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February 18, 2018

Dollar Worries Starting To Mount As Foreign Investors Reduce Exposures

Dollar Worries Starting To Mount As Foreign Investors Reduce Exposures

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


Equity Markets Volatile With Prices Correcting Financial Markets have seen considerable turmoil in recent weeks, with Forex and Fixed income markets following the lead of equities. On Wednesday, U..S. January CPI data came in hotter than expected and solidified market expectations for a rate hike the March 21 Fed Meeting. This will be the first meeting by Jerome Powell as new Fed Chair. Powell will also get a chance at this meeting his first chance to face the press. Before t

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February 11, 2018

Markets Dealing With Extreme Turmoil

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


Equity Markets Volatile As Prices Correct Following an extended period with no correction, share markets finally paused after fixed income markets started to worry about rising market interest rates in the U.S. as expectations for a rising U.S. budget deficit mount. The benchmark 10-yr bond yield has decisively broken out of its previous well- worn 2.70%-2.80% fluctuation range to a new level supported at 2.80%. Late this week the 2.90% level was approached and many fell that the 3.00% line will be seen fairly soon.

As equities went through pe

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February 04, 2018

Central Banks (Fed and ECB) Continue To Roil The Markets

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


Fed Holds Rates Steady For Now To the surprise of no one, the Fed held rates steady with a Fed Funds target range of 1.25% to 1.50% on Wednesday January 31. Market odds were near zero for a rate hike beforehand. As for the next meeting on March 21, the odds strongly favor (92%) a 25bp hike in the Fed Funds target range. Wednesday was the final meeting with Janet Yellen as Fed Chair. She will be replaced by Jerome Powell shortly. The policy statement has a strong tightening bias going into Powell’s first meeting as Fed Chair. Furthermore, He is schedul

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January 28, 2018

Treasury Secretary Mnuchin Bombshell Sets Stage For Forex Volatility -- UPDATED

UPDATE: I have left the report below as written even after President Trump and Secretary Mnuchin said that Mnuchin’s comments had been taken out of context. I heard his comments directly when spoken several times. His initial comments were perfectly clear and needed no clarification. My best guess is that the Administration got considerable push back from senior financial market players at home and officials overseas over this new forex policy. My best guess is that we revert to the pre-existing policy of “benign neglect” of any USD weakness, with no overt encouragement of additional weakness

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January 21, 2018

“Dovish” Bank of Canada Policy Tightening. ECB Meeting Thursday Could Be Revealing

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


Bank Of Canada Raises Rates As was widely expected, the Bank of Canada raised its target rate for overnight funds to 1.25% by 25bps from 1.00%. In his press conference afterwards, Bank of Canada Governor Poloz said that the rate rise “'validates” data we have seen and that it was not a “no brainer”. Furthermore he said "Today we have more room than we did a year ago; with economy in such good health, we are confident we can continue to build on this". He warned that we cannot assume the end of NAFTA would be only a small shock, but

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January 14, 2018

Central Banks Abandoning Overly Easy Monetary Policies And Upset Market Status Quo

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


ECB Quantitative Easing Bombshell The ECB recently started to publish the Minutes of their policy meetings three weeks afterwards, and up until the latest week they have ben inconsequential. That changed on Thursday when it was reported that the central bank could consider shift in policy guidance from early 2018. The comments suggested that the ECB discussed moving further away from excessive monetary support for the economy more quickly that generally assumed. Many feel the ECB has been overstaying its support of the Eurozone economy. In response to this hi

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January 07, 2018

Why Higher Fed Rates Haven’t Helped the Dollar

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


USD Not Responding Positively to Higher Fed Funds Target  The prospect of a tighter Fed policy during the second half of 2017 and into the new year has not been providing the USD with the support that we might have expected. We have been scratching our heads about this since forex markets usually are driven by short-term interest rates. The Fed has increased the top end of the range on Fed funds by 100 bp from early December 2016 until the final FOMC meeting of 2017. In the same time period, the yield on the 10-yr yield has been virtually unchanged

