NFPs marked a good opportunity to break USDollar from its months of consolidation. However, the jobs report offered headline figures essentially in-line with expectations while wage growth and unemployment offset each other to temper rate forecasts. An opportunity missed. This pattern will still break, we just have to wait longer now.
Bollinger Banks are producing some interesting signals for EURUSD. They suggest a breakout is coming while also saying the market may have overstretched to the short-side. A breakout seems likely but only after the weekend when we can process the Referendum. Now, as for a market oversold...that depends on what happens to Greece and the view of monetary policy.
Here we have the TSX Buyback Index. There has been plenty of talk of how a slowing in economic growth, tempered capital investment (CAPEX) and even a throttled down stimulus backing has been compensated by buybacks. So here is the TSX Buyback Index versus the S&P 500 (emini).
Here we have the Renaissance IPO and First Trust US IPO ETFs meant to track the market performance of stocks that are not yet in the major equity indexes - so 'IPO-like' companies. Appetite for these untested companies is considered by some a leading indicator of investor risk appetite; so I put it up against the S&P 500.
The Fed's rate hike timing is 'data dependent'. Few data points are as comprehensive and influential for determining monetary policy than the BLS's monthly labor statistics. The unemployment rate is good for the employment element of the mandate, but there is also an inflation gauge: wage growth. Will this data offer enough of a push to shift interest rate...
Central bank accommodation graduated from rate cuts to stimulus early in the market recovery from 2009. That support helped to keep presumed 'risk' low. However, it has also increasingly reached beyond the bounds of what it should reasonably be expected to provide the capital markets. The Fed and its global counterparts are likely to be a little less supportive in...
A bid is forming under bitcoin as Greece keeps capital controls in place. Not as much foreign wealth in Greece as there was in Cyprus - which necessitated a vehicle to move capital out especially as foreign accounts faced large taxes - but this development comes after the cryptocurrency has further matured.
We haven't seen many instances where volatility has jumped universally like this in the past years. When it happens, it is worthwhile to keep a close eye on it as it is often a signal that markets are sensitive to broad and lasting risk aversion / deleveraging.
The GREK Greece ETF shows what would have happened if local markets were open and pricing rather than closed in the run up to this weekend's Referendum for creditor proposals.
EURUSD is facing high-level event risk ahead. Hard to believe the Greece negotiations may finally have an end game (for better or worse), but another key IMF payment and the original rescue program's expiration may play the symbolic 'end of the road' for both sides. Meanwhile, the Dollar will have to prepare for the 'upper and downer' combination of NFPs followed...
Implied volatility measures across the asset spectrum seem to be cooling. However, in a world founded on complacency, that calm should generate more concern than relief. What's more, there is more and more evidence of speculative effort in what are essentially insurance products. When the havens turn into speculative outlets, beware the complacency.
The National Bank of Greece is one of Greece's largest banks. That makes it a good measure of local speculative interest, financial stability and distinctly a liquidity barometer. I like it for day-to-day assessments of the view on negotiations. Unfortunately, confusion is so deep, that is starting to suffer the same deer-in-the-headlights distress as the Euro,...
BoE interest rate expectations have strengthened materially while the RBNZ is still suffering from its rate cut earlier this month. That is a strong fundamental divergence, but it won't just keep the market running at this pace forever. With a lull in key data and an over-extended position, a pull back is a strong force. I am not building a big position on this,...
The Euro is a deer in the headlines and implied volatility measures on the currency seem to be drawn down by tempering in other asset classes. Looking at Greece CDS, we have an instrument issue - we had a technical defaulted with the debt restructuring years ago and they have never been the same. Looking for a more sensitive and perhaps accurate gauge of...
The Euro broke its tight range before the Greece debt standoff has officially been resolved. What makes it even more interesting is that Euro-area equity indexes, Greek bank shares rose on the day while the countries credit default premiums and government bond yields fell. Finding conviction in this preemptive move will be very difficult to find.
Market expectations for BoE rate timing is building. Overnight swaps, short-sterling futures and Gilt yields have been showing a solidifying view of rate expectations more in line with what has been attributed to the Fed. We can see the impact of this speculation between the GBPUSD's advance and the iShares Index-Linked Gilt ETF's decline. Do you think the BoE...
The big bear phase from last July's swing high to the April swing low this year has pulled a mid-point on GBPUSD around 1.5900. We tested and held that line this past week. Without a FOMC decision or UK CPI this week, will this pair be left to its own devices and follow technicals' cues?
Here is a comparison of implied volatility levels from various asset classes: equities (VIX), FX (EURUSD-based EVZ), commodities (oil-specific OVX) and Treasuries (CBOT's VXT). Looks like most asset classes are seeing a moderation of expected market swings with the notable exception of the FX market. Sure there is a 'Greek' uncertainty behind this measure, but the...