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Japan’s Economy in the Gutter: Will the Yen Follow Its Lead?
Historically speaking, the Japanese yen has proved to be a safe haven against global turmoil. Right now, however, Japan’s economy is among the worst hit of all the global powers. It is ill prepared to weather the global storm and it’s falling like a rock.
That’s why, this time around, as Japan’s economy falls away, I think there’s a very good chance the yen could drop as well.
Obviously, this would be very bad news for the huge numbers of speculators and institutions that have literally bet their existence on yen-based hedging strategies. But while a freefall in the yen would be…
24Feb2009 | Money Morning | 0 comments | ContinuedA New, Slicker Currency
The Holy Book tells us that there is a time to every purpose under heaven. Or was that the Byrds? In any event, these times have done an outstanding job of confounding all the investment world’s beastly inhabitants, bull and bear alike. Just where the markets are headed a day or two from now is anybody’s guess.
The only clear item to emerge from this last week’s trade is a decided shift in sentiment toward the pessimistic. Yet whether this shift has been large enough to be used by contrarians appears doubtful. There’s not enough genuine fear, in our view, to…
20Jan2009 | Oxbury Research | 0 comments | ContinuedNONâ€FARM PAYROLLS BETTER THAN EXPECTED BUT STILL PAINT A VERY BLEAK OUTLOOK
The dollar surged against the majors following better than expected payroll data. The EurUsd dropped nearly 200pips to the low range of 1.35, while the UsdJpy fell 100pips finding support near 90. The GbpUsd is flat, trading very closely to its previous close, mostly due in part to the market digesting recent changes in monetary policy. Equity markets are lower in the US and Europe, with the Dow off 1.27% or 100pts and the SPX down 1.58% or 14pts. Bond buyers were back in the market purchasing was heavy in 2yrs driving rates in 6bps at the portion of the…
9Jan2009 | Advanced Currency Markets | 0 comments | ContinuedUS SESSION: DOLLAR CLOSING THE WEEK STRONGER ACROSS THE G10
The dollar gained substantially against most of the majors recovering most of this week’s losses. The EurUsd sunk over 360 pips to the high range of 1.38, while the UsdJpy was mostly flat up only 7pips to mid 89 price area. The GbpUsd dropped an additional 160 to the mid 1.48 level, due to several factors including weak economic conditions. Equity markets have traded traded closely to yesterday’s levels with the Dow and SPX virtually unchanged. Bond have given up light ground with 2yr and 10 yr yields higher by 5bps, but remain considerably lower from average levels. The commodities…
19Dec2008 | Advanced Currency Markets | 1 comment | ContinuedUS SESSION: DOLLAR SLAMMED FOLLOWING FOMC RATE ANNOUNCEMENT
Prices in the FX market continue to experience a strong correction putting a cease to the recent trend of dollar strength. The EurUsd surged over 350pips to the mid range of 1.40, while the UsdJpy dropped 170pips to the high 88 price area. The GbpUsd rallied 260pips to the high 1.55 level, following the trend of dollar selling. Equity markets were positive in the US and Europe, with the Dow up 4.2% or 359pts and the SPX back above 900 on a 5% gain. Interest rates remain the cornerstone of the market with the squeeze in treasuries pushing yields to…
16Dec2008 | Advanced Currency Markets | 0 comments | ContinuedUS SESSION: FX PRICES DEVIATE FROM RISK AVERSION TRADE, GOLD AN OIL RALLY STRONG
The dollar fell to its lowest levels in seven weeks against the majors displacing the recent trend trading across the financial markets. The EurUsd rose over 300 pips to the low 1.33 price area, while the UsdJpy fell 137pips to the mid range of 91. The GbpUsd gained 245pips to the low 1.50 level, marking the decoupling of the risk aversion trade which has been a consistent theme in the market over the last several weeks. Equity markets performed poorly with the Dow sliding 2.24% or 196pts on weak economic data and delays with the auto sector bailout. Bond yields…
12Dec2008 | Advanced Currency Markets | 0 comments | ContinuedUS SESSION: CALM BEFORE THE STORM, CENTRAL BANKS ARE SET TO MEET NEXT WEEK
Dollar strength carried into Black Friday, seeing strong against the majors. The EurUsd fell a bit over 200pips to the low 1.27 level, while the UsdJpy rose 30 pips to the mid 95 price area. The GbpUsd slipped 90 pips to the low range of 1.53, on a light trading day. Equities are mostly flat following the US holiday, traditionally a low volume session. Bond yields remain compressed with the 2yr at 1.1% and 10yr at 2.9%, we should look for more activity next week considering monetary policy decisions out among the G7. Commodities declined across the board with oil…
28Nov2008 | Advanced Currency Markets | 0 comments | ContinuedThe Death of Currencies
Throughout history, there has never been a successful fiat currency. It doesn’t matter how we define success, or in this case failure. Fiat currencies are simply the tools of Keynesians whether it was before the time of John Maynard Keynes or not.
Some currencies have lasted longer, or limited debasement longer than others, but in the long run, all currencies are dead (poking at Keynes’ most famous quote). Fiat failures are blanketed throughout history with the Roman Denarius, French Livres, Assignats and Francs, and Weimar Germany Marks. In more recent times we’ve seen fiat failures in Argentina, Mexico, Thailand, Russia, and…
27Nov2008 | Oxbury Research | 1 comment | ContinuedUS SESSION: GOVT. BAILOUT PROVIDES SHORT TERM EUPHORIA, STILL ROOM FOR ADDITIONAL MARKET TURBULENCE
The dollar was battered in intraday trading as the market reacts to the announcement of another US Govt. bailout. The EurUsd rose sharply by 190pips to the high range of 1.27, while the UsdJpy is mostly flat slight under 97. The GbpUsd rose over 70 pips finding resistance near 1.50 as risk aversion eases in the marketplace. Equity futures are pointing higher in the US, following the trend of European stock indexes with the FTSE up 175pts or 4.6% and the DAX up 141pts or 3.4%. Commodities are consistent with the bias towards risky assets in early trading, oil is…
24Nov2008 | Advanced Currency Markets | 0 comments | ContinuedUS SESSION: PAULSON AND BERNANKE TESTIFY BEFORE THE HOUSE FINANCIAL SERVICES COMMITTEE REGARDING THE TARP
The dollar was mostly flat against the majors in intraday trading as Fed Chairman Bernanke and Treasury Secretary Paulson discuss the TARP before the House Financial Services Committee. The EurUsd slipped 10 pips to the low range of 1.26, while the UsdJpy rose 85 pips through the 97 level. The GbpUsd was mostly unchanged from the previous session, despite the economic data announced. Equity markets were higher in the US and Europe with the Dow higher by 150pts or a little less than2%, and the FTSE up 1.8% or 76pts. The bond markets were mixed with that short end of…
19Nov2008 | Advanced Currency Markets | Comments Off | Continued
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