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August 19, 2018

Turkey Political and Currency Crisis Dominates Late Summer Trade

John M. Bland, MBA, co-founder, Global-View.com


Turkey Crisis Dominates Trading Activity The political and currency crisis in Turkey dominated trade at the end of last week and in the first part of the current week. There are many dimensions to the problem. Markets were most worried about the risk of contagion, however, only a handful of European banks were exposed to Turkey. Furthermore, the risks of significant problems in the European banking system were seen as minimal. The European Central Bank (ECB) has been keeping a close eye on the situation and has ready to act if needed. The imposition of ta

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August 12, 2018

USD Range Trading. Reserve Bank Of Australia Dovish

John M. Bland, MBA, co-founder, Global-View.com


EURUSD Trading In Ranges Summer markets this year have been unusually thin. The EURUSD pair has been in a rough 1.15 to 1.1650 range with daily price ranges in between excessively choppy due to seasonal illiquidity. The GBPUSD and EURGBP pairs have been volatile as well due to ongoing Brexit discussions and wildly differing wire headlines. Markets should return to near normal liquidity conditions in the second half of August.

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August 05, 2018

Bank of England Hikes Rates, More Fed Hikes Coming, And Bank Of Japan Dovish

John M. Bland, MBA, co-founder, Global-View.com


Bank OF England Hikes Key Rate By 25bps To 0.75% As expected, the Bank of England hiked its key Repo Rate by 25bps on Thursday to 0.75%. Market odds on a hike at this meeting had been 90% in favor of this tightening into the meeting. The street consensus on the vote was 7-2, but it came out at 9-0 in favor of the hike. My view was this simply the view on this decision alone. I don’t feel the committee was sending a signal about the future. Afterwards. some in the markets were calling this a “dovish” rate hike. The central bank reiterated rei

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July 29, 2018

Markets Still Trying To Digest Dollar Policy of Trump Administration; ECB Meeting

John M. Bland, MBA, co-founder, Global-View.com


Trump Statements Opposing Strong Dollar Still Being Absorbed A week ago U.S. President Trump took the unprecedented step in recent history of talking down the USD and opposing further policy tightening by the Federal Reserve. The last President to jawbone the Fed not to raise interest rates was Richard Nixon in the early 1970’s. Since then its been taboo for a President to encroach on the independence of the Fed by commenting on monetary policy. As for his comments on forex, after too many misstatements by untrained government officials, it has become

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July 22, 2018

Doubts Starting to Surface About An August 2 Bank Of England Rate Hike

John M. Bland, MBA, co-founder, Global-View.com


June U.K. Inflation Data Miss Consensus Estimates Markets were surprised on Wednesday after the June CPI data fell short of street estimates. The month on month CPI was uchanged at 0.0% vs. estimates for a gain of 0.20% and the yr/yr reading was 2.40% vs. 2.60% estimated. Core CPI was 1.90% vs 2.10%. Headline CPI remained above its target, but well below the six year high of 3.10% set in November. Following the release, street probabilities for an August 2 rate hike fell to 74% vs. 83%. Some also are taking note of the recent declines in crude oil prices will

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July 15, 2018

Brexit Developments Continue To Drive Sterling

John M. Bland, MBA, co-founder, Global-View.com


U.K. Prime Minister May On The Defensive  PM Theresa May remains on the defensive as she serves as head of a party divided. Some feel she might have emerged from the latest Brexit-triggered crisis safely as U.K. prime minister. However “hard Brexit” lawmakers were warning that she could split the Conservative Party when she tries to get her plan through Parliament. Two of her most senior ministers resigned in one day. This was an event without parallel in recent decades. May’s plan is seen as a “soft Brexit” proposal that w

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July 08, 2018

German Chancellor Merkel Survives Leadership Crisis. Bank Of England to Hike?

