Today’s sudden jump in the Euro and large decline in the USD are not based on any factual news or developments. Ten year bund yields jumped 13bps to 0.66%, but the bulk of that move occurred before the FX rout. Rumors and headlines continue to fly about the status of Greece’s talks with it’s creditors. […]

There have been a flurry of articles over the last month about emerging market economies beginning to drawdown their FX Reserves. Foreign exchange reserves serve as a rainy day fund: assets accumulated by exporting economies that implement some form of currency peg(manipulation). China is the main user of this strategy, building up a $4 trillion […]

The S&P 500 has risen 319% since the March 2009 lows. This bull market has been driven by a range of factors, but the easy explanation would be as follows: Liquidity in US credit markets was stabilized by the first quantitative easing program launched in 2008, which led to a broad rebound in the economy […]

The Dollar fell late last week as two key data points showed that the US economy is losing steam. ISM manufacturing data came out at 51.5 which is the lowest level since Spring 2013. The survery missed estimates of 52.5 and is now only slightly above contraction territory. Payrolls were also very disappointing, with only […]

Broad market consensus currently says that the Federal Reserve will remove the term “patience” from its statement at this Wednesday’s FOMC meeting, effectively making the June meeting live for an interest rate hike. Eurodollar futures currently show that there is a 20% chance of a June hike, up from 18% on Friday but down from […]

Euro shorts remain close to near the all time highs seen in 2012 when Greece teetered on the edge of exiting the Eurozone.  I have noted in the past couple of weeks that unprecedented degrees of monetary policy divergence call for unprecedented amounts of short positioning in this pair, and we have probably not reached […]

Currency markets have once again settled into impressively quiet ranges. Our last “Market Rangers” post featured eerily similar set ups: annoying ranges across most of the major pairs even the the midst of what seems like a busy period for fundamental news. Europe is somewhere close to a Greek deal, US data is positive but […]

Monday’s highly anticipated Eurogroup meeting to determine the fate of the Greek bailout program ended in disarray as  Greek officials called the terms of extending the deal “unacceptable”, adding they “wont take orders” on the subject of the bailout. The point of contention continues to be the draconian austerity measures built into the current program. […]

Currency markets have been mixed on this Monday morning after the US Dollar made a significant move higher this past Friday in the wake of a blowout US jobs number. Strong growth in jobs as well as wages stemmed any doubts from weakness in recent US economic indicators.  Price action in the currency markets on […]

Liaquat Ahmed’s “Lords of Finance” tells the story of the American, British, French and German central bankers trying to hold the world together in the midst of the great depression. The most striking story in the book is the saga of Germany’s post World War I struggles to pay reparations. The German government printed trillions […]