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XE Market Analysis: Asia - Nov 30, 2015

By: XE Market Analysis

FX trade was relatively quiet to end the month of November, though the dollar did post modest gains versus most major currencies. EUR-USD eked out new trend lows of 1.0558 after topping at 1.0584 early in the session. USD-JPY found support at 123.00, though upside was limited to 123.34, an eight-session high. Read more

Comparing new homes sales with housing permits - which leads?

By: New_Deal_democrat

The housing market is the single most leading sector of the US economy. So when it appears to go sideways, that is a cause for concern. One of the anomalies in the economy this year has been that sales of new single family homes peaked in February and have gone nowhere since, while housing permits for one unit structures have continued to rise, and made a new post-recession peak in October: So I decided to take a look at the historical record, and it turns out that it is not unusual at all for single family home sales to make a peak significantly earlier in the economic cycle than permits. The first thing I did was to compare permits for single family homes (blue) with permits overall (red), and permits for multi-unit dwellings (green), first through the 1980s: and from 1990 to the present: In general, permits for single family homes peak at or slightly before permits overall, while permits for multi-unit structures not infrequently peak later. Read more

XE Market Analysis: North America - Nov 30, 2015

By: XE Market Analysis

The dollar posted gains, led by EUR-USD, which edged out a new seven-month low just under 1.0565. Cable also logged fresh seven-month lows, at 1.5001. USD-JPY rose some 0.25%, trading above 123.00 for the first time in a week. USD-CHF is also up, but remained shy of the five-year peak it saw on Friday, at 1.0328. Read more

XE Market Analysis: Europe - Nov 30, 2015

By: XE Market Analysis

The dollar and other G3 currencies are near net unchanged in early-week trade just ahead of the London open. EUR-USD has been plying a narrow range in the upper 1.05s, while USD-JPY has been doing likewise in the upper 122s. Mixed economic figures out of Asia led to mixed performances across currencies and Asia equity markets. Read more

US Equity And Economic Review: Moderate Growth and Declining Earnings, Edition

By: HaleStewart

The BEA issued its second GDP report last week, increasing the 3Q GDP estimate to 2.1%. Real gross domestic purchases – a measure of strictly domestic demand – increased 2.8% Y/Y. From the report: The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, state and local government spending, residential fixed investment, and exports that were partly offset by a negative contribution from private inventory investment. Read more

US Bond Market Week in Review: Diverging Oil Price Predictions and Rising Junk Yields, Edition

By: HaleStewart

One of the central debates occurring within the Fed regards the causation of current inflation weakness. Some, like Fed President Bullard and Chairman Yellen argue low oil prices are solely responsible for the weakness. Ohers like President Brainard and Chicago Fed President Evans see a more nuanced picture involving declining international trade negatively impacting a wide swath of commodity prices. Read more

International Economic Week in Review: A General Tenor of Malaise, Edition

By: HaleStewart

In A Hard Look at a Soft Global Economy, author Michael Spence outlines the primary issues facing the global economy. He begins by noting that since the end of the crisis, the world issued $57 trillion in debt to fuel growth. And potential deflation makes repayment of that figure more difficult. Read more

Weekly Indicators: the intensified deflationary pulse continues edition

By: New_Deal_democrat

Monthly data for November included a decline in both consumer confidence measures. October data included an increase in new home sales although not to a new peak, and a decline in existing home sales. Personal income and spending both rose. Durable goods orders rose. Read more

Corporate profits as a leading indicator for stock prices: Q3 profits update

By: New_Deal_democrat

This is an update as to a relationship I have written about a number of times already. See, e.g., http://community.xe.com/blog/xe-market-analysis/corporate-profits-leadin... The relationship is straightforward: if corporate profits are a long leading indicator for the economy, and stock prices are a short leading indicator, then logically corporate profits should lead stock prices at least in terms of direction, if not necessarily in terms of volatility. Read more


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