The theme of the last 6 months has been low volatility and carry trade investing. Global investors have become ‘yield seeking zombies’, lurching from one market to another seeking out higher returns relative to  their respective domestic markets. The trades of choice have been high yield US bonds, leveraged loans and emerging market corporate and […]

Risky assets traded down to recent lows early last Friday as Barack Obama approved airstrikes to push back the spread of religious militant groups in Iraq. Since those lows, stocks, high yielding currencies and junk bonds have roared back based on a combination of factors. Fading Geopolitical Risks: There were constructive headlines out of Russia […]

Recep Tayyip Erdogan has been elected to a ten year term as Turkey’s first President. The office has existed in prior forms as a ceremonial title, but now Mr.Erdogan will be called President after already serving since 2003 as prime minister. Critics see his AK party as likely to consolidate power with a plan to […]

The Bank of Japan went into the 2nd quarter of this year with a rather bullish outlook on the economy and price inflation. The April 1st sales tax hike from 5% to 8% has taken effect and it is now becoming clear that the Abe administration underestimated the impact. In the last few months, inflation has […]

Today is the first day in some time that there has been obvious and even broad dollar strength. The Dollar rally began during the London session and took another leg higher after the great consumer confidence numbers that came out at 10am. The trends we see with today’s price action should provide valuable clues for […]

With the entire market standing around waiting for some totally obvious FOMC shift in forward guidance, Janet Yellen may have subtly delivered that change this morning. The Fed Chief’s semi annual testimony today was a long and arduous  rehashing of current Fed policies without much noticeable change in content. As I tuned in today two […]

In early January of this year selling the Canadian Dollar was a consensus trade. The Bank of Canada was making a shift towards dovish language, repeatedly saying that ‘rate cuts were not off the table‘. BoC Governor Stephen Poloz seemed to capitalize on an extremely harsh Winter in Canada as a reason to become more […]

On July 3rd Reserve Bank of Australia Chief Glenn Stevens made a noticeable change in tone during a speech at the Australian Conference of Economists. The governor said that his central bank has more ‘ammunition’ to make further rate cuts. He also said that investors are underestimating the chances of a material decline in the […]

Dollar Yen has been  locked in a relatively tight trading range for over half a year now. The 7 month long range between 101 and 105, has coincided with a fall in US interest rates and stock market volatility. The market malaise seen over the last two months or so has had USDJPY fall into […]

Fighters from Al-Qaeda related group known as the Islamic State of Iraq and al-Sham(ISIS) have swept through northern Iraq and Eastern Syria in a brazen and violent power grab.  The US trained Iraqi military is on the run. The WSJ is reporting that government troops are abandoning their posts before the insurgent forces get anywhere near. […]