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global dollar liquidity

Spreading Spreads (and JPY)

By |2018-08-20T18:56:40-04:00August 20th, 2018|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

What is it that’s different in August? If there was some relative calm in global markets in June and July it certainly disappeared this month. The dollar shot higher and global liquidity indications began sinking again. Yields have fallen on safety (liquidity) instruments more apparently divorced from any other mainstream factors. One place to look for answers is Tokyo. I [...]

TIC Confirms Pretty Much Everything

By |2018-07-18T17:39:55-04:00July 18th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Russian ruble has fared far and away much better than its EM peers. Compared to something like the Brazilian real, there is no comparison. The ruble has been relatively steady following an initial drop in April with the imposition of sanctions. April 19 came and went, and while that date is displayed prominently across all the key currencies it [...]

Is It Over?

By |2018-05-01T17:10:13-04:00May 1st, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

The world is full of anomalies. It may seem like a paradox, but financial markets are particularly eventful places. Something happens, some people notice, and most often it goes…nowhere. It’s all the time and a constant part of analysis, trying to identify and separate what is truly contained. The global eurodollar monetary system grew so far and so fast in [...]

The Very Important Task Of Trying To Figure Out What Happened In The Middle

By |2017-02-08T18:09:31-05:00February 8th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The whole point of any “stimulus” is to buy time. The idea is to keep the economy busy or, in the case of more purely monetary policy, happy during that time so that the economy on the demand side can on its own heal. In the parlance of orthodox economics, “stimulus” reduces the output gap, the difference between current output [...]

Why Different Hasn’t Been Different

By |2016-12-01T18:25:29-05:00December 1st, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Rumors persisted in China of new foreign currency restrictions from state authorities now trying to crack down on corporate activity. The story was picked up in many news outlets all over the world, but will remain unconfirmed as it is based on reports from the South China Morning Post and others inside the country that have only claimed to have [...]

More Testing For The Nightmare Scenario

By |2016-11-15T18:21:37-05:00November 15th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Clichés are clichés for a reason, largely because their meaning no longer requires precision in order to communicate information. Because of that, their use is usually limited to cultural exchanges, being largely shunned in areas when technical proficiency requires a high level of exactitude. Economics and finance in more recent years, really since August 2007, seemed to have shifted more [...]

‘Rising Dollar’ Again To Start This Week

By |2016-11-14T18:47:36-05:00November 14th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The rout in EM’s continued into this week, suggesting that the negative reactions last week may have been more than reflexive recoiling to whatever catalyst. The media is struggling to figure it out, and so has brought up the usual suspects even though there is great inconsistency in doing so. Expectations of fiscal stimulus, infrastructure spending and reflationary policies under [...]

An Unwelcome Participant In The Inconsistency

By |2016-11-11T18:07:12-05:00November 11th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

China’s State Administration of Foreign Exchange (SAFE) reported a large drop in forex assets in October. This was unsurprising given what we already know of “dollar” conditions from the behavior of the exchange rate itself. The pattern is by now very well established and quite predictable. At -$45.73 billion for the month, it was by far the largest decline in [...]

It’s Not Really About Deutsche Bank

By |2016-09-26T12:41:42-04:00September 26th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It is never a good thing when official sources either named or unnamed are quoted in the media as denying bailout discussions. For any bank such rumors and denials are harmful because, obviously, they are a reflection of common perception. Furthermore, most people know all-too-well the true nature of any denials, thus reinforcing only that much more the troubling perceptions [...]

SAFE Plus TIC Equals TED?

By |2016-08-15T20:00:48-04:00August 15th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

China’s State Administration of Foreign Exchange (SAFE) reported a slight decline, -$3.6 billion, in foreign “reserve” assets in July. That followed a $13 billion “inflow” in June, which was the largest since early last year, maintaining the same pattern that we have observed for some time. A positive month isn’t so much an “inflow” as very likely forward operations from [...]

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