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The Yuan and Tariffs

June 18, 2019
Consensus thinking sees two levers.  One is the US tariff, and the other is the weakness of the Chinese yuan. They talk as if China may be depreciating the yuan, or tolerating a weaker yuan to offset the tariffs.  This feeds the fear that China can escape from US pressure and supports those favoring an aggressive confrontation with China.   The v…
The Yuan and Tariffs The Yuan and Tariffs Reviewed by Marc Chandler on June 18, 2019 Rating: 5
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Draghi Ends Calm Ahead of FOMC, Sending the Euro and Yields Down

June 18, 2019
Overview: ECB President Draghi underscoring the likely need for more stimulus broke the subdued tone as market participants took a "wait and see" stance ahead of tomorrow's FOMC decision.  Draghi's comments sent the euro through $1.12 for the first time in two weeks and drove European bonds yields to new lows.  Asian equity marke…
Draghi Ends Calm Ahead of FOMC, Sending the Euro and Yields Down Draghi Ends Calm Ahead of FOMC, Sending the Euro and Yields Down Reviewed by Marc Chandler on June 18, 2019 Rating: 5
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Quiet Start to Big Week

June 17, 2019
Overview:  The global capital markets are off to a subdued start to what promises to be a busy week, featuring the FOMC, BOE, BOJ meetings, and the flash June PMIs.  Investors also expect some signal whether Presidents Trump and Xi will at the G20 meeting later this month.  Asian equities were narrowly mixed.  Hong Kong's Hang Seng gained 0.4%…
Quiet Start to Big Week Quiet Start to Big Week Reviewed by Marc Chandler on June 17, 2019 Rating: 5
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USD Resilience in the Face of Aggressive Fed Easing Expectations

June 16, 2019
News that despite the disappointing jobs growth and weaker earnings growth, the engine of the US economy--consumers--remain resilient helped lift the dollar, which retraced most if not all of the previous week's losses.  The dollar rose against all the major and most of the emerging market currencies.  The Mexican peso was the best-performing …
USD Resilience in the Face of Aggressive Fed Easing Expectations USD Resilience in the Face of Aggressive Fed Easing Expectations Reviewed by Marc Chandler on June 16, 2019 Rating: 5
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FOMC, EMU PMI, and Pre-G20 Positioning: Crossroads and Crosswinds

June 15, 2019
The week ahead is likely to provide some clarification for investors on three fronts that have been a source of uncertainty.  The FOMC meeting, with updated forecasts, is center stage.  The credit markets are pushing the Fed to be aggressive but can be disappointed.  In the eurozone, the preliminary PMI may confirm a modest, even if uneven recover…
FOMC, EMU PMI, and Pre-G20 Positioning: Crossroads and Crosswinds FOMC, EMU PMI, and Pre-G20 Positioning:  Crossroads and Crosswinds Reviewed by Marc Chandler on June 15, 2019 Rating: 5
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Waning Risk Appetite Going into the Weekend

June 14, 2019
Overview:  Worries about an escalation in the Gulf following US accusations that Iran was behind yesterday's two attacks and weaker growth impulses, while trade tensions remain high, are dampening risk appetites ahead of the weekend.  Equities are lower.  Nearly all the stock markets in the Asia Pacific region fell today with Japan and Austral…
Waning Risk Appetite Going into the Weekend Waning Risk Appetite Going into the Weekend Reviewed by Marc Chandler on June 14, 2019 Rating: 5
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Financial Statecraft or Whack-a-Mole

June 13, 2019
Overview: After roiling the markets by threatening escalating tariffs on Mexico, US President Trump has threatened China that if Xi does not meet him and return to the positions that the US claims it had previously, he will through on imposing tariffs to the remaining goods the US buys from China that have not already been penalized.  Yesterday as…
Financial Statecraft or Whack-a-Mole Financial Statecraft or Whack-a-Mole Reviewed by Marc Chandler on June 13, 2019 Rating: 5
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Great Graphic: Euro's (OECD) PPP

June 12, 2019
US President Trump recently bemoaned the fact that the euro is undervalued.  While his critics complain that he is prone to exaggeration, in this case, the euro is undervalued.  This Great Graphicisa long-term chart of the euro has moved around its purchasing power parity as measured by the OECD.  Currently, the euro is about 22% undervalued, and …
Great Graphic: Euro's (OECD) PPP Great Graphic: Euro's (OECD) PPP Reviewed by Marc Chandler on June 12, 2019 Rating: 5
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Anxiety Ticks Up, Risks Pared

June 12, 2019
Overview: The S&P 500 snapped a five-day advance yesterday and set the heavier tone for equities today.  Continued protests in Hong Kong were not shrugged off as they have been in the last couple of sessions.  The Hang Seng's nearly 1.9% decline was the largest in a month and led the region lower.  European shares are falling in sympathy, …
Anxiety Ticks Up, Risks Pared Anxiety Ticks Up, Risks Pared Reviewed by Marc Chandler on June 12, 2019 Rating: 5
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