June 22, 2012

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Lighthouse Morning Market Wrap – It’s the economy Stupid

When I first became a currency strategist at Westpac back in 1998 there wasn’t really anyone to benchmark yourself against. Sure Jim O’Neill was at Goldman Sach’s but in Australia I don’t think there were any other Currency Strategists. I remember my wife, Lisa, asking me what I was going to do as I prepared […]

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June 21, 2012

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Does the inverse Aussie curve spell recession?

Wives tales and Murphy’s Law persist for a reason. As I’m oft heard saying “Murphy’s Law wouldn’t be a law if it wasn’t true” So there are “market laws” as well. Old axioms that have persisted through time largely because of a good track record and predictive ability. One of these market laws is that […]

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June 19, 2012

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Oil looking wobbly

A couple of weeks ago, maybe a month, writing for the Prince over at MacroBusiness when WTI was above $90 Bbl I suggested it was going to head toward $80. Last week it bottomed out at $81.10 and has been trying to rally since. But it still looks really fragile technically and Bloomberg has run a […]

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June 19, 2012

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Australian Dollar failing at resistance

Last night’s price action in the Euro and the US Dollar suggested, quite rightly, that the market remains worried about Spain. Indeed the Spanish 10 year yield closed at 7.16% and the Euro fell back from the Asian highs. The Australian Dollar on the other hand has been holding in really well and sits just […]

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June 15, 2012

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Markets Squeeze higher – but Germans reject pooled eurozone debt

You might be asking a question about how the Australian Dollar is back above parity after a night where Spanish yields hit just around 7% where Italy’s bond auction got sold but at substantially higher rates than just last month and only a couple of days before the Greek election. Please don’t believe anyone who […]

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June 13, 2012

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Why Germany should save the Euro and Spain, Italy and Greece should exit

I saw this chart in a presentation last week and I reckon it summarises the conundrum that is Europe. What you are looking at on the left hand side is the Real exchange rate (TWI based) adjusted for unit labour costs. It is clear here that even with the fall in the trade weighted RER […]

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June 13, 2012

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Contrarian View – Australian Dollar and Euro vulnerable to a squeeze higher

When I did links this morning over at Macro Business I posted an article noting that US money continued to flow out of Europe last month. I also saw that the Euro was back above 1.25 and the Aussie Dollar was around 0.9950. Chart courtesy of AVAFX Mobile off my iPhone Given the European malaise […]

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June 12, 2012

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OECD leading indicators point to diverging economic activity

Originally posted on Global Macro Monitor:
The OECD reported today, Composite leading indicators (CLIs), designed to anticipate turning points in economic activity relative to trend continue to point to divergence between economies. The CLIs for Japan, the United States and Russia continue to signal improvements in economic activity. However, the deceleration in these countries’ CLIs…

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June 8, 2012

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Australian Dollar Rally ends – Bernanke steals the punch bowl

Ben Bernanke stole the punch bowl for commodities and commodity currencies last night which had rallied on the back of the Chinese rate cuts and freeing up of deposit and lending rate controls. But the Fed Chairman with his usual equanimity simply didn’t want to play ball and add more stimulus and markets were no […]

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June 8, 2012

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China Cuts rates, Spain Downgraded, Bernanke hoses down expectations and Merkel remains recalcitrant.

By Greg McKenna In a surprise move yesterday the Chinese Central Bank cut rates by 25 basis points and gave banks more flexibility to set rates for their customers. Clearly there have been concerns about China and its growth profile over the past month or so and the news about iron ore purchase, steel trading, […]

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