Posts Tagged ‘BOE’

Notes From Underground: The Jobs Report Was Not Data Dependent

March 10, 2019

Wow! That was a serious miss by the forecasters on job growth as only 20,000 new jobs were added. The huge miss will prove to be an aberration but doesn’t matter at all. As I pointed out in Thursday’s blog — as well as on the PODCAST Peter Boockvar and I recorded with Richard Bonugli from FRA, the ECB’s pivot toward liquidity addition via cheap bank loans has forced the FED into a policy of “watchful waiting.” And Chairman Jerome Powell reiterated that stance in his speech Friday night as he stressed the need for caution in the search for normalization on rates and the balance sheet.

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Notes From Underground: A Hard Brexit Is Going To Fall?

February 10, 2019

The economic fallout from a “hard” Brexit has been debated in the media for the last few months. When I say “hard Brexit,” I mean that the U.K. leaves the European Union without any deal about trade rules, movement of people or any other binding treaty rules concerning the contemporary EU/U.K. relationship. I have refrained from forecasting outcomes because they are beyond the scope of economic analysis since it requires using models built of questionable assumptions. The British have a long history of economic intercourse intertwined with the lines of commerce from its empire.

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Notes From Underground: The Umpire Strikes Back

December 19, 2018

The Fed chairman is situated as the key arbiter of the economy and rules via its DUAL MANDATE. Given that it has a research staff of at least 500 economists the FED positions itself as ALL KNOWING, which is certainly okay as long as it accepts the consequences and lays aside the use of counterfactuals when its policies may turn out to be very misguided.

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Notes From Underground: More Perspective In the Time Of Reflection

September 12, 2018

First, to all of those in the NOTES community who celebrate the Jewish New Year, I wish you a year of health, peace and prosperity. To those who celebrate other spiritual endeavors I offer you a wish for health, peace and prosperity. Now, to the markets. In the past month I have spent time putting issues we’ve been discussing for the last nine years into perspective. Lately, the airwaves are filled with the accolades laid upon the policy makers who SAVED CAPITALISM. Listening¬† to Paulson, Geithner and Bernanke pontificate on how they acted to save the system is enough to send me into fits of rage as the culprits who failed to act to halt the housing bubble praise themselves for the “Courage To Act.”

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Notes From Underground: Central Bank Palooza

July 30, 2018

Coming on the heels of my first Kenny Chesney concert I am viewing the synchronicity of central banks as a reflection of the rhythms of global financial repression. Last Thursday, the ECB issued its last statement before the summer recess, while this week we have the Bank of Japan tonight, the FED on Wednesday and the Bank of England on Thursday.

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Notes From Underground: The Ball of Confusion Keeps On Rolling

March 22, 2018

Tonight I am posting a PODCAST I recorded Wednesday with Richard Bonugli just after new Fed Chairman Jerome Powell’s press conference. Richard and I covered a great deal of ground in discussing the most pertinent issues confronting the world of global macro. Pour yourself a libation and enjoy the interview. I look forward to hearing thoughts from the readers of Notes From Underground.

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Notes From Underground: Did I Miss Anything?

December 17, 2017

There were myriad central bank meetings last week as the FED, ECB, BOE, SNB, Bank of Mexico and others rendezvoused. With the exception of the Fed, all maintained their current policies. (The U.S. FED raised rates, which was 99% baked in.) The ECB was as dovish (as expected) and President Draghi has a few new issues to confront as Italian elections are scheduled for March 4, 2018. The Italian situation is already impacting sovereign bonds as the Italian 10-year yield rose against the German and French equivalents. BUT I FULLY EXPECT FOR THE ECB TO BREAK THE CAPITAL KEY RULES BY PURCHASING MORE ITALIAN DEBT THAN ALLOWED. POLITICS WILL BE DRAGHI’S MAIN CONCERN.

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Notes From Underground: Quick Note on the BOE and Friday’s Jobs Report

November 2, 2017

Today, the BOE raised interest rates (as expected). But the market deemed it to be dovish and the EUR/GBP rallied 2 percent as the British pound tumbled and the euro strengthened versus the pound and dollar. On Wednesday I cautioned that the EUR/GBP failed to hold below its 200-day moving average and this provided a good technical level. As expected, the FOOTSIE index rallied more than 1 percent as investors appreciated a weaker POUND as beneficial to British corporations regardless of Brexit. The initial release of the statement revealed a 7-2 vote, which on first read was not the expected 6-3 vote so could have been a bit hawkish. But the eight paragraph statement clarified the soft-side of Governor Carney:

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Notes From Underground: A Tale of Three Central Banks

November 1, 2017

The BOJ released its policy statement on Tuesday and it was as expected. The central bank sustained its yield curve control (YCC) policy as the BOJ seeks to ensure that inflation reaches its 2% target. The 8-1 vote by the Governing Committee was a bit dovish as one of the two new members, Goushi Kataoka, voted to extend the purchases further out the curve to prevent 15-year yields from rising. The bank will also have REITS and ETFS to buy if JGB supply runs short. Bottom line is that the NIKKEI made new 27-year highs and the dollar/YEN rallied as the currency gave up some of its recent gains against the U.S. and euro currencies.

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Notes From Underground: Who Gets Eaten and Who Get’s to Eat (Sweeney Todd)

October 15, 2017

As Stephen Sondheim wrote in the dark musical Sweeney Todd, “What’s the sound in the world out there. It’s man devouring man. The history of the world, my sweet, is who gets eaten and who gets to eat.”

I open with this thought in regards to a wonderful op-ed piece in the Barron’s over the weekend by John Curran titled, “The Coming Renaissance of Macro Investing.” Curran has the pedigree of writing this piece as he served his time at one of the greatest global macro funds, Caxton Partners. There are no greater thinker/traders than Stan Druckenmiller or Bruce Kovner. When it came to understanding the role of foreign currencies in creating investment opportunities Kovner is the wisest I have ever had the pressure to read. The last 10 years have been difficult for the global macro discretionary crowd but as John Curran suggests the winds of change are blowing. This is also a theme I have been discussing of late. The big difference in my opinion is that short-term trades will morph into momentum investments.

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