Marc Chandler

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Marc Chandler
About the author:

Head of Global Currency Strategy at Brown Brothers Harriman.

Young and Old Weigh in on the Brexit

Date: 21 June 2016

The betting and events markets have shifted more decisively than the polls in favor of the UK to remain in the EU.  Sterling extended its rally from $1.4010 last Thursday to nearly $1.4785 today, as the market participants adjust positions.

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The Eurozone Focus on Germany, the U.S. on Yellen

Date: 21 June 2016

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.   Nevertheless, we expect to see the dollar stabilize over the next couple of sessions.

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Are We at Peak Pound Yet?

Date: 20 June 2016

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.

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St. Louis Fed President Bullard's 'Regimes'

Date: 20 June 2016

The dot plot the recent FOMC meeting was curious.  We noted right away that inexplicably there was one official that apparently anticipated one hike this year and then no hikes in 2017 or 2018.  There was also one dot that was missing for a long-term view.

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Markets Undergo a Mild Psychology Shift

Date: 20 June 2016

Since the murder of UK MP Cox last week, the mood in the markets shifted.  Today is the continuation what was seen in the last two sessions last week.  The difference is that participants seem more confident, as the polls and betting odds seem to support our initial recognition of the tragedy's potential to impact psychology. 

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CFTC: Setting Up for the Vote

Date: 20 June 2016

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.

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Over There

Date: 20 June 2016

The Chair of the Federal Reserve testifies before Congress on Tuesday and Wednesday.  Given the recent FOMC meeting and Yellen's press conference, it is unlikely new ground will be broken. It is difficult for the market to price out a July hike more than it already has done.

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Technically Speaking: Could We See a Shaky Dollar?

Date: 20 June 2016

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.

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German Ruling could Pit National Court against ECJ

Date: 17 June 2016

The assassination of the Jo Cox has broken the powerful momentum in the markets.  Investors recognize that the tragedy potentially injects a new element into consideration for the outcome of next week's referendum.  The campaigns will be resume over the weekend, and new polls will be available.  Investors will place more weight on polls conducted after the assassination.

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The Senseless Attack on MP Jo Cox is Far-Reaching

Date: 17 June 2016

The assassination of Jo Cox, a member of the UK parliament is a personal and political tragedy.  Her needless death provided an inflection point.  The suspension of the referendum campaigns and a steady stream of reports and speeches have the emotionalism of contest freeze.

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Searching for Equilibrium

Date: 16 June 2016

The Federal Reserve modified its stance yesterday without changing rates.  It is not just about how fast the Fed sees itself normalizing monetary policy but also where the level of the equilibrium rate.

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Long-Lasting Headwinds

Date: 16 June 2016

Officials and events have conspired to shake the already fragile market confidence.  The Federal Reserve noted yesterday, its widely anticipated decision not to lift its rate target, which the long-term equilibrium target rate is likely lower than previously thought.

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Now Can We Expected a Slower Tightening Cycle?

Date: 16 June 2016

The Federal Reserve anticipated a more gradual tightening path going forward.  This weighed on the dollar and lifted equities.  August Fed funds futures imply less of a chance of a hike next month.  It is now consistent with an 8% chance of a hike, which is less than half the probability assigned at the end of last week.

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Japan's Kuroda and the BOJ are in a Corner

Date: 15 June 2016

Following today's FOMC meeting, the central banks of Japan, Switzerland, and the UK meet tomorrow.  The SNB will keep its powder dry to be able to respond to the results of the UK referendum if needed.  The Bank of England is also on hold.

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Your FOMC Primer

Date: 15 June 2016

The FOMC meeting later today, with updated economic projections and a press conference, is the key event of the day, even though three other central banks meet over the next 24 hours.  Investors should know four things before the FOMC meeting.

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Off to Electoral College

Date: 14 June 2016

This infographic was in the Wall Street Journal on the US election.  It is important to remember that the US does not elect the President by direct popular vote.  This makes the national polls a bit misleading.  There are 538 Electoral College votes.  To be elected a candidate must secure a majority or 270 Electoral College votes.  Obama received 332 electoral votes and Romney 206.

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Oil Slips off an 11-Month High

Date: 14 June 2016

Oil prices reached their highest level in eleven months in the middle of last week.  The front-month futures contract did not post a key reversal on June 9, but the continuation contract did.  Since reaching almost $51.70, prices have pushed lower, with lower highs and lower lows.

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Positioning for Life after the UK Referendum Continues

Date: 14 June 2016

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 decision first thing Wednesday in Asia, Chinese shares eked out a small gain.

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EU Support Varies Dramatically by Age, Immigration Policy

Date: 13 June 2016

One of the most profound criticisms of the EU that it remains, even at this late date, primarily an elite project.  The democratic deficit has grown, according to the latest Pew Research multi-country poll.  The Pew Research survey covered ten countries that represent 80% of the EU28 population and 82% of the region's GDP.  The poll surveyed nearly 10.5k people between April 4 and May 12.

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Short-term Volatility is Up, Encouraging Capital Market 'Risk-Off'

Date: 13 June 2016

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 dollar before the weekend and is off another 1% today.  A week ago, it traded as high as $1.4530.  Now it is nearing $1.41.

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