Posts Tagged ‘Bundesbank’

Notes From Underground: Much to Be Thankful For. Now Back to Work

November 25, 2018

Tonight, we at Notes From Underground will clean up some unfinished business. We will discuss a couple of important speeches and articles from the past two weeks.

Then I will answer the questions Mike Temple made on the previous blog post. In responding to some of Mike’s points I come back to the idea of INFRASTRUCTURE, which I addressed in a few other blog posts. The reason I foresee aggressive fiscal stimulus put forth by the G-20 is precisely because of some of the fears that Mike raises about the damage coming to the investment grade corporate bond market while the FED’s shrinks its balance sheet and raise interest rates. It may be having a greater impact than the FOMC wants to acknowledge.

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Notes From Underground: Europe Takes Center Stage (Again)

January 15, 2018

It is always a pleasure to talk with the Richard Bonugli at the Financial Repression Authority. Like Anthony Cruedele of Futures Radio, Richard is a very astute financial mind, which allows for deep discussions in a longer format. We cover several issues discussed in Notes From Underground so I’m sorry if it seems redundant, but I will say that we take a deeper dive on the issues. The segment taped on Wednesday, January 10 so from a trading perspective the information may be stale. But from an investors’ perspective it will still be relevant as the markets begin to unravel the mysteries of a new year. We dive deeper into Europe as I am certain the continent will provide much of the tinder for market volatility in 2018. This weekend proved the case as several stories from Europe propelled the DOLLAR lower as U.S. markets were on holiday for Martin Luther King Jr.’s birthday.

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Notes From Underground: First Friday Of The New Month, You Must Be ‘Jobbing’ Me

January 5, 2017

I’m still nursing a New Year’s hangover. It takes a long time for the mind to rid itself of all the news the mainstream media deems fit to read. But as the third rock keeps spinning, markets will keep moving and we will strive to untangle the ball of confusion. After today’s tepid ADP data the market has settled into a consensus for 175,000 nonfarm payrolls. Again, I would love to see a number greater than 250,000 just to test the recent market action. BONDS rallied, currencies rallied against the DOLLAR, precious metals are showing early year strength and commodities have held support levels in the age of TRUMFLATIONARY EXPANSIONARY EXPECTATIONS.

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Notes From Underground: The RBNZ Didn’t LET IT BE. Will Mario Draghi Lean on the Taxman?

March 9, 2016

Two central banks announced interest rate decisions today: the Bank of Canada (BOC) and the Reserve Bank of New Zealand (RBNZ). The BOC left rates at 0.50% while the RBNZ SURPRISED markets by lowing its official cash rate by 0.25% to 2.25% as Governor Graeme Wheeler revealed concerns about a slowing Chinese economy and the ever-increasing global financial risks. There was no specific mention about the KIWI but Wheeler voiced concerns about the downward pressure on DAIRY EXPORT PRICES. The KIWI dropped 2 percent against the U.S. and Australian dollars following the surprise move but the explicit notation of slowing Chinese growth should be an alarm for those concerned about the impact of China on global commodity prices.

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Notes From Underground: Goldman Ought to Learn 2+2=5

January 20, 2016

Open question to Goldman Sachs: ARE YOU ARROGANT OR DEAF? There’s a story in tomorrow’s Financial Times there is a story titled, “Goldman Sachs Makes Large Donation to Pro-EU Campaign.” It is being reported that Goldman has made a large six-figure donation to Britain Stronger in Europe. Whoever thought this up needs their head examined. There is nothing in the world more TOXIC than the big investment banks. In a potentially existential issue for British democracy, the idea of a large U.S. investment bank playing in the U.K. referendum will stir the anti-EU forces to push harder for a NO vote. The anti-euro camp has many strong, legitimate former officials working hard to push England further from the restrictions of an overzealous group of Brussels eurocrats.

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Notes From Underground: Tomorrow’s Unemployment Release Is a Meaningless Event, UNLESS …

December 3, 2015

After today’s violent market reaction to a wounded Mario Draghi (more on that later),the consensus numbers for tomorrow’s U.S. jobs data will render the December interest rate rise by the FED a certainty. The STREET is estimating  around a 205,000 increase in nonfarm payrolls and a 0.2% increase in the very important average hourly earnings (AHE). IF PAYROLLS ARE BELOW 100,000 or IF AHE IS FLAT OR NEGATIVE THEN THE FOMC MAY BE RETICENT TO RAISE RATES AT THE DECEMBER MEETING. A gigantic upside number of more than 300,000 would not be big enough to increase the possible rate rise or even change the Fed’s sense of raising faster than the market already anticipates. It is definitely a one and done until some of the present uncertainty in the global financial system clears. This is a very reluctant move by the FED, especially now that the Germans have increased the pressure on Mario Draghi and the ECB.

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Notes From Underground: European Stress Tests Have Passed; Now All Trading Stress Begins

October 27, 2014

After the release of the asset quality review yesterday, analysts had time to digest the information and form a modicum of market opinion prior to Monday’s market opening. I give the European authorities credit for releasing reams of information on a Sunday so the market would not be merely reacting to headlines and tweets and could actually trade on substance rather than fluff. The FED could learn a great deal about how to disseminate information from the European authorities. Yes, I know that the results were leaked on Thursday or Friday but the leaks were not significantly market-moving events. The market’s initial reactions to the 25 undercapitalized banks was a rally in the European equity markets and a short-lived rally in the European peripheral bond markets.

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Notes From Underground: CNBC — EU Referendum

September 30, 2014

Yra on CNBC September 30, 2014

Click on the image to watch Rick and I discuss European referendums.

Notes From Underground: Mark Carney Lives Up to His Name (A Master of the Strange and Inane)

September 9, 2014

Did he really say that about currencies and sovereignty? In an article in tomorrow’s Financial Times it is reported that Mark Carney said during a Q&A that a “… currency union between England and an independent Scotland would be ‘ incompatible with sovereignty.'” Carney said a currency union needed three elements for success. “These were the free movement of goods and services across different parts of the currency, a banking union underpinned by common institutions such as a central bank, and elements of shared fiscal arrangements.” Fanning the flames of criticism against the euro and Brussels, Carney added: “You only have to look across the continent to look at what happens if you don’t have those components in place. A currency union is incompatible with sovereignty.”

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Notes From Underground: Mama, Don’t Let Your Children Grow Up To Be Global Macro Traders

September 4, 2014

Well, NOTES FROM UNDERGROUND gets an A+ for analysis and an F or incomplete for EXECUTION. Caught off guard by Draghi’s timing, the market never provided a rally for the more cautious trader. The euro currency began its break 55 minutes before the official ECB rate announcement as Reuters ran a story revealing the governing board’s discussion of a supposed EU500 BILLION ABS program. A leak during the meeting should provide reason for the ECB to investigate its security breaches and find out who is making money from revealing important information ahead of the governing officials. It must be like Congress, where elected representatives are allowed to be insider traders.

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