Sep. 3, 2013, 1:53 PM| Comment!
Sep. 3, 2013, 2:03 AM
- As expected, the Reserve Bank of Australia has left its cash rate unchanged at 2.5%.
- The RBA reiterated that it expects the economy to continue running at a "bit below trend" in the near term as it "adjusts to lower levels of mining investment."
- The bank noted that inflation has been consistent with the medium-term target, a trend that is expected to continue in the next 1-2 years despite the recent depreciation of the Aussie dollar, "which remains at a high level" and could still depreciate further. That would foster a re-balancing of the economy.
- In a change from previous statements, the RBA did not say that inflation could provide some scope for further easing if necessary. Instead, the bank said it will "adjust policy as needed." (PR)
- AUD-USD +0.6% to $0.9032
- ETFs - Stocks: EWA, EWAS, KROO, AUSE, FAUS. Bonds: AUD, AUNZ. Currency: FXA, GDAY, CROC.
Aug. 28, 2013, 7:38 AM
- The 10-year yield fell to as low as 2.70% overnight, but is currently 3 bps above yesterday afternoon at 2.74%. TLT -0.4% premarket.
- Europe's off moderately and Asia fell inline with yesterday's decline in the U.S., but crude oil surged more than $3 per barrel to $112 before falling back to just above $109 at the moment.
- The dollar (UUP) is stronger across the board, with the euro (FXE), cable (FXB), yen (FXY), swissie (FXF), and loonie (FXC) all off somewhere in the area of 0.5% against the greenback. As is typical of late, the aussie's (FXA) decline is somewhat higher, -0.8%.
- Other dollar ETFs: UUPT, UDN, UDNT.
- Related currency ETFs: ERO, ULE, URR, EUO, DRR, EUFX, GBB.
- Treasury ETFs: TLH, TLT, IEF, DTYL, DLBL, ILTB, TENZ, ITE, TLO, EDV, VGIT, VGLT, TMF, TYD, LBND, UBT, UST, TMV, TYO, DSTJ, DSXJ, SBND, PST, TBT, DTYS, DLBS, TBF, TTT, TYNS, TYBS, TBX.
Aug. 27, 2013, 3:41 PM
- The leverage between broadcasters (CMCSA, DIS, FXA, CBS, AMCX, VIAB) and the cable/satellite industry (TWC, CVC, CMCSA, CHTR, DTV, DISH) is so lopsided that BTIG says it feels as if the bazooka-carrying armored broadcasters are battling a cable/satellite group only carrying paper swords. A scenario that detriments U.S. consumers.
- One solution proposed by BTIG is to allow retransmission fees to be negotiated in each market by the entire group via a little Congressional intervention. Not a perfect solution if major broadcasters decide to turn into cable networks, but potentially a workable one.
- What to watch: It's only 9 days before NFL football starts and CBS vs. TWC goes to Defcon 1.
Aug. 27, 2013, 7:49 AM
- Moving along with the precious metals over Syrian tension is crude oil, with both WTI crude (USO) and Brent (BNO) up more than 1.6%. WTI at $107.50 per barrel is threatening to take out levels last seen in the Spring of 2011.
- The greenback is also catching a bid, moderately higher against the euro (FXE), cable (FXB), and the loonie (FXC), but sharply higher vs. the aussie (FXA). The dollar is losing a good bit of ground against the yen (FXY), and off just a bit vs. the Swiss franc (FXF).
- Dollar ETFs: UUP, UUPT, UDN, UDNT.
- Related currency ETFs: FXE, ERO, ULE, URR, EUO, DRR, EUFX, GBB, YCL, YCS, JYN.
- Oil ETFs: OIL, USO, DBO, OLO, USL, CRUD, UCO, DTO, SCO, SZO, DNO, UWTI, DWTI, BNO, UOIL, DOIL.
Aug. 26, 2013, 4:21 AM
- Forex reserves have been falling at Asian banks as they have attempted - not so successfully - to bolster their weakening currencies, which have been suffering partly from the Fed's talk of tapering. Six out of the 10 banks with the largest holdings have cut their reserves this year.
- The Bank of Indonesia's holdings have plunged a record 18% in 2013, while the rupiah has dropped 12%. The Reserve Bank of India's holdings have fallen 4% as the rupee has dropped 12%.
- The trends threaten currencies that central banks bought as they looked to diversify their reserves beyond the U.S. dollar in past years, including the euro, the Swedish krona, the Norwegian krone, the South Korean won, and the Australian and Canadian dollars.
- ETFs: CEW, AYT, JEM, PGD, FXE, ERO, ULE, URR, EUO, DRR, EUFX, ICN, INR, FXA, GDAY, CROC, FXC, FXS,
Aug. 15, 2013, 4:38 PM
- Rising rates, the decline in stocks, and escalating violence in Egypt provided no bid for the greenback which fell across the board today.
- The dollar (UUP -0.7%) lost more than 1% against the Swiss franc (FXF +1%) and nearly 1% vs. the yen (FXY +0.8%) and cable (FXB +0.9%). The euro (FXE +0.7%) gained nearly three quarters of one percent.
