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Fri, Feb. 5, 10:01 AM
- Sharply lower this week as the Fed and markets continue to walk back expectations for tighter monetary policy, the dollar (UUP +0.6%) is moving higher following this morning's jobs numbers.
- Jobs gained of 151K was a sizable miss, but the unemployment rate fell to 4.9% (even with labor force participation rising), and annualized wage growth topped 5%.
- Fixed-income and currency markets, for now, are focused on the strength in the report, with the 10-year yield up three basis points and the dollar ahead vs. the other major currencies.
- ETFs: UUP, UDN, USDU
Thu, Feb. 4, 12:41 PM
- The dollar (UUP -0.6%) is retreating again today, continuing a move which began at the start of the week and picked up steam yesterday morning when New York Fed President Bill Dudley called out the greenback's strength as a cause for concern.
- Not coincidentally, commodity stocks are bouncing off of sharply discounted levels, with names like Freeport McMoRan, Vale, and Cemex up double digit percentages over the last day-plus.
- Turning to countries, Brazil (EWZ +3.7%) is on a two-day tear of about 6%, and Canada (EWC +2%) of just under 3%. In its first chance to respond to Dudley's remarks, Australia (EWA +2.1%) gained 2.1% overnight.
- ETFs: DBB, BOM, RJZ, BOS, JJM, BDD, UBM, BDG, HEVY
Wed, Feb. 3, 9:17 AM
- The unsteady markets to start the year have finally gotten to FRBNY President Bill Dudley, who's sounding awfully dovish in an interview he gave this morning. He specifically mentioned weakening global growth and the strong dollar as concerns.
- The greenback (UUP, UDN) immediately spiked lower as his remarks hit, and the dollar index is now off 0.6% on the session.
- Just for the record - while the long-term trend remains up and to the right - the dollar index has weakened thus far in 2016 and is at roughly the same level it was at one year ago.
Wed, Jan. 27, 2:10 PM
- The S&P 500 (SPY -0.1%) and DJIA (DIA -0.3%) remain near flat, and the Nasdaq (QQQ -0.9%) modestly lower after the FOMC considerably softens its recent hawkish tone.
- Trading at 2.05% ahead of the announcement, the 10-year Treasury yield slips to 2.02%. TLT -0.2%, TBT +0.4%
- Gold adds $6 per ounce to $1,121 - right about its highest level since late October. GLD flat on the session.
- The dollar (UUP -0.2%) weakens across the board, and is now modestly lower today.
- Previously: Fed waves white flag (Jan. 27)
Fri, Jan. 15, 4:16 PM
Wed, Jan. 13, 9:25 AM
- “This is a capital-preservation market, not a money-making environment,” says Jeff Gundlach in his latest webcast. "We could be looking at a really ugly situation during Q1 ... It's particularly more likely to happen if the Fed keeps banging this drum of raising interest rates against falling inflation.”
- While oil may have bottomed for the moment, there's no reason to be bullish on black gold over the long term.
- The long dollar trade (UUP, UDN) is a crowded one, says Gundlach, noting plenty of occasions when the greenback fell despite Fed rate hikes.
- Of the Fed's insistence on four rate hikes this year vs. the market's expectation for just about two, Gundlach thinks the market might win.
Fri, Jan. 8, 8:49 AM
- U.S. stock index futures have added to gains following the strong December jobs print, with the S&P 500 now higher by 1.25%.
- Jobs were up 292K in December vs. 200K expected, and November/October gains were revised higher. The unemployment rate held steady at 5%.
- The 10-year Treasury yield popped up to 2.20% right after the report, but is returned back to 2.18% - up three basis points on the session. TLT -0.4%, TBT +0.8% premarket
- Gold (NYSEARCA:GLD) has added to losses, now lower by 1.3% to $1,094 per ounce. GLD -1.1% premarket
- Oil has added to its gains, now up 1.4% to $33.81 per barrel. USO +0.6% premarket
- The dollar (UUP, UDN) pops higher, now up 0.75% on the session. Particularly weak is the euro (NYSEARCA:FXE), down 1.2% to $1.08.
- Previously: Strong upward revisions add to December jobs beat; wages and hours worked flat (Jan. 8)
- Previously: Big jobs beat in December (Jan. 8)
Mon, Jan. 4, 11:17 AM
- Oil had been sharply higher after Saudi Arabia cut off diplomatic ties with Iran on Sunday, but it's tumbled more than $1 per barrel in the past few minutes, and is now modestly lower on the session at $36.95 per barrel. USO -0.55%
- The dollar sold off overnight, but it's put in a strong rally over the past couple of hours. The greenback is now in the green (UUP +0.5%) against all the major currencies, and particularly strong vs. the Swiss franc (FXF -0.4%) and commodity currencies the aussie (FXA -1.9%) and loonie (FXC -0.7%).
- U.S. equities are at session lows, the S&P 500 down 2.5% and Nasdaq off 3%.
Dec. 24, 2015, 1:08 PM
Dec. 17, 2015, 3:39 PM
- Word in trading circles was that king dollar was due for a leg down after the long-expected tightening in U.S. monetary policy, but the greenback (UUP +1%) has moved steadily higher since the Fed's move yesterday afternoon.
