Deus Forex Machina


Macro Morning: Yawn

Politics and pronouncements were the key drivers in a macro sense overnight. In the US the House voted to suspend the debt ceiling for 3 months forestalling problems for the stock market and opening the way for the economy and earnings to continue to drive prices higher. David Cameron announced an “In or Out” referendum


Macro Morning: Euro volatility

Euro was absolutely smashed in early trade last night as it and the Dax were sold heavily on talk that the commercial and retail arms of Deutsche Bank are to be split up. But it was then rescued in part by the ZEW survey and the strong Spanish bond auction. Equally however, in the case


Macro Morning: Yen watch

Wall Street was out overnight for both the Martin Luther King holiday and the inauguration of US President Obama for his second term. Europe had a positive tone however with the Bundesbank putting out a report saying that the recent weakness is likely behind the German economy. Bloomberg report that the Bundesbank said in its


Macro Morning: Stocks make new high

It looks like there is not going to be a debt ceiling debacle as US lawmakers seem to moving toward conciliation and compromise which when combined with GE’s earnings report saw stocks in the US set their highest weekly close since 2007 as the unconventional policies of the Fed and Chairman Bernanke continue to work


In a bull market, be bullish

The title of this post is one of the most important statements in all of Jesse Livermore’s great book “Reminisences of a Stock Operator” but it is also one of the hardest market axioms to adhere to because often rhetoric gets in the way. Often economic reality gets in the way or often our personal biases get in


Macro Morning: US blast off

Stocks hit their highest level since 2007 overnight as a combination of continued Fed buying and better than forecast US data saw traders focus on the positive. The US dollar came under pressure again as a result which saw the euro and many commodities including gold and silver rally and the tone was overall more


Macro Morning: FX dominates markets

Sleepy is a word one of my old colleagues Richard Franulovic of Westpac in New York used to describe the market’s trade overnight and it seems apt at least from an equity market point of view. But sleepy is not a way we would describe trade on global FX markets as the Yen consolidates some of its recent


Macro Morning: Yen reverses, stocks stall

The Yen might finally have found a reason to put in a sustainable high for the moment after comments from the Japanese Economy Minister, Akira Amari, yesterday reinforced that it’s not just the weaker Yen that is the panacea for corporate Japan. Dow Jones news wires reported Amari said: …a yen that’s too weak is not


Macro Morning: Euro tear

The euro is at it again driving to a new 11 month peak at 1.3404 in overnight trade as markets await a speech by Fed Chairman Ben Bernanke which is due to kick off around 8 am Australian time. The speech is widely expected to reiterate Bernanke’s and the Fed’s dovish credentials and to reiterate


The Great Rotation

Cash flowed into the US stock market at a pretty fast clip last week with Lipper reporting that US stock funds received $9 billion in new allocations. Bond funds didn’t miss out entirely though with $4.2 billion of inflows. If we just looked at the Stock flow we’d say the market is bullish. If we


Macro Morning: Stocks flat, euro soars

Stocks were fairly quiet if not pressured for much of the day in European and US trade Friday but the euro roared higher  as the US dollar came under a fresh assault from the single currency. Interestingly, the Aussie dollar’s inability to follow the euro higher could suggest that with the rotation that seems to


Macro Morning – Stocks cautious awaiting Alcoa report

US markets are cautious ahead of the start of earnings season and Reuters reports that: Profits in the fourth quarter are seen above the previous quarter’s lackluster results, but analysts’ current estimates are down sharply from where they were in October. Quarterly earnings are expected to grow by 2.7 percent, according to Thomson Reuters data. So as


Macro Morning – FX markets volatile, stocks rally

We’ll get to non farm payrolls in a little bit but what a day’s trade Friday was in Global FX markets. We sat here in Asia watching currencies continue their trends from the night before – the Aussie came under pressure breaking down through the level we identified Friday morning, found support around 1.0425 before


Macro Morning – Fed back in play

The release of the Fed Minutes from the last meeting was not anticipated to be a market mover overnight but the fact that members thought the bond buying program may end this year spooked some investors pushing stocks lower which also drove the US dollar and US yields sharply higher. Reuters reported, “Several (officials) thought


Will the RBA intervene in the Australian Dollar?

Cross posted from The Australian Dollar made a high at 1.0525 last night and with the Fiscal Cliff avoided, stock markets ebullient, commodities independently strong even with the overnight US dollar strength and Chinese and US PMI’s signalling an economic recovery there seems to be little headwinds to an Aussie dollar that can trade


Macro Morning – Stocks surge on Cliff deal

The Punditry has been full of pessimism in the past 20 odd hours since the Cliff deal was passed by the House yesterday morning – “watch out for the debt ceiling negotiations”, “the US needs to stabilise its debt position”, “this deal doesn’t fix anything” and so on. But the markets don’t care and aren’t


Macro Morning – Euro surge derailed by Cliff comments

A night of two halves with optimistic Obama comments driving Euroepan stocks and the Euro higher but then Republican posturing placed the focus squarely back on the possibility that the US might still go over the cliff. German IFO came in stronger than forecast overnight as well which helped the Euro to surge higher across


Australia’s Leading Index turns down again

Westpac has just released its monthly Leading Index of Australian growth in conjunction with the Melbourne Institute. This index is set up to give an indication of the likely level of growth in 3 to 9 months time. Westpac – MI said, The annualised growth rate of the Westpac–MelbourneInstitute Leading Index, which indicates the likely pace


The people’s champion exits

News today that Aussie John Symonds has ceded control of the Aussie Home Loans Group to the Commonwealth Bank which has taken an 80% stake in the erstwhile people’s champion. Business Day reports that, Mr Symond will continue as executive chairman of Aussie and will retain the outstanding 20 per cent shareholding, while continuing to


Macro Morning – Fiscal Hope drives markets

Finally some movement and hope that the ‘Fiscal Cliff’ might be averted with John Boehner making a large and material concession by putting tax hikes on the table, but only for those who earn over $1 million, not the $250,000 lower income limit that president Obama was or is looking for. This is a big


Macro Morning: Abe wallops yen

Friday night’s trade was once again dominated by moves in global FX markets and a continuation of weaker equity prices in the US.  It doesn’t feel like it is going to be a quiet close to the year. Normally with only one full week left in the year volumes get thin, thoughts turn to the


Macro Morning: Focus on the cliff

Ben Bernanke would have looked at the US PPI data last night and been convinced he is doing the right thing. During November producer prices fell 0.8% from -0.2% last and -0.5% expected with the year on year rate now sitting at just 1.5%. Of course the Fed Chairman is expressly targeting unemployment now and will keep


Macro Morning: Bernanke drops, so do stocks

The Fed has ramped up its efforts at stimulus and signalled that the notion of QEInfinity was right expressing its disappointment at the recovery so far and the level and length of time that Americans are spending on the dole queue. In its statement this morning the Fed said that it will keep rates at