This is a collection of articles I have read over the weekend to get a feel for the overall macro conditions / themes for the next week.
Marc to Market: Greenback Finds Better Traction
The US dollar rose against all the major and most emerging market currencies last week. After selling off following the ECB and FOMC meetings, the dollar found better traction. It was helped by widening interest rate differentials. Regional F
ed manufacturing surveys for March suggest the quarter is ending on a firm note. With new orders rising, it is reasonable to expect the momentum to carry into Q2.
Marc to Market: Is that Buzzing Sound Helicopter Money?
Helicopter money is the rage. Central banks are talking about it. Economists are debating it. The media is rife with coverage. While it sounds important, it is not precisely clear what helicopter money means
Marc to Market: ECB, Corporate Bonds, and Credibility
The euro’s rallied shortly after the ECB announced numerous monetary measures that in their totality were more than expected. Many saw this as proof that monetary policy had lost its effectiveness, and central banks have lost credibility.
Marc to Market: When Doves Cry: Imprudently Cautious
Yellen acknowledged that the Fed’s assessment of the US economy had not changed much from December. There is little reason it should. However, it is difficult to reconcile that with the substantial change in the forward guidance, and the halving of the rates hikes that are deemed appropriate this year.
Was that it? ~ Macro Man
Over the last 5-6 weeks risk assets, commodities, and non-dollar currencies have bathed in the warm glow of an accommodative Fed that’s been more than willing to play it cool.
Was that it? While calling tops may not go as spectacularly wrong as trying to pick bottoms, kevlar glove-style, it can on occasion be no less painful. Call it death by a thousand cuts rather than a decapitation- either way there is sufficient danger that it is difficult to call a definitive extreme with anything more than temerity. (The exception, of course, is if you’re in the business of being notable rather than profitable, in which case 100% confidence is a prerequisite and accuracy is of secondary if not tertiary importance.)
Notes From Underground: Bored of the Fed | Notes From Underground
Currently, the financial markets are in rally mode as repressed savings seek some measure of return while PENSIONS, SAVERS and INSURANCE COMPANIES have to seek shelter from the game of negative interest rates. This experiment is commented on all day long and I am bored, terribly bored as the continued praise heaped on the promoters of the ever-present counter factual rubbish. Today, San Francisco Fed President John Williams was paraded out to reignite the possibility of a Fed rate hiked in April or June as it seems the headwinds that prompted Yellen’s dovish press conference last week have abated. Williams is not even a voter so why should we care what he has to say? It’s just more nonsense. The rumors continue to swirl that the G-20 crafted some type of agreement to prevent the dollar from rallying, and stopped other nations from attempting to manufacture the depreciation of their currencies in a contrived manipulation to gain a competitive trade advantage. Again, I don’t believe this story and will wait to see how it plays out during the coming month.