Marc to Market: Current Account Positions

Results for Current Account Positions

EMU External Account Reviewed

Marc Chandler August 20, 2014

The euro area reported its current and financial accounts for the month of June. Combined they make up the balance of payments.
Traditionally, under the gold standard, the current account would be balanced by capital flows and the transfer of gold claims.
In the modern era, some economists emphasize the basic balance in explaining (and forecasti…

EMU External Account Reviewed Reviewed by Marc Chandler on August 20, 2014 Rating: 5

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Great Graphic: Seasonality of Japan's Investment Income Balance

Marc Chandler January 14, 2014
Japan's JPY592.8 bln November current account deficit is the largest on record. It is the second consecutive deficit after a string of 8 surpluses that followed a string of three deficits, going back to late 2012. Before then, Japan consistently reported surpluses, leaving aside the occasional fluke.
Japan has been running trade deficits…

Great Graphic: Seasonality of Japan's Investment Income Balance Reviewed by Marc Chandler on January 14, 2014 Rating: 5

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FX: A Return to Form?

Marc Chandler January 14, 2014
After trying to decipher the policy implications of the weak US jobs data, investors are attempting now to look past it. In the currency markets, this has meant a return to the status quo ante, which was weaker yen and dollar-bloc currencies and stronger euro and sterling. The euro rallied to test $1.37 and sterling neared $1.6450. The dollar …

FX: A Return to Form? Reviewed by Marc Chandler on January 14, 2014 Rating: 5

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Dollar and Bonds Mixed, Equities Higher...Happy Monday

Marc Chandler November 18, 2013
The US dollar is mixed amid a light news stream. Last week's losses were extended against most of the major currencies except the Japanese yen. The greenback slipped from testing JPY100.45 before the weekend to JPY99.80. There is talk of a large amount of JPY100 strikes expiring in the first half of the week.
The favorable reaction to th…

Dollar and Bonds Mixed, Equities Higher...Happy Monday Reviewed by Marc Chandler on November 18, 2013 Rating: 5

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Dollar Mixed, Market Looking Elsewhere for Inspiration

Marc Chandler October 08, 2013
After unwinding the pre-weekend move yesterday, the global capital markets are quiet even if mixed. The partial shutdown of the US government and the political impasse remains the most important factor. Many are also recognizing that the longer the government is closed, the more likely that the Fed's exit strategy from QE3 is delayed. The r…

Dollar Mixed, Market Looking Elsewhere for Inspiration Reviewed by Marc Chandler on October 08, 2013 Rating: 5

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Dollar Remains Soft

Marc Chandler August 08, 2013
The US dollar remains on its back foot, where it has been since the disappointing employment report last Friday. It has slipped against all the major currencies this week, except the Canadian dollar. It is not so much the magnitude of the dollar's decline, which has been led by a 2% appreciation of the yen and a 1.8% short-covering gain of …

Dollar Remains Soft Reviewed by Marc Chandler on August 08, 2013 Rating: 5

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Consolidation Continues into the Weekend

Marc Chandler July 19, 2013
After large swings in the second half of last week, a generally consolidative tone emerged this week in the foreign market and continues now. The dollar fell against all the major currencies this week except the Japanese yen, against which it rose about 1%. The Scandis and antipodeans were the best performers, gaining 1.2-2.0% against the gre…

Consolidation Continues into the Weekend Reviewed by Marc Chandler on July 19, 2013 Rating: 5

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Dollar Consolidates Gains

Marc Chandler July 08, 2013
Asian participants initially tried to extend the US dollar's pre-weekend losses found little satisfaction. This seemed to encourage momentum traders in Europe to pare back long dollar exposure. However, North American traders may take advantage pullback to get on underlying trend.
The MSCI Asia Pacific Index slumped 1.75% and appears techn…

Dollar Consolidates Gains Reviewed by Marc Chandler on July 08, 2013 Rating: 5

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The Global Investment Climate

Marc Chandler July 07, 2013
There are five main characteristics of the global investment climate: 1) the Federal Reserve has begun a protracted exit from the extraordinary monetary policy; while 2) other major central banks are not ready to follow suit. This is encouraging 3) an unwind of structural positions, that were predicated on low US interest rates, and 4) the repl…

The Global Investment Climate Reviewed by Marc Chandler on July 07, 2013 Rating: 5

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Great Graphic: Italy's Surprise

Marc Chandler July 01, 2013
This Great Graphic depicts the manufacturing PMI for Germany (white), Italy (yellow) and France (green), which are the three largest economic in the euro area. The chart was made on Bloomberg.
Not one in a hundred observers would have guessed that the June manufacturing PMI was higher for Italy than Germany and France. Germany in fact is flat…

