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Tag Archives: ECB

Greenback Extends Recovery

Overview: Julius Ceasar is said to have "crossed the Rubicon" on January 10, 49 BCE, taking the 13th Legion into Rome, defying orders from the Senate, and precipitating the Roman Civil War that marked the end of the republic and the birth of the empire.   Last week's events paled in comparison despite the US President urging his supporters to march on Washington and demonstrate its strength. It was the only way the "stolen" landslide election would be secured.  His personal lawyer called for...

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Inflation Hysteria #2 (Anleihen kaufen es nicht)

On Monday, November, 9, pharma company Pfizer announced that in partnership with Germany’s BioNTech the pair had finally come up with the answer. The world infested with COVID could breathe easier safe in the knowledge a vaccine had been discovered, proven, and already close to approvals and production. “Today is a great day for science and humanity. The first set of results from our Phase 3 COVID-19 vaccine trial provides the initial evidence of our vaccine’s ability to prevent...

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Brexit Fears Weigh on Sterling

Overview:  The odds of a UK-EU agreement and new stimulus before year-end in the US have faded and are sapping risk appetites ahead of the weekend.  Although most Asia Pacific equity markets gained, China and Australia were notable exceptions, European shares are heavy, and the Dow Jones Stoxx 600 is near three-week lows.  It is set to end a five-week rally.  US shares are also trading heavily. Bond markets are bid.  In fact, yields in several countries, core as well as periphery, are at new...

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Brexit and US Stimulus are Unresolved as Attention Turns to the ECB

Overview:Asia PacificEuropeSome modest profit-taking was seen ahead of the ECB meeting, but the euro remains above the upper end of the $1.1600-$1.2000 range that dominated from mid-July through the end of November. The focus is squarely on today's ECB meeting, where the market feels fairly confident about the outcome.  The ECB will extend and expand its emergency bond-buying program (PEPP).  It is also widely expected to announce a new targeted longer-term refinancing operation (three-year...

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It may be a Weak Dollar Story, but Europe is Center Stage in the Week Ahead

Europe is center stage in the week ahead.  It is not as if there are not other important events or economic data due out.  After all, the US reports both the consumer and producer price indices, as does China, along with its reserves, trade, and lending figures. However, for investors, the events in Europe may overshadow them.  The European Central Bank meeting is the highlight of the week ahead.  Traditionally officials have been wary of pre-committing to a policy change, but this time,...

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Saving Jobs Won’t Save Us From Jaws

Mario Draghi’s sunset retirement festivities weren’t supposed to have gone off this way. Celebrated for his July 2012 “promise” to save the euro, he instead spent the entirety of his eight years as President of the ECB chasing inflation and recovery, the very things meant to accomplish the euro’s saving, without success. By the end, his final act in September 2019 was to restart QE all over again, putting him like Europe right back at the start.It’s why, when it comes to “stimulus” like QE,...

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Equities are Heavy and the Dollar Softer to Start New Week

Overview: Month-end profit-taking saw Asia Pacific shares tumble earlier today.  Most markets are off 1-2.5% today after the MSCI Asia Pacific Index rose 2.25% last week.  European shares are mixed, but little changed.  US shares are also trading lower.  The energy sector is being dragged lower by the failure of OPEC+ to signal an agreement to extend cuts, but the formal meeting continues into tomorrow as well.  After testing $46.25 last week, WTI for January delivery is Benchmark yields are...

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The Investment Climate and the Dollar

We have all been hopeful that a vaccine could be developed for the coronavirus, and these hopes were not vain.  Pfizer and Moderna's promising results are just the tip of the iceberg, and in the coming weeks, more results from other companies are expected.  Make no mistake about it.  There is a several-month slog in front of us as the virus surge has yet to be convincingly turned in Europe, let alone the US, which seems to lag behind a couple of weeks.   The data highlight of the week, the...

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Prospect of a Vaccine Signals a New Game is Afoot

Pfizer's extraordinary results on developing a vaccine for Covid-19 has injected a new factor into the investment climate, even as many countries around the world continue to wrestle with a new and powerful spread of the virus.  In the US equity market, a rotation, which may have been underway previously, gained ground.  It can be illustrated by the fact that the FAANG-driven NASDAQ trailed the other major benchmarks, including the Russell 2000.  European and Japanese equities extended...

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COT B-und?

We’ve been documenting for weeks now how every chart, therefore every market, shows some kind of inflection around and immediately after August 27. This was Jay Powell’s big Jackson Hole fiasco, questions about the global “V” having already multiplied since June were further compounded by the absolute joke that was average inflation targeting. As noted earlier, even Germany’s bund market had sniffed this out, with longer end German yields noticeably back lower and nearing record...

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