- For today's session, the dollar is up 1.45% to its highest level since the ECB unexpectedly sat on its hands earlier this month. Among the losers vs. the dollar today are the euro (FXE -1%), loonie (FXC -1.2%), yen (FXY -0.6%), swissie (FXF -0.7%), aussie (FXA -1.6%), and pound (FXB -0.7%).
Dec. 16, 2015, 2:17 PM
- Currency traders sell the Fed rate hike news, taking the dollar index (NYSEARCA:UUP) slightly into negative territory vs. solid gains ahead of the central bank's 2 ET statement and revised economic projections.
- Neither held too much surprise, with the "dots" continuing to show expectations for a Fed Funds rate of 1.4% at the end of next year.
- As for gold (NYSEARCA:GLD), it's volatile, but remains about 1% higher at $1,072 per ounce, and oil continues 4% lower at $35.80 per barrel.
- Previously: Stocks add to gains following Fed (Dec. 16)
- Previously: Fed projections: 1.4% Fed Funds by the end of 2016 (Dec. 16)
- Previously: Fed officially puts an end to ZIRP (Dec. 16)
- ETFs: UUP, UDN, FORX, USDU
Dec. 15, 2015, 9:18 AM
- Fifty-eight percent of those surveyed expect the Fed to hike rates three or more times in the coming year, according to the BAML Fund Manager Survey. It thus shouldn't be too much of a surprise that 53% of the group believe long greenbacks (NYSEARCA:UUP) to be the most crowded trade (up from 32% who believed so in November).
- That trade has already begun to unwind - the dollar index is lower by more than 2% since the ECB at the start of December surprised with no boost to QE.
- "The strong dollar view is writ large across all asset, regional and sector allocations," says chief strategist Michael Hartnett. "It will take a very dovish Fed and weak U.S. earnings to reverse the strong dollar view in 2016."
- Europe and Japan continue to be the most favored regions for overweight equities, while investors are getting more underweight the U.S.
- ETFs: UUP, UDN, FORX, USDU
Dec. 9, 2015, 1:05 PM
- The dollar index is off 1% today, and now lower by about 3% since Thanksgiving, though the move doesn't look like much more than a blip in the big bull market which began in the middle of 2014.
- At least today, the move lower is not just about the surging post-ECB meeting euro (FXE +1%). Also higher by more than 1% against the greenback are the pound (NYSEARCA:FXB) and yen (NYSEARCA:FXY). The commodity currencies - the loonie (NYSEARCA:FXC) and aussie (NYSEARCA:FXA) - continue to struggle, and are both lower on the session.
- ETFs: UUP, UDN, FORX, USDU
Dec. 7, 2015, 5:15 AM
- World shares started the week strongly on Monday, buoyed by Friday's big gains on Wall Street, after upbeat jobs data bolstered investor confidence in the U.S. economy.
- The sturdy employment report likely means a green light for a Federal Reserve rate hike next week, marking the first increase in nearly a decade.
- The news is also having a big effect on the currency markets, boosting the greenback against most of its peers. U.S. Dollar Index +0.5% to 98.77.
- U.S. futures: Dow +0.2%. S&P +0.2%. Nasdaq +0.3%.
- Europe: London +0.7%. Paris +1.7%. Frankfurt +1.9%.
- Asia: Japan +1%; Hong Kong -0.2%; China +0.3%
Dec. 3, 2015, 10:13 AM
- The ECB earlier cut its deposit rate further into negative territory and extended the length of the QE program, but the central bank failed to give markets what they want - a boost in the amount of QE, or expansion into asset classes like regional bonds, ABS, or used exercise equipment which never seems to sell on Craigslist.
- As a result, European stocks are tumbling, and the euro and bond yields are on the rise.
- Treasurys are also taking the news hard, with the 10-year yield up nine basis points to 2.27% (all of this move came before Janet Yellen told Congress she is "looking forward" to hiking rates). TLT -1.7%, TBT +3.4%
- On the flipside of the soaring euro is the dollar (UUP -1.5%).
- ETFs: TBT, TLT, UUP, TMV, UDN, TBF, EDV, TMF, TTT, ZROZ, TLH, SBND, VGLT, UBT, FORX, DLBS, USDU, TLO, TENZ, LBND, DLBL, TYBS, VUSTX
Dec. 3, 2015, 5:06 AM
- Although the eurozone has its eyes set on new stimulus plans, the U.S. is reinforcing the case for a rate hike later this month.
- Fed Chair Janet Yellen said yesterday she was "looking forward" to a U.S. interest rate increase and she's set to speak again today before the Joint Economic Council in Washington.
- "Rates in Europe and the United States will move in opposite directions for the first time in a long time which is being dubbed as 'the great monetary divergence,'" said Jim Bianco, president of Bianco Research.
- Besides Yellen's testimony, there are also speeches today from Fed officials Loretta Mester and Stanley Fischer.
- U.S. Dollar Index +0.3% to 100.38.
- Futures: Dow +0.4%; S&P +0.4%; Nasdaq +0.5%.
The PowerShares DB US Dollar Bullish Fund (Symbol: UUP) is based on the Deutsche Bank Long US Dollar Index (USDX®) Futures Index™ (DB Long USD Futures Index). The Index, which is managed by DB Commodity Services LLC, is a rules-based index composed solely of long USDX® futures contracts. The USDX® futures contract is designed to replicate the performance of being long the US Dollar against the following currencies: Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc. You cannot invest directly in an index. Ordinary brokerage commissions apply.
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