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December 17, 2017

Janet Yellen and The Fed Do Not Disappoint The Markets

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


Fed Raises Fed Funds Target By 25bps  On Wednesday December 13, the FOMC announced a +25bp hike in its Fed Funds target range to 1.25-1.50% from 1.00-1.25%. This hike was as widely expected, after having been signaled by the Fed. The Fed also released its quarterly “dot plots” forecasts for the Fed Funds rate in 2018. It showed members of the committee as a group were expecting three rate hikes in the new year. Many in the markets had been expecting these forecasts might show four rate hikes. As for the Fed Funds futures markets,

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December 10, 2017

Busy Week Ahead For Major Central Banks. Fed Rate Hike Widely Expected

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


Fed Hike a Done Deal  The financial markets have already priced in a 25bp rate hike at the FOMC meeting next week (December 13) with the target range for Fed funds moving higher from 1.00-1.25% to 1.25 to 1.50%. Given that this move is widely discounted, it is difficult to guess how the markets will react to this decision. Markets are always forward looking, but we have to wonder if Fed Chair Yellen will want to hamstring Fed Chair designate Jerome Powell with a a forward rate hike signal in addition to a rates hike before he comes into office early next

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December 03, 2017

Global Economic Recovery Building Steam. New Fed Chief A Dove?

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


Economic Growth Accelerating Forex markets are in a state of flux as global economic activity appears to be gaining steam. This recovery has been uneven, and this lack of consistency has been reflected in a volatile lead EURUSD forex relationship. From early August until now, the EURUSD pair has traded a rough 1.1550 to 1.2100 range and it appears at the present time that the EURUSD is preparing for a run at the top of this range (1.2093). While financial officials generally keep mum about specific forex trading levels, we have been hearing pretty consistentl

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November 19, 2017

Market Seasonality And The British Pound Remains in the Spotlight

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


Seasonality In Forex Activity Forex trading has always been marked by strong seasonality. Following the arrival of the robots, some of the seasonality has been diminished. Nevertheless, end of month and end of quarter trading still have their special characteristics. The end of the calendar year, which is characterized by end of year for many financial statements and a number of global holidays tends to see institutions, such as central banks, trying to get decisions out of the way so that their profile is reduced in the final half of December and into th

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November 12, 2017

Continuity In New Fed Chair. The British Pound Bears Watching

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


Period Of Calm In Forex Trading? Markets have moved into a quiet period in the latest week as most of the current market uncertainties around the USD have lifted. Money markets are indicating now that a 25bp hike in the Fed Funds target range from 1.00-1.25% to 1.25-1.50% is a near certainty at the December 13 FOMC. Most money market economists are predicting a hike, and Fed Funds futures contracts are placing a near 90% probability on a rate hike at that conference.

Furthermore, the Trump Administration has made its selection for the next

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November 05, 2017

Fed Remains On Track For A December Rate Hike. Bank Of England “Dovish” Hike

John M. Bland, MBA


No Fed Policy Change; New Chair Named As widely expected, the U.S. Federal Reserve kept policy steady at its November 1 meeting. Since instituting quarterly press conferences mid-month in March, June, September and December, all but those special meetings have informally eliminated as dates for policy changes. It is now generally accepted that the central bank would prefer an opportunity to explain itself when major policy decisions have been made. Of course policy changes can be executed at non-press conference meetings, that has not happened yet. On the other hand, for several months no

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October 29, 2017

ECB Cuts Back On Quantitative Ease, As Expected. Markets React Strongly

John M. Bland, MBA


Buy The Rumor; Sell the Fact? There were no major surprises in the closely watched ECB policy decision on Thursday October 26. This was probably the most closely followed ECB decision ever because the ECB has been well behind the Fed and Bank of England in gradually pulling away from aggressive policy accommodation. ECB President Draghi has a market reputation for being a policy dove and forex markets took this ”policy tightening” as not as aggressive as they might have liked. The main focus of the markets was by how much the ECB would reduce its asset purchases (bonds) when t

