ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
What a difference 19 months make. It was June, 2014 when Bank of England (BoE) Governor Mark Carney confidently warned financial markets that rate hikes could come earlier than implied at that time by the market. Less than a month later, the British pound (FXB) (or sterling) peaked against the U.S. dollar (DXY0). Peaks against … Read more
(This is an excerpt from an article I originally published on Seeking Alpha on January 19, 2016. Click here to read the entire piece.) For a brief moment on January 15, 2016, the S&P 500 (SPY) looked ready to extend the sell-off that ended with the August Angst of 2015. At 1858, the index was … Read more
(This is an excerpt from an article I originally published on Seeking Alpha on January 15, 2016. Click here to read the entire piece.) The recent movements in crude oil prices are very substantial in historical context. Headline inflation will return to target once oil prices stabilize, but recent further declines in global oil prices … Read more
(This is an excerpt from an article I originally published on Seeking Alpha on December 17, 2015. Click here to read the entire piece.) The Federal Reserve could not have asked for a better response to its first rate hike in 9 years and first move off zero interest rates in 7 years. The Fed … Read more
For what I think is the first time since the Fed rate hike in December, the market pushed out the timing of the next rate hike. Source: CME Group FedWatch The presumed change in heart has come from the trading chaos in China. Back in September, the Fed used out-sized volatility coming from China’s devaluation … Read more
The U.S. dollar index ended 2015 on a strong note, but it has yet to develop any post-Fed momentum. Of the ten trading days following the rate hike from the U.S. Federal Reserve, the index has closed below that day’s intraday high five days. Notably, the intraday LOW of that day is still holding strong … Read more
(This is an excerpt from an article I originally published on Seeking Alpha on December 2, 2015. Click here to read the entire piece.) The European Central Bank (ECB) next makes a statement on monetary policy on December 3, 2015. The market is apparently eagerly anticipating an announcement from ECB President Mario Draghi that delivers … Read more
(This is an excerpt from an article I originally published on Seeking Alpha on November 29, 2015. Click here to read the entire piece.) The U.S. Federal Reserve is likely to hike interest rates in December. The Fed and economic data have finally convinced the market of an imminent rate hike, and the high odds … Read more
(This is an excerpt from an article I originally published on Seeking Alpha on November 19, 2015. Click here to read the entire piece.) “…the changing nature of China’s development implies that the potential for commodity prices to rise from here is somewhat limited.” – Christopher Kent, Assistant Governor, Reserve Bank of Australia (RBA) at … Read more
This past week was an important one for monetary policy. The Bank of England (BoE) made clear it is willing to put off rate hikes as long as necessary. Despite its words that suggest otherwise, the Bank is NOT biased for action. U.S. Federal Reserve Chair Janet Yellen made it clear that, all else being … Read more