LIBOR

Is It Over?

By |2018-05-01T17:10:13+00:00May 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 [...]

It’s The Track Record That Is Unaccounted-for Risk

By |2018-04-25T19:46:51+00:00April 25th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

No one seems able to account for the rise in LIBOR-OIS. I think it’s a vain effort, and focuses on the wrong segments, but nonetheless there is considerable uncertainty which always casts suspicions into the shadows. That is important.  A few weeks ago, all the big bank analysts were alight with their theories. They couldn’t [...]

Renewed ‘Reflation’ From A Short-term Dollar Perspective

By |2018-04-20T19:28:26+00:00April 20th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s worth revisiting the topic of the “rising dollar.” What determines its exchange value in the first place? Orthodox convention associates the general direction up or down with interest rate differentials, the infamous global carry trade. Not just any interest rate comps, either, but those of short-term money markets. Thus, if the Federal Reserve is [...]

Hong Kong, China, And The Nightmare of Forex Piles

By |2018-04-13T19:35:35+00:00April 13th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Very early on in the turn, I mean very early, you could already tell there were substantial problems underneath. By the time CNY started lower, against all expectations, there had already been serious signs of trouble in China for months by then. In that initial seemingly minor drop in early 2014, the PBOC’s actions belied a [...]

What’s In A Spread? Euro$ Futures Have Been Anticipating LIBOR-OIS For Seven Months

By |2018-04-02T19:44:42+00:00April 2nd, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Since LIBOR is a hot topic again, though no 2a7 in sight, I thought I’d add one additional perspective that isn’t found in any other analysis. LIBOR is, of course, a money rate applied not to domestic funding but eurodollars on offer in London. The current criticism of the rate stems from the fact that [...]

The X’s and Y’s Of Jerome Powell & The Long End, As Calculated by Eurodollar Futures

By |2018-03-13T19:29:16+00:00March 13th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

For the end-of-bond-bull-market-crowd, 3% is a line in the sand. There is no inherent significance in that number, except that it’s a round one. The benchmark 10s as of now trade with regard to that level as if it’s a ceiling. That’s what makes it so momentous. In 2013, the yield finally broke 3% the [...]

A Boom Of Hysteria

By |2018-02-13T12:28:08+00:00February 13th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s always been easy to lose perspective. In the modern social media age, maybe it has become even easier. Conventional wisdom rarely seems to get challenged anymore, particularly given the assignment of “what everybody knows.” Big Data is, for example, predicated on a very good theory, the wisdom of crowds. It hasn’t yet lived up [...]