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US Dollar Loses Momentum Ahead of the Weekend

May 25, 2018
The euro and sterling were sold through yesterday's lows in Asia, but rebounded in Europe, with the help of mildly constructive data in the form of the German IFO and details of UK Q1 GDP.   The IFO climate measure matched the April reading and thereby snapped a five-month slide.  The expectations component slipped, but the current assessment …
US Dollar Loses Momentum Ahead of the Weekend US Dollar Loses Momentum Ahead of the Weekend Reviewed by Marc Chandler on May 25, 2018 Rating: 5
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Argentine Stability Remains Tenuous

May 24, 2018
(from my colleague Dr. Win Thin)
INTRODUCTION
Argentina has been able to inject some stability into its markets with several aggressive moves.  Yet the situation remains precarious.  We believe a quick IMF deal followed by adherence to program targets are necessary but not sufficient conditions to make this stability more durable.  Argentina is li…
Argentine Stability Remains Tenuous Argentine Stability Remains Tenuous Reviewed by Marc Chandler on May 24, 2018 Rating: 5
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Europe's Sovereign Bond-Backed Securities

May 24, 2018
It has been discussed for several weeks, and today the European Commission unveiled a proposal for a new asset-backed security.  The backing would be sovereign bonds weighted by the size of the economy.  
This may sound like mutualization of risk, but it is no such thing.  These new securities are not Eurobonds. The EC is calling on the private sec…
Europe's Sovereign Bond-Backed Securities Europe's Sovereign Bond-Backed Securities Reviewed by Marc Chandler on May 24, 2018 Rating: 5
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Greenback Pushes Lower

May 24, 2018
The US dollar is pulling back after recording new highs for the year against the euro and sterling.  The greenback is lower against nearly all the major currencies, but the Canadian dollar.  It is also softer against most of the emerging market currencies.  The chief exception is the Turkish lira.  Yesterday's 300 bp rate hike could only stem …
Greenback Pushes Lower Greenback Pushes Lower Reviewed by Marc Chandler on May 24, 2018 Rating: 5
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Merkel: Is She a Xi?

May 23, 2018
After visiting Russia's Putin earlier this week, German Chancellor Merkel is calling on China's President Xi at the end of the week. Merkel and Xi are savvy politicians, and both have raised a simple practice to a high art form:  don't stop adversaries from shooting themselves in the foot.  
China may be among the largest beneficiaries …
Merkel: Is She a Xi? Merkel:  Is She a Xi?  Reviewed by Marc Chandler on May 23, 2018 Rating: 5
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Dollar and Yen Surge, European Data Disappoints

May 23, 2018
The US dollar has extended its gains against most of the major currencies.  Momentum, positioning, and divergence continue to drive it.  The euro briefly traded a little below $1.17, an important technical area and has enjoyed a bounce in late morning turnover in Europe. There is a 707 mln euro option struck there that expires today and  1.1 bn eu…
Dollar and Yen Surge, European Data Disappoints Dollar and Yen Surge, European Data Disappoints Reviewed by Marc Chandler on May 23, 2018 Rating: 5
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Trade is Important, but Capital More So

May 22, 2018
Tensions between the world's two largest economies over trade issues have dominated the agenda in recent weeks.  Trade in goods and services is important.  China is the top market for US goods exports in 2017.  
It bought more  $127 bln of US exports last year, a 12% increase after small declines.  Overall, US goods exports to the world rose a …
Trade is Important, but Capital More So Trade is Important, but Capital More So Reviewed by Marc Chandler on May 22, 2018 Rating: 5
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Is Turnaround Tuesday Nearly Over Already?

May 22, 2018
Corrective forces that took hold in the foreign exchange market yesterday extended their hold today.  However, a cent bounce from yesterday's lows has seen new sales of euro and sterling emerge, and the greenback found bids below JPY111.00.  There is a $600 mln option struck there that will be cut in NY today.  There is a 1.1 bln euro option a…
Is Turnaround Tuesday Nearly Over Already? Is Turnaround Tuesday Nearly Over Already?  Reviewed by Marc Chandler on May 22, 2018 Rating: 5
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The Threat of the Mini-BoT

May 21, 2018
Investors are having a fit.  For the first two months after the early March Italian elections, investors could hardly care less.  Italy's premium over Germany to borrow money for a decade fell to a two-year low in late April near 132 bp.  In the last two sessions, it has jumped nearly 40 bp to 1.87%.  
The economic program of the new government…
The Threat of the Mini-BoT The Threat of the Mini-BoT Reviewed by Marc Chandler on May 21, 2018 Rating: 5
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