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’China’s foreign reserves not so hot
China’s first quarterly decline in its forex reserves since 1998 has been described as a result of “hot money” leaving China. But there are a few other reasons — probably bigger ones.
Firstly, though,
SNB shows some pegleg
SNB: “Leave our dear Swissie alone. Seriously, leave it alone.”
Investors: ”But we don’t know where else to hide.”
SNB: “Right then, you’ll have to pay for it.”
Investors: “How much have you got?”
Le plan, negatifs taux d’intérêt – redux
Oh dear.
The ‘psychological shock’ of Wednesday’s moves by the Swiss National Bank to stem the rapid rise of the franc is already wearing off — at least in the FX market.
Frankly, that’s no surprise.
What’s a Swiss central bank to do?
As has been well documented, the Swiss franc’s relentless rise has been causing no end of headaches.
Swiss exporters, Swiss banks and even Polish and Hungarian mortgage holders have all been affected.
“Mostly meaningless blurbs”
Oh deary me.
Someone at a major European investment bank (known for its foreign exchange services) is possibly a touch red-faced right about now.
We’re not going to name names, but it seems the following personal note was sent out by accident on Thursday to the entire distribution list of the senior director in question:
Assessing the dollar’s weakness
How weak is the dollar?
A timely question asked by Goldman Sachs on Tuesday morning, what with the euro reaching a 15-month high of $1.45 earlier today. Indeed, on the face of it, there is weakness everywhere.
Underestimate the force of a supply shock, do not
David Bloom’s currency strategy team at HSBC looks at the issue of oil and foreign exchange rates on Monday, arriving at a clear-cut conclusion.
Determining which currency in which to park one’s money when oil prices are on the rise is dependent on one thing and one thing only — whether said price rises are the result of demand forces or of a supply shock.
The new volatility FX carry trade
FT Alphaville wrote last year about how the Federal Reserve’s experimentation with quantitative easing — while managing to alleviate stress in money markets – may have unwittingly transferred volatility into the foreign exchange market.
Inside an FX IPO
FXCM, the US-based FX and securities broker, filed a prospectus to the Securities and Exchange Commission on Monday for an intended initial public offering later this month.
The terms show the company hoping to raise $211m by offering 15.1m Class A shares at a price range of $13-$15 — a mid-point of which would give the company a market value of $1.1 bn.
FX still mopping up excess volatility
We wrote last week how ‘Bernanke’s put’ was potentially transforming into ‘Bernanke’s genie released’ over in the FX markets.
On Tuesday, it seems, that offloading of volatility was still very much going on.
The great race (to the bottom)
Some further thoughts on the topic du jour — competitive currency devaluation and the race to the bottom.
In the wake of Tuesday’s FOMC statement, RBS FX analyst Gregg Gibbs reckons the chance of a major meltdown on the currency markets is increasing as investors seek the relative safety of higher growth regions — or ones that are not dropping notes from helicopters:
50:1 leverage lives!
A big H/T to Alea for this story, plus the title.
Late on Monday, the US Commodity Futures Trading Commission released its final foreign exchange market rule. The centrepiece is the limit on leverage for firms dealing in retail forex — the decision itself,
What’s up with commodity currencies?
Having warned about increasingly negative sentiment towards the euro, Bank of New York Mellon’s Simon Derrick takes a stab at commodity currencies on Wednesday.
In a nutshell, they are behaving oddly.
May’s market mayhem in FX settlements
June’s ECB Monthly Bulletin, released on Thursday, is turning out to be a treasure trove of enlightenment when it comes to what transpired inside the financial system in May.
We’ve already noted the critical dysfunctions the Bank observed in the money markets — which it said were comparable to the stresses experienced over the course of the Lehman collapse.
The rise and rise of the corporate treasury trader…and Google
Un thème nouveau pour l’époque?
It appears that corporations, just like municipalities and, err, city-states, are increasingly dabbling with the ‘synergies’ that can be extrapolated from managing their own treasury affairs,
No, it’s true – everyone is shorting the euro
We cautioned a few weeks ago that a little perspective was probably needed when discussing the “everyone is shorting the euro” story.
The CFTC data on which the stories were based, we argued, only reflected of a small sliver of the OTC forex market.
Euro rise *alert*
We posted a dollar rise *alert* at the beginning of November based on some contrarian thinking in the market at the time.
And the contrarians did not do a bad job of calling the bottom in the dollar rout:
FX is changing
Harpal Sandhu, chief executive officer of a systems firm called Integral Development, is trying to change the way forex markets function.
Specifically, he wants technology to even-out the jagged playing field,
The return of capital controls, Indonesia edition
What’s this?
Another country touting the possibility of capital controls in a bid to protect itself from an appreciating currency?
From Reuters:
SINGAPORE, Nov 18 (Reuters) – The Indonesian rupiah slipped on Wednesday after the central bank threatened to restrict foreign ownership of short-term debt,
‘The dollar is the most crowded long in history’
So stop calling the current vogue for betting against the greenback a “crowded short”, says boutique brokerage Aviate Global.
And their logic is hard to fault. As the world’s de facto currency the world is,
Aggressive FX marketing goes mainstream
We wrote last week about the extent to which retail investor money was contributing to growth in international foreign exchange trading, and to what extent Mrs Jones — the personification of the average yield-seeking western investor — was gaining ground on her Japanese equivalent Mrs Watanabe.