ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
After scanning through the latest quarterly release of the “Statement of Monetary Policy” from the Reserve Bank of Australia, I was reminded that currency traders are trying to prepare for eventual rate hikes from the European Central Bank (ECB) and the Bank of England (BoE): “While financial markets continue to expect the US federal funds … Read more
Currency traders appeared very disappointed that the Bank of Canada left interest rates unchanged on Tuesday. The Canadian dollar (“loonie”) immediately bounced sharply from near three-year highs against the U.S. dollar, and the USD/CAD eventually popped over parity (1.0) for the first time in two weeks on Thursday. The accompanying statement suggested that the Bank … Read more
Mark Carney, the governor of Canada’s central bank (Bank of Canada), must be one of the most relaxed central bankers in the Western world. In an interview posted on Paul Kedrosky’s website (minutes 9 to 35), Carney admits that his job is easy compared to the task still facing many of his contemporaries. For example, … Read more
Nassim Taleb, famous author of “Fooled by Randomness” and “The Black Swan”, was so distressed by the Federal Reserve’s roll-out of quantitative easing part 2 that he ended his media black-out and interviewed with Erik Schatzker on Bloomberg Television a few days ago. Anyone familiar with Taleb will not find any new themes or critiques … Read more
China leads charge against U.S. injection of hot money – The Globe and Mail Facing a speculative wave of foreign investment, China and other emerging market economies are clamping down on the so-called hot money rippling through their economies in the wake of the United States’ latest move to stimulate growth and employment. (tags: Federal_Reserve … Read more
Bloomberg summarized the latest missive from Bill Gross in a piece called “Fed Easing to Signify End of Bull Market, Gross Says.” Gross called an end to the 30-year bull market in bonds thanks to the the Federal Reserve’s planned second round of quantitative easing. I decided to read Gross in his own words, and … Read more
On Tuesday morning the Bank of Canada decided to leave its overnight interest rate unchanged at 1.0% and confirmed the caution expressed by Governor Mark Carney on CNBC almost a month ago. The concluding paragraph in the statement on monetary policy summarizes the Bank’s concern about current economic conditions: “At this time of transition in … Read more
Since peaking in June, the dollar has arguably experienced a near freefall. These moves reflect the near certainty felt amongst investors and traders about the Federal Reserve’s intention to print more currency to forestall the threat of deflation. However, with dollar shorts at their highest levels in three years and the dollar index stalling at … Read more
Talk of currency wars have heated up as several events have converged to make the public increasingly aware of the on-going competitive devaluations around the globe. The increasing clamor came ahead of an IMF meeting Thursday and a G7 meeting this weekend where the topic of global trade and currency rates are hot topics. It … Read more
While most of the Western industrial world struggles with deflationary fears, Australia continues to worry about inflation. In tonight’s latest release on monetary policy, Reserve Bank of Australia (RBA) Governor Glenn Stevens states: “If economic conditions evolve as the Board currently expects, it is likely that higher interest rates will be required, at some point, … Read more