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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

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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

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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

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June 04, 2017

British Election, ECB Decision And U.S. Jobs Surprise

John M. Bland, MBA


U.K. Vote Has Become A Horse Race When PM Theresa May called for a “Snap Election ” several weeks ago, the Conservatives initially were 20 percentage points ahead of Labour and seen easily picking up a number of extra seats in the election slated for Thursday June 8. Somehow the Conservatives lead in one poll has dwindled to as low as 3 percentage points late in the week just ending. The talk is that many are unhappy with the Conservative Party, but prefer current PM May over Labour Party Leader

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May 28, 2017

Somehow Fed Policy Is Back In Play Again

John M. Bland, MBA


Fed Resolve Waning? Wednesday May 24 saw the release of the Fed Minutes from the FOMC meeting which concluded on May 3. Minutes for FOMC conferences are released three weeks following each Fed meeting. A key point about the Minutes and why the markets react to them is that while they are based on the meeting, the Fed can choose to emphasize whatever it feels are the relevant comments in the light of subsequent developments nearer to the release date. It turns out that the Fed Minutes have become an "update" t

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May 21, 2017

Special Counsel To Investigate Trump Election Committee Calms Markets

John M. Bland, MBA


Special Counsel Named To Investigate Any Coordination Between Trump Campaign and Russia The New York close has become the time for bombshell political announcements affecting the Trump Administration. Late Wednesday of this week saw the Justice Department appoint a special counsel to investigate possible coordination between the Trump Presidential campaign and Russian officials. Deputy Attorney General Rosenstein announced that Robert S. Mueller III, former FBI director (2001-2013), had agreed to take over

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May 14, 2017

French Election Settled, But New Trump Controversy Blooms

John M. Bland, MBA


Macron Victory In France Greeted With Relief By Markets Pro-EU adherents in Europe greeted the overwhelming victory of center-left and pro-EU candidate Emmanuel Macron over Far-right candidate Marine Le Pen in Round Two (Final Round) of the Presidential selection process with relief at the start of the week. The result puts to bed any medium-term worries about a French exit from the EU. The fear has been that the U.K. "Brexit" decision could spread to the Continent, but so far this has not been the case. The

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May 07, 2017

French Presidential Election Looms Over Another Sunday

John M. Bland, MBA


Markets Price In Macron Victory For Sunday Presidential Vote Far-right candidate Marine Le Pen and center-left candidate Emmanuel Macron were the top two finalists from Round 1 of the French presidential elections two weeks ago. This Sunday, May 7 sees Round Two (Final Round) of the Presidential selection process. Macron has consistently been polling at a prohibitive 20% advantage over LePen. A final Presidential debate took place on Wednesday. According to post-debate polls, viewers felt that Macron had outperformed LePen.  

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April 30, 2017

ECB Disappoints The Markets As Yields In Fixed Income Markets Fall

 

John M. Bland, MBA


No Change In ECB Policy Bias Disappoints Markets


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April 21, 2017

Sunday French Vote Could Be Pivotal For Euro

 

John M. Bland, MBA



French Presidential Election In Spotlight Sunday April 23 will see the first round of the French Presidential Elections. There is a long list of contenders running, but the main focus is on the top four candidates. To win, one candidate must garner 50% of the vote. If no one wins 50% of votes cast, there will be a second round contest between the two top vote getters on May 2 to determine the next President. There virtually is no chance that any candidate will garner the required 50% wit

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April 14, 2017

Key Surprises For Traders By President Trump

John M. Bland, MBA



Dollar Comments A Surprise President Trump surprised forex markets late on Wednesday when an interview with the Wall Street Journal was released. The President indicated that the USD was becoming too strong. We assume he was talking about the EURUSD pair because the dollar has been rising against the JPY ever since he became President. Furthermore, the dollar has been slipping against the Chinese Yuan due to heavy sales of U.S. securities by the Chinese Central Bank (PBOC) to support their currency. He

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April 09, 2017

What Now From The Fed and Trump?

John M. Bland, MBA



Poor March U.S. Employment Data March U.S. Employment data fell short of expectations. Non-Farm payrolls increased by only 98K vs. street expectations for an increase of +175K in the month. Some blamed a weather distortion for the poor data, but the level of job creation was less than the distortion would have implied. Average hourly earnings remained essentially flat in the month with a gain of only 0.20%, as expected. On Friday markets also had to digest a U.S. rocket attack on Syrian facilities in r

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April 02, 2017

Change In direction For The Dollar?

