Japan's Massive Yen Intervention Ineffective Amid BoJ Bond Buying
On Wednesday night, I wrote my usual post flagging the risk Japan would intervene and it did later that night. Its intervention is reportedly as big as in 2024. This didn't work in 2024 and it won't now as the BoJ keeps buying JGBs, which weakens the Yen. https://t.co/arqluOw4gK https://t.co/zPulF5MdEp
Key Global Central Bank Moves and Election Watch Ahead
Week Ahead: RBA hikes, Banxico cuts. UK local elections. US April jobs data. Be prepared: https://t.co/Eo3ZubYqLB https://t.co/RS94rNYlVS
Mideast Energy Crisis Pushes Fed Toward Dovish Stance
Being a Fed dove in 2025: Here’s why we should cut Being a Fed dove in 2026: Here’s why we don’t need to hike How the Mideast energy crisis is reshaping the Fed’s debate
Iran's True Inflation Hits 116% Annually, Not 67%
Iran’s Central Bank reports its inflation rate is 67%/yr. WRONG. Today, using high-frequency data, I measure Iran’s inflation rate at a PUNISHING 116%/yr. I remain the only reliable source for inflation measurements in Iran. YOU WON'T FIND THIS IMPORTANT STORY IN THE MEDIA. https://t.co/W81HmL3Xvp
Euro Adoption Triggers Bulgaria's Inflation Surge, Proves Costly
Bulgaria’s inflation EXPLODED to 7.1%/yr in April from 3.9%/yr in March. As the Father of Bulgaria’s currency board, I predicted an inflation SURGE with the introduction of the euro. EURO INTRODUCTION = BAD MOVE. https://t.co/kTXEo9l5sO
Central Banks Grapple with Massive Inflation‑Growth Dilemma
From Jeff Sommer's article, "The World’s Central Banks Are Wrestling With a Gigantic Problem." #economy #markets #centralbanks @nytimes #inflation #growth
Argentina's Money Supply Shrinks as Global Credit Bloats
Argentina is the only country where money supply is contracting at a double-digit rate. Meanwhile, the rest of the world continues to expand credit with little to no monetary discipline. None of us own enough hard assets. https://t.co/7n3N1S2a1W https://t.co/mVU3eZcLRN
Live: Japan's FX Intervention Misread, US Leads Standoff
I'm doing a livestream tomorrow morning at 9 am to discuss Japan's latest FX intervention, which is as "lost in translation" as always. I'll also give an update on the US blockade and where we now stand. The US is...
Skip Dynamic Currency Conversion, Save on Every Purchase
Europe’s most expensive button 👆 It’s called Dynamic Currency Conversion, and pressing USD costs you way more. ❌ A worse exchange rate ❌ A ~3% markup fee The fix: ✅ Pay in local currency abroad ✅ Use a card with no foreign transaction fees Save this for...
Jackson Hole Speech Marks Most Hawkish Remarks Yet
His speech at Jackson Hole that year is the most hawkish speech in the entire corpus IIRC
April's Weaker Dollar Signals Shift to Risk‑Off
Biggest shift in market dynamics in April? Weaker US Dollar. Stronger $USD in February and March provided an important signal of rising risks, and a weaker $USD in April suggests risk-off vibes from the currency markets. At...
Fedlock's Hawkishness Score Climbs Sharply with Recent Statements
As discussed below, Fedlock's aggregate hawkishness score continues to rise noticeably, with the latest communication from Kashkari, Powell, and Hammack all registering high relative to their recent comms https://t.co/b7k8lndodx
Miran’s Exit Leaves Fed with No Remaining Doves
Interesting chart, although there is some hard-to-quantify nuance regarding how dovish/hawkish each individual member truly is.
Japan's FX Trade Slashes Net Debt, Cuts Gross Debt
Alternative framing for Japan's intervention Japan sold $35 billion of dollars bought at around 80 yen the dollar for close to 160 yen, booking a massive profit that reduced Japan's net public debt -- and in the process brough Japan high...
Looser Labour Market Means Milder Inflation Shock, Smaller Policy Response
Yesterday the BoE put out some analysis, basically showing the difference between now and 2022. Because the labour market is not so tight anymore, the shock to inflation should be much less persistent - justifying a smaller monetary response (if...
Foreign Central Banks Stopped US Treasury Purchases; Domestic Funding Rises
Multiple things are simultaneously true: 1) Foreign public sector (central banks) are not buying US treasuries for over a decade, led by China. 2) Foreign private sector is still buying treasuries. 3) Foreign buying is not keeping up with issuance, so more is...
