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What the Fed Thinks: Quarles, Mester, Barker, and some Conclusions

By: HaleStewart

Vice chairman of supervision Quarles explained his opinion of the U.S. economy in a speech on February 26. He began by noting that unemployment was 4.1%. He believes this has “spilled over” into consumer confidence which, in conjuntion with growing household wealth, is sustaining consumer spending. Read more

What the Fed Thinks: Williams and Bostic

By: HaleStewart

This is the second part of my series looking at this year’s committee members to determine who are the hawks and who are the doves. In the first part, we looked at Powell, Dudley and Brainard, all of whom are hawkish. Here, I will start with San Francisco president John Williams who recently explained his thinking in a February 7 speech titled, “Expecting the Expected: Staying Calm When the Data Meet the Forecasts.” Williams has been hawkish for some time; this latest speech indicates he remains so. Read more

What the Fed Thinks: Powell, Dudley, and Brainard

By: HaleStewart

The Yellen era at the Federal reserve is over; the Powell era has officially begun. Yellen had the unenviable task of steering the Fed from an easy money policy to a gradual tightening bias. Her work was cut out for her; when Bernanke tried to raise rates, the market had a “taper tantrum” that caused a spike in interest rates and talk of a fed-induced recession. Read more

Weekly Indicators: slow deterioration of long leading indicators edition

By: New_Deal_democrat

February data included a big increase in the Index of Leading Indicators, positive existing home sales month over month, and positive durable goods orders. A small decline in new home sales was the only negative. My usual note: I look at the high frequency weekly indicators because while they can be very noisy, they provide a good Now-cast of the economy, and will telegraph the maintenance or change in the economy well before monthly or quarterly data is available. Read more

XE Market Analysis: Asia - Mar 23, 2018

By: XE Market Analysis

The dollar weakened in N.Y. trade on Friday, weighed down by ongoing trade concerns, as China said it would slap tariffs on some U.S. exports. Trump spooked the markets when he threatened to not sign the omnibus spending bil (though he later signed it), resulting in lower equities. Read more

XE Market Analysis: North America - Mar 23, 2018

By: XE Market Analysis

The dollar is softer today, although above lows seen yesterday versus many of the main currencies, or above the 16-month low that was seen during the Tokyo session earlier today in the case against the yen. EUR-USD clocked a high at 1.2349 earlier, since settling lower by remaining 0.2% up on the day. Read more

XE Market Analysis: Europe - Mar 23, 2018

By: XE Market Analysis

The yen remained underpinned as risk aversion continued to course through global markets on the realizing threat of Trumpian trade wars. USD-JPY logged a 16-month low at 104.64. Japanese inflation data today may have given the yen an added bid, with the BoJ-watched core CPI reading rising to a rate of 1.0% y/y in February from 0.9% in the month prior, although the rate is still well off the central bank's 2% target. Read more

XE Market Analysis: Asia - Mar 22, 2018

By: XE Market Analysis

The DXY bounced to 89.96 highs, after printing 89.41 one-month lows in London morning trade. Risk off conditions prevailed through the session, as trade concerns rose following Trump's direction to the U.S. Trade Office to consider increased tariffs on Chinese goods, with a list that initially would include $50 bln in Chinese exports. Read more

An examination of the rare inversion of *direction* in long vs. short bond yields

By: New_Deal_democrat

Something unusual has happened in the movement of short vs. long term bonds. I'm not talking about a yield curve inversion, because obviously there hasn't been any. In fact, 10 year bonds are still yielding more than 0.5% higher than 2 year bonds, which was a very typical spread during any expansion between the 1960s and 2000s. Read more

XE Market Analysis: Asia - Mar 21, 2018

By: XE Market Analysis

The dollar initially fell, rose to session highs, then turned choppy after the as-expected 25 basis point Fed rate hike. The dot-plot remained at 3 2018 tightenings (some had been expecting a shift to 4), which was likely the catalyst for the initial dollar-slide. Read more

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