Monthly Archives: April 2014

April 30

EURO: 99 Problems

The Euro is starting to look very vulnerable in the wake of recent data on inflation and money growth. Additionally short term interbank rates are on the rise, meanwhile periphery bond spreads have plunged to multi year lows. In the past four months, Ireland, Portugal and Greece have all returned to capital markets and have […]

April 29

Market Rangers

Major currency pairs are stuck in tight ranges. USDJPY has been between 101 and 103.50 for over three months now. EURUSD has been contained by 1.37 and 1.39 since mid February. These types of market conditions can slowly chip away a trend traders account as momentum is very low and its hard to get continuation […]

April 22

Clock Ticks on China Sentiment

AUD, NZD and EM(ZAR,TRY,MXN) currencies have had a strong 8 weeks. Ironically this strength seems to have been helped by slowing data from China. The worse the numbers have come out the more the market seems to expect a bold stimulus program, but these hopes have been all but dashed in the past week. The […]

April 17

China Is Holding Back the US Dollar

During my experience on an interbank trading desk, the locations of “ACB”  (Asian Central Bank) orders were coveted secrets. The main ACB is of course the Peoples Bank of China. The PBoC manages its FX reserves through various shadowy custodians and sovereign wealth vehicles.  The method these central banks use is staking out a particular […]

April 16

US  Data Points to Spring Bounce

Last week I wrote that a clear change in sentiment on the Dollar would be needed for USD bulls to take control. The recent string of data may be just what was needed to lend the greenback some support. U.S. economic data reported over the past few days has been unambiguously positive.  Producer prices, Consumer […]

April 14

AUDNZD At a Turning Point

  The Australian Dollar/ New Zealand Dollar exchange rate has been in a down trend over the past year. During the spring of 2013, the Reserve Bank of Australia(RBA) began to shift towards a dovish policy and cut rates several times over the course of the year. These reductions in the Australian policy rate weakened […]

April 12

Draghi on Eurozone ABS Market

Mario Draghi spoke today in Washington at an IMF press conference. The majority of his comments revolved around the Eurozone Asset Backed Securities(ABS) Market. Since the Davos Conference in Late January Mario Draghi has eluded to a possible quantitative easing program focused on purchasing asset backed securities from Eurozone banks. As the case for QE […]

April 10

Dollar Down Days

The USD is now in its fifth day of declines. Last week’s non-farm payrolls and recent Bank of Japan meeting sparked a wave of Dollar selling. Looking into the recent CFTC positioning report, the vast majority of USD longs were held against the Yen. Earlier this week these positions were put under massive pressure as […]

April 09

FOMC Fights Hawkish Fires

Today’s FOMC minutes provided clarity on the March 19th Fed meeting that left markets with a hawkish impression on monetary policy. The original statement and forecasts of the fed funds rate initially sent the US dollar and short term interest rates higher. Markets expectations of easing have been adjusted lower substantially in recent days as […]

April 08

U.K. Economy Takes a Breather

Sterling has seen an impressive rally over the past 6 months with GBPUSD rising from 1.48 to 1.68.  This increase has been driven by an astounding turn around in sentiment on the UK economy. In early 2013 economists and market participants served up gloomy predictions for the United Kingdom. The British economy was seen as weighed […]