 

John M. Bland, MBA, co-founder, Global-View.com


Merkel To Survive? Late Monday, word got out that German Chancellor Angela Merkel and Interior Minister Horst Seehofer had reached an agreement which ended a two-week face-off over immigration. The dispute between two parties in the ruling coalition had threatened to break up the government. Merkel has staked her legacy on welcoming hundreds of thousands of migrants into Germany. She agreed on Monday on camps for those seeking asylum and to tighten the border with Austria to rescue her government. The plan envisions setting up holding ce

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July 01, 2018

Despite Strong Fundamentals The Dollar Advance Has Been Underwhelming

John M. Bland, MBA, co-founder, Global-View.com


Dollar Should Be Doing Better? The strongest fundamental force in forex trading tends to be interest rates. After the most recent Fed meeting (June 13), the Federal Reserve sent signals that further rate increases are likely. The Fed has made clear the view that it sees 2.50% to 3.00% as the equilibrium level for Fed Funds (Current target range top 2.00%). Latest FOMC member interest rate forecasts suggest most now expect two more 25bp interest rate hikes this year. Three further hikes are then expected in 2019 and one more increase is expected in 2020.

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June 24, 2018

Bank Of England Decision More Hawkish Than Expected

John M. Bland, MBA, co-founder, Global-View.com


BOE Decision Sends Hints Higher Rates Could be In Store For Future The closely-followed Bank Of England policy decision Thursday saw no change in the Repo Rate of 0.50% as widely expected. Also as forecast, there was a unanimous vote to keep total asset purchases (QE) steady at GBP435bn per month. As for the rate decision, three members voted for an immediate 25bp rate hike. The Previous vote had been 7-2. The new dissenter was Chief Economist Andy Haldane, who dissented for the first time. This marked the first dissenting vote for a hike by a Bank insider si

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June 17, 2018

Fed More Hawkish Than Expected. ECB Disappoints

John M. Bland, MBA, co-founder, Global-View.com


Eventful Fed Meeting Sees Key Changes As expected, on Wednesday, the Fed raised its target range for Fed Funds by 25bps to 1.75%-2.00%.This change had been fully priced in by the markets well ahead of time. With the rate hike already discounted, the main focus of markets was on the Fed’s the forward guidance. The Fed policy statement continued to indicate that the pace of future tightening would be “gradual” and that “further” increases are likely. The Fed has been making clear its view that it sees 2.50% to 3.00% as the “

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June 17, 2018

Fed More Hawkish Than Expected. ECB Disappoints

John M. Bland, MBA, co-founder, Global-View.com


Eventful Fed Meeting Sees Key Changes As expected, on Wednesday, the Fed raised its target range for Fed Funds by 25bps to 1.75%-2.00%.This change had been fully priced in by the markets well ahead of time. With the rate hike already discounted, the main focus of markets was on the Fed’s the forward guidance . The Fed policy statement continued to indicate that the pace of future tightening would be “gradual” and that “further” increases are likely. The Fed has been making clear its view that it sees 2.50% to 3.00% as the &ldquo

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June 10, 2018

Week Ahead: ECB QE Coming To A Close? Fed To Hike Rates

John M. Bland, MBA, co-founder, Global-View.com


An End To European Central Bank Quantitative Easing (QE) On The Horizon? Too many voices from the European Central Bank (ECB) have been hinting about an end date for QE for this to be coincidental. Many are speculating it will be the end of the year. It smells like a communication strategy is in play to prepare the markets for such an announcement following the ECB meeting on Thursday (June 14). ECB Chief Economist Peter Praet indicated that an assessment of QE would be made at this meeting, and. Bundesbank President Jens Weidmann said that an market expectat

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June 03, 2018

Markets Upset By Political And Economic Turmoil In Italy

John M. Bland, MBA, co-founder, Global-View.com


Italian Political and Financial Crisis Roils Markets Italian political instability came to the fore at the start of the latest week and at the end of the week prior. Concern mounted as two populist parties, one right-wing and the other from the left, were negotiating to form a coalition to mount the next government. One wag said it was tantamount to Bernie Sanders and Donald Trump getting together to rule. The two parties have little in common other than frustration with the political “establishment” in Italy. This frustration is directed at the E

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May 27, 2018

Fed Signals A June 13 Rate Hike, While U.K. Inflation Data Disappoints

 

John M. Bland, MBA, co-founder, Global-View.com


Dovish Tone of May 2 FOMC Minutes Disappoints USD Bulls The Fed indicated that the Fed Funds target could reach neutrality “before too long”. The day after the meeting, the Dallas Fed President Kaplan, speaking for himself, said that a Funds target range of 2.50% to 2.75% would represent "neutrality". Perhaps he might have been speaking for others?

