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Tag Archives: Europe

No Talk In The Dollar Shadows

The company isn’t bankrupt, it just doesn’t have the right currency in its reach to repay debts coming due. YPF is Argentina’s (former) gold mine, in this case the black gold of energy exploitation. State-owned, the business has obviously close ties to the ruling powers-that-be and a privileged place to go along with them. Its formal name, Yacimientos Petrolíferos Fiscales, literally translates as “fiscal oilfields.”But no matter the primo spot in the Argentinian hierarchy, no government...

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PMI Day – Will FX Traders Care?

PMI Day – Will FX Traders Care? Daily FX Market Roundup 01.21.2021 By Kathy Lien, Managing Director of FX Strategy for BK Asset Management It has become abundantly clear over the past year that the market is driven by optimism. The COVID-19 pandemic dealt a major blow to every corner of the world but rather than worrying about how deep the impact will be on local economies, investors and central bankers are looking to the recovery. We saw that throughout the second half of 2020 and now...

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Future Stimulus Math

Sticking with Europe, central bankers want and expect higher inflation because that would confirm an economy strong enough – and monetarily sufficed – to sustain success. It’s the sustainability which has been lacking; the global economy since the first global (euro)dollar shortage never able to do more than lurch between downturns and the absence of downturns (reflation).Without enough monetary oxygen flowing around the world, the global economy just could never get going enough to hit...

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The ‘Cs’ Both Stand For ‘Clown’; YCC ‘Lite’ Hits Europe (allegedly)

The ECB wants everyone to know that it is in control, and therefore has everything under control. Through an almost certainly carefully placed leak, European central bank officials have let it be known current monetary policy is practicing a kind of yield curve control. Not just the usual QE in terms of bond buying, but tailoring specific parameters within the program in order to achieve what policymakers are saying adds up to more complete financial command. They just aren’t ready to call...

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Stocks Cheer Biden Inauguration, FX Traders Look to ECB

Stocks Cheer Biden Inauguration, FX Traders Look to ECB Daily FX Market Roundup 01.20.2021 By Kathy Lien, Managing Director of FX Strategy for BK Asset Management The inauguration of the 46th President of the United States went off without a hitch. Equity and currency traders welcomed the new Administration with fresh records for the S&P 500 and Nasdaq. The peaceful transition allowed investors to turn their focus to President Biden’s 100 day agenda which includes aggressive...

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Central Bank Machinations with No Exit: ECB Leaks New Thingy, It’s Doing Yield Spread Control

Yves here. Market-minded readers will take interest in Wolf Richter’s sighting of the latest ECB intervention strategy. However, I have to differ with Wolf on his claim that yield spread control by a central bank is unprecedented. The Fed attempted to do that in a clumsy way with QE and was explicit about it. It claimed it was not trying to influence yields but spreads, as in of mortgage bonds (which it was buying) along with Treasuries. In other words, the Fed was not only trying to lower...

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Biden Inauguration & Bank of Canada: The Odds of a Micro Cut

Biden Inauguration & Bank of Canada: The Odds of a Micro Cut Daily FX Market Roundup 01.19.2021 By Kathy Lien, Managing Director of FX Strategy for BK Asset Management It’s a big week for the financial markets. The Congressional hearings for Janet Yellen’s confirmation as Treasury secretary began today (there’s no guidance on how fast the panel will vote on her nomination) and tomorrow, Joe Biden will be sworn in as the 46th President of the United States. There are 3 central bank...

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Ahead of Yellen – Mood is Back to Risk On.

All markets green across the board Yellen confirmation on deck today Nikkei 1.39% Dax 0.32% UST 10Y 1.10 Oil $52 Gold $1843/oz. BTCUSD $37000/oz. Asia and the EU EUR ZEW -66.4 vs. -68.5 US CAD Wholesale Sales 8:30 USD Yellen confirmation It’s green across the board in both FX and equity markets today with mood clearly tilted to risk-on ahead of Janet Yellen’s confirmation hearings on Capitol Hill. On the first full day of global trade with US markets back to business after yesterday’s...

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The Double Irony of the New UK-EU Trade Relationship

By André Sapir, a Senior Fellow at Bruegel. He is also University Professor at the Université Libre de Bruxelles (ULB) and Research Fellow of the London-based Centre for Economic Policy Research. Originally published at Bruegel. The Trade and Cooperation Agreement signed between the European Union and the United Kingdom goes against six decades of UK efforts to avoid being economically disadvantaged in Europe. Tracking the evolution of the EU-UK relationship over the last 60 years can help in...

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Brexit: Wheels Coming Off

We’ve been quiet about Brexit because so many things have been happening on other fronts, and truth be told, because reporting has been thin. That isn’t necessarily due to a lack of newsworthy developments but that getting a good picture would involve things like interviewing haulers and farmers or at least their trade associations, and that means developing new sources, which equals work. But even adverse outcomes for the City are getting surprisingly little notice. Some of that may be...

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