John M. Bland, MBA



Only Flexible Forex Traders Survive One thing most learn early in their Forex trading career is that the stubborn do not survive. One week ago, the outlook for the USD was looking pretty grim after the Trump Health Care bill effectively went down to defeat. Markets worried that his economic stimulus program could would be in shambles without the savings the new program would produce. One impact from the defeat has been a correction in stock prices and the yield on the 10-yr note has fallen from abov

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March 26, 2017

When Trading, Avoid The Crowd!

John M. Bland, MBA



Stay Away From Conventional Wisdom Often in the financial markets things things just don't work out as planned. This is not just true in forex. Most of the financial markets, such as equities, got set up long for the Trump Presidency on the promise that he would pursue policies more supportive of economic growth than previous administrations in the recent past. There was also a widespread expectation that a strong USD would ensue and would ultimately see the EURUSD fall to "parity" vs. the USD. Hopes f

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March 26, 2017

When Trading, Avoid The Crowd!

John M. Bland, MBA



Stay Away From Conventional Wisdom Often in the financial markets things things just don't work out as planned. This is not just true in forex. Most of the financial markets, such as equities, got set up long for the Trump Presidency on the promise that he would pursue policies more supportive of economic growth than previous administrations in the recent past. There was also a widespread expectation that a strong USD would ensue and would ultimately see the EURUSD fall to "parity" vs. the USD. Hopes f

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March 19, 2017

Fed Market Dominance Not Fading

John M. Bland, MBA



As Long Predicted, Fed Hikes Rates We had been predicting here a March 15 rate hike since market odds were below 20% for a Fed Funds 25bp increase. As expected, the Fed went through with a 25bp rise and left the door open to two additional hikes, conditions permitting. The target range for funds was increased from 0.50-0.75% to 0.75-1.00%. In its open market operations, the Fed tries to hit the mid-point of that range.

Financial markets are never to be satisfied. Some were disappointed that

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March 12, 2017

Creaky Monetary Policy Wheels Start To Turn

 John M. Bland, MBA

 



Markets Say Wednesday Fed Hike is A Done Deal Just over a week ago Fed Chair Yellen came as close as a top Central Bank official ever comes to pre-announcing a policy tightening. As a result, the financial markets have priced in a rate hike at the FOMC meeting this Wednesday (March 15).The prospect higher interest rates has also given the USD a bid, driven the yield on the 10-yr note to above 2.60%, and has been weight on equity prices. Equities at time can get caught in the midd

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March 05, 2017

Fed Now Signaling An Interest Rate Hike For March 15

John M. Bland, MBA



Looks Like Finally Its A "Go" As of last week, I mentioned that for well over a month here that I felt the Fed was likely to be planning to consider raising the Fed funds rate at the March 15 FOMC, conditions permitting. At that time, based on Fed Funds futures, the odds of a March hike were 38%, and in earlier weeks they were considerably lower than that. Last week, I placed my odds at 70%. By the end of the week just ending, the odds on a hike had spiked to above 90%. The market and I are finally in

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March 05, 2017

Fed Now Signaling An Interest Rate Hike For March 15

John M. Bland, MBA



Looks Like Finally Its A "Go" As of last week, I mentioned that for well over a month here that I felt the Fed was likely to be planning to consider raising the Fed funds rate at the March 15 FOMC, conditions permitting. At that time, based on Fed Funds futures, the odds of a March hike were 38%, and in earlier weeks they were considerably lower than that. Last week, I placed my odds at 70%. By the end of the week just ending, the odds on a hike had spiked to above 96%. The market and I are finally in

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February 26, 2017

Fed Minutes Never Fail To Move The Markets

John M. Bland, MBA


FOMC Minutes Impact Markets But Send No Clear Signals The Fed releases the Minutes of each policy board meeting three weeks following each decision. One would think that after its policy statement, and quarterly, a press conference, that they would say nothing new. However, Fed Chair Yellen reserves the right to include additional topics discussed at the meeting that had not otherwise been released. This means that the Fed has the ability to tweak the Minutes and bring up-to-date by including additional item

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