January 28, 2021
No, I am not referring to the gyrations in the realm of heavily shorted stocks and the attacks by the populace of Sherwood Forest to drive valuations ever higher.
The insanity following Wednesday’s FOMC statement and the Powell press conference leaves me contemplating the works of Kindleberger and Minsky. Complacency in financial markets relying on the kindness of strangers is setting the course for continued madness in all financial asset classes. The POWELL PRESS CONFERENCE YIELDED WHAT OUGHT TO HAVE BEEN THE HEADLINE FOR ALL FINANCIAL NEWS: FED CHAIR POWELL SAYS REAL UNEMPLOYMENT RATE IS 10%.
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Tags: China, Chinese Yuan, easy money, ECB, Euro, Federal Reserve, FOMC, inflation, Jerome Powell
Posted in Currency, ECB, Fed | 20 Comments »
January 21, 2021
This week, three G-7 central banks had meetings and all decided to CHECK and leave policy unchanged. This was widely expected as there was little reason to UPSET the incoming Biden administration with any idea of currency manipulation. However, the Bank of Canada, Bank of Japan and European Central Bank all discussed the fear of a further slowdown from an increased spread of covid-19.
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Tags: Bank of Canada, bitcoin, blockchain, Canadian Dollar, Chinese Yuan, Christine Lagarde, Euro, European Central Bank, Janet Yellen, raw commodities, U.S. Dollar
Posted in Central Banks, China, Commodities, Cryptocurrency, Currency | 13 Comments »
January 19, 2021
Say goodbye to Daddy Warbucks Say hello to Uncle Joe.
On Monday we got a preview of the Biden Administration as Treasury Secretary nominee Janet Yellen appeared before the Senate Finance Committee. It was sad that her testimony was released over the weekend. There were the stock answers to the issue of the U.S. dollar, which falls under the auspices of the Treasury Department. Yellen proclaimed that the markets would set the value of the DOLLAR and that it would not be the policy of the Biden Administration to manipulate the currency to attain some illusionary trade advantage.
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Tags: Bank of Canada, Canadian Dollar, Federal Reserve, inflation, Janet Yellen, Jerome Powell, Loonie, Treasury Secretary, U.S. Dollar, U.S. yield curve
Posted in BOC, Currency, Fed, United States | 15 Comments »
January 10, 2021
I had the pleasure of sitting down with Louis Gave last week and we discussed many of the pressing issues facing the global macro world. In May 2020, Richard Bonugli provided the FRA platform as a place to discuss the global outlook with a little bit of FORESIGHT. We HIT IT OUT OF THE PARK. Hopefully, our most recent analysis will provide similar investment outcomes and maybe succeed in clarifying some important issues facing the investment community as 2021 begins.
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Tags: Euro, Federal Reserve, Japanese yen, nonfarm payrolls, precious metals, Treasury bonds, U.S. Dollar, U.S. yield curve, yield curve control
Posted in Currency, United States | 20 Comments »
January 3, 2021
In 2020, the entire world endeavored to smooth out a new wrinkle in the global macro landscape as the covid pandemic spurred fears of a global depression as economies shuttered to stem the virus’s spread. The FED stepped in to ensure that the global system had access to enough dollars as corporations and individuals rushed to sell assets in an effort to meet a potential economic contraction. The U.S. central bank did its best to reduce the fear of deflation by opening dollar swap lines to more foreign central banks, as well as pushing U.S. interest rates back to the lower zero bound. The huge amount of liquidity thrust upon the financial system stopped a global selloff in its tracks.
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Tags: bitcoin, deflation, Federal Reserve, inflation, Janet Yellen, Jerome Powell, Treasury Secretary, U.S. Dollar
Posted in Currency, Fed, United States | 28 Comments »
December 21, 2020
… a supporter of Treasury Secretary Steve Mnuchin. In my opinion, he’s another Wall Street hack devoid of any genuine knowledge of the global macro world in which he his sent to do battle on a daily basis. Last week’s decision to label Vietnam and Switzerland as “currency manipulators” is badly timed, badly chosen and badly misinformed. Why would you name Vietnam a currency manipulator when a large part of the Trump administration’s policy is directed toward relocating global supply chains away from China. In addition, labelling Vietnam a “currency manipulator “is an immoral and unconscionable act. Even Bob McNamara is spinning on his “rotisserie in hell.”
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Tags: currency manipulator, Euro, Swiss Franc, Switzerland, U.S. Dollar, U.S. Treasury, Vietnam
Posted in Currency, SNB, United States | 12 Comments »
December 18, 2020
Wednesday’s FOMC release and the Jerome Powell press conference provided the market with enough ammunition to power even higher and send the DOLLAR lower. There was NOTHING hawkish about the FED decision regardless of the conclusions drawn from the ridiculous forecast from the SUMMARY OF ECONOMIC PROJECTIONS, which have as much value as teats on a bull. The SEPs have been never met in all the years the FED has released them as “quality” forecasts. Why did the market resolve to take a DOVISH view?
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Tags: Federal Reserve, FOMC, FX swap lines, inflation, Jerome Powell, U.S. Dollar, yield curve control
Posted in Currency, Fed | 6 Comments »
December 13, 2020
There two issues whose headlines are creating intraday volatility: Brexit and Congressional tweets surrounding another covid stimulus package (or not). As it stands, so many workers are struggling due to job losses — though no fault of their own — and small businesses are trying to keep their doors open.
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Tags: Brexit, covid stimulus, ECB, Fed, U.S. yield curves, yield curve control
Posted in Debt Market, ECB, Fed, UK, United States | 38 Comments »
December 10, 2020
There were two central bank meetings in the past two days: The Bank of Canada and the European Central Bank. The BOC stayed its current course with no change in policy. Several analysts were looking for more dovish action because of the appreciation of the Canadian dollar but the BOC was wise in noting that a “broad-based decline” in the U.S. exchange rate has contributed to a “further appreciation of the Canadian dollar.” As a result, the BOC has ZERO concerns about its currency appreciating as long as it is BROAD-BASED.
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Tags: Bank of Canada, Christine Lagarde, currency manipulation, Euro, European Central Bank, Swiss Franc, Swiss National Bank, U.S. Dollar
Posted in BOC, Currency, Fed, Switzerland | 24 Comments »
December 6, 2020
After the performance of the 30-year yield on Friday, we must ask this question. The overall release was on the weak side as jobs created were far less than expected, even though the RATE dropped to 6.7% and average hourly earnings increased by 0.3%, higher than forecasted. The AHE are difficult to measure as it can reflect lower wage earners being left out of the job market, as well as bonuses paid out to middle- and upper-level management.
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Tags: 30-year Treasury bond, Federal Reserve, fiscal stimulus, Jerome Powell, Treasury yield curves, yield curve control
Posted in Debt Market, Fed, United States | 24 Comments »