ahead Emerging Market Preview: Week Ahead Reviewed by Marc Chandler on May 29, 2018 Rating: 5
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Dollar and Yen Surge

May 29, 2018
The world looks in turmoil, and the dollar and yen are the chief beneficiaries.  The epicenter of the tension is in Europe, and the euro has been sold to near $1.15 and sterling to $1.3200.  The dollar slumped a little through JPY108.45, its lowest level since April 23.  The dollar is higher against all the emerging market currencies, led by a 1.3…
Dollar and Yen Surge Dollar and Yen Surge Reviewed by Marc Chandler on May 29, 2018 Rating: 5
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What Happened Monday?

May 28, 2018
Italian politics dominated Monday's activity.  Initially, the euro reacted positively in Asia to news that the Italian President had blocked the proposed finance minister.  A technocrat government would be appointed to prepare for new elections. 
The euro reversed course by midday in Asia, several hours before European markets opened.   The mov…
What Happened Monday? What Happened Monday? Reviewed by Marc Chandler on May 28, 2018 Rating: 5
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Political Crises in Europe Rivals Economic Data and Trade to Drive Capital Markets Political Crises in Europe Rivals Economic Data and Trade to Drive Capital Markets Reviewed by Marc Chandler on May 27, 2018 Rating: 5
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Greenback's Advance Narrows

May 26, 2018
The US dollar was mixed last week.  After reaching a four-month high against the  yen near JPY111.40, it tumbled slipped below JPY109 by the end of the week, ending an eight-week advance with an exclamation point. 
The euro, on the other hand, saw, its push lower extended for the fifth week.  The euro has risen in only five sessions this month duri…
Greenback's Advance Narrows Greenback's Advance Narrows Reviewed by Marc Chandler on May 26, 2018 Rating: 5
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Emerging Markets: What Changed

May 25, 2018
(from my colleague Dr. Win Thin)
·President Trump canceled the planned summit with North Korea’s Kim Jong Un. ·Malaysia’s new Finance Minister Lim was sworn in along with 13 other cabinet ministers. ·Philippine central bank cut reserve ratios for commercial banks by one percentage point to 18% effective June 1. ·The United Arab Emirates opened up its…
Emerging Markets: What Changed Emerging Markets: What Changed Reviewed by Marc Chandler on May 25, 2018 Rating: 5
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