Confusion, Uncertainty, and Directionless
The three words in the title sufficiently describe the state of the globes financial markets. Although, directionless might be a little over optimistic given the S&P 500 is down nearly 6 per cent over the last 3 months and the yield on the US 10 year bond has moved from approximately 2.3 per cent to again below 2 per cent for the fifth time this year.
read moreSitting Tight
It has been 81 months, and counting. The US Federal Reserve has missed another opportunity to raise interest rates. Instead, Janet Yellen and her fellow committee members cited global economic and financial uncertainty, sidelining Fed policy for at least another month. The problem with the Federal Reserve’s decision Thursday, and in turn their decision making process is that it paves way for greater uncertainty.
read moreWill They or Wont They: A Cloud over the Markets
August was the 80th successive month of the US Federal Reserve standing pat and not adjusting their key policy interest rate known as the federal funds rate. This Wednesday could mark the first rate move since December of 2008. As investors attempt to determine the actions of the US Federal Reserve, this “will they, or wont they” scenario has cast a cloud over the markets for the past few month as the US Fed readies themselves for liftoff.
read moreSeptember Arrived Early for the Markets this Year
On the 10th of August we witnessed the Peoples Bank of China decision to allow the yuan to depreciate for the first time in two decades. Brazil, the “B” in the sensation that was the BRIC economies tabled a budget this week that roiled the real, its currency, and sparked fears among investors that its debt would be relegated to junk status by credit rating agencies.
read moreDownside verse the Upside
It may just be my natural bias, but it seems the “anti-gold bugs” have more animosity and emotion when expressing their views on gold then the gold bugs have in their excitement for the yellow metal. And there is absolutely nothing wrong with being bearish on gold at present time. Especially as the trend following the undeniable strength of the US dollar and chatter of the US Federal Reserve hiking interest rates gives little reason or evidence to go against consensus.
read moreCapital Controls: The Game Changer
Make no mistake; the European Central Bank (ECB) has decisively been the game changer for how events are unfolding in Greece. The decision by the ECB to limit the emergency liquidity assistance provided to Greek financial institutions prompted the bank closures, which if they remain will have devastating and escalating effects on their economy.
read moreGreece and the Fed, what’s new?
Markets don’t seem to be overly obsessed with developments in Greece. I, however, continue to watch with absolute astonishment as the idea of a currency that was established only 23 years ago sees the potential of fracturing so quickly. With 10 days left in the month of June, key deadlines are quickly approaching for whether Greece can finalize a deal with their creditors and secure funding. Ongoing is the threat of the stability of their financial institutions with overnight lending from the ECB routinely being increased to support the outflow of customer deposits.
read moreA Timely Warning Call
The unorthodox specificity found in the International Monetary Fund’s latest forecasts for the US economy reintroduces a level of confusion and uncertainty for investors surrounding when the Federal Reserve will raise interest rates.
read moreAtrocious, Anomalous, and So Much More
The best comment between the statuses of either the US or the Canadian economy comes from a Bank of Montreal Economist, Jenifer Lee. In referring to US economic growth in the first quarter she writes “the good news is its history.”
read moreConsensus Delayed, or Broken
Markets have entered a state of flux. Without a doubt, one of the clearest trends in recent times has been the breakdown of the commodities super-cycle and a surging US dollar, a trend that now seems to be reversing.
read moreArt, Land, or Gold
The chief executive of the world’s largest asset management corporation made comments this week that suggested gold was passé.
read moreDead Cat Bounce
The US dollar index has fallen around 3 per cent since its high the beginning of March. This past week saw the best weekly performance for the Canadian dollar in the last four years.
read moreStuck in Purgatory
Financial markets have been going through another wave of directionless movements as they obsess over the “will they or wont they” question as to when the US Federal Reserve will begin to raise interest rates.
read moreOut of Options
As the euro makes its way towards parity, we are witnessing the sole desired outcome of the policy initiative of the European Central Bank and their member governments.
read moreA Deal to Make a Deal
Greece can declare a small victory. As Prime Minister Alexis Tsipras stated Friday evening, “a battle has been won, but not the war.”
read moreA Long Bridge to Where?