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October 22, 2017

Catalonia Independence Heating Up; Fed Rate Hike Odds Rise

John M. Bland, MBA


Catalonia Stands Up To Madrid On Thursday, the Catalan President, Carles Puigdemont, stood up to Madrid by refusing to drop its independence claim for the region. Spanish PM Mariano Rajoy said his government (Spain) said it would move ahead with its threat to suspend the powers of the regional administration. Madrid said it would hold an emergency Cabinet meeting on Saturday, October 21st to begin process of suspending Catalan autonomy under Article 155. Rajoy plans to go ahead with Article 155 procedures to restore rule of law in Catalonia. Following Cabinet meeting, this declarat

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October 15, 2017

Fed Bias In Favor Of A December 13 Rate Hike

 

John M. Bland, MBA


”Unlawful” Catalonia Independence Vote Wins BigCentral banks continue to be the dominant influence in forex trading and in the financial markets generally. Most appear to be in the process trying to back away from supporting the markets and economies ever since the 2008 financial crisis. Different economies are at different points in their recovery process and those differences are reflected in the different policies of the respective central banks. Last Wednesday, traders focused intently on the Minutes of the FOMC meeting from September 20. The USD seems alway

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October 08, 2017

Catalonia Simmers While U.S. Economic Picture Improves

John M. Bland, MBA


”Unlawful “ Catalonia Independence Wins Big Last Sunday voters in the Catalonia region of Spain apparently overwhelmingly vote in favor of independence from Madrid. On Thursday, Spanish Economy Minister Luis de Guindos ruled out mediated talks with separatist leaders . He said independence is out of the question and that Spain has nothing to discuss with the secessionists until the rule of law is restored. Clearly, Madrid is taking a hard line on the vote by questioning its very legitimacy. There are press reports that Prime Minister Mariano Rajoy and his minority governme

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October 01, 2017

More Unexpected Policy Twists And Turns By The Fed

John M. Bland, MBA


Chair Yellen Does It Again! I was taken aback by the lengthy Yellen speech last Tuesday. It was an academic presentation laced with an update of current conditions. Most of us had felt Yellen could have nothing new to say after the recent Fed meeting, but included in her speech, she sent a hawkish signal to the markets about the December FOMC meeting. It took a while for the markets to figure out if she was sending a hawkish or a dovish message. The bottom line is that the Fed is having trouble with its economic models when it comes to inflation. She said the Fed has to pre-emptive when i

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September 24, 2017

Janet Yellen “the Hawk” And The Fed Deliver

John M. Bland, MBA


Janet Yellen, the unlikely hawk On Wednesday the Fed took a more hawkish policy stance than the markets were expecting. As expected, the Fed Funds target range was held steady at 1.00-1.25%. However, the central bank hinted at a tightening bias for the December 13 meeting. Also, as expected, the Fed announced that it would start to unwind its massive investment portfolio in October.

The vote was a unanimous 9-0 and the policy statement indicated that risks to the economy remain toughly balanced . The surprise was that a December interest

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September 17, 2017

Bank Of England Strikes A Blow Against Perpetual Quantitative Ease?

John M. Bland, MBA


Quantitative Ease (QE) Everywhere In this era of endless Quantitative Ease (QE), the focus always is on the major central banks. The hope for many investors is that this period of uncontrolled money printing of money will die a natural death, but it seems that something new is always standing in the way. Many yearn for a return to a “normalized” monetary policy and fully functioning money markets in the major economies, but it seems that something new is always standing in the way. The latest concern is that the Fed might feel the n

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  • Dollar Worries Starting To Mount As Foreign Investors Reduce Exposures More »
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  • Treasury Secretary Mnuchin Bombshell Sets Stage For Forex Volatility -- UPDATED More »
  • “Dovish” Bank of Canada Policy Tightening. ECB Meeting Thursday Could Be Revealing More »