You are here:

All Membership Contents

All

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

Read More

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

Read More

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

Read More

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

Read More

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

Read More

September 10, 2017

Key European Central Bank Meeting Provides Some Clarity

John M. Bland, MBA


ECB: Growth, Inflation, Exchange Rate ECB President Draghi provided some interesting insights into its deliberations at the meeting which ended on Thursday September 7. After that meeting, as expected, no changes were announced in any of their key interest rates were announced. Draghi said that the meeting focused on growth, inflation and exchange rate.

GROWTH Draghi indicated that the growth in the Euro-Area economy has been “robust”. Apparently, the ECB feels the economy does not need additional stimul

Read More

September 03, 2017

European Central Bank Meeting Major Focus. U.S. Jobs Data Disappoint

John M. Bland, MBA


Key ECB Meeting On Thursday There was chatter near the end of the week just ending that ECB officials feel the euro is too strong and that its strength is putting the Eurozone fragile economic recovery at risk. This week the EURUSD surged to a two-and-a-half year high and that has put pressure on Germany exports Furthermore, the stronger euro threatens to lower inflation, which is already well below target. On Thursday it was announced that flash Eurozone HICP had increased only 1.20% y/y vs. 1.20% for the same number in July. Core HICP gained 1.

Read More

August 27, 2017

Central Bank Policies Inadequate. Time For New Methodologies

John M. Bland, MBA


Pushing On A String Traders spent the better part of last week waiting for the Kansas City Fed Central Banker Symposium in Jackson Hole Wyo. This has become a major event annually with key central bankers from all over the world in attendance. In past years, some figures have made news in their keynote addresses, but such was not to be the case this year. Both ECB President Draghi and Fed Chair Yellen were slated to make high profile speeches, but not much was expected in terms of news. Both (and many others) are having trouble combatting low le

Read More

August 20, 2017

More Fed Twist And Turns. USD Helped By Risk-Off

John M. Bland, MBA


Following Fed Is Like Trying To Nail Jell-O To A Wall Trying to pin down the current policy of this Fed is muck like trying to nail Jell-O to a wall. First of all, their message is convoluted as they speak with way too many conflicting voices. The leadership (Chair Yellen, Vice Chair Fischer and N.Y. Fed President Dudley), keep signaling that the preference of the board is to “normalize” (= tighten) monetary policy, but they never seem to follow through. Policy seemingly is based on internal economic growth models and inflation foreca

Read More

August 13, 2017

Can The Dollar Continue To Stabilize Against The Euro?

John M. Bland, MBA


EURUSD Shows Tentative Stability The latest week was slow on scheduled news releases but the geo-political threat posed by the potential North Korean nuclear threat began to impact the markets. Equity markets were already thought to be overbought by many stock analysts, and the North Korean threat became a pretext for reducing equity exposures. In general, this risk-off bias tended to be a pro-USD influence. Lower equity prices saw a run back into fixed income instruments and drove the yield on the 10-yr yield lower. The yield on the 10-yr

Read More

August 06, 2017

Where Is The Dollar Headed Next? More Weakness In Store?

John M. Bland, MBA


USD Continues To Head South Vs. EUR The EURUSD has been trading gradually but relentlessly higher since mid-April from the 1.0550 level to a peak just shy of 1.1900. That amounts to a EURUSD gain of nearly 13%. This development will certainly be welcome in the White House as a falling currency improves the terms of trade for the weakening currency and thus is a stimulus for the economy.

A decade or so ago a weaker USD would have been seen as a problem because a falling currency increased the cos

Read More

July 30, 2017

U.S. Monetary Policy Walking A Tightrope

John M. Bland, MBA


Fed Signals QE Taper and No Rate Hike What was expected to be an uneventful Fed meeting Wednesday had a serious impact on forex markets. Curiously, the policy announcement was about as expected with no changes in interest rates Fed Funds (1.00% to 1.25% range). As signaled at the prior Fed meeting in July, the central bank indicated that it would start to wind down its QE portfolio very soon. This wind-down could start as early as after the September 13 meeting. One mild surprise to the markets was another expression of concerns about the low levels of U.S. inflation. If this is born

Read More

July 23, 2017

EURUSD Spikes Higher Despite A Dovish Draghi

John M. Bland, MBA


ECB Continues To Worry About Inflation The EURUSD was rising as the Draghi press conference following the ECB policy wore on. This left many casual observers of the forex market scratching their heads. As promised, the ECB policy decision turned out to be a major event for forex trading. The few traders who had been looking for a more hawkish Draghi were disappointed once again, while those expecting a dovish Draghi were correct in terms of his performance, but were squeezed out when markets did not react by selling the EURUSD afterwards.

