Marc To Market's blog

Here's my take on the key events for investors in the week ahead, with an attempt to place them in a somewhat larger context.

Near-term outlook for the major currencies discussed and a brief analysis of the short-coming of fair-value "discounting" models in understanding recent price action.  

Overview of the great unwind, which I suggest has three components--tapering talk in the US, Japanese selling foreign assets and the liquidity squeeze in China (squeezing another carry carry trade).

What next for the mighty greenback ?  

The global capital markets are seeing large moves in response not only to the Federal Reserve, though clearly that is a key impetus, but also to developments elsewhere. Here is a dispassionate review.

China is snugging, trying to rein in its financial system and shadow banking system.

Overview of these week's key developments

Tryingto make sense of the price action in the foreign exchange market.  The dollar was heavier than we anticipated and there is no compelling sign of a turnaround, but the key is the FOMC meeting.  

Foreigners are net buyers of Japanese stocks in the most recent week.  When they have bene sellers it has been very small amounts.  Japanese investors for their part continue to sell foreign assets and at arond the average pace seen over the last several months.  

A macro overview.

A dispassionate review of a slew of Chinese economic data.  Why the capital inflows are not a result of Qe as much as Chinese investors gaming their own system.  Why the lower inflation is not evidence of Japan exporting deflation, as some have claimed.  Why the decline in imports may be related to prices and foreign demand, more than Chinese demand itself.  

Here is my weekly outlook for the major foreign currencies.  Yes they are not backed by silver or gold, it is still the largest of the major captial markets at an estimated turn-over of some $4 trillion a day.  Yes, officials may try to guide the market directly and indirectly, but success is often elusive.   

US jobs data is important, but other forces are at work that seem more powerful.

Here is what is shaping the global capital markets.

Here are four things that seem to be dominating the weekend discussions.