Posts tagged 'Currencies'

Moving targets and a lack of self-belief at the BoJ

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Jan 08 18:55 | Comment |

Oh look, it’s the Abe effect. How exciting. From Reuters:

RTRS – BOJ TO MULL SETTING 2 PCT INFLATION TARGET AT JAN 21-22 MEETING, DOUBLE CURRENT PRICE GOAL – SOURCES

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Reserve managers turn sultry eyes towards China

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Dec 17 2012 17:30 | Comment |

China snuck something out last Friday that just might be pretty significant…

From the FT: Read more

The second coming of Abe… confirmed

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| Dec 17 2012 09:07 | Comment |

The landslide win for the Shinzo Abe-led Liberal Democratic party in Japan at the weekend pushed the Japanese yen to its weakest level against the dollar since April 2011 (inverted chart, don’t ya know):

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It’d be Aud if it wasn’t so simple

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Dec 13 2012 15:52 | Comment |

The Australian Financial Review is reporting that some central bankers are encouraging the Reserve Bank of Australia to consider heavy intervention rather than cut rates, if it wants to bring down the value of the Australian dollar, which is at its highest in months. Read more

‘Negative’ has such unfairly negative connotations

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Dec 11 2012 12:36 | Comment |

Dear people,

ATTENTION:

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Draghi’s ready to get negative

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Dec 06 2012 15:30 | Comment |

Obvious dovishness + Draghi’s admittance that the ECB is operationally ready for negative deposit rates = that. Read more

Credit Suisse finds positives in negative (rates) [updated]

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Dec 03 2012 14:36 | Comment |

Are you a Swiss bank? Do you have haven appeal? Want to make some quick, easy money? Then keep reading…

Credit Suisse has decided it will start charging negative rates on Swiss franc cash balances above a certain threshold. From CS: Read more

A sterling inflow

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Nov 30 2012 10:45 | Comment |

So, would a sovereign downgrade hurt sterling? And if so, how much? It’s hard to model this as historic comparisons are muddy and sterling crosses each obviously carry their own difficulties. Consider this chart from Morgan Stanley, by way of illustration:

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Yenning for a counter argument

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Nov 29 2012 11:15 | Comment |

THE YEN IS DOOMED, don’t ya know? And, to be fair, the longer term arguments are hard to fight against but the risk of a near to medium-term yen bounce is significant. Read more

FX excitement! Nah, you may as well head home for Christmas

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Nov 28 2012 12:56 | Comment |

Oh dear, many an FX trader is gonna be disappointed by this one — history suggests FX volatility is heading down, not up, as we exit November.

From Deutsche Bank’s Alan Ruskin… Read more

An actual consequence of France’s downgrade?

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Nov 20 2012 13:13 | Comment |

Not many people seem bothered by France’s overnight downgrade by Moody’s. The euro shrugged and French bond yields crept upwards at a snail’s pace.

But one place the downgrade might have a real and lasting impact is within the Swiss National Bank. They have a predilection for core eurozone bonds and the downgrade might just prompt them to ditch what holdings they have and/or stop loading up on French debt.
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Woot! RoRo is fading.

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Nov 09 2012 15:58 | Comment |

This is from RBC’s Adam Cole who has been trying to get WOOT (World of One Trade) into the FX psyche for a while. So, l33t research indeed, but RoRo was always gonna be a tough meme to contend with.

Anyway… Cole’s point is that that there are more currency pairs uncorrelated to equities right now than at any time for five years. In fact, he says, correlations have started to break down to the extent that a majority of G10 currency pairs were uncorrelated with equity returns over the last three months. Another false dawn or an actual end to the dominant RoRo paradigm? Read more

Hey, Japanese government – leave the BoJ alone (says Koo)

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| Nov 07 2012 08:45 | Comment |

The Bank of Japan’s unprecedented joint statement with the Japanese government after the central bank’s October meeting raised eyebrows around the world. The BoJ was already widely seen as having come under increased political pressure in recent months as the country’s economy had slowed; so what did the joint statement mean?

