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US Bond Market Week in Review: The Fed Is Chasing An Inflation Ghost

By: HaleStewart

The Fed voted to raise rates an additional 25 basis points. After noting the economy was growing solidly, the observed: Consequently, the Committee continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will remain strong. Read more

Fed rate hikes and the Phantom Menace of inflation

By: New_Deal_democrat

With this morning's CPI report, inflation has run at a whopping 2.2% YoY. Core inflation is still under 2%. In other words, if the Fed is fighting inflation, it is a Phantom Menace. While in most cases, as shown in the first graph below showing the last 70 years, the Fed has raised rates generally coincidentally with an increase in inflation, three times before, the Fed has raised rates in the face of an inflation phantasmagoria: Note that the late 1950s and 1960s, and again in 1994 there was a Fed rate hike campaign in the face of no or virtually no increase in inflation. Let's take a closer look at what happened each time. Read more

XE Market Analysis: North America - Dec 13, 2017

By: XE Market Analysis

The dollar recovered its poise during the London AM session after taking a hit during the Asian session on news that a Democratic candidate won a Senate seat in the state of Alabama for the first time since 1992, which was taken as a possible threat to the implementation of the Trump agenda. Read more

XE Market Analysis: Europe - Dec 13, 2017

By: XE Market Analysis

USD-JPY took a 30-pip clobber on news that Democrat Doug Jones won the election for an Alabama senate seat, the first time there's been a Democratic Senate member from that state since 1992. The market narrative is that this will erode the chances for corporate-friendly legislation in the U.S., with the Republican advantage in the Senate ebbing to 51 to 49 from 52 to 48 (aside from the fact that the election result bods badly for the GOP in the mid-term elections in November 2018)) . Read more

XE Market Analysis: Asia - Dec 12, 2017

By: XE Market Analysis

The dollar rallied in N.Y. trade on Tuesday, as warmer U.S. PPI, and softer European data supported. In addition, the greenback was bid up into Wednesday's FOMC meeting, where a 25 basis point rate hike is widely expected. Given a hike has been priced in, risk for the dollar appears to be a sell-the-fact sell-off. Read more

XE Market Analysis: Dollar on the Rise as the Fed Meeting Begins

By: xemarketanalysis

OVERVIEW GBP rises after CPI hits a 6-year high. German ZEW survey hits fresh multi-year high US producer prices rise at a faster pace in November. US stock markets hit fresh record highs. HIGHLIGHT The US Dollar is broadly higher as the Federal Reserve commence their two-day meeting to decide whether to raise interest rates for a third time this year. Read more

XE Market Analysis: North America - Dec 12, 2017

By: XE Market Analysis

The dollar has traded softer for the most part, mostly against the commodity currencies, losing over 0.5% in the cases against the Australian and New Zealand dollars, and 0.3% to the Canadian dollar. The dynamic has been concomitant with a 0.7% gain in oil prices, with the gains on the week of crude now tallying over 2%. Read more

XE Market Analysis: Europe - Dec 12, 2017

By: XE Market Analysis

USD-JPY eked out a new four-week high of 113.69, and the New Zealand dollar rallied strongly following an announcement that a new RBNZ governor had been appointed, which was greeted as a something of a relief by Kiwi markets (the currency having been under pressure amid a cloud of policy uncertainty following elections in September). Read more

XE Market Analysis: Asia - Dec 11, 2017

By: XE Market Analysis

FX trade was relatively light in N.Y. to start the week, with little in the way of data to drive prices, and as traders remained largely sidelined into Wednesday's FOMC announcement. The dollar dipped in early trade, before managing a modest comeback after the London close. Read more

XE Market Analysis: GBP Remains Volatile as Brexit Negotiations Rumble On

By: xemarketanalysis

OVERVIEW The Pound claws back some of last week’s losses on Brexit negotiations. The US Dollar slumps ahead of the Fed interest rate decision. Angela Merkel assures markets that coalition talks will be done quickly. HIGHLIGHT Last week, the UK and the EU reached an agreement early on Friday on Brexit divorce terms after working through the night to end an impasse over the status of the Irish border that had prevented an earlier attempt to clinch a deal on Monday. US DOLLAR The Dollar is marginally weaker today as investors and traders alike position themselves before the interest rate announcement from the Federal Reserve. Read more


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