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October 21, 2018

No Signs Of Brexit Fading As A Market Factor

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


Brexit Talks Stalled? Headlines from the EU Brexit Summit are suggesting that negotiations between the U.K. and EU are stalled. U.K. Prime Minister May has nothing new to offer Brussels and in fact might have already offered more than she can deliver, and the EU negotiating strategy now appears to be to let talks drag on indefinitely until the U.K. reconsiders and holds a new referendum that the EU feels would not be approved. EU officials are already touting a “no-deal” Brexit Summit in November if no progress is made. They say that November 1

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October 14, 2018

Fed Should Take A Breather On Policy Tightening Before It's Too Late

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


U.S. economy starting to run out of Steam? Many are increasingly worried that the U.S. economy might be starting to run out of growth momentum. They have been pointing for a while at the high end of the housing market and are noticing now that its softness is showing up at the lower price points. Additionally, the steady “normalization” of Fed policy has seen short-term rates steadily rising. At this point, it appears that the central bank has lost its fix on what the “neutral level” of Fed funds might. Once it was put at 2.50% (c

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October 04, 2018

Diverging Manufacturing PMIs Raise a Red Flag For EUR Vs. USD

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


Final September 2018 Manufacturing PMIs Display Strong Divergence Between EZ And U.S. PMI Survey resuls fall into the category of “soft” data, as they are not the “hard” data usually released by governmental agencies. Nevertheless, I like these reports because they are calculated on a similar basis more or less simultaneously for many individual economies. I usually compare the manufacturing series, even in Service economies, because it is tends to be more sensitive to changes in business conditions than the Service sector.
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September 30, 2018

Fed Chair Powell and ECB President Draghi send Hawkish Messages

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


Fed Hikes Fed Funds Target Range By 25bps, As Expected On Wednesday, the Fed raised its Fed Funds target by 25bps to 2.00%-2.25% as the markets had fully priced in. This was a quarterly FOMC meeting, so it included a press conference with Fed Chair Powell. Also, the central bank has fallen into a pattern of changing interest rates only at the quarterly meetings. I suspect that this pattern could change some time soon. Chair Powell was upbeat on the economy. He said that the economy is strong, and that inflation is stable and that overall, the growth outlook re

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September 23, 2018

Fed to hike Rates By 25bps On September 26

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


Futures Markets Running Dead Certain 100% Odds on a +25bp Fed Funds Hike The silence on Fed policy has been deafening for the past month or so. If the central bank had been worried about the markets pricing in with complete certainty a 25bp rate hike at this meeting, it would have been getting the story out in the press that there are serious doubts about this outcome. The current Fed Funds target range of 1.75-2.00% will be raised to 2.00%-2.25% as the central bank attempts to get rates to what they perceive to be market neutrality of 2.50%. On this score,

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September 16, 2018

ECB Steady Policy; Draghi Turns Hawkish Bank Of England Policy Steady.

ECB Steady Policy; But Draghi Turns Hawkish Bank Of England Holds Policy Steady.

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


ECB Keeps Policy On Hold, but Draghi Decidedly Less Dovish As expected Thursday, the ECB kept its seven day refinancing rate steady at 0.0% and its Marginal Lending Facility Rate unchanged at -0.40%. The bank reiterated that it expects key interest rates to remain at current levels until the summer of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to levels that are below, b

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September 16, 2018

ECB Steady Policy; Draghi Turns Hawkish Bank Of England Policy Steady.

ECB Steady Policy; But Draghi Turns Hawkish Bank Of England Holds Policy Steady.

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


ECB Keeps Policy On Hold, but Draghi Decidedly Less Dovish As expected Thursday, the ECB kept its seven day refinancing rate steady at 0.0% and its Marginal Lending Facility Rate unchanged at -0.40%. The bank reiterated that it expects key interest rates to remain at current levels until the summer of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term. De

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September 09, 2018

Bank Of Canada Holds Policy Steady; Signals October Hike


Bank Of Canada Leaves Key Target Rate Steady At 1.50% On Wednesday, as expected, the Bank of Canada left policy unchanged. There was a slightly dovish tone to the latest policy statement, but the central bank said that recent data reinforces the view that higher rates will be warranted. We recently saw Governor Polotz at the Jackson Hole conference interviewed on television seeming to imply that the Bank of Canada was comfortable following the lead of the Fed. Markets have already priced in a 25bp Fed rate hike this month (September 26) with near certain odds. At the time of the interview, markets were still digesting the July Canadian inflation data

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August 26, 2018

Markets Looking Forward To Rising Canadian And U.K. Interest Rates


Latest Canadian Consumer Prices Running Hot Key data this week were July Canadian Consumer prices which increased 3.0% year-on-year. This was unexpected and up significantly from 2.5% in June. The markets had been expecting an unchanged print. On a mo/mo basis, prices rose 0.5%. Core inflation was broadly unchanged. For instance, the Bank of Canada CPI-median measure was up only 2.0% yr/yr.. Many analysts felt that headline inflation might have been a one-off increase, reflecting fuel increases and higher labor costs in the airline industry. However, the economy has been beating expectations and excess capacity in the economy appears to be limited. Fu

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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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