The statement contained a couple of key declarations: “The Bank strongly expects the Government to vigorously promote measures for strengthening Japan’s growth potential”, and “The Government strongly expects the Bank to continue powerful easing as outlined in section 2 until deflation is overcome.” Read more

Of anniversaries and odd couples in Japan

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Nov 06 2012 15:07 | Comment |

Well, we’re cheating a bit here as the anniversary was two days ago, but it still allows for a discussion of the “government versus the central bank” thing going on in Japan and gaining traction everywhere else. It’s been just over a year since Japan’s Ministry of Finance last threw a whole heap of yen at the US dollar — the selling started on October 31 and ended on November 4. Read more

Turkey’s pending upgrade to currency war footing

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Nov 05 2012 16:44 | Comment |

So, Fitch has become the first of the ratings agencies to upgrade Turkey to investment grade, giving it its first such rating since 1994. It’s been a while coming and the Turkish lira jumped at the news — up 0.9 per cent at pixel time against the dollar to a three month high:

So far, so rosy… if unsurprising. But there may be an interesting by-product of this overdue upgrade. Namely, it might force the Turkish central bank into a smidgen of FX fiddling. That is, if the upgrade actually matters and inflows really step up. Read more

A bento box of pressure at the BoJ

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Oct 30 2012 10:09 | Comment |

So the Bank of Japan basically did what what was expected of it as did the yen, which gained 0.5 per cent against the dollar as traders saw massive selling of dollar-yen going through as the Bank’s decision hit the wires.

So far, so predictable. We thought UBS’ Paul Donovan summed up the BoJ’s move fairly well:

Japan saw the Bank of Japan defy government pressure to increase the asset purchase program by JPY10tn. They increased it by JPY11tn. No doubt this will be as effective as all the previous actions which have already raised the level of the BoJ balance sheet to 32% of GDP.

But the increasing pressure that is being piled on the Bank by the government is worth drawing attention to. As well as the Bank’s attempts to shift it right back to the government. Read more

Expectations management at the BoJ

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Oct 29 2012 17:16 | Comment |

Here’s a trend for ya:

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Putting a new drachma in historical perspective

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Oct 29 2012 13:06 | Comment |

Here’s a chart from Nomura:

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Antipodean intervention (probably) [updated]

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Oct 29 2012 10:20 | Comment |

As Neil picked up on already there is a suggestion that the Reserve Bank of Australia is practising some ‘passive intervention’ to hamstring the Aussie’s strength a touch.

It’s easy enough to see why this conclusion has been drawn, even as questions abound about China’s demand, its effect on commodity prices which Australia relies s0 heavily upon and the RBA repeatedly cuts still high interest rates the Aussia has stubbornly refused to fall versus the US dollar:

But there is a potential difficulty attaching the label intervention, even ‘passive’, to this build up at so early a stage.  Read more

Gawd but the currency wars are boring

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Oct 24 2012 16:26 | Comment |

There’s basically nothing happening. Sure we’ve got plenty of rhetoric, a Swiss franc floor and QE — but FX volatility is touching recent lows:

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A brief respite for the euro?

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Oct 23 2012 12:32 | Comment |

Commerzbank is arguing that we should all forget about the eurozone crisis for a bit where euro-dollar is concerned (with our emphasis):

At the same time a further improvement of the Spanish and Italian yield premiums no longer supports EUR-USD (see chart 1). Why? From the market’s point of view the crisis has eased sufficiently for German CDS to ease below 30bp for the first time since April 2010. That means the crisis is no longer sufficiently virulent to affect EUR-USD to the same extent as it did over the past 12 months.