DXY Hits 3‑year Low, May Slip to 96
$DXY monthly - Made a 3 year cycle low in January. The action this year has been similar to 2021 when it rallied into March but retested the low in May. At the moment it looks like May will be...
FOMC Dissent Procedural; Wait for June SEP to Revise Statement
In the weekly commentary that drops tomorrow, I suggest the 3 FOMC dissents over the statement was more procedural than substantive. When is the best time to change the statement--the majority was including to wait for the June iteration of...
Dallas Fed Warns Inflation May Stay Above Target Longer
Dallas Fed President Lorie Logan explains her dissent, which objected to suggesting that the next rate move is more likely than not to be a cut: "I am increasingly concerned about how long it will take inflation to return all the...
Takaichi's Low‑Rate Push Risks JGBs, Only Hikes Cure
Takaichi wants to intervene in markets to mitigate inflation, but keep rates low to support her agenda. JGBs will suffer until she realizes hiking rates is the only way to durably keep inflation in check and support JPY. Bank lending has...
Kashkari Urges Fed to Keep Policy Flexible Amid Iran War
Minneapolis Fed President Neel Kashkari: "Why I dissented" He says the policy statement should signal the next rate move could be a cut or a hike given the broader range of outcomes from the Iran war. He lays out two modalities: a...
BOJ's Massive Yen Intervention Yields Little Effect
From our latest @ForwardGuidance…”throwing good money after bad”… BOJ intervention >2x the size of recent Yen purchases with minimal impact. https://t.co/Unck13wfjJ
BOE Pauses Digital Pound While Competitors Accelerate
BOE considers keeping the digital pound on ice as rivals race ahead https://t.co/Un1uISiQVD via @tomelleryrees https://t.co/Hp6lRnRs2z
Dollar Softens as Markets Await US Leadership
May Day: Market Looks for US Leadership: In holiday-thinned markets, the dollar is mostly softer as North American leadership is awaited. In light of yesterday’s surge in the yen, and contrary to our expectation, it does appear that Japanese officials…...
Derivatives Trim BoC Rate Outlook by 22bps, Hikes Discounted
5 G10 central banks met this week and they all delivered to varying extents hawkish holds. The derivatives market adjusted expectations for this year’s course by 22 bp for the Bank of Canada. Two hikes are now...
Japan Likely Intervened Heavily; Fed Remains Sole Cut Prospect
It is looking more likely that Japan did materially intervene yesterday and for a bit more than it did on average in 2024. Today's holiday has thinned activity. US leadership sought. Fed is still only major central bank where mkt...
Japan's FX Interventions: Temporary Fixes Mask Denial
There's 2 problems with Japan's FX interventions. First, they're only a temporary fix and never reverse the falling trend of the Yen. Second, they signal a gov't that keeps repeating a failed strategy instead of doing what's right, i.e. they...
China's De-Dollarization Is Just a Reserve Shift
1/4 Brad Setser explains why China didn’t truly de-dollarize—it just shifted its dollar holdings from official reserves at SAFE to less transparent state entities like banks and investment funds. @Brad_Setser https://t.co/xz6NMW6HWT
Dollaryuan Market Emerges as Key Global Currency Shift
There are lots of moving parts at the moment. But a key one involves the possible formation of a dollaryuan market (or will it be called a yuandollar market? Yet to be determined). https://t.co/NuEwX8HNB6
Global Rate Divergence Poised to Push Dollar Lower
We are in a new era of global central bank policy divergence. The rest of the world appears to have significantly more room to tighten financial conditions than the US. That divergence is likely to act as a major driver of further...
Dollar Short Resists Gap, Signaling Potential Inflation Surge
Dollar short maintained resistance at gap area....first day down with big impulse - me thinks start of something huuuuge (ha joke, there), but seriously, weekly structure still supports swing to new lows. START of major inflationary...
China's Yuan Strengthens as Petrodollar Talk Dominates
There has been too much talk of petrodollars. And not enough talk of Chinese dollars China isn't really de-dollarizing. Rather the contrary. A new blog 1/ https://t.co/6NT3Onlp9U
Treasury's Hidden QE Fuels Reckless Economic Overheating
Policymakers are running the economy so unbelievably hot right now that I am starting to think it has approached or surpassed recklessness. The Treasury has completely taken over control of the money supply and financial conditions with their ongoing ATI/YCC...
