Posts Tagged ‘Euro’
April 5, 2020
At this time of great chaos in the world I am going to take a 10 day hiatus to sit back and reflect as it is the time of Passover and Easter. These holidays will take on special significance this year as the Covid-19 impacts our plans.
So as I retrench I put forward the words of the Prophet Micah for something to contemplate: “To Act Justly, and to LOVE MERCY and to walk HUMBLY with YOUR GOD.” Wishing all my readers a meaningful period of the holidays before us. I may post a podcast I recorded this morning with Anthony Crudele but that will be it, although I will respond to all questions in an effort to stay alert to critical issues in a rapidly changing global environment. Now to the issues before us.
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Tags:bond market, Christine Lagarde, Euro, Eurobond, European Union, Fed, Jerome Powell, oil, Russia, Saudi Arabia, U.S. Dollar
Posted in Central Banks, Currency, Debt Market, Fed, Oil | 20 Comments »
March 5, 2020
The other day I called question to the tepid G-7 statement, which was followed by a 50 basis point CUT from the Federal Reserve. On Thursday the Financial Times published a story saying the Fed’s move was counter to a history of G-7 collaboration. Let us first dissuade the popular mythology of the G-7 as relevant to any serious global action. The colonial remnants of the authority of the bailiwick of the mechanism for the containment of the Soviet Empire are a JOKE. During the financial crisis it was the moves made by China that did more to stabilize global growth than any action by the G-7.
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Tags:Aussie Dollar, Canadian Dollar, Euro, G-7, U.S. Dollar, Yen
Posted in Currency, United States | 26 Comments »
December 10, 2019
What an appropriate song for the band Hedgehoppers Anonymous. This week is loaded with potential market-moving outcomes. On Wednesday we have the final FOMC statement of the year followed by Chairman Jerome Powell’s press conference. The CONSENSUS is for no change in the current fed funds target range of 1.5% to 1.75%. The real key will hopefully be Powell’s press conference as market participants are hoping for any sort of dialogue about the Fed’s role in the repo market.
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Tags:Christine Lagarde, ECB, Euro, Federal Reserve, fiscal stimulus, Jerome Powell, repo market, SNB, Thomas Jordan, U.S. Dollar
Posted in Central Banks, Currency, ECB, Fed, SNB | 28 Comments »
December 8, 2019
This is a rhetorical question of course, for the lack of wage growth is to be found in the vast amount of money chasing a global labor pool.
It is capital that had benefited from the last 30 years of the unleashing workers after the fall of the Soviet Empire and the black/white cat policies of Deng in pursuing growth in China. Now that other emerging economies are attracting capital in an effort to create jobs, there still remains a great deal of downward pressure on wages. Even the movement of supply chains out of China will act as a drag on global earnings as manufacturers will act to hold down wages as way of remaining attractive to foreign direct investment. The world has been watching as Chinese earnings growth has accelerated over the last 10 years but one of the outcomes from the Trump tariffs will be to force a slowdown in China’s wage inflation.
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Tags:carry trade, China, Euro, Fed, Swiss Franc, tariffs, trade war, U.S. Dollar, U.S. jobs data, wage inflation
Posted in Currency, United States | 24 Comments »
November 19, 2019
On Monday, Treasury Secretary Steven Muchin and Federal Reserve Chairman Jerome Powell met with President Trump at the White House where the duo “advised” and “forecasted” the economy to the president as 2020 election posturing is in full swing. NOTES FROM UNDERGROUND has maintained that Trump used the tariff threat to cajole Jerome Powell into lowering interest rates, weaken the DOLLAR and end the balance sheet runoff that the administration believed has held back the U.S. economy. What was Powell buying insurance against?
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Tags:balance sheet, BOJ, ECB, Euro, exit strategy, Federal Reserve, Jerome Powell, SNB, Steven Mnuchin, Swiss Franc, tariffs
Posted in Currency, Fed, Switzerland, United States | 20 Comments »
September 10, 2019
We are coming to the end of Mario Draghi and the “Whatever It Takes” era. Remember, the head of the European Central Bank said he would do whatever it takes to preserve the EURO. This fealty to the currency has resulted in a -40 basis point deposit rate, a massive expansion of the ECB’s balance sheet via sovereign and corporate bond purchases.
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Tags:Christine Lagarde, ECB, Euro, fiscal stimulus, Mario Draghi, QE, rate cuts, whatever it takes
Posted in ECB | 19 Comments »
September 4, 2019
Football season in the U.S. is just beginning. That said, it would be appropriate for President Mario Draghi to refrain from any type of new QE program or cut in interest rates at next week’s meeting. There have been several comments from ECB members during the past week advising against more QE or additional interest rate cuts.
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Tags:Bank of Canada, Christine Lagarde, ECB, Euro, French oats, German bunds, Jerome Powell, Loonie, Mario Draghi, QE, rate cuts, Reserve Bank of Australia
Posted in Debt Market, ECB | 23 Comments »
August 27, 2019
These Simon and Garfunkel lyrics could apply to the events of this past weekend, the bookends of Jackson Hole and the G-7 meeting. The meaning was best summed up i a Financial Times story that quoted St. Louis Fed President James Bullard, who said, “Something is going on ,and that’s causing I think a total rethink of central banking and all our cherished notions about what we think we’re doing. We just have to stop thinking that next year things are going to be normal.”
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Tags:Bundesbank, ECB, Euro, G-7, James Bullard, Jens Weidmann, no exit, portfolio balance channel, tariffs
Posted in ECB, Europe, G-7 | 8 Comments »
August 18, 2019
The Federal Reserve just won’t admit that President Trump and the European Central Bank are holding its policy designs captive. Trump ramps up talk of tariffs in an effort to keep the financial markets uncertain while the ECB wishes to pursue an ever expanding balance sheet in an effort to reach an ambivalent inflation target. There is no doubt that REAL YIELDS throughout the European Union are NEGATIVE. Even the Italian 10-year is trading around 1.35%, which is below the inflation level however dubious it is calculated.
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Tags:10-year yields, 5/30 curve, ECB, Euro, FOMC, Gold, Jerome Powell, Olli Rehn, ultra-long bonds
Posted in Debt Market, ECB, Fed, United States | 15 Comments »
July 24, 2019
On Thursday morning we will hear from the ECB about its desires to raise inflation to its self-imposed 2% target. But on Wednesday we received more tepid economic data from the EU. Then couple that with the ascent of Boris Johnson to the position of British Prime Minister. The rise of Boris Johnson is a problem for Draghi as the possibility of a HARD BREXIT increases dramatically. The market and its DAVOS media sycophants have sold the narrative of a hard Brexit as being devastating for the U.K. economy, the British GILTS, the British pound and the Footsie 100. President Draghi has to be careful that a severe rally in the EUR/GBP cross doesn’t damage the European exporters, especially Germany, who runs a 50 billion-plus surplus with Britain.
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Tags:Boris Johnson, Brexit, ECB, EUR/GBP, Euro, Federal Reserve, FOMC minutes, Gold, Jerome Powell, Mario Draghi, QE, U.S. Dollar
Posted in Currency, ECB, Europe, Fed, UK | 14 Comments »