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China’s potentially tepid money outflows

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Oct 22 2012 13:39 | Comment |

There have been a few estimates of large scale capital flight out of China recently that don’t exactly tally with other signals. The strength of the yuan is among them, though it admittedly may be explained by myriad other factors.

Capital flight has largely been calculated by movements in China’s FX reserves, with reference to other variables such as the trade surplus, FDI and movements in exchange rates. Read more

Of China, the yuan, inequality and the euro

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Oct 18 2012 14:35 | Comment |

There may be a new China to consider but its signs are not very easy to discern. The yuan is on a roll against the dollar, hitting multiple new highs since July but somewhat confusingly, estimates suggest that in the 12 months through September, some $225bn flowed out of China — that kind of outflow doesn’t square with the yuan’s recent strength. Read more

Japan as the new Switzerland…

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Oct 17 2012 13:08 | Comment |

… just as it becomes the new China, which is no longer the old China. Ok? Probably not, but we may as well go through the argument anyway. The idea is that Japan, sick of yen strength which it struggles to combat in a risk-driven world, sticks a Swiss-style floor under its currency.

It’s not the newest idea and there are suggestions that a de facto floor is already in place anyway but the argument, from Société Générale, is worth running through as there is certainly more chance of an explicit floor being announced now than there was when we last visited the idea. Read more

Bernanke and Lagarde clash big in Japan

Masa joined the FT in 2009 and has worked on a number of desks across the paper, including Companies, Markets and Comment. She spent much of 2010 in New York covering the US equity markets. But earlier this year she finally saw the light and moved to Alphaville.

She started her career in the investment banking division at Lehman Brothers in the summer of 2007, timing it perfectly with the beginning of the credit crunch.

She studied philosophy, politics and economics at Oxford University.

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| Oct 15 2012 12:28 | Comment |

Ben Bernanke was over in Tokyo on Sunday at a BoJ-IMF seminar, explaining just how great QE in the developed economies was for the rest of the world.

It went something like this (emphasis ours): Read more

A tinhat-full of dollars

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Oct 11 2012 15:55 | Comment |

This is just a lovely chart from the FX team at HSBC (click in to see — tis just too big for an excerpt to handle):

What it, and its fellow soon to be introduced below, do is call further into question the US dollar’s status as a haven currency; one which will benefit in periods of risk aversion. They do so by looking at the performance of G10 currencies against the S&P500. It’s a timely query considering the approaching fiscal cliff… and, well, lots of other stuff. Read more

The rial-ity of Persia-stroika

| Oct 09 2012 09:55 | Comment |

Hyperinflation or not. Immediate collapse of the regime or not. This situation is scary if what is coming out of Iran is accurate.

This is from the FT’s Najmeh Bozorgmehr in Iran:

“Chi mikhad beshe?” – what is going to happen? – is the most common question Iranians ask each other. It is asked in taxis, grocery stores, hairdressers and in the queues to buy bread. No one, however, seems to know the answer.

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Local currency bonds: (probably) not an EM bubble

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Oct 08 2012 17:58 | Comment |

From Standard Chartered:

Local-currency emerging bond markets have seen ever greater levels of foreign demand as global investors flee from the ongoing European sovereign crisis and continue to allocate to fixed income securities. From less that USD 150bn in March 2009, foreign holdings of local-currency government bonds in emerging markets (EM) are now well above USD 500bn.

Bubble? Read more

Iranian rial-ity, or when Gresham’s law goes awry

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

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| Oct 08 2012 10:26 | Comment |

Almost everywhere, the fall of the Iranian rial is being interpreted as a huge problem for the incumbent Iranian regime — one that could bitterly undermine economic stability in the country.

Ehad Mostaque of Religare Capital Markets, however, posits a different view. Read more

From Gresham to Giffen in Iran

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Oct 04 2012 08:39 | Comment |

Iran’s new rial-ity is biting hard.

From Bloomberg (with our emphasis):

“Most of my customers just look at products behind the window and pass,” said Behrouz Madani,

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