Posts Tagged ‘Euro’
May 22, 2017
Angie Angie
where will it lead us from here
Oh, Angie don’t you wish
Oh your kisses still taste sweet
I hate that sadness in your eyes, but Angie Angie
Ain’t it time we said goodbye [Richards and Jagger]
Today, German Chancellor Angela Merkel openly admitted that the German trade surplus was large because the ECB‘s monetary policy rendered the EURO to a bout of severe weakness, which helped make “German products cheaper.” It continually amazes me how forthright politicians become once the political storm clouds have lifted. When President Trump noted a similar view he was criticized for trying to force a break-up of the European Union. What was Angie’s angle in challenging the policies of the ECB and Mario Draghi? As I have written for the last six months, the ECB was going to become an issue in the upcoming German national elections. It appears that the Chancellor is getting ahead of the AfD and other challengers about the negative impact of Draghi’s policies that punish and financially repress German savers.
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Tags:Angela Merkle, DAX, ECB, Euro, German elections, Mario Draghi, U.S. Dollar
Posted in Currency, ECB, Equity, Europe, Germany | 15 Comments »
April 25, 2017
The global reaction to the first round of the French presidential election was not confusing. Capital was sitting on the sidelines as the polls reflected a possibility of a second round Le Pen/Melenchon faceoff, which would have been devastating for global investors because fear of an EU break-up would have led to a massive repricing of risk premia. The avoidance of such an outcome led to a rush of capital into European markets, which provided support to Asia and the U.S. The German/French 10-year spread reacted as expected. The yield differential narrowed by a significant 20 basis points. The BUND yields rose against all European sovereign debt as Berlin’s haven status was rendered null and void for at least another two weeks. The GOLD and YEN also performed as expected as money rushed to purchase a risk on profile in a global zero interest environment. The EURO rallied by 2% as global capital flows into European stocks forced previous short euro positions to the sidelines. There’s nothing confusing about any of these outcomes. But let me throw some confusion onto some of the other geopolitical events making the front pages:
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Tags:Bunds, Canada, Euro, French election, French oats, Gold, Japanese yen, North Korea, South Korean won, tariffs, U.S. Dollar
Posted in Canada, Currency, France, United States | 9 Comments »
April 12, 2017
In an interview with the Wall Street Journal, the tweeter-in-chief was reported to have said, “The DOLLAR IS GETTING TOO STRONG.” As some pundits discussed, instead of Trump calling China a currency manipulator it seems he wants to use the dollar as a cudgel to pressure others into not embarking on policies to weaken their currencies. As I wrote on April 2:
“The Trump Administration’s efforts to curb the U.S. trade deficit may see the executive branch try to depreciate the U.S. dollar if Secretary Mnuchin and Secretary Ross fail to persuade certain global actors to embark upon policies to adjust their current account and trade surpluses. The Fed’s recent tightening has not rallied the dollar–it actually closed lower on the quarter–so if the political status quo is sustained in Europe and no new political crisis emerges, the DOLLAR will become a barometer of Trump’s policies on trade.”
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Tags:ECB, Euro, Europe, Fed, Germany, Gold, Mario Draghi, Merkle, Trump, U.S. Dollar
Posted in Currency, ECB, Germany, Gold, United States | 15 Comments »
March 30, 2017
The biggest news in a very slow week of news is the beginning of the Brexit plan as Prime Minister May sent a six-page memo to Brussels as Article 50 begins and the two-year time period allotted for extrication from the EU starts the clock ticking in a very formal fashion. I SAY THIS TO ALL MY READERS: Two years is a very long time. There are many political and economic events (unforeseen by the static minds of entrenched power elites) that can dynamically change currently perceived outcomes. The fragility of global politics can wreak havoc with the certainties laid down by the likes of Jean Claude Juncker. The current position of the Brussels bureaucrats is the desire to punish Britain for the temerity of its citizens to vote to exit the “UTOPIAN” construct of the European Union.
