Investing Archives - Page 5 of 80

Low Growth Fears Hit Global Bond Yields

The problem of negative returns on sovereign bonds may be spreading. U.S. Treasuries are seeing yields fall on all parts of the curve, with 10-year and 30-year yields reaching historical lows. The 10-year Treasury fell to 1.38% in early morning trading Tuesday, a historic low as fears about growing global uncertainty hit growth expectations both in America and globally. The 30-year Treasury fell to 2.15%, a 101 basis point decline from a year ago (10-year yields fell 100 basis points over the same period).

Currency Speculators Limited Position Changes and were Divided around the Brexit Vote

In the sessions before and after the UK referendum speculators in the currency futures did three things. First, they generally reduced exposure. This means gross longs and short positions were reduced. Of the 16 gross speculative currency futures positions we track, 12 fell.

Precious Helium Reserve Discovered in Tanzania

A team of overseas researchers discovered 54 billion cubic feet of helium gas in Tanzania’s Rift Valley, according to The Guardian. Helium is a rare gas used for research and medical purposes, and its scarcity has sent prices skyrocketing over 500% in the past decade. Norwegian firm Helium One has three extraction licenses pending with the Tanzanian government.

CFTC: Report just Two-Days Short of the Referendum

The CFTC reporting week ending June 21 covers the day FOMC and BOJ meetings and ends two days before the UK referendum. The overarching theme was the reduction of exposure. This is not measured by net positions but by gross positions.

Of the eight currencies we track, six saw a reduction of gross long positions and a six saw a reduction in the gross short positions. Five of the eight currencies showed a decline in both long and short positions.

Foreign Exchange Market Technical Condition Changes

The dramatic reaction to the UK decision to leave the European Union has changed the technical condition in the foreign exchange market. While the precipitating factor is a fundamental political development, it is mediated by psychology. Group psychology is the subject of technical analysis. In the current context, the technical analysis puts the price action in the larger context and provides mile-markers, as it were, and potential inflection points.

Are We at Peak Pound Yet?

Sterling is recording its daily advance since 2008 today. It is up about 2.3%. The ostensible driver is the weekend polls suggesting that, as we suspected the murder of the UK MP acting as a catalyst of sorts for public opinion. The odds makers in the betting houses and the events markets have also shown a shift toward remaining in the EU.

CFTC: Setting Up for the Vote

In the days ahead of the murder of Jo Cox, a UK member of parliament, apparently for her support for remaining in the EU, speculators in the futures market scooped up sterling. They added 25.4k sterling contracts to lift the gross long position to 61.7k contracts. This is the second largest long speculative position after the mid-March holdings of 62.9k long contracts.

Technically Speaking: Could We See a Shaky Dollar?

The US dollar recovered from the sell-off sparked by the poor employment data released on June 3. It continued to move higher after the Federal Reserve met and shaved its forecasts for the next year and 2018. The number of Fed officials that think only one hike may be appropriate this year increased from one in March to six in June.

The market is discounting less than a one in 10 chance of a July hike, though an upward revision to the May jobs data coupled a robust June report would likely see the perceived risks increase.

Is Singling Out the Yuan as Manipulated Fair?

We have a lot of power with China. We can’t continue to allow China to rape our country, and that’s what they’re doing.

– Donald Trump, May 1, Fort Wayne, Indiana

U.S. Treasury Department Lays Down the Currency Law

For over a quarter-century now, the US Treasury Department has released a formulaic report on the currency policy and practices of key economies on a semi-annual basis. On occasion, it has hauled up a trading partner as a ‘currency manipulator’ and proceeded to jawbone that partner to appreciate its currency and shrink its bilateral trade surplus. This was the case with South Korea and Taiwan in 1988 and then again in 1992 with China and Taiwan.