Big Macs and Big Buildings: The “Gates” Are Up In The UK

If you had no idea how the Brexit vote turned out, you could certainly surmise what happened just by glancing at the following chart: What do you see? That’s right, a stronger dollar, a stronger yen, and sharp declines in the Chinese yuan and British pound. Actually it’s not entirely accurate to call the pound’s…

Red Light, Green Light

Earlier this week, we explained how pretty much everything you’re seeing in terms of market swings can be at least partially explained by central bank frontrunning. Stocks up? Investors anticipate the Fed will delay its next hike thanks to the Brexit debacle. Dollar up? Investors know that even if the Fed doesn’t hike, it’s still…

Pounded: British Pound Plunges, Stocks Soar As Bank Of England Comes To Rescue

This is yet another one of those days where everything can pretty much be explained in one chart. Here it is: Bank of England governor Mark Carney gave his second speech since the Brexit vote on Thursday and all but assured the market that more BoE easing is in the cards. “The economic outlook has…

Are You For Real? Enjoy The Rally, But Remain Incredulous

First thing’s first. Here’s the only chart you need to make sense of the two-day risk-on move (i.e. the rally): You’ll likely see several versions of that throughout the rest of the day assuming equities hang on to outsized gains. Basically, Treasurys aren’t buying what stocks err … aren’t selling. Ok, that’s a confused attempt…

Bulls Make Money, Bears Make Money, (Un)Hedged Hogs Get Slaughtered

We’ve talked quite a bit about what companies and sectors are most vulnerable to Brexit and a rising dollar (see here and here). Let’s look, for a moment, at asset classes and equity drawdowns. Over the past several days, the need to hedge against long tail events has become readily apparent. Unfortunately, hedging against macro…

Markets Rally - Out Of The Woods Already?

And now, back to our regularly scheduled programming. Well, not entirely, but US traders woke up Tuesday to green screens, a welcome reprieve from two days of mayhem. “Brexit” discussions still dominate the airwaves and headlines, but you can count on the dip buyers and knife catchers for what may or may not be a…

Brexit Fallout Continues: Here’s What To Watch

US and European bourses got off to a rocky start on Monday after a largely positive session overnight in Asia. You’ll want to watch financials here, both in the US and (especially) in Europe. Needless to say, markets were already questioning the solvency of some European banks and now, post-Brexit, we’ve got a real problem.…

A Closer Look At Which Companies Are Vulnerable To A Rising Dollar

Clearly, the results of the UK referendum leave us with quite a bit to think about going forward. Trading in the days ahead of the vote provided some important lessons in investor psychology and we learned, yet again, that the post crisis landscape is vulnerable to tail events. We were also reminded of the extent…

The Morning After: Surveying Brexit Damage

It all started at exactly 5:01 pm ET Thursday evening. That’s when the following headline hit the terminal: NIGEL FARAGE: LOOKS LIKE REMAIN WILL EDGE IT: SKY Hallelujah. This week’s risk-on sentiment was justified after all. They’ll be no “Brexit” on our watch. Take that, anyone long yen. Then, exactly one hour and 53 minutes…

Final Call For Brexit Analysis: A Last Minute Look At One Bank’s S&P Forecast

This is it folks, last call for Brexit analysis and commentary. Or at least we hope so, although one certainly imagines that if the vote is close, whichever side loses will demand a do-over. To be sure, markets are trading as though “remain” is a done deal. Have a look, for instance, at (in order)…