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…

The First Week Of The Rest Of Your Life

Welcome to the first week of the rest of your life. By now you all know what’s coming and if you don’t, well, you can review the HR weekend reading or you can simply scan the short version here. Overnight, the action found the dollar adrift (although it did bounce a bit later in the…

“I’d Tax Every Benz,” “It’s A Corpse That Still Moves”: Are You Getting The Truth On Trade?

“At the same time, tariffs would weigh on US growth. If we assume that Mexico and China retaliate with equivalent tariffs, this would substantially reduce demand for US exports, depressing US GDP by around 0.7pp by 2019. In fact, tariffs would likely hit US GDP so sharply that the Federal Reserve would be prompted to reduce interest rates to cushion the blow—despite an increase in inflation.”

Daily Kickstart (Japan Battles Bond Markets, Mexico/Turkey Battle FX Traders, May Meets W/Trump)

As is rapidly becoming custom, we start with FX markets, where the USDJPY rose again, recapturing a 115 handle following the BoJ’s 10th bond buying operation of the month. If we hit 116, the dollar rally could gather some momentum “as the market seems to be short vol above that level,” one European trader told…

Daily Kickstart (Dollar In Focus As UK Court Rules; Lira Plunges)

On Monday evening I said I’d likely find myself talking about the dollar again first thing Tuesday morning and sure enough… As noted last night, the greenback came under renewed pressure around 4:30 p.m. EST when Bloomberg ran comments from Trump’s Treasury pick Steven Mnuchin who said “from time to time, an excessively strong dollar may have negative…

Is Now The Time To Short The British Pound?

Ok, so sterling had its best day since 2008 on Tuesday. It was as if everyone suddenly forgot the rationale behind the short bias that on Sunday pushed cable below 1.20 for the first time since the October flash crash (for those who are interested in black swans and multi-sigma events here’s the full flash…