<Click on chart for larger image> AQA – Peter Forbes: Spike in SKEW Index Not a Bearish Sign A sharp rise in the CBOE’s SKEW Index caught the attention of equity traders already wary of rising geopolitical concerns. We looked at 5 and 20 day changes in the SKEW index and found little predictive value… Continue reading The SKEW Index
Bloomberg.com – Fed’s Internationalists Vindicated as Global Events Drive Policy Britain’s vote to exit the European Union has been hailed as a vote against globalization. For the Federal Reserve, though, it serves as a reminder of just how much international issues have come to affect monetary policy. The Fed’s mandate is domestic: stable inflation and… Continue reading The Fed’s Global View
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Conference Call Presentation/Charts of the Week Audio [audio:https://www.biancoresearch.com/bianco/SubscriberArea/063016.mp3|titles=Conference Call ] Topics Covered This Week Include: An Epic Miss By Bettors And Markets Telling People Favored Remain Anonymous Mouse Clicks Favored Leave France Hates The EU More Than The UK Europe’s Populist Uprising How Things Worked, What Happened In 2008 New Paradigm In Politics What’s Next… Continue reading Conference Call Presentation/Charts of the Week
Bloomberg Business – Draghi Wishes for a World Order Populists Will Love to Hate Mario Draghi has just pushed the boundaries of central banking further into the realm of globalization, at a time when globalization is on the run. Following the work of Reserve Bank of India Raghuram Rajan and others, the European Central Bank… Continue reading The Pressure Is On Central Banks
The Financial Times – EU leaders meet without UK to plan Brexit response Watershed summit for Europe comes amid divisions on dealing with Britain European leaders met in Brussels without the UK for the first time on Tuesday in a historic informal meeting where the EU-27 will attempt to pick up the pieces from the… Continue reading EU Leaders Meet To Discuss Brexit
<Click on chart for larger image> Comment The chart above shows how many rate hikes are priced in over the next 12 months. The US is shown in red, the UK in green and the EU in blue. Collectively they are further away from rate hikes than any time since the Great Recession in 2009.… Continue reading Derivatives Markets See Rate Cut More Likely Than Hike In 2016
Bloomberg View – The Fed Is in an Epic Battle With Itself Two Federal Reserve announcements less than a week apart, in contrast to the Federal Open Market Committee’s decision earlier this month, are likely to show that the agency’s own goals are in conflict. The committee setting monetary policy remains accommodative, with readily available… Continue reading The Fed Is Its Own Worse Enemy
<Click on chart for larger image> The Wall Street Journal – A Threat to Status of Pound Some analysts say sterling may not be able to keep position as a reserve currency … The pound is a much smaller part of the global system of foreign reserves than it once was. It made up just… Continue reading Will The Pound Remain A Reserve Currency?
The Wall Street Journal – Quantifying the Brexit Shock Investors are facing what may be the biggest policy shock of their lifetimes. But past events give some sense of what sort of damage it may cause Part of why Brexit has had such a pernicious effect on global markets is that it is in many… Continue reading Comparing Brexit To Past Policy Shocks
Barron’s – Why Bond Investors Don’t Have to Fear Higher Rates Generally, the greater yield earned in a rising-rate environment offsets the fall in bond prices those rates cause. Are you avoiding bonds because of the near certainty that interest rates will be higher in the future? Welcome to the club. Since higher rates inevitably… Continue reading Bond Investors And Higher Rates
<Click on graphic for larger image> Bloomberg Business – In the Midst of Brexit Chaos One BlackRock ETF Had a Big Day Junk-bond fund posted $291 million of inflows during rout Weakening interest-rate outlook spurs hunt for yield Amid Friday’s rout in the financial markets following Britain’s vote to leave the EU, one exchange-traded fund… Continue reading Massive Inflows Into Blackrock’s Junk Bond ETF