ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
The U.S. Federal Reserve is set to cut interest rates by 25 basis points in the coming week (July 31). The odds for at least another 50 basis points by next January are around 61.9% according to the CME FedWatch Tool. Yet, the U.S. dollar index (DXY) has regained new life. After breaking critical support … Read more
“It would be a difficult place for policy, and my sense is that the markets are not really onto the complexity of it. It seems a little too easy that ‘Oh. Interest rates could decline and that will make everything OK.’ That may be true for the small kind of shocks that we’ve had so … Read more
The Bank of Canada released its latest pronouncement on monetary policy on the heels of a rapid rally for the Canadian dollar (FXC). USD/CAD was down 5 straight days going into the release of the January, 2019 Monetary Policy Report. Four of five of those days delivered substantial declines. The Bank provided a truncated summary … Read more
It was a simple headline from the Wall Street Journal but enough to turn the tide for trade-sensitive plays: “U.S. Proposes New Trade Talks With China to Avert Tariffs.” The reported talks are proposed for later this month, but the market wasted no time in responding. In the world of foreign exchange, the U.S. dollar … Read more
I completely missed how the Bank of Canada (BoC) was deftly tempering its rate hike designs with a claim that the Canadian economy still needs more accommodation. For example, in April’s statement on monetary policy, the BoC said the following (emphasis mine): “Some progress has been made on the key issues being watched closely by … Read more