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Tag Archives: Europe

Full Blown FX Risk Aversion, Trade War Reaches New Heights

Full Blown FX Risk Aversion, Trade War Reaches New Heights Daily FX Market Roundup August 23, 2019 The US-China trade war reached new heights on Friday. Currencies and equities ended the week with major losses after China hit the US with tariffs on $75B worth of US goods. Almost immediately, President Trump ordered US companies to start looking for an alternative to China and promised a more painful response. Many believe that he will raise Chinese tariffs to 25% but we can’t rule out a...

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EURO Outlook & The Fed is Sending an Interesting Message

EURO Outlook & The Fed is Sending an Interesting Message Daily FX Market Roundup August 22, 2019 No one is buying euros because they are worried about the political situation in Italy, the possibility of a recession in Germany, the prospect of aggressive easing from the European Central Bank and the ongoing risk of more tariffs from the US. This week, Italy’s Prime Minister Conte resigned, turning crisis into chaos for the Eurozone’s third largest economy. Of all the euro’s...

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Next 48 Hours is Make or Break for EURO

Next 48 Hours is Make or Break for EURO Daily FX Market Roundup August 21, 2019 The next 48 hours will be very important for EUR/USD because the currency pair has been confined in a narrow 60 pip trading range for most of the week. With Germany talking about potential recession in the third quarter and the Italian government in disarray, the single currency is struggling to find buyers. Yet the pair holds above 2 year lows because the market also expects an interest rate cut from the...

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FX: Getting a Sugar High from Talk of Stimulus?

FX: Germany, US, China All Talk Stimulus Daily FX Market Roundup August Investors are dipping their toes back into US assets. Stocks traded higher for the third day in a row, Treasury yields rebounded off their lows and the greenback started the week stronger against all of the major currencies. These moves had nothing to do with data as there are no major US economic reports on the calendar this week. Instead currencies continue to be driven by headline risk and the prospect of fiscal...

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No Shock, A Bigger Theatrical Budget

You have to understand, none of this is about money or even bonds. It is all intended for one thing and one thing only: expectations. This has been the fulfillment of Paul Krugman’s long-ago criticism. The way out is to shock the system, he said. It doesn’t even matter, by this theory, what you do. So long as it is outside of every market expectation, that’s the only goal. Japan, who was the target of Dr. Krugman’s reproach, and after having consulted with the former Economist (he’s now just...

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Will EUR/USD Break 1.10?

Will EUR/USD Break 1.10? Daily FX Market Roundup August It has been a great week for the US dollar which recovered against all of the major currencies with the exception of sterling, which coasted on stronger UK data. The dollar’s rally was driven primarily by better than expected US data. Retail sales doubled expectations while year over year CPI growth edged closer to the central bank’s 2% target. These reports validate Fed Chairman Jerome Powell’s recent comments about the...

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The Rebound in the Pound Continues

Market Drivers August 16, 2019 EUR hits a 2 week low Pound rises above 1.2100 Nikkei 0.06% Dax 0.96% UST 10Y 1.56% Oil $55/bbl Gold $1507/oz BTCUSD $10000 Europe and Asia: No data North America: USD Building Permits/Starts 8:30 USD U of M 10:00 Financial markets started the final day of the week in a decidedly better mood with risk on flows all across equity markets as sentiment stabilized a bit. The dollar was stronger against both the euro and the yen while commodity pairs held steady...

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USDJPY Drops as US Data Beats but Fed Still Needs to Ease

USDJPY Drops as US Data Beats but Fed Still Needs to Ease Daily FX Market Roundup August The most important piece of US data scheduled for release this week was retail sales and even though consumer spending doubled expectations, investors shrugged off the news. For our readers, this should not be a surprise because yesterday we said nothing matters more than trade tensions, recession risks and global uncertainty. Even if consumer spending soars, the Federal Reserve will still need to...

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Brexit: According to Script

Aside from Boris-Johnson-generated noise, like his People’s PQMs, Brexit is evolving, or devolving, on the trajectory predicted by our insightful readers. Specifically, vlade and others anticipated that the only viable route for Parliament to obstruct Johnson’s crash-out plan was to win a vote of no confidence, then use the 14 day period in which Parliament could vote confidence in a government, including one different than the one it had shot down, to create what amounted to a caretaker...

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Some Brief European Leftovers

Some further odds and ends of European data. Beginning with Continent-wide Industrial Production. Germany is leading the system lower, but it’s not all just Germany. And though manufacturing and trade are thought of as secondary issues in today’s services economies, the GDP estimates appear to confirm trade in goods as still an important condition and setting for all the rest. The weakness is persisting and intensifying – particularly after May 2019. Before that, IP was first rocked in July...

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