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Tags:Brexit, ECB, EU, Euro, French election, German election, Greece, Italy, Mario Draghi, Portugal, Spain
Posted in Currency, ECB, Europe | 6 Comments »
March 20, 2017
In reviewing the March 9 ECB and March 15 FOMC meetings, the press conferences emceed by President Mario Draghi and Chair Yellen revealed little but raised questions about serious issues confronting the world’s two key central banks. The ECB maintained its current policy and will scale pack monthly QE activity to 60 billion euros starting April 1 while keeping its deposit rate at NEGATIVE 40 basis points. Draghi bowed deep and heaped praise upon himself and his fellow board members by proclaiming that they saved the EU and the euro. Draghi said “without a single currency there could not be a single market.” It was Draghi’s July 2012 speech of “we will do whatever it takes” to preserve the euro, which saved the currency and logically means the ECB saved the EU.
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Tags:ECB, EU, Euro, Fed, fiscal stimulus, Janet Yellen, Mario Draghi, U.S. Dollar
Posted in ECB, Fed | 14 Comments »
February 9, 2017
The main story for the next two days will be Japanese Prime Minister Abe’s visit to the U.S. to meet with President Trump. Abe is coming to mend relations after Trump officially ended the Trans Pacific Partnership (TPP) agreement before Congress could even debate the trade treaty. The Japanese prime minister had expended a great deal of political capital in Japan to get various parties to accept a massive Pacific-based trade agreement. In an effort to forestall any discussion of Japan as a currency manipulator, the Japanese are offering all sorts of investment ideas in the context of getting Trump the negotiator to soften his stance on tariffs for Japanese goods, or sourced material from Asia for assembly in the U.S. Japan is a paramount promoter of the global supply chain paradigm.
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Tags:Abe, Euro, German/French 10-year spread, Greece, Japanese yen, Trump
Posted in Currency, Germany, Greece, Japan | 5 Comments »
January 31, 2017
Janet Yellen and the FED take center stage tomorrow and the consensus is for NO CHANGE. The market believes the FED will be on hold until March. BUT I OFFER THIS: If I was the FED chair I WOULD RAISE RATES 50 BASIS POINTS to take some of the risk out of the U.S. equity markets. The S&Ps are virtually unchanged since the December FOMC meeting but the market’s enthusiasm for anticipated tax cuts, regulatory relief, and possible currency intervention means the FED cannot wait to let the economy run “hotter for longer,” especially because of the 4.7% U3 unemployment level. If Chair Yellen wishes to burst the TRUMP exuberance it is time to move aggressively to stem the rise of a potential inflationary threat.
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Tags:Angela Merkel, deutsche mark, EU, Euro, Fed, FOMC, Germany, Gold, Janet Yellen, Japanese yen, Peter Navarro, QE, silver, U.S. Dollar
Posted in Currency, ECB, Fed | 18 Comments »
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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Tags:Angela Merkel, bonds, Bundesbank, CDU, ECB, Euro, FOMC, Germany, Gold, Mario Draghi, nonfarm payrolls, U.S. Dollar
Posted in Currency, Debt Market, Germany, unemployment, United States | 7 Comments »
December 12, 2016
The question for the political uncertainty confronting global markets will be the rollback of the U.S. influence via the reduction of its presence in various regional treaty agreements. Trump’s “faux pas” over Taiwan should cause the entire NATO structure to be reviewed. The ONE CHINA issue was pledged by the Nixon/Kissinger framework forged during the détente with China. The People’s Republic of China maintained that Taiwan’s independence was a domestic affair and should be resolved by the Chinese people. But the bottom line for the U.S. was: Would Washington risk a thermonuclear war to maintain Taiwan’s independence? Well, a similar question is relevant today in regards to Turkey. Would the U.S. risk war with Russia if Vladimir the Magnificent attacked Turkey in an effort to further destabilize the Middle East, resulting in a greater Iranian presence and further strengthening the KURDS?
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Tags:China, Erodgan, Euro, Kurds, NATO, SNB, Trump, Turkey, Turkish lira
Posted in Currency, Turkey | 10 Comments »
December 8, 2016
“When you’re in the shit up to your neck, there’s nothing left to do but sing.” This is what Samuel Beckett wrote and it was the way President Mario Draghi performed today. Never in the history of central banking has a policy maker spewed so much crap about monetary policy and the annals of central bank shenanigans is voluminous. The EURO CURRENCY rallied 1 percent on the headline of the ECB‘s desire to cut monthly purchases to 60 billion euros a month but announced that the duration of QE would be extended through December 2017. So tapering on a monthly basis, but not on a longevity measurement.
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Tags:ECB, Euro, Mario Draghi, QE, yield curves
Posted in Currency, Debt Market, ECB | 6 Comments »
