Volatility Collapses (Again) As Investors Cling To Goldilocks Outlook On Brexit Wednesday

It’s quiet out there. Well, except for that whole UK officially leaving the EU thing. As outlined earlier this morning, Theresa May will make the UK’s split with the EU official on Wednesday, sealing the economic fate (literally, as they’ll be a hand delivered letter involved) of the British people and very possibly relegating the…

It’s Falling Apart: Reflation Trade Shrivels Up And Dies As Markets Sour On Risk

Well, the dollar is under pressure on Monday, just as we said it would be on Sunday evening. The Bloomberg Dollar Spot Index fell as traders digested the failure of the GOP health care bill on Friday. This is the index’s eighth drop in the last nine days, and as Bloomberg notes this morning, “further losses of…

Mind The Cross-Atlantic “Gaps”: Your Week Ahead Preview

Earlier, we talked a bit about Donald Trump’s waning political capital and the extent to which rising policy uncertainty in the US and declining political risk in Europe may ultimately lead to a narrowing of rate differentials, painting a bearish picture for the dollar. Meanwhile, the yen is likely to remain bid as its fortunes are…

“Trump’s Political Capital Is Getting Consumed”: One Simple Trade Idea For The Week Ahead

Think about the events that transpired over the last two weeks. Now think about them in terms of the following two frameworks for how things could have gone. Fed comes out hawkish, guns ablazin’, Geert Wilders puts up a better-than-expected showing in the Dutch elections, the GOP health care bill moves forward Fed comes out…

“Hope”: Health Bill Failure Isn’t Death Knell For Trump Trade, One Bank Says

We’ve said it before and we’ll say it again: one-way bets and crowded trades are inherently susceptible to getting caught horribly offsides when sh*t goes wrong. And although specs have trimmed 10Y shorts over the last two weeks (they cut around $7.4m/DV01 in the week ended Tuesday, the second straight week of pared bearish bets), eurodollar shorts are still…

“Things Are Calm. Too Calm”

As we said earlier, “not a creature was stirring” over night. Or, put differently, “it’s quiet out there.” “Maybe too quiet.” Former FX trader Richard Breslow agrees and he seems to be feeling a bit “punchy” on Thursday morning (to quote one of his missives from last month). Below, find his latest and do note…