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Several Developments ahead of the ECB meeting

April 27, 2017
The ECB meeting and the press conference that follows it is the main event.  However, it has had to compete with the Bank of Japan and Riksbank meetings, as well as the further reflection of the tax reform proposals by the Trump Administration yesterday.  Also, after a misdirection over pulling out of NAFTA entirely, the US has now signaled its in…
Several Developments ahead of the ECB meeting Several Developments ahead of the ECB meeting Reviewed by Marc Chandler on April 27, 2017 Rating: 5
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What is the Bank of Japan to Do?

April 26, 2017
The Bank of Japan is unlikely to change policy.  Its current policy of targeting 10-year bond yields and expanding the balance sheet by JPY80 trillion is aimed at boosting core inflation to 2%.  
However, the risk is that BOJ Governor Kuroda surprises the market as he has done on other occasions.  If Kuroda is going to surprise the market, what wou…
What is the Bank of Japan to Do? What is the Bank of Japan to Do?  Reviewed by Marc Chandler on April 26, 2017 Rating: 5
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Euro Drivers

April 26, 2017
There is one variable that explains the euro movement better than any other single variable we have found.  The US-Germany two-year interest rate differential continues to be highly correlated with the euro-dollar exchange rate.
Specifically, the percent change in the differential (or swap rate) and the percent change in the euro have a 0.56 correl…
Euro Drivers Euro Drivers Reviewed by Marc Chandler on April 26, 2017 Rating: 5
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Dollar Stabilizes Ahead of Trump and ECB

April 26, 2017
The US dollar was marked down in response to the French election and saw some follow through selling yesterday, but the momentum had slowed, and now it is stalled.  The greenback is posting upticks against nearly all the major currencies.  
There is a good reason to be cautious.  We have mentioned it before, but think it is important that speculato…
Dollar Stabilizes Ahead of Trump and ECB Dollar Stabilizes Ahead of Trump and ECB Reviewed by Marc Chandler on April 26, 2017 Rating: 5
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NAFTA Trade Update

April 25, 2017
The Trump Administration has switched gears.   During the campaign through the inauguration,  Trump picked on Mexico.  The rhetoric and threats drove the peso to record lows.  By the OECD's calculation the peso more than 150% undervalued. 
The re-opening of NAFTA negotiations was supposed to be aimed more at Mexico than Canada.  Sentiment turne…
NAFTA Trade Update NAFTA Trade Update Reviewed by Marc Chandler on April 25, 2017 Rating: 5
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