Anniversary of the End of Bretton Woods: Thoughts Going Forward

Nixon cut the last lifeline of Bretton Woods 47-years ago today.  The world will never be the same, but could there be another such agreement in the foreseeable future?

Continue reading “Anniversary of the End of Bretton Woods: Thoughts Going Forward”

Crude Approaches Year-Old Trend Line

Crude oil has been climbing a trendline for the past year.  This chart depicts this trend on a weekly bar chart.  Depending exactly the line is drawn, it comes in now near $65 a barrel.  The technical indicators are consistent with further losses.

Continue reading “Crude Approaches Year-Old Trend Line”

JPY Struggles at Trendline

The dollar is consolidating in a large triangle against the yen.  Below we discuss the technical implications.  We also note that if pressure on EM returns after today’s respite, the yen is likely to strengthen.

Continue reading “JPY Struggles at Trendline”

Possible Head and Shoulders Top in Euro

Our technical analysis supports our medium-term bearish euro outlook, while at the same time, is consistent with a potential limited bounce near-term.   Continue reading “Possible Head and Shoulders Top in Euro”

Why Tariffs will Not Reduce the US Trade Deficit

US tariffs are ostensibly to reduce the trade deficit, but we are skeptical that it will work, due to rising input costs, retaliatory tariffs and ongoing growth differentials.  At same time, the funding of the US imbalance is still smooth and has actually improved.

Continue reading “Why Tariffs will Not Reduce the US Trade Deficit”

Turkey Drives Risk-Off, but Pressure Abating

Turkey’s response to the pressure on it currency fell well shy of what is needed to stabilize the situation.  This continues to encourage risk-off activity, which seems, among the major currencies to be exaggerated. 

  Continue reading “Turkey Drives Risk-Off, but Pressure Abating”

Dollar Surges, but Recent Gains Seem Exaggerated

The recent price action confirms the dollar’s break out of the spring and early summer ranges against most of the major currencies.  While our understanding of the macro drivers anticipates additional dollar gains, we are concerned that the technical condition is stretched and the markets may be exaggerating the systemic risk posed by Turkey. 

Continue reading “Dollar Surges, but Recent Gains Seem Exaggerated”

The Yin and Yang of the US-China Relationship

The US-China relationship sits at the center of the global political economy.  We fear that the narrative in the press and among economists locate China as the main threat to the world order.  We offer this non-consensus macro view.  

Continue reading “The Yin and Yang of the US-China Relationship”

US-Japan Trade Talks

The withdrawal of the US from the Trans-Pacific Partnership trade agreement left it exposed on two fronts.  First, the TPP was going to modernize the NAFTA.  Without, the US remains locked in protracted negotiations.  A breakthrough in talks with Mexico has been reportedly imminent for weeks.  Talks with Canada have apparently not progressed very far in recently, and the US insistence on a sunset clause remains a deal-breaker.

Continue reading “US-Japan Trade Talks”