Deus Forex Machina


Macro Morning: Australian dollar weakens

It is a potentially huge day for markets today as we have the monthly release of the big manufacturing PMI numbers. Kicking off this morning is the HSBC manufacturing PMI and then tonight we get the Markit PMI’s for France, Germany, the Eurozone and the US. These data are very important for a number of reasons


Macro Morning: G20 rubber stamps currency war

Well, well, well, what a weird mob the G20 has become. The distance between reality and what exists behind the cloistered walls of their cosy little meetings and networking functions seems to grow with almost the same magnitude of the distance between Brussels and the rest of Europe. But then why should we be surprised


Macro Morning – Growth worries

The outlook for growth is taking what is becoming the usual middle 3rd swoon at the moment with data from the US overnight reinforcing the weaker than expected non-farm payrolls from last month. The Philly Fed survey fell to 1.3 from 2 and against the 3 the market expected but was was troubling was that


Macro Morning: It’s the economy stupid

Markets are nothing if not emotional, erratic fools at times and as proof of the adage that volatility begets volatility the Aussie and euro completely reversed the previous days recovery, stocks were under intense pressure – Apple more so than anyone – and the copper price was sold down heavily on reported concerns about global


Macro Morning: Boing

Some days the data matters and others it doesn’t. When markets are volatile it is difficult to know which day it will be but it seems that last night was one of those ones when US stocks investors at least grabbed the better than expected data with both hands and ran with it. FX traders on


Macro Morning: Bulls slaughtered

Gold’s fall continued in early Asian trade yesterday and it was already under acute pressure when the weaker than expected Chinese data was released. The pressure on gold had been also pressuring Aussie and it came under sustained selling once the 1.6% QoQ and 7.7% YoY prints hit the screens. At first I was surprised that


Macro Morning: Gold whacked

Much happened Friday night but clearly the weaker than expected retail sales in the US, which fell 0.4% raw and -0.1% ex autos and gas, hurt economic sentiment and was confirmed by the sharp and unexpected fall in the Michigan Consumer sentiment number which printed 72.3 against 78.5 consensus and 78.6 last. The US recovery


Macro Morning: Stocks still flying

The risk appetite of global investors for equities remains unsated with more rallies on stocks in Europe and the US as the central bank goosing continues with the steady flow of liquidity and seeming absence of risk.  News overnight that PC sales have plummeted should come as no surprise in a world that is increasingly becoming tablet


Macro Morning: Wild yen

The jobs report in the US was an out and out shocker on Friday night printing at just 88,000 against expectations of an increase of 200,000. This data built on the weak ADP report and the unexpected up tick in Jobless Claims over the week which has dented the certainty with which many market pundits


Macro morning: BoJ smashes yen

No mucking around at the Bank of Japan yesterday with the vote to double the size of the balance sheet and try to hit 2% inflation by March 2015. The fact that the vote was unanimous behind the new BoJ Governor Kuroda is also instructive that after 2 decades of moribund growth the Japanese are growing


Macro Morning: US disappoints

Interesting day in Europe and North America with stocks lower on the back of weaker than expected US data but gold and crude also lower even as North Korea grows more bellicose. I have know idea what is running through the minds of those in power in Pyongyang but according to Reuters: North Korea “formally


Macro Morning: Gold tanks

Last night was one of US dollar strength with USDJPY reversing yesterday’s weakness, Euro and GBP unable to sustain their up moves  and gold coming under intense pressure. The reason is hard to fathom given that stocks, especially in Europe were so strong. Perhaps it was news of a little bit of backsliding over the


Macro Morning: Dud data

The markets were less focused on Cyprus and more focused on some weaker than expected data out of the US overnight with stocks a little lower and the US dollar a little weaker. Interestingly, the Tankan survey in Japan yesterday didn’t stop the yen from strengthening in what looks like both a technical move and


Macro morning: Europe sours

The euro and the Aussie came under some pressure overnight as the former continues to be buffeted not just by Cyprus but also the Italian political impasse and weak European data while the latter continues to do well on the crosses but just couldn’t hold the up trend under the weight of negativity thatis just enough to


Macro Morning: Dijsselbomb

I had grave concerns about the Dutch Finance Minister Jeroen Dijsselbloem and his ability to lead the Euro Group and command the gravitas and experience necessary for that position. Overnight we saw that he is still wearing his L-Plates as he torpedoed the markets rally after the Cyrpus deal was announced. In an interview with Reuters and the


Macro Morning: Cyprusania

Will they won’t they. What will they, what won’t they. Cyprus, Cyprus it’s all about Cyprus. The Cypriot issue continues to dominate the minds of the market and the pundits as the rumours fly on what the new deal to haircut deposits might be. Reuters reported over the weekend that it was 4% for the


Macro Morning: Australian dollar roars

So the emotional roller coaster continues and the markets were worried about Cyprus again overnight. That is now four trading days where we have been worried, not worried, on and off. This suggests that Cyprus might be a convenient ex poste excuse rather than an ex ante cause but hey who am I to argue


Macro Morning: World doesn’t end

The world didn’t end after the Cypriot vote so markets had a better night in the Northern hemisphere with stocks and the euro higher. Even the British pound managed to post a positive day which speaks volumes for the markets move given the the Chancellor of the Exchequer halved expected growth in the UK this


Macro Morning: Cyprus unearths gold

Emotions are great in markets. One day something matters, the next it doesn’t then it does again. Such has been the case this week with Cyprus. Asia was really worried Monday but the Northern hemisphere less so and then overnight with the Cypriot Parliament voting down the proposed “rescue” package markets have decided that Cyprus


Macro Morning : Don’t panic

You won’t be surprised to know that Russian President Vladimir Putin had something to say about the Cypriot deposit grab by the EU Troika over the weekend. A spokesman for him called it “unjust, unprofessional and dangerous”. We echo those thoughts but without the Russian leader’s obvious self interest. Still, overnight markets shrugged off the


Macro Morning: Cyprus FAIL!

The Cyprus ‘bail in’ of depositors and the butterfly effect that this might have on banks across the Eurozone in almost every nation except maybe Finland and Germany has knocked the euro and Aussie substantially lower this morning. The euro closed the week at 1.3073 yet this morning in early Asian trade it sits at


Macro Morning: US retail sales were good

The Dow closed higher again overnight, just, for the 9th straight day posting a rise of 0.03% 14,455. A rally of this length hasn’t happened since 1996 according to news reports out of the US. The bear in me wants to say the last couple of days aren’t much of a rally anyway but that


Macro Morning: No volatility

The VIX volatility index hit its lowest level since 2007 overnight as the Dow printed another new all-time high and the troubles with Italy and the problematic Chinese data over the weekend were ignored. As you can see in the chart at right, which is the VIX over the past 12 months, the markets estimate of volatility


Macro Morning: King dollar returns

The US dollar is doing something very strange at the moment. Well, not that strange, after all it’s really just something that we haven’t seen for a while. That is, the US dollar seems to be re-establishing a positive correlation with moves in the stock market and is rallying along with the Dow and the