Marc Chandler

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Marc Chandler
About the author:

Head of Global Currency Strategy at Brown Brothers Harriman.

CFTC: Gross Futures Positions Show Significant Shifts

Date: 13 June 2016

In the first week of June, which featured both the largely uneventful ECB meeting, and the surprisingly weak US jobs data through the first couple sessions this week saw speculators make several significant adjustments to their positions.

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It's All about the Fed...and other Central Banks

Date: 13 June 2016

A couple of weeks ago, the four central banks that meet in the coming days were thought to be a big deal.  Numerous Federal Reserve officials were preparing the market for a summer hike. Risks of a new downturn in Japan spurred speculation that BOJ would ease policy.

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Technically Speaking: It's Still the FOMC and UK Referendum

Date: 13 June 2016

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 claims, coupled with the ongoing anxiety over the June 23 UK referendum helped the dollar recover in the second half of the week. 

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Separate Politics and Economics at Your Own Peril

Date: 10 June 2016

Many people understand politics and economics to be two different disciplines.  I remember in graduate school more than two decades ago, many colleagues and professors operationally defined political economy as how politics, by which they meant the state, screws up economics.

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Down, then Up, the Dollar is Ready for the Weekend

Date: 10 June 2016

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 today.

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The Dollar Meanders, South Korea Delivers a Surprise Rate Cut

Date: 9 June 2016

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 low near JPY105.50.  The New Zealand dollar though is the strongest of the major currencies; gaining 1.5% following the RBNZ's decision to leave rates on hold, and signal of little urgency to cut again in the near-term.

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Nearly Double the Price, but Only Halfway Back

Date: 8 June 2016

With today's gains, the price of Brent has nearly doubled from its lows in January.  Of course, the price of oil is still less than half of levels that prevailed two years ago.  At the same time, many leveraged investors cast a jaundiced eye toward currency pegs.  Many have concluded that the Middle East currency pegs cannot be sustained.

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Economic Data Overshadowed by the UK Referendum, US Election

Date: 8 June 2016

The foreign exchange market is quiet.  The euro remains confined to the narrow range seen on Monday between $1.1325 and $1.1395.  We continue to look for higher levels near-term as the drop from May 3 (~$1.1615) to May 30 (just below $1.11) is corrected.  A move above $1.1420 would likely spur more buying.

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Intervention or Valuation Change?

Date: 7 June 2016

News that Switzerland's reserves rose to a new record high of CHF602.1 bln in May from CHF587.9 bln in April spurred talk that the SNB has been intervening covertly.  One media account cited one trader that terms the intervention as "massive."

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Brexit Odds are Fluid, but Rising

Date: 7 June 2016

This Great Graphic shows the price people are willing to pay to bet that the UK votes to leave the EU at the June 23 referendum on the PredictIt events markets.  We included the lower chart to give some sense of volume of activity on this wager in this event market.

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Yellen Speaks while the Yen and Sterling get Testy

Date: 7 June 2016

The Japanese yen is the only major currency not to be gaining against the US dollar.  Emerging market currencies, save the Chinese yuan, are also advancing against the greenback today.  The yen rose 3.5% against the dollar last week, and rising equities and commodities are weighing on the yen.

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So Now the ECB is Buying Corporate Bonds

Date: 6 June 2016

In March, the ECB decided to increase its asset purchases from 60 to 80 bln euros a month and to include corporate bonds.  The corporate bond-buying program begins this week.  We use an FAQ format to discuss the key issues.

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Emerging Markets Pop off US Jobs Data, May not Last

Date: 6 June 2016

EM ended the week on a firm note after the US jobs shocker.  While we view the weak reading as a fluke, shifting market perceptions of Fed tightening risk should keep EM bid near-term.  However, we think the July FOMC meeting is still very much alive.  That and the upcoming Brexit vote are potential pitfalls for EM in the coming weeks.

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June or July Now Looks Like July

Date: 5 June 2016

Through the first part of the year, the swinging pendulum of expectations for the trajectory of Fed policy has been a major driver in the foreign exchange market.  This is true even though the ECB and BOJ continue to ease monetary policy aggressively.

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Speculators are Ho-Hum Prior to Key Events

Date: 5 June 2016

Even recognizing a holiday-short week, speculative position adjustments were minor in the days before the ECB meeting and the US jobs report.  There were no gross position adjustments that met the 10k contract threshold.

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Is the Dollar Correcting for the May Advance?

Date: 5 June 2016

The US dollar reversed higher on May 3 and trended higher.  It peaked on May 30, but it was not clear until the poor US jobs report sent the greenback reeling on June 3.  The fact that May 3-May 30 move is over is the most important technical consideration for the dollar's outlook.

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