Great Graphic: Italy's Surprise Reviewed by Marc Chandler on July 01, 2013 Rating: 5

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Economic Surprises Keep Dollar Bid

Marc Chandler June 14, 2013
Unexpectedly firm producer prices and a smaller than expected Q1 current account deficit helped the US dollar extend gains recorded in Asia and Europe.
US producer prices rose for the first time in 3-months and the 0.5% headline increase contrasts with market expectations for a 0.1% increase and the sharper than expected decline in import price…

Economic Surprises Keep Dollar Bid Reviewed by Marc Chandler on June 14, 2013 Rating: 5

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Great Graphic: European Imbalances

Marc Chandler March 12, 2013
This Great Graphic is from Bruegel, a European think tank. It depicts the changes in the current account positions of several European countries.

A few observations may be worth sharing. First, despite prodigious exports and imports, there has been no significant change in the German current account position.

Second, both Ireland and Greece …

Great Graphic: European Imbalances Reviewed by Marc Chandler on March 12, 2013 Rating: 5

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Great Graphic: Shifting Trade Patterns will Reduce Target2 Imbalances

Marc Chandler December 10, 2012
The Target2 imbalances caused much consternation earlier this year as some economists focused on them as either signs that a transfer union was a fact on the ground, or alternatively, as a sign of the pending costs to Germany, which German politicians fail to acknowledge.
This Great Graphic comes from the Brussels Blog at the London School of Econ…

Great Graphic: Shifting Trade Patterns will Reduce Target2 Imbalances Reviewed by Marc Chandler on December 10, 2012 Rating: 5

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Three Key Developments

Marc Chandler October 31, 2012
The US dollar is generally offered today. There does not seem to be a major catalyst. Rather technical factors, and in particular, the euro's inability to fall through the $1.2880 area despite repeated tests appears to have encouraged the move to the upside, as the path of least resistance.

Month-end flows are difficult to anticipate but m…

Three Key Developments Reviewed by Marc Chandler on October 31, 2012 Rating: 5

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Thoughts about the Euro Zone's External Accounts

Marc Chandler March 20, 2012
Yesterday, the euro zone reported that its January current account surplus of 4.5 bln euros was largest in almost five years. The December surplus was revised to 3.4 bln from 2.0 bln initially. The monthly swings of the time series can be misleading due to seasonal factors and the schedule of transfer payments.
The 12-month cumulative deficit wa…

Thoughts about the Euro Zone's External Accounts Reviewed by Marc Chandler on March 20, 2012 Rating: 5

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G20: Little Room for Fresh Initiatives

Marc Chandler February 24, 2012
The G20 will meet in Mexico this weekend. There seems to be three key issues: IMF funding, replacement for Zoellick who will step down as head of the World Bank and the oil shock. It is unlikely that any of these issues are resolved this G20 meeting, but important groundwork could be laid for future decisions.
The European debt crisis remains the …

G20: Little Room for Fresh Initiatives Reviewed by Marc Chandler on February 24, 2012 Rating: 5

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The Problem with Success

Marc Chandler February 05, 2012
Failures are humbling and costly, but ultimately it is success that is more challenging.

The strains which broke the back of the economic and financial system emanated from its successes. Years of economic growth produced surpluses in Asia after the 1997-1998 financial crisis, and emerging markets more generally, that could not absorbed. These surp…

The Problem with Success Reviewed by Marc Chandler on February 05, 2012 Rating: 5

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Dollar Bid

Marc Chandler January 25, 2012
The dollar's downside momentum has faded since the start of the week and short-term momentum traders have to adjust. There does not seem to be a precipitating factor. The German IFO was mostly better than expected and while the UK Q4 GDP was off 0.2% rather -0.1% may could have been a factor, but sterling is holding in better. Key support …

Dollar Bid Reviewed by Marc Chandler on January 25, 2012 Rating: 5

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Consolidation in FX

Marc Chandler December 22, 2011
A consolidative tone has emerged after yesterday's powerful reversals after the warm reception to the initiation of the ECB's 3-year funding facility. Although the argument advanced in this space is that banks will 1) use the funds as a liquidity cushion, 2) service own liabilities, and 3) to the limited extent they increase sovereign bond…

Consolidation in FX Reviewed by Marc Chandler on December 22, 2011 Rating: 5

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Three Key Developments

Marc Chandler December 11, 2011
Three events took place last week that will shape the general investment climate in the weeks and months ahead.
Pump it Up The ECB significantly increased its liquidity provisions. Some observers seem to be disappointed that the ECB did not flout its own legal mandate and indicate it would buy an unlimited amount of peripheral bonds.
This should not…

Three Key Developments Reviewed by Marc Chandler on December 11, 2011 Rating: 5