I suppose it’s easy to look at gold and see only fear. It is, after all, the ultimate currency hedge. Therefore, if the price is rising there is probably a good chance fear over monetary considerations is, too. The opposite interpretation, then, would appear to be just as straightforward, but it’s often complicated by the mechanics of wholesale global eurodollar [...]
One of Candidate Trump’s biggest priorities was to renegotiate NAFTA. Seen as an accelerator for harm not just inside of the nation’s rust belt, the incoming administration made it a top priority. Blaming the trade deal for the loss of 700k manufacturing jobs, Robert Lighthizer, the US’s top trade official for the renegotiation process, said in August as talks got [...]
Last week’s Chart of the Week kicks off this week’s, though it will have to wait for a series of explanations to get us from that one to this. A week ago, we noted the growing divergence between leveraged loan prices and WTI, two risk indicators that used to be pretty well correlated for obvious reasons. The S&P/LSTA Leveraged Loan [...]
In later 2014, the Bank of Russia began to repo out eurodollars to local Russian banks. These financial institutions were being increasingly deprived of “dollar” funding on global markets. It made sense that Russia’s central bank would step in on their behalf, redistributing what it could out of its own pocket (though exactly which one was never made clear) to [...]
The American view of the “rising dollar” period is one of truly understated appreciation. I wouldn’t be surprised if many of us didn’t realize there was ever a downturn to begin with, let alone one that flirted with proportions reaching recession. After all, the most widely felt effects didn’t manifest and really sting until the labor market slowdown dragged into [...]
Of all the countries around the world impacted by the “rising dollar”, Brazil got the worst of it, at least out of the major economies. What Brazilians have experienced over the past four years is nothing short of 1929-style collapse. By every economic statistic, that economy has been utterly devastated. In Q2, however, real GDP rose year-over-year for the first [...]
Brazil is another one of those topics which doesn’t seem to merit much scrutiny apart from morbid curiosity. Like swap spreads or Japanese bank currency redistribution tendencies, it is sometimes hard to see the connection for US-based or just generically DM investors. Unless you set out to buy an emerging market ETF heavily weighted in the direction of South America, [...]
Unemployment in Brazil typically rises at the start of each year, a ritual accepted in that part of South America in a way that it isn’t here (residual seasonality). In 2013, for example, from December 2012 through March the rate rose by 1.1 percentage points. The following year, from December through March, it increased by 1 percentage point. This year, [...]
Something had to give one way or the other. With all the oil traders piled onto the long side, either demand had to seriously pick up (or plausibly appear ready to do so) or the weak hands would start to capitulate. But as WTI has pulled back from $54 to around so far $48, the futures market remains nearly as [...]
The fact that China reported a small increase in official “reserves” for February 2017 is one of the least surprising results in all of finance. The gamma of those reserves is as predictable as the ticking clock of CNY, in no small part because what is behind the changes in those balances are the gears that lie behind face of [...]
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