Trying to make sense of the global capital markets.
After trending sharply higher in recent months, the US dollar has entered a consolidative range against most of the major currencies.
The US dollar has been even stronger than this bull thought let alone the perma-bears. Here's why,
For the third month in a row, FX 'traders' in AUD "guessed" the Reserve Bank of Australia's decision in the seconds before it was released to the public. Aussie regulators, seemingly furious at the blatant-ness of the front-running, confirmed they will be investigating the price spike overnight...
A dispassionate look at the drivers of the investment climate in the week ahead.
Even before the disappointing US jobs data, we anticipated a downside correction in the dollar after a sharp advance in Q1.
* Silver surges 6.5% in dollars and 19% and 12% in euros and pounds *Oil and most commodities declined on economic concerns in the quarter (see table) *U.S. stocks eked out minor gains to new record highs and look toppy *Gold performance impressive given strength of dollar and equities, oil collapse and negative sentiment
A non-bombastic look at the week ahead in the capital markets.
Fed to lose patience. Many expected Norway and Switzerland to cut rates. Could they be disappointed?
What next for the greenback?
The bust of Aussie boom-towns, collapse of the mining industry, dramatic capital outflows, and a bursting housing bubble all have one thing in common, according to billionaire hedge fund manager Crispin Odey - "China is everything to Australia in lots of ways." Simply put, he tells The Australian Financial Review, economies dependent on China for income, including Australia, are headed for recession and central banks will not be able to able to come to the rescue because they have exhausted the arsenal of policy weapons. "We've got a very old-fashioned recession which is spreading across the world," and Australian banks face a tough time ahead too because there are indications bad debt risks are rising.
Following a year of threats that the west would kick Russia out of SWIFT, Moscow finally took the plunge and created its own international payment system alternative. And now, seeing how easy and fast it can be done, here comes China next with its own "China International Payment System" or CIPS, as one after another major global powers wave goodbye to a dollar-based, Washington-controlled (and NSA-supervised) international funds-transfer protocol. One that no longer relies on the US Dollar.
Dollar extends gains, defies doom and gloomers again.
"What’s Going On" - Traders Stumped As HFTs Frontrun Last Night's Australia "Surprise" Rate DecisionSubmitted by Tyler Durden on 03/03/2015 09:46 -0400
Yesterday at 10:30pm eastern, or alternatively today at 2:30pm local time, Australia's central bank unexpectedly did not cut its key interest rate, keeping it at 2.25% even as the majority of economists had predicted a rate cut. However, not everyone was surprised. Just a minute before the official announcement at bottom of the hour sharp, the AUD surged by 0.6%, rising from 0.7774 to 0.7822, suggesting that at least one algo and likely more, had advance knowledge of the unchanged decision, as shown in the chart below.
With little newsflow out of Europe, and just as little on deck out of the US (just NY ISM and auto sales later today), the main overnight events were out of Asia where first the RBA decided to leave rates unchanged but not before the announcement was leaked up to a minute early. In China, the rate-cut euphoria lasted just one day, and after a feeble 0.8% bounce on Monday, the SHCOMP was down 2.2% this morning over fears the PBOC is doing too little, too late to halt what is now perceived by many as a massive "tightening" capital flight out of China. Finally, Japan made the newsflow, after it JGBs continued to slide following a weak auction, fears that the BOJ is done easing after Abe advisor Etsuro Honda warned against overheating, and after the biggest jump in base pay in over a decade led some to think the BOJ may soon have to halt easing altogether, especially if real wages proceed to rise