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Tag Archives: EUR

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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December Monthly

The end of the annus horribilis is at hand, and despite the hard winter ahead for the northern hemisphere, there is a sense of optimism for the new year.  The first generation of vaccines for the coronavirus appears promising. The US has elected as president a person who is within the internationalist tradition.  The UK's standstill agreement with the EU will still expire at the end of the year, but many are still hopeful a last-minute deal can still be struck. China has entered into the...

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The Critical Week Ahead

Many macroeconomic and geopolitical issues remain open and are unsettling.  Europe is wrestling with the Turkey-Greece dispute over territory of potentially significant value in the Mediterranean.  The trade negotiations between the UK and EU have deteriorated, and the window of opportunity for an agreement is closing quickly.  Meanwhile, the poisoning of a Russian opposition leader, apparently using the same nerve agent that has been used on other "enemies of the state," is threatening...

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The Race is Afoot? Over to the ECB

The Federal Reserve's adoption of an average inflation target pushed on a door in the foreign exchange market that was already open.  The dollar had been trending lower since the end of March and, as of the end of August, was down against all the major currencies this year, save the New Zealand and Canadian dollars. The real broad trade-weighted dollar is arguably the best measure of metric to gauge the economic impact.  At the end of August, it stood at 108.09 after finishing 2019 at...

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August Survey Data and Beyond

Economists are often lampooned because of their inability to forecast changes in the business cycle.  But the pandemic helped them overcome the challenge this time. A record contraction in Q2 was anticipated before in March.  Similarly, economists generally expected the recovery after the March-April body blow.  However, after an initial surge, some high-frequency data point a deceleration of the rebound. That is what is important about next week's economic reports.  Businesses,...

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Would The Real Dollar Please Stand Up

On December 3, 2015, Europe’s central bank, the ECB, supposedly disappointed markets especially those trading European equities. Losses were large because Mario Draghi’s gang of policymakers merely extended its first QE rather than accelerating the pace of purchases. Investors, such as they were, had been told to expect more than that. To make matters worse, according to the mainstream narrative, the central bank also chose to take it easy on the banking sector. The money rate floor, the...

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Cool Video: Dollar, Trade, and China on TDA Network

I began my career as a reporter on the floor of the Chicago Mercantile Exchange, covering the currency futures and short-term interest rate futures for a news wire.   Among other things, I learned that often, the locals, people trading with their own money and wits, would take the opposite side of trades of the institutional players.  The institutional operators had deeper pockets but were looking to lay-off risk.  It was a David vs. Goliath story often.  It is, therefore, a special...

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Cool Video: TD Ameritrade–Stocks, the Dollar and the Trap Laid by the German Court

Here is a nine-minute clip of a chat I had with Ben Lichtenstein at TD Ameritrade. Ben captures futures traders' energy and breadth of vision.  Often in institutional settings, one develops a specialization, but in my experience, futures traders are more likely to look across the markets and asset classes.  It is one of the lasting lessons learned early in my career on the floor of the CME.  We focus on the S&P 500 and yesterday's German court decision, which I think is a trap that...

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Cool Video: CNBC Asia

As the markets were re-opening in Asia earlier today, I joined Martin Soong and Sri Jegarajah on CNBC Asia.  I had returned from a business trip and visited our summer house on the Jersey shore for what I thought was going to be a weekend more than a month ago.   Oil prices had initially reacted positively to the OPEC+ agreement. Still, I was skeptical as the cuts seemed inadequate to meet the dramatic compression in demand, let along the notorious non-compliance by some of the...

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October Monthly

Trade,  central bank policy, and Brexit dominated the investment climate in September. The US-Chinese trade conflict stopped escalating.  Although face-to-face talks are planned in October and the list of exemptions from the punitive tariffs has increased (US soy and pork, for example, are now exempt as are 10 components of Apple’s Mac Book Pro from China), the tensions remain high.  The conflict is more than about more than trade.  It is also about market access, unfair subsidies, and...

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