Archive for December, 2015

Preparing For the Rate Hikes

Thursday, December 10th, 2015

When the FOMC hikes rates next week it will be the first rate hike in nearly a decade. This one is different and no one can be sure of its impact on markets. The Fed's balance sheet is Brobdingnagian and no one knows for sure how they will soak up ...

More FX

Thursday, December 10th, 2015

Via Marc Chandler at Brown Brothers Harriman: Greenback Recovers, but Antipodeans Advance - There are two broad themes among the major currencies today; the first is the pullback in the euro and yen after yesterday's run-up - The second broad theme is the relative strength of the Australian and New Zealand dollars. - The ...

Famous Last Words

Thursday, December 10th, 2015

Via the FT: 3 minutes ago by: Jamie Chisholm There is less than a week to go before the Federal Reserve is expected to raise interest rates. Capital Economics says there are five reasons why investors should not fret that “lift-off” will badly hurt the global economy. First point, argues Andrew Kenningham, CapEco’s senior ...

Early FX

Thursday, December 10th, 2015

Via Kit Juckes at SocGen: <http://www.sgmarkets.com/r/?id=hf544b12,152158c5,152158c6&p1=136122&p2=cf59930eae4d724e08a2269f44c8a0a8> The RBNZ cut rates by 25bp to 2.5% and the NZD rallied sharply. There's a pattern here! March Bill futures fell back a little as the market is reluctant to embrace the idea of further rate cuts in this cycle and NZD shorts are being cut ...

Investigation

Wednesday, December 9th, 2015

The Department of Justice is investigating a narrow corner of the bond market alleging that dealers were rigging prices via conversations in Bloomberg chat rooms. The market sector under the government spotlight is the market for sovereign and supra paper. For the uninitiated that would be bonds of issuers such ...

Options Expiration and the FOMC

Wednesday, December 9th, 2015

Excellent article on options expirations and the FOMC. Luke Kawa of Bloomberg cites a report by JPMorgan strategists that $670 billion of puts on the S and P with strikes between 1900 and 2050 will expire on December 18th. Via Luke Kawa at Bloomberg: Analysts at JPMorgan Chase say the Federal Reserve ...

Ratings Agency Trashes Brazil

Wednesday, December 9th, 2015

Via the FT: Brazil’s woes deepened on Wednesday as Moody’s Investors Service downgraded all ratings for embattled oil group Petrobras, and the country faced the threat of losing its investment grade credit rating from the agency. Moody’s downgraded all ratings for Petrobras to Ba3 from Ba2, and placed them on review for ...

FX Musings

Wednesday, December 9th, 2015

Some excellent musings from Kit Juckes at SocGen.

NFIB

Tuesday, December 8th, 2015

Via Stephen Stanley at Amherst Pierpont Securities: As most of you know, I am a fan of the NFIB monthly small business survey.  I believe that it provides helpful color above and beyond what the aggregate statistical data can tell us about where the economy is and where it might be ...

What to Watch Today

Tuesday, December 8th, 2015

Via Bloomberg: WHAT TO WATCH: * (All times New York) * Economic Data * 10:00am: JOLTS Job Openings, Oct., est. 5.580m (prior 5.526m) * 10:00am: IBD/TIPP Economic Optimism, Dec., est. 45 (prior 45.5) * Central Banks * 1:10pm: Bank of Canada’s Poloz speaks in Toronto * Supply * 11:30am: U.S. to sell $14b 1Y bills, TBA 4W bills * 1:00pm: U.S. to ...