“Get To The Chopper”: Japan Election, Bernanke Visit Fuel Helicopter Money Rumors

We’ve talked plenty in these pages about the ebb and flow between the Japanese yen and risk assets. Simply put, the yen is a safe haven currency. When you wake up to see it’s appreciated sharply against the dollar in the overnight session, you can pretty much immediately infer that the mood out there is…

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…

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…

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 Black Swan Landed: What Happens Now?

Ok, the Brexit dust has settled. Sort of, although there’s a Russell rebalance today, so don’t forget about that. The obvious question going into the weekend is this: “so by almost all accounts that was a catastrophe, what now?” Well, the first thing you should probably take into consideration is the collective central bank reaction.…

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)…

Yellen Testimony Overshadowed By Brexit, Soros Warns Of “Black Friday”

Janet Yellen trekked up Capitol Hill on Tuesday for her semi-annual Humphrey-Hawkins testimony. Frankly, it kind of feels like a snoozer. Here are some of the bullet points: WE DO HAVE LEGAL BASIS TO PURSUE NEGATIVE RATES NOT CONSIDERING NEGATIVE RATES BREXIT-RELATED FINANCIAL VOLATILITY COULD AFFECT U.S. I DON’T THINK RISKS TO FINANCIAL STABILITY ARE…

Everything Is Fixed, But Watch For “Tape Bombs” Ahead Of Thursday

We woke up Monday morning and everything was fixed. Actually, it started last night when the British pound suddenly spiked above 1.46. Liquidity was thin, according to traders who also told Bloomberg that market-makers in some global banks have been told to cease quoting short-dated GBP options until further notice.   The GBP rally set…

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