Exchange is memorialized by contract. That contract can settle between T+0 and T+ n. The contract summarizes the terms and conditions of the exchange. Government’s validity is optimized where it protects enforcement of the contract. A bank is a repository of contracts. An individual can look at themselves as a bank, sitting also on an … Continue reading An argument for private currency contracts.
Four types of political risks arguably move interest rates. First, the perception of fiscal responsibility. If bond holders perceive an increased risk in the government defaulting on bond payments, or not collecting enough in taxes, bond holders will want a higher interest rate before lending the government more money. Second, the economic stances of a … Continue reading Political risks create either shorting opportunities or existential threats …
For merchants entering forward contracts for their international trade, they should keep in mind that markets, overall, are not too concerned about who wins the U.S. presidency, especially given the good odds that the Congress will be split and that whoever is chosen as Treasury secretary will likely maintain the U.S. policy of a strong dollar. Continue reading When it comes to inflation, those Europeans are violent …
Today, at 7:06 am EST, the EUR/USD was trading at 1.1094. This reflected a price decrease from the 1.1143 price from yesterday. My take on the euro is that there appears to be less demand for it, not only based on its price but on a consumer expectations survey from the European Central Bank last … Continue reading Israel v Iran: The foreign exchange market is telling me to cool it.
I don’t expect the EUR/USD to exceed 1.1168 by 3:00 pm Friday, 4 October 2024. My initial assessment is based on the German bund 10-year yield of 2.135% and a U.S. 10-year bond yield of 3.756%, per MarketWatch. Per X-rates.com, the current EUR/USD is 1.1166 as of 9:59 pm EST. (Interested in proprietary trading? Determine … Continue reading I don’t expect the EUR/USD to exceed 1.1168 by weekend. That could change, of course.
What I did not hear last night: who will be your pick for chairman of the Council of Economic Advisors? Who will be the director of the National Economic Council? Who would you select as chairman of the Board of Governors-Federal Reserve System? Who will you choose as Treasury secretary? (People are looking for ways … Continue reading What was missing from last night’s debate? An idea as to who will lead a Trump or Harris economy.
This is a crazy sounding observation, but the Democrats may do best on the economy because of their preference for a high tax regime. I am not a proponent of the modern monetary theory or high taxes. I am not a proponent of taxes at all, but there is something to the MMT argument that … Continue reading Maybe the Democrats do best on the markets because they enjoy taxing us.
It is tough to nail down Ms. Harris’ view on the currency and interest rates since Mr. Biden’s announcement three days ago that he was discontinuing his campaign for a second term. So far, her outreach efforts have included a couple speeches to black sororities, a meet and greet with her campaign staff in Wilmington, … Continue reading In the immediate term, the next president will have to think about who the next Fed chair will be.
Plenty of chatter on the business cable news channels and online press about the “Trump Trade.” The first time I heard this term, I was shuttled back to November 2016 when the business media