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Focused On The Wrong End of Oil

By |2016-04-27T18:47:53-04:00April 27th, 2016|Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The front end of the oil price complex continues to get all the attention because it seems to further the more optimistic narrative. It is the back end, however, that is most significant. The nearer maturities of the futures curve reflect more the funding environment than the fundamental view of oil and the economy. The lack of continued liquidation has [...]

Still Yen, No China, Now Banks

By |2016-04-07T16:42:43-04:00April 7th, 2016|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

It’s never a good sign when bank stocks are leading any retreat, but that is especially the case given recent events when several high profile banks were at the epicenter of early 2016’s liquidation rerun. As usual, Deutsche Bank and Credit Suisse are the firms most mentioned and among those most disfavored at these times. The media struggles to find [...]

Only One Oil Fundamental Factor

By |2016-03-23T16:47:30-04:00March 23rd, 2016|Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The fundamentals for crude oil continue to be atrocious. Production remains relatively stable if slightly reduced, which is about the only factor in favor of oil prices since the February 11 low. On the other side of the ledger, you don’t hear as much about how it’s all oil supply anymore other than the occasional reference to a “glut” that [...]

Rising Yen as Rising Dollar Only with a Weaker Dollar Shown Via That Stronger Yen

By |2016-03-21T18:00:00-04:00March 21st, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Oil prices remain ebullient, relatively, compared to the dismal start to the year. Everything else, it seems, is driven by that background which means “dollar.” In that respect, we look to China or at least the Asian version of the “dollar” for guidance on triangulating funding conditions and future potential positioning. The CNY exchange is still within the post-Golden Week [...]

Crude and Crude China Financials

By |2016-03-09T17:19:35-05:00March 9th, 2016|Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Crude oil prices in the US have jumped back up to above $38 again, leading various financial correlations toward much less depressing interpretations (chiefly stocks). That in turn has allowed the proliferation of the “it’s all over” narrative despite fundamental accounts that continue to suggest otherwise. Being the sharpest rally in WTI since really last April, these reflections appear to [...]

Fundamental and Finance; Really Downward

By |2016-01-28T18:14:19-05:00January 28th, 2016|Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Rumors persisted about Iran, Russia or OPEC close to declaring productions cuts, so that has to factor at least into sentiment about oil trading. However, with rumors being denied, the physical universe of crude oil especially in the US has been fundamentally more negative again. Yet, oil prices have reached back to almost $34 (front month futures) again today just [...]

Asian Axis of Junk

By |2016-01-13T18:04:30-05:00January 13th, 2016|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

You almost have to marvel at the resilience shown in leveraged loan pricing over the past nearly month. Prior to the Fed’s rate decision on December 16, the leveraged loan market, as with the rest of the junk bubble, was sinking fast and furiously. Since then, however, despite great financial turmoil all over the world, and even in the places [...]

Reading Curves and Finding Only the Death of Money

By |2016-01-11T18:58:21-05:00January 11th, 2016|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

When analyzing the full and true nature of the dissonance between the idea of continued recovery and the financial markets’ scenario for something much worse you realize that this is not a new occurrence. In curve after curve, negativity has been building for years. Financial curves are important because they tell us the health of the monetary economy, namely assumptions [...]

PBOC Wastes No Time Proving Desperation

By |2016-01-11T12:28:30-05:00January 11th, 2016|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

The PBOC wasted no time this week showing that it was serious about its desperation last week. The central bank fixed the CNY reference contrarily upward to 6.583 this morning from Friday’s 6.600. As we have been documenting during this unabated “dollar” problem, whenever the PBOC attempts a contrary maneuver with the fix it typically sets off enormous fireworks. Sure [...]

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