Insights on Fed, ECB, BoE, and Big Tech Earnings
Always good to talk financial markets with @MrMBrown where we talk Fed, Bank of England, ECB and Big Tech earnings... https://t.co/sX8SUhflrE
Cuban Peso Falls 30%, Still 5th Worst Globally
On this week's Hanke's #CurrencyWatchlist, the Cuban peso ranks as the WORLD'S 5TH WORST CURRENCY. The peso has depreciated by 30% against the USD in the past year. Given the US sanctions and blockade on Cuba, it’s surprising that the peso has done as...
RBI's Derivatives Intervention Hits Record $103B Dollar Short
Rajan showed them the way in and not the way out. The Indian central bank’s intervention in the derivatives market rose sharply in March with its net short dollar position surging to a record $103 billion. https://t.co/nieEKFI3Wc
Cross‑border Debt Now Props the Dollar, Fuels Deficits
These days, the dollar is supported less by the US Navy, and more by all the crossborder dollar-denominated debt outstanding. But the real punchline is that it's also the source of the US structural trade deficits and industrial stagnation.
Brazil Slashes Rates Again, Down to 14.5%
Global Central Bank Update: -Brazil cut rates for the second month in a row, 25 bps move down to 14.50%. https://t.co/a53O5fczcP
Nikkei Confirmation Signals Continued USDJPY Momentum
Considering that its reported by the Nikkei, a national paper - its likely confirmed which means we should have USDJPY continuation We wont get the data from the Ministry of Finance until a month from now
USD/CHF Reverses Sharply, Breakdown Risk Rising
Swiss Franc Short-term Outlook: USD/CHF Reverses Hard From Resistance- Breakdown Risk Builds https://t.co/fYEj1sHMEZ $USDCHF Daily & 240min Charts https://t.co/Gmh0QMS5Xo
Patience Beats Speed: Wait for Confirmation, Not Emotion
Rush entry… regret later ⚡ This chart is a perfect example of why patience beats speed in trading. Wait for confirmation — not emotion. #ForexReels #ICTForex #SmartMoneyTrading #TradingDisciplineLife #Liquidity
Massive USD Deposits Make Swap Lines Unnecessary, Says Munger
"Invert...always invert." -Charlie Munger For example, w/ $14T in USD deposits offshore, why would the UAE (or any nation) ever need a USD swap line? If a guy w/a $14B bank deposit needed a home equity line just to pay his bills,...
Rate Cuts Done, Fed May Hike by 2027
The interest rate cutting cycle is officially over. With previously forecast rate cuts off the table, the market is now pricing in 50% odds the Fed will hike rates by April 2027. Position accordingly. https://t.co/LBGUwo4wXJ
USDJPY Likely to Surge After Intervention Skew
Room for USDJPY to keep going. Here is some data. After an intervention, it tends to go up a bit or down a lot. Often, there is a second round of intervention and that's why the skew is this way....
Dollar Index Slides as BOJ Warns Yen Short‑Sellers
Big dip in the dollar index [DXY] today but this is news based. BOJ threatened speculators on betting against the Yen. This may end up being a one off and we need to observe the pattern after that. 98 is...
Fed's Rate Moves Defy Crisis Predictions
The Fed kept rates at 0% for a long time Lots of pundits predicted it would lead to a crisis and maybe even hyperinflation Didn't happen Then they raised rates b/c of the pandemic inflation Still no crisis Why? https://t.co/JqtrhQ1AHs https://t.co/g75B9IkwoQ
Yen Surge Suggests Unofficial Intervention, Biggest USDJPY Drop Since 2023
Still no word from an official Japanese gov't source (BOJ or MOF) that this surge in the Yen is direct intervention. That said, looks like intervention. Biggest $USDJPY drop since January 2023 - in the aftermath of intervention back then....
Growth Boom and Surplus Can't Stop Currency Decline
Massive growth acceleration Massive external surplus Yet its currency weakened amid the growth surge hmmm https://t.co/r5svYHvizk
BOJ's Gigaton Reserves Deter Over‑Eager Yen Bears
Every once in a while, the BOJ puts the fear of god into over-eager yen bears by reminding them that it has a metric gigaton of reserve firepower. https://t.co/eIUqeJsch7
Nikkei Confirms Material Market Intervention Occurred Today
The Nikkei is reporting that material intervention did take place today. It cites unidentified govt official.