Read More

July 15, 2017

Commitment Of Traders Report for 11 July 2017 Data

Register To Test Your Amazing Trader

1.

Forex trading is all about stops. The Commitment of Traders Report (COT) is an imperfect, but useful, "sampling" of market positioning. I would prefer more frequent and precise readings, but we have to live with what we get. The data work for the purpose of getting an idea if traders are positioned long or short and if they in big or small.

Read More

July 16, 2017

Fed Chair Yellen Softens Her Policy Stance

John M. Bland, MBA


Fed Changes Its Policy Signals Once Again

Trying to nail down current Fed policy is like shooting at a moving target. The week just past saw what might have been Chair Yellen’s final Congressional appearance as head of the central bank, as it currently seems as though she will not be reappointed early in 2018. The items the market zeroed in on were in her prepared text. Keep in mind that her prepared text was written to convey precisely whatever message the central wanted to

Read More

July 09, 2017

Credit Markets Starting To Discount Transition From Quantitative Ease

John M. Bland, MBA

Fed Minutes Do Not Disappoint FOMC policy meeting minutes following each meeting have become an important part of the central Bank's communication process. They are also roughly three weeks ahead of the following meeting. They are not just a recap of the meeting, but they have been evolving into a policy update mechanism. What is released seems now to be aimed at explaining the most current thinking on policy. The latest Minutes released focused on the concerns of some at the Fed who now might be having second

Read More

July 02, 2017

Unexpected Sea Change In Policies At Top Tier Central Banks

John M. Bland, MBA


ECB President Draghi Roils the Markets

Over the past several months I have kept returning to the theme that the major central banks have been playing a key role in the tone of the markets. Once again they are back in the limelight. This time it was ECB President Draghi who set the stage for major moves in the global financial markets. In a closely-followed speech at an ECB Conference in Portugal, Draghi surprised markets. While he stuck to his usual cautious posture on policy, traders reacted to h

Read More

June 25, 2017

Central Banks (Bank of England and Fed) Continue To have Profound Impact On Forex Trade

John M. Bland, MBA


Bank Of England Sends Confused Policy Message The Bank of England took a page out of the Fed’s playbook this week after it sent mixed messages on policy. It’s difficult to understand the rationale for a central bank sending a confused message to the markets. Early on the week just past, Bank of England Governor Carney dampened expectations of a near-term rate increase. Then towards the end of the week Chief Economist Haldane indicated that he favors withdrawing some stimulus later this year, p

Read More

June 18, 2017

Surprisingly Hawkish Signals From Fed Chair Yellen

John M. Bland, MBA


Fed Hikes Funds Rate By 25bp As Expected, But Surprises On Taper Announcement The Fed announced a 25bp hike in its Fed Funds target range of 0.75%-1.00% to 1.00%-1.25%. This was the third interest rate increase the past three months. A 25bp rate hike had been widely expected at this meeting. There is no doubt that the pace of rate hikes has accelerated recently. Markets feel the Fed would like to hike rates three times this year and three times in 2018. Their ultimate goal is to raise rates to what it

Read More

June 11, 2017

British Election Stunner, Mixed Messages From Draghi, Fed Decision Awaited

John M. Bland, MBA


U.K. Votes Remain A Predictable Source Of Uncertainty In yet another important election, voters have come out again against the political establishment. While PM May ran a poor campaign, the underlying message of the electorate once again was one of dissatisfaction with the status quo. Politicians who do not recognize this reality are likely to have a difficult time at the polls. Once again, political pollsters were given another taste of humility. For now PM May is destined to rule from a weak minority gov

Read More

Archives 2017 | 2016 | 2015 | 2014 | 2013
If you would like more in-depth information on this article and others...

Join Us Today!

The message from the founder

Click Here

Review our featured articles

Click Here

The Latest Articles
  • Fed Bias In Favor Of A December 13 Rate Hike More »
  • Catalonia Simmers While U.S. Economic Picture Improves More »
  • More Unexpected Policy Twists And Turns By The Fed More »
  • Janet Yellen “the Hawk” And The Fed Deliver More »
  • Bank Of England Strikes A Blow Against Perpetual Quantitative Ease? More »