Brexit Prevails: Enter the Unknown
How much change can we see in asset prices in 24 hours? Apparently, a lot as extreme volatility roils the world’s financial markets in reaction to Britain’s decision to vote in favour of exiting the European Union.
read moreBrexit: Anomaly or Awakening
Gold and other safe haven assets have seen strong momentum leading up to the June 23rd ‘Brexit’ referendum when the United Kingdom will vote whether to remain within or exit the European Union.
read moreThe Week Ahead In Gold
The gold market saw some heightened volatility last week as a number of potentially significant issues are driving investor anxiety.
read moreThe Week Ahead In Gold
This week could be a pivotal one for the gold market as the bulls will look to build on solid strength seen over the last few trading days…
read moreRegressive Economic Policies
It says a lot about the state of the world economy when ideas dictated through extreme political leaders have populist appeal to them, and are what is driving the promotion of regressive economic policies.
read moreThe Week Ahead In Gold
The gold market could see some follow through this week to significant buying seen on Friday following a disappointing U.S. Employment Situation report…
read moreYellen’s Enigma
Hindsight is 20/20. That being said, 2015 saw a bull run in the US dollar that was forecast by many credible analysts…
read moreA Common Theme
The theme of divergence has been playing out in the global economy. One example is how the US Federal Reserve has begun their path of gradually raising interest rates whereas…
read moreComing to the Rescue
If the Wednesday morning bank of Canada announcement revealed anything, it’s that Canada and Stephen Poloz may be shifting course to join the group of central bankers that are no longer attempting to save the world…
read moreParing Their Bets
January 21st of 2015 stunned investors and economists as the Bank of Canada lowered their key interest rate by a quarter of a per cent…
read moreWhat a Week
What a week. It’s a new year for the world’s financial markets, but it sure didn’t take long for investors to realize that the themes of 2015 are still very much prevalent. The week and the year began with Chinese regulators attempting to maintain control of their currency as the offshore market continues to discount the official rate has seen investors sell Chinese stock markets and prompt fear of further weakness in the world’s second biggest economy.
read moreDollar, Debt, and Politics
Like a rock tumbling down hill, oil prices have broken 40 dollars per barrel and sustained their downward momentum. Bearish reports ranging from the outcome of the OPEC meeting in Vienna over a week ago to supply outlooks from the International Energy Agency continue to weigh on the global crude market and have further dampening effects on global financial markets.
read moreDivergence and the Dollar
This past week in the markets set the scene for a diverging picture in terms of monetary policy in the United States versus the reset of the world. Through speeches and congressional testimony, US Fed Chair Janet Yellen made clear that a December rate hike remains on the table as the US Federal Reserve looks to lift off of rock bottom interest rates on December the 16th.
read moreThe Next Phase
A lot is being made of remarks from Federal Reserve Chair Janet Yellen earlier this week and the likelihood of the Federal Reserve raising rates as early as December. This is because, all else being equal, the US economy no longer warrants emergency level interest rates. Fridays US jobs report added further evidence to this, and that in fact the lame payroll numbers of August and September look more to be anomalies than a slowdown of the US economy, which was immediately impacted by economic instability in Asia.
read moreConfusion, 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…
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