Posts Tagged ‘Gold’
September 22, 2019
There is no question that the world’s central banks are all living under the shadow of doubt as investors and financial markets are questioning the efficacy of the zero lower bound. The sense of always doing more in an effort to attain a self-conjured 2% level of inflation has led to the continued downward slide in interest rates.
On this note, last week we saw the Powell Fed lower the target range for the fed funds rate by 25 basis points — and its interest on excess reserves rate by 30 basis points — as congestion in the financial plumbing sent overnight rates soaring. (For those who are interested in the nuances, I am linking to one of many splendid pieces from Bloomberg reporters Liz McCormick and Alexandra Harris detailing out the repo market mess.)
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Tags:ECB, Federal Reserve, FOMC meeting, forward guidance, funding markets, Gold, Jerome Powell, Mario Draghi, repo, tariffs
Posted in Debt Market, Fed, United States | 4 Comments »
September 15, 2019
The inmates are running the asylum as policy makers are busy putting out old prairie fires. The European Central Bank’s move on Thursday was a final curtain call for President Draghi as he sought to cement his legacy as the man that would do whatever it takes to “preserve the Euro” and would have no taboos in his efforts. But it seems like the opposition to both the rate cut and new QE was far greater than the magician of Frankfurt let on at his final obfuscation. It is amazing how the dissidents find their voice the day after. Oh well, so it goes in the world of consensus-driven outcomes.
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Tags:central banks, copper, crude oil, ECB, Fed, fiscal stimulus, Gold, Mario Draghi, precious metals, Saudi Arabia
Posted in Oil, Saudi Arabia | 13 Comments »
September 8, 2019
Of all the U.S. president’s tweets (and believe he has a lot), Friday’s tweet about Federal Reserve Chairman was one of the best. Unfortunately, there probably should’ve been a comma between “guy” and “Jerome” since one could ask the question about any member of Trump’s economic team. President Trump could be asking the Fed chairman about Secretary Steven Mnuchin, or Commerce Secretary Wilbur Ross, and certainly of Larry Kudlow or Peter Navarro. NOTES FROM UNDERGROUND has been asking that for many months. In my opinion, the only Trump pick that inspires confidence is Robert Lighthizer.
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Tags:Canadian Dollar, currency crosses, ECB, Federal Reserve, Gold, Jerome Powell, Mario Draghi, silver, SNB, Swiss Franc, Thomas Jordan
Posted in Central Banks, Currency, Fed | 11 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 »
June 30, 2019
First things first: There were no surprises out of the G-20, at least for those who read Notes From Underground and listened to the discussion that took place in the Whitewave Trading room. The most significant outcome was that President Trump held off from installing additional tariffs while President Xi confirmed that China would be buying more U.S. production, especially in the agricultural sector. In Thursday’s podcast with the Whitewave participants I advised that with the current weather problems in the U.S. heartland the Chinese would have to be vigilant about the cost of global grain prices rising as supply was hampered by poor planting conditions.
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Tags:agriculture, central banks, China, G-20, Gold, President Xi, tariffs, U.S. Dollar, U.S. yields
Posted in Central Banks, China, Commodities, Currency, United States | 20 Comments »
April 8, 2019
As the second quarter begins, the financial markets seem fixated on China/U.S. trade frictions, or lack thereof. This narrative is old and stale. For those new to the realm of international relations, be aware that China will slow-walk these negotiations. There will be many attempts to “agree to disagree.” For example, in Monday morning’s SOUTH CHINA MORNING POST, there was an article titled, “China Refuses to Give Up ‘Developing Country’ Status At WTO Despite US Demands,” about China’s “privileged position” at the World Trade Organization. In the simplest terms, the WTO allows for countries to self-define as developing country status. This brings certain rights that allow for longer transition periods before they have to be in full compliance with WTO rules and regulations. This is described as “Special and Differential Treatment.”
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Tags:China, Gold, Robert Lighthizer, Russia, trade, WTO
Posted in China, Gold, Russia, trade | 9 Comments »
April 4, 2019
On Friday we have U.S. and Canadian employment. The Canadian report is important because Canada is an important trading partner of the U.S. so any slowing in Canadian employment may reflect of slowing cross-border trade. The consensus is for Canada to have a DECLINE of 10,000 jobs with the unemployment rate holding at 5.8 percent. From a global perspective, Canada is a good look at the continuing narrative about slowing global economy, which is significant as the New Zealand, Australian, European and Japanese central banks have used the slowing global economy as the reason for maintaining their current accommodative monetary policies. The Canadian dollar has been weak versus many of the key currencies so weak jobs should put more pressure on the Canadian dollar.
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Tags:average hourly earnings, Canada, Gold, nonfarm payrolls, U.S., wage inflation, yield curves
Posted in data, Fed, United States | 9 Comments »
March 20, 2019
Wednesday’s FOMC statement and press conference was as dovish as we have heard in many moons. More importantly, the VOTE WAS UNANIMOUS. Even Kansas City Fed President Esther George voted with the group. Why was this dovish?
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Tags:balance sheet, Federal Reserve, global economy, Gold, Jerome Powell, slowing growth, SPS, U.S. Dollar, U.S. yield curves
Posted in Currency, Debt Market, Fed, United States | 17 Comments »
March 7, 2019
ECB President Mario Draghi’s press conference was, once again, another act of flim-flam as he PIVOTED away from any tightening for the next [FILL IN THE YEAR]. There was NO SURPRISE as the TLTRO was well telegraphed various news outlets in recent weeks. What’s amazing is that the currency markets were surprised by Draghi’s press conference as the U.S. DOLLAR staged a sizable rally, reaching its highest level in more than three months. The YEN was stronger as the weak stock markets provided a sense of Japanese repatriation of invested capital, while GOLD performed dismally.
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Tags:ECB, Euro, Fed, Gold, Jerome Powell, Mario Draghi, nonfarm payrolls, U.S. yield curves
Posted in Currency, ECB, Gold | 11 Comments »
