Today’s Market Reversals are not that Surprising
The global capital markets are stabilizing for the first time since the UK referendum. It is not uncommon for markets to move in the direction of underlying trends on Friday's; see follow-through gains on Monday, and a reversal on Tuesday. ...
Keeping Asian Growth out of the Doldrums
The global economic outlook may be grim but it would be grimmer still but for Asian economic growth. There’s no dynamic growth pole anywhere else in the world and global uncertainties have increased around the rise of Donald Trump in...
Moving On Because the Markets Insist
The UK choice to leave the EU on a 52%-48% vote is one of those moments that define before and after. It is true that there are examples of the EU not liking the outcome of a referendum and allowed...
Is the UK the First Domino?
The British decision to leave the EU has been a long time in the making, but it does not lessen the shock that many politicians in the UK and across the EU are feeling. While London begins the long process of...
Brexit Forces Scramble for Safety
The UK's decision to leave the EU spurred a dramatic risk-off move through the capital markets. The dollar, yen, and gold soared. Equities and emerging market assets sold off hard. Core bond yields fell sharply. The UK's decision to leave...
Post-Asian ‘Taper Tantrum’ Analysis Provides Keen Capital Flows Insight
Looking at the varying patterns of the capital flows into Asia in the last decade, the period after the taper tantrum on 21 May 2013 until 31 October 2015 is of particular interest from both global and local perspectives. Globally,...
The Calm Before the Storm
There is a nervous calm in the capital markets today. The focus is squarely on tomorrow's UK referendum. According to a BBC focus group, the leave camp won the debate 39%-34%. The last polls show a contest that it too...
The Eurozone Focus on Germany, the U.S. on Yellen
The US dollar remains heavy against most of the major and emerging market currencies today as the pullback that began at the end of last week continues. The Australian and New Zealand dollars are leading the way, with 0.5%-0.6% gains. ...
U.S. Fed and RBA Traveling a Similar Path
A familiar theme of this column has been the significant uncertainty about the global economy that is leaving investors - and to some extent, consumers - standing on the sidelines. That in turn means lower growth, which validates the decision...
Long-Lasting Headwinds
The US dollar is higher against the major currencies but the Japanese yen and the New Zealand dollar. The dollar fell to new two-year lows against the yen to JPY103.55 before bouncing in the European morning back to JPY104.40. The...
Positioning for Life after the UK Referendum Continues
A spate of opinion polls showing a tilt toward Brexit, and the leading UK newspaper urging the Leave vote on the front page, keep the global capital markets on edge. Equities are lower, though of note ahead of the MSCI...
Short-term Volatility is Up, Encouraging Capital Market ‘Risk-Off’
The risk that the UK votes to leave the EU next week is the dominant force in the capital markets. It is a continuation of what was seen at the end of last week. Sterling fell 1.4% against the US...
Technically Speaking: It’s Still the FOMC and UK Referendum
The US dollar traded heavily in the first few days of last week as investors continued to respond to the poor employment report. However, Yellen's willingness to defer judgment while noting the underlying economic strength, JOLTS and the initial jobless...
Down, then Up, the Dollar is Ready for the Weekend
The US dollar weakened in the first half of the week as participants continued to react to the shockingly poor jobs report and shift in Fed expectations. However, it recovered smartly yesterday and is seeing some modest follow through buying...
The Dollar Meanders, South Korea Delivers a Surprise Rate Cut
The US dollar is posting modest upticks against most of the European currencies and the Canadian and Australian dollars. However, it has fallen against the yen and taken out the recent low, leaving little between it and the May 3...