- Typically the first to sell off when markets get a bit panicky, even the loonie (FXC +0.2%) and the aussie (FXA) picked up ground against the U.S. unit.
- A reason? Maybe the commodity sector (DBC +1%) - it was notably strong with metals, energy, and the grains all higher.
- Related dollar ETFs: UUPT, UDN, UDNT.
- Broad commodity ETFs: DJP, GSP, LSC, RJI, GSC, GCC, GSG, DBC, DPU, DJCI, UCI, USCI, DYY, UCD, DEE, CMD, DDP, RGRC, CTF, CFD CSCR, CSCB.
Aug. 6, 2013, 2:23 AM
- The Reserve Bank of Australia has reduced its key interest rate by a quarter of a percentage point to a record low of 2.5%. This is the eighth cut since the RBA started an easing cycle in November 2011.
- RBA Governor Glenn Stevens explained that "the economy has been growing a bit below trend over the past year," which is expected to continue in the short term due to falling mining investment.
- Stevens also cited the strength of the Australian dollar. Although the currency "has depreciated by around 15% since early April...it remains at a high level. A further decline "would help to foster a rebalancing of growth in the economy."
- In a slight change of language Stevens said that the "RBA has previously noted that the inflation outlook could provide some scope to ease policy further, should that be required to support demand." Interpret it how you like as to whether that means the RBA is or isn't open to more cuts.
- The Aussie (FXA) is +0.6% at $0.8984, as the bank's move was widely expected. (PR)
Aug. 4, 2013, 4:29 AM
- Australian Prime Minister Kevin Rudd has called a general election for September 7, saying the poll will be about who can best lead the country "through the difficult new economic challenges which now lie ahead."
- Rudd's Labor Party has reduced the lead of the right-of-center Liberal Party since Rudd deposed Julia Gillard as PM six weeks ago in an internal Labor coup.
- The Liberals, led by Tony Abbott, have vowed to scrap mining and carbon taxes if they win the ballot, policies that would affect the likes of BHP (BHP), Rio Tinto (RIO), Peabody Energy (BTU), Vale (VALE), and Glencore (GLCNF.PK).
- Relevant country ETFs include: Stocks - EWA, EWAS, KROO, AUSE, FAUS. Bonds - AUD, AUNZ; Forex - FXA, GDAY, CROC
Aug. 1, 2013, 2:59 PM| Comment!
Jul. 30, 2013, 12:14 AM
- The aussie (FXA) falls 1.4% against the dollar to 0.9074 on comments by RBA Governor Glenn Stevens.
- Recent inflation data provide some scope for further rate cuts, Stevens says.
- "The recent decline in the exchange rate seems to make sense from a macroeconomic perspective," he notes, adding that "it would not be a major surprise if a further decline occurred over time.” By "over time" Stevens apparently meant over the next half hour or so.
Jul. 24, 2013, 3:22 AMAustralian CPI held steady +0.4% on quarter in Q2 vs consensus of +0.5%. On year, inflation +2.4% vs +2.5% in Q1 and forecasts of +2.5%, and in line with the RBA's target of 2%-3%. Prices increased for apparel, footwear and health care, although transportation costs fell. AUD-USD (FXA) -0.4% to $0.9255. (PR) | Comment!
Jul. 19, 2013, 7:29 AMChina's PBOC eliminates the country's lending rate floor - which prevented banks from lending below a centrally planned price - and also says it will reform deposit caps. There's "no direct economic impact except (a) positive message of reform," says Sebastien Galy. Nevertheless, the aussie (FXA) pops about 50 pips. China financial ETF: CHIX. | 3 Comments
Jul. 16, 2013, 1:34 PMEither a change in trend or a chance for shorts to reload, the aussie (FXA +1.5%) is having maybe its best session of the year after RBA minutes suggest policymakers are considering a pause in the easing cycle. A number of rate cuts and a substantial devaluation of the currency are working their way through the system, and the central bankers note the inflation outlook is now "slightly higher." Traders are now pricing in a 54% chance of an August cut, down from 65% a day ago. | Comment!
Jul. 15, 2013, 9:57 PMJapanese stocks jump early after a three-day weekend, as the Nikkei rises 0.8%. Meanwhile, South Korean and Chinese shares trade fractionally lower and Australian equities rise modestly after RBA minutes indicate the central bank believes the inflation outlook "could still provide some scope for further easing" if necessary, although "lags" in the monetary policy transmission channel may make a wait-and-see approach appropriate for the time being. The aussie (FXA) is at $0.9158 at last check. | Comment!
Jul. 12, 2013, 8:32 AMThe tumbling Australian dollar (FXA) falls below $0.90 for the first time in about 3 years amid rising unemployment and as Beijing's mandarins dial back even further their expectations for economic growth. The aussie's 1.6% decline today has the currency off about 15% vs. the greenback in the last 3 months. The unhedged Australian stock index ETF (EWA) -1.7% premarket. | Comment!
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