There was certainly no shortage of action in the markets this week. Following a week when the Swiss France made a 30 per cent move in a matter of seconds, it would have been hard to believe we could match the week prior in terms of volatility and excitement.
read moreCutting Their Losses, Early
The Swiss National Bank (SNB) shocked currency markets Thursday of this week with a policy decision that crippled the Euro-Franc cross. Their announcement sent the franc soaring 30 per cent against the euro.
read moreA Longer Term View
Following a year where US equity markets found the ability to overcome a Russian invasion of Ukraine, a tremendous decline in oil and commodity prices, and policy uncertainty in the major economies of the European Union and Japan, investors have to question whether the same resilience can hold through 2015.
read moreDivergence Part II
The focus of financial markets has certainly stuck with the fallout in the price of crude oil, and rightly so as its impacts will be far reaching from global economic growth projections to domestic monetary policy.
read moreDivergence
With less than a month to go in 2014 investors are faced with the question, what gives?
read moreSwiss Votes…No
In the wake of the Swiss referendum on whether the central bank should increase their allocation to gold, investors are tasked with the question, is the no vote yet another reason to be bearish on gold at present time.
read moreGeopolitics Plays Interference
It seems that once again the direction or trend playing out in the markets has been interrupted by geopolitical tensions heating up between Russia, Ukraine, and the Western powers.
read moreGame Changer
Friday was the best single day for gold in 14 months. This is as the markets seem to be playing a risk-on, risk-off tug of war with the US dollar.
read moreThere Will Be Haircuts
It’s puzzling why Europe is more an issue now than it was a few months ago. It seems the market has finally come to grips with the fact that their economy is stagnating, and hopes for growth are diminishing.
read moreGlobal Slump
There have been an increasing number of factors that have begun to put pressure on global financial markets, and many are ones that three years ago would be used to explain higher gold prices…
read moreOh, Flower of Scotland
Leading up to the referendum on Scottish Independence, one trader remarked “there will be blood on the trading floor Friday” if the Scots were to vote “Yes” and chose to break the 307-year-old union with the United Kingdom.
read moreDominating Dollar
The resounding story for the markets these last few weeks has been the unequivocal strength of the US dollar. The dollar closed higher Friday for the ninth straight week as it continues on its best run in 17 years.
read moreSuper Mario Shows His Hand
Mario Draghi and the European Central Bank (ECB) shocked financial markets this week when they yet again revealed they were prepared to further combat a stagnating European economy.
read morePredicting the Unpredictable
As the markets awoke at the beginning of the week to news of a US air strike on Iraq, one aspect of the risk off trade that had been ensuing became clearer. Those who had been selling equities from the week earlier were doing so because of events in Russia.
read moreA Goldilocks Moment
Who would of figured that in a week when the US economy reported initial estimates of second quarter GDP growth of 4 per cent, that the Dow Jones Industrial Average would simultaneously erase its gains for the year.
read moreEconomic Patriotism or Free Market Pragmatism
The Obama administration is becoming quite critical of US corporations acquiring foreign firms in order to relocate their tax domicile to a country with a more favorable regime.
read moreMemories of a Euro Crisis
Gold prices gained for the sixth week in a row putting up the metals’ best winning streak since August of 2011.
read moreSanguine Markets
A clear message from investors as we head into the July 4th Holiday weekend in the United States is that equity markets are poised to continue their march higher.
read moreAnother Bullish Signal for Gold
The Financial Times reported this week that central banks around the world are in the process of repositioning their portfolios as they pare back their exposure to US treasuries.
read moreSizing Up Gold’s Rally
Gold had its best single day performance since September of 2013 on Thursday of this week. It begs the question, what contributed or led to the 50-dollar rally?
read moreEurope’s Deflation Fear
The story with the ECB was that all they had to do thus far was wave their metaphorical policy weapon without every firing a bullet.
read moreIs a Golden Opportunity Finally Presenting Itself?
There is a bizarre dichotomy between financial markets and the economy.
read moreBack to the Bond Market
Gold has not closed outside the range of 1,282 to 1,311 US per oz. since April 14, 2014. It has made the market action over the last six weeks decisively boring.
read moreA Dose of Reality
2014 so far hasn’t really panned out as many had anticipated. While financial markets, particularly equities have seen increased volatility, the year of a strong greenback (US dollar) corresponding to a strong US economy is yet to develop.
read more