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May 20, 2018

Dollar Breaks Higher Through a Major Psychological Turning Point

John M. Bland, MBA, co-founder, Global-View.com


Establishing Above 3.00% In The Ten-Year Note Yield Has Been A Critical AchievementFor the better part of the current year, forex traders have been focused on the psychological 3.00% yield in the U.S. 10-year Note. More precisely, 3.03% has been the major target for technical traders and others. Once broken, 3.030% was broken in the latest week that yield spiked higher to above 3.10%. With this goal having been achieved, I expect the focus of forex traders Focus now to shift more to the DIRECTION of yields rather than a specific level, now that there are no m

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May 13, 2018

Bank Of England’s Carney, “Mr. Excitement”

John M. Bland, MBA, co-founder, Global-View.com


Bank Of England Changes Market Expectations For Policy Last Thursday saw global financial markets keenly focused on the latest Bank of England policy decision. A month ago, traders had a 25bp rate hike locked into their market expectations. However just about three weeks ago Bank of England Governor Carney had sent signals to the markets that a hike at this meeting was unlikely due to an unforeseen slowdown in 1Q18 growth. Many in the markets were then feeling that Carney had only postponed a rate hike until August of this year and thus were expecting the

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May 06, 2018

Fed Less Hawkish Than Expected. U.S. April Jobs Miss

John M. Bland, MBA, co-founder, Global-View.com


The Federal Reserve’s latest meeting fell last week on May 1-2. As expected, no changes in key rates were announced following the conference. Every other Fed meeting has a press conference afterwards, and the central bank has fallen into a pattern where policy changes are only announced at the meetings with press conferences. While in theory “no-press conference meetings” can see a policy change, this has not happened yet. My hope is that every meeting at some point will include an exchange with the press. Nevertheless, every meeting sees a

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April 29, 2018

Stoic Mario Draghi Does Little Positive For Euro

John M. Bland, MBA, co-founder, Global-View.com


Draghi Puts A Strong Face On a Slowing EZ Economy Markets were setting up for a dovish ECB President Draghi on Thursday after the majority of analysts were saying that he would be forced to take account of what appears to be a global slowing of economic activity. Furthermore, Draghi has a reputation of being a policy dove. However, he surprised many of us as the markets had been expecting him to be more dovish in his commentary. While he acknowledged that both “hard” and “soft” data, e.g. government statistics and PMI reports, were

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April 22, 2018

Doubts About A May Bank Of England Rate Hike Mounting

John M. Bland, MBA, co-founder, Global-View.com


Comments by Bank Of England Carney Adjust Market Thinking About May 10 Rate Hike Bank of England Governor Mark Carney roiled financial markets late Thursday with a speech at the IMF in Washington. His comments cast doubt on a rate hike at the May 10 Bank of England meeting. While Carney said the markets should prepare for a few interest rate hikes over next few years, he warned not to get overly focused on exact timing of a rate hike and that the focus should be more about the general path of interest rates. He said there will be some differences

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April 15, 2018

Recent Eurozone PMI Data Waving A Warning Flag For ECB

John M. Bland, MBA, co-founder, Global-View.com


Recent Eurozone PMI Data Turning Soft I have collected Monthly Survey of Purchasing Managers (PMI) for many years. The PMI data fall into the category of soft, as opposed to hard data, on broad trends in various sectors of economies as reported by Purchasing Managers. The two major sectors surveyed are the Manufacturing and Service sectors of key economies. I prefer the Manufacturing readings, even in the Service economies, because the Manufacturing sector tends to be more sensitive to changes in the business cycle.

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