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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. […]

Out of all the confusing headlines and policy changes from the ECB today, the most noteworthy quote was Mario Draghi stating that his central bank is now at the lower bound on policy rates. This means that rates will not be cut any further. Additionally, another quote saw the ECB chief say that “the OMT […]

Over the past year and a half, easing from the world’s central banks has spawned a great calm across financial markets. The Swiss National Bank’s policy of a cap in the Franc at 1.20 vs the Euro produced around 200bn in EUR purchases between April 2012 and July 2012.  In late 2012 the Federal Reserve […]

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The fact that Mario Draghi is ‘comfortable’ acting next time seems to equate with markets being comfortable pricing in less volatility. The VIX dropped to a recent low of 11.36 on Friday, levels not seen since early January’s bout of equity market complacency. Much has been made of the wider lull in volatility across bond, […]

The Dollar has been stronger in recent sessions with the bulk of strength seen against higher yielding currencies. The greenback has traded sideways against the EUR and GBP, and lost ground against the Yen. US Yields remain near recent lows as European periphery spreads continue to widen. Stocks have weakened in what looks like profit […]

Since early April numerous pundits and Financial Times articles have heralded the return of the carry trade. We have seen emerging markets and European periphery assets perform extremely well since stresses seen in Janaury.  The Chinese Yuan has been nearly the only major EM currency that has fallen. Periphery yields have fallen and EM currencies have […]

10 year yields are now down almost 10 basis points today as the benchmark US rate is now trading at 2.527%. The 2.60% -2.80% range that has been in place since early February has broken out decisively today with the all important 2.50% level in close view. Falling volatility in bond markets has been the […]