Living in the UK and working in the financial sector, it feels like it's all Brexit and Trump at the moment, interspersed with some economic data and a bit of central bank action. Although the…
Markets Dump after a Cocktail of Negative Issues
Financial markets have just suffered their worst week since February. The catalyst would appear to be a cocktail of rising bond yields precipitated by either concerns over a potential rate rise from the Fed or…
Ranges Have to Break at Some Point
Last week, we set out the case for being constructive on the US Dollar. Although the resilience of the Dollar in the face of weak data is impressive, in reality the Dollar, along with bonds…
The Market’s Reaction to Jackson Hole Demands Attention
Before we get on to the events of Jackson Hole and their impact on bonds and FX, we just wanted to pick up on where we left last week. We outlined some initial thoughts about…
Current Economic Thinking May Need to Change
Having taken my family holiday in July, I had actually been hoping that August would see a pick-up in volatility and offer some trading opportunities. However, with trading ranges compressed and the post Brexit rally…
A Quiet Week but There is Always Something to Look Out For
Not only were financial markets extremely quiet last week, but the recent trend of every asset going up whilst the US Dollar nudges down remained intact. With trading volumes very much in holiday mode, we…
A Positive Cocktail for Risk Assets – Can it get any better?
Another dovish central bank and another strong US employment report, and investors are tripping over themselves to increase risk in their portfolios. With many now also focusing on holidays, the next few weeks are likely…
A Very Important Juncture for Central Banks and the Economy
We want to try and cover a few areas this week. According to the headline data, the US economy remained weak in Q2 and the European economy slowed a bit. There are grounds for both…
Dollar Strength to Come – Implications for Oil and Equities
This week’s commentary is more of an update on views previously expressed rather than anything earth shatteringly new. That said, we do think that there are important developments afoot in the FX markets that have…
Looking for a Turn in Government Bonds and the Japanese Yen
In quite a few ways, recent weeks have been anything but boring. Trying to filter out important events from random noise in markets today feels like a bit of a mugs game, but that shouldn’t…
The Cost of Sanity is Being a Patsy
Albert Einstein is widely credited with saying “the definition of insanity is doing the same thing over and over again, and expecting different results”. The laws of physics dictate that a particular phenomenon will always…
Global Central Banks Continue to Distort Markets
Markets really have been on a roller coaster ride since the Brexit vote. Major equity indices have enjoyed a remarkable rally the last few days predicated we believe on hopes for a further round of…
A Financial and Political Turning Point
It’s been an incredibly long couple of days as we tried to navigate the initial fallout from the ‘Brexit’ vote in the markets, and then sit down to consider the longer term implications of what…
The Continuing Story of Central Bank Failure
We have been meaning to write an in depth report on central bank policies for some time and the market responses to recent BoJ policy decisions as well as the Fed meeting and press conference…
Another European Summer of Discontent
Five of the last six Summers have seen European troubles bubbling to the surface. It appears that this year, Europe is again struggling to contain some wildfires that have just taken hold. Indeed, after four…
Data Dependent US Central Bank Just Found Life More Difficult
Two weeks ago in our note titled “Markets have to adjust as Fed alters course”, we said the following; “…The Fed is continuously worried about upsetting financial markets if they remove the punch bowl. They…
Picking the Low Hanging Fruit
Anyone who has got to know our views over the last 12 months or so has probably heard us talking about trying to pick low hanging fruit. By this, we obviously mean that we wish…
Financial Markets Need to Adjust as Fed Alters Course
The Fed’s normalisation process has been a tortuous on/off affair primarily because their focus has been almost entirely on not upsetting the financial markets rather than doing the right thing for the long term health…
Patience Needed as Investors Seek Instant Gratification
As most of us know, trying to predict financial markets is frustrating nearly all of the time, and downright impossible too much of the time. Part of the problem is that everyone wants instant gratification.…