Posts Tagged ‘Euro/Swiss cross’
June 12, 2019
Some shots were fired last Friday, but it seems that the markets can only hear the siren song of White House tweets. There was an important story from Bloomberg reporter Saleha Mohsin titled, “Trump’s Currency War Plan Puts Treasury and Commerce at Odds.” The article noted that “a Commerce Department proposal to impose countervailing tariffs on countries that it determines have devalued their currencies has alarmed officials at the Treasury Department.”
It appears that President Trump has grown frustrated by Treasury’s failure to name any country as a “currency manipulator.” It has been Treasury’s bailiwick to monitor the foreign exchange interventions of countries who strive to artificially hold down the value of their currencies in an effort gain a competitive advantage versus any G20 country, especially the U.S. (from the Treasury Department perspective).
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Tags:Angela Merkel, Commerce Department, currency manipulation, Euro, Euro/Swiss cross, Gerhard Schroeder, Germany, Nord Stream 2, SNB, Steve Mnuchin, Swiss Franc, Treasury Department, U.S. Dollar, Wilbur Ross
Posted in Currency, Germany, SNB, trade, United States | 16 Comments »
December 5, 2017
Just a few quick points that are relevant to the markets at the end of the year:
1. Tonight I am including charts of the U.S/German two-year yield differentials. The U.S. two-year note is yielding 256 basis points above the German rate. This is relevant because both instruments are high quality assets that play an important role as collateral in the funding markets. I’ve also included a 25-year chart of the U.S. 2/10 yield curve. Note that the last two INVERSIONS occurred before significant equity market corrections. Does this current flattening portend a stock market correction? We can’t be certain because the role of the central banks has certainly created an investment environment where markets suffer from a lack of RISK PREMIA in all asset prices.
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Tags:Bank of Canada, BOJ, Euro/Swiss cross, Fed, German/U.S. 2-year spread, Kuroda, Paul Tudor Jones, QE, Swiss/yen, U.S. 2/10 curve
Posted in BOC, BoJ, Currency, Debt Market, Fed | 5 Comments »
May 8, 2017
Now we can finally put the French elections behind us as its citizens maintained the status quo and elected Emmanuel Macron to a five-year term. Parliamentary elections follow in June but the two main parties, Socialists and Republicans, aren’t expected to face challenges. But, if the more conservative Republicans gain control of the Parliament and the prime minister post it will force Macron to move further to the right-center. If Macron moves away from the Hollande Socialist camp it will result in political protests from the Left. Macron will experience a difficult presidential term if the government is gridlocked by continual demonstrations. The German chancellor is going to ask a great deal from Macron: fiscal austerity, as well as a restructuring of the French domestic economy.
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Tags:ECB, Euro/Swiss cross, Fed, French election, Mario Draghi, SNB, SOMA, ZIRP
Posted in ECB, Europe, Fed, France, SNB | 13 Comments »
April 17, 2012
The BOC announced that rates will remain on hold and the Canadians will watch to see what happens in Europe as an important indicator of bank policy. It is unanimous that all central banks are concerned about the economic situation in Europe. Even the Chinese have noted the deterioration in Europe as a reason to be cautious about trying to slow the economy too quickly. However, in a confusing headline, “IMF PREDICTS MODEST GROWTH AS EUROPE STARTS TO EXIT RECESSION,” the Washington Post seems to think the worst is over for Europe. This headline is off base as the body of the article reveals, but such is the crap that drives the markets. IMF Managing Director Christine Lagarde is begging for increased funding for a bigger firewall for Europe and then this headline appears. Which is it: Crisis averted or further vigilance and action necessary to calm the European debt markets?
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Tags:Bank of Canada, Christine Lagarde, ECB, Euro/Swiss cross, France elections, Germany, IMF, Merkel, Sarkozy, SNB
Posted in Currency, Europe, Switzerland | 4 Comments »