Debtors prefer inflation; the more the better Fed, ECB and BoJ yearning for higher inflation, but latter is no-show Low inflation gives Fed more flexibility when to hike rates, which has investment implications There is no shortage of issues that … Continued
Expectations of higher US interest rates and stronger economy acting as tailwind behind resurgent $ Sentiment too bullish, reflected in non-commercials’ near-record net longs in US $ futures Safe bet probably is to wait to take the other side of … Continued
Tick, tick, tick. That is the sound of the clock ticking for the first rate hike by the Fed. It is coming sooner than expected. So it seems. Or, is it? At least that is how the market seems to … Continued
As discussed last week that non-commercial futures traders might just once again be ahead of the curve in anticipating market reaction to Thursday’s ECB decision, they indeed were. By Tuesday (last week), they had raised net shorts in euro futures … Continued
The expected decline in the euro never came. Back on August 11, it looked like the currency was ready for a bounce. Just a bounce, as long-term technicals were only midway through unwinding overbought conditions hence did not call for … Continued
Non-commercials further added to net shorts in euro futures. They are now net short 129k contracts – a two-year high. In recent weeks these large speculators have been adding more shorts than cutting longs. Since early June, they cut longs … Continued
There is a lot of chatter these days around imminent asset purchases by the ECB. Speaking to the press post-Governing Council meeting yesterday, ECB President Mario Draghi hinted as much, saying policy makers are unanimous in their willingness to use … Continued
There is probably no other price as important as the price of money – that is, interest rates. They are what grease the wheels of an economy. Simplistically, when rates are high, people are incentivized to save more. When they … Continued
The euro so far is trading exactly as expected. ECB President Mario Draghi did not disappoint. Yesterday, the refi rate (main lending rate) was cut to 0.15 percent from 0.25 percent and the deposit rate to negative 0.1 percent from … Continued
The euro experienced a rather sharp downward move in May. In the currency world, the two-and-a-half-percent decline (from early in the month until the trough two sessions ago) in a span of 15 sessions is big. When FXE began to … Continued