Posts Tagged ‘Australian dollar’

Notes From Underground: Central Bank Policy Peeks

June 2, 2020

On Monday night, the Reserve Bank of Australia issued its policy decision and as expected, there was no change in overnight rates at 0.25%. More importantly, the RBA is targeting three-year Aussie government bonds at 0.25%, keeping the yield curve flat or inverted out to that point.

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Notes From Underground: A Microscopic Germ Packs a Wallop

March 2, 2020

There is no doubt little organisms can wreak havoc in ways that blowhards could never imagine. People are trying to assess the financial impact by looking at previous pandemics. This is flawed analysis because each pandemic is different depending on the global circumstances and the morass for incubation. During the Cold War people did not move freely so political containment acted as a drag on the spread of disease.

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Notes From Underground: Another FRA Podcast

May 1, 2018

While waiting for the FOMC‘s rate decision on Wednesday, I am posting a new PODCAST in which I discuss the global macro situation with a woman who whose work I had not been familiar. Nomi Prins has written a new book called Collusion, in which she investigates the role of central banks in its current predicament. I thoroughly enjoyed the 51-minute podcast as Richard Bonugli does a fine job of allowing the guests to discuss in deep detail. I will certainly be buying the book (it was released Tuesday) as it explains in detail what the central banks have accomplished in destroying the signalling mechanisms of capitalism and markets. The Financial Repression Authority has been an important platform for allowing deep discussion on matters of global investment concerns. Enjoy the discussion as I await my readers feedback on the issues we covered and hope it will lead to profitable trade opportunities.

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Notes From Underground: Where Are We?

March 28, 2016

First quarter is winding down and after a great deal of volatility it is time to reflect on the markets. The SPOOS are virtually unchanged  while the Nasdaq 100 is down 5%, the Nikkei is down 10% and the German Dax is down 8%. The global equity markets have been riding a wave of liquidity for a long while but with the aggressive QE programs from the ECB and BOJ the first quarter one would expect the German and Japanese stock markets to have been the star performers. Maybe more QE is losing its power to impact the markets? The DOLLAR INDEX is lower by 3.2%, which is also in contravention of conventional wisdom as QE is done to weaken one’s currency in an effort to aid the domestic economy. In examining the individual currencies the euro is +3%, Swiss franc +3%, yen +8%, Canadian dollar +5% and Aussie dollar +3%. Yes, the easing banks have seen their currencies strengthen against the DOLLAR.

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Notes From Underground: The FED … Unsafe at Any Ultra-Low Rate

November 30, 2015

Last week, in the middle of gorging our material senses, Janet Yellen was responding to a letter from Ralph Nader, a well known consumer advocate who took the Bernanke and Yellen to task for keeping interest rates too low, resulting in asset inflation for Wall Street and the very wealthy while MAIN STREET was “rewarded” with zero interest rates and almost NO returns on passive, low-risk credit channels. Yellen repeated her third grade teacher tutorial about how savers have indirectly have benefited because of the bounty of jobs available for them and their children and grandchildren and they should stop complaining because home prices have increased to pre-crisis levels in many parts of the country–all because of the wonderful work of the FED and its QE programs. (Even as Carmen Reinhart and other top-level economists have criticized the FED for prolonging FINANCIAL REPRESSION in order to insure against inflation staying below the FED‘s self-imposed mandate of 2 percent.)

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Notes From Underground: Tsipras–1; Merkel–0; and the Sycophants of Access Journalism Prattle On

July 6, 2015

The outcome of the Greek referendum surprised all, even those who believed a NO vote was imminent. As NOTES has written ad nauseam, the referendum card was the nuclear option for Prime Minister Tsipras and he played it for a resounding impact. Chancellor Merkel was furious with Tsipras for having the audacity to challenge the EU elite by going to the people and testing the concept of the general will. The financial media and its purveyors of pabulum could only see this move by the Greeks in its impact upon the equity markets–and marginally the global bond markets. The outcome for the debt markets is a mixed bag for some bonds rally while the debt of smaller peripheral economies take a hit as the risk-off trade is initiated to the possible negative fallout from the lopsided Greek vote of NO.

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Notes From Underground: Larry Summers In Mister October

October 7, 2014

There is not doubt that Larry Summers is excited by October G-20 and IMF meetings as the top policy makers meet to discuss the state of the world economy and other significant global interests. It’s a time when the media is focused on the world’s leaders and Mr. Summers likes the role of being a major player. There is no question about Summer’s academic qualifications and his wealth of policy making experience. If success in the field of economics was based on eugenics, well, Larry Summers would certainly have a Nobel Prize. My one major criticism of Secretary Summers was his running interference for Robert Rubin and Sandy Weil in their efforts to repeal Glass-Steagall, which even Mr. Weil has admitted was a great mistake. In today’s Financial Times, Larry Summers had an op-ed, “Why Public Investment Really Is A Free Lunch.”

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Notes From Underground: Putin Says Russian Central Bank Sells 12,000 OUNCES of Gold …

October 29, 2013

(to Pay for Escorts for U.N. Opening Party)

In response to a WSJ headline today, “Gold fades From Investment Picture,” the Russian President announced that dollars were needed in New York. The Russian Central Bank made delivery on 120 Comex contracts by moving the gold to New York and receiving funds for deposit in New York so as not to violate U.S. rules on currency amounts. The Russian delegation to the U.N. opening party needed funds for escorts and booze. Putin assured global financial markets that delivering 12,000 ounces of gold from Russian vaults was a mere dip into petty cash. Seriously, CNBC was all atwitter that central banks were initiating gold sales … all 120 COMEX CONTRACTS. Too bad that the U.N. meetings weren’t in Mumbai for the Russians could have received a $270 premium over the world market price. It’s a major non-story unless tapering is linked with the sale. Maybe Putin really has inside info on Fed intentions.

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Notes From Underground: Month-End, Quarter-End and Oh Yes, a New Fiscal Year in the U.S.

September 30, 2013

Tonight’s agenda brings an announcement from Australia as the RBA meets to decide its forward monetary policy. Interest rates are currently at 2.5% on the overnight cash rate (OCR). Consensus is for no change and I would agree with that for the Aussie dollar has been stable and the 2/10 yield curve is a healthy 135 basis points positive slope. Confusion reigns around the world as politics is causing uncertainty in much of the developed world’s economies. Expect the RBA Governor to note risks to global growth and that the Aussie bank will remain vigilant. Also, with a new government elected in early September the bank will want to see what types of fiscal policy will be enacted before embarking on a change in current monetary policy.

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Notes From Underground: Good Trading Advances One Funeral At A Time (Thanks, Max Planck)

July 23, 2013

When Max Planck opined that “Science Advances One Funeral At A Time” it is believed that he meant that when proponents of long-held theories die, science is allowed to advance. In terms of trading I have applied this to mean that long-held losing trades have died a death due to lack of liquidity to support a flawed analysis. The BOND MARKET is going to provide the opportunity to put the wit of Planck to work as we try to examine the ways in which the FED will deal with the vast amount of reserves with which it has flooded the financial system. As traders and investors, the FED‘s decisions will impact the entire spectrum of the GLOBAL MACRO WORLD. Therefore, it is time to embark on thinking about ways the FED can remove reserves in the least disruptive and to anticipate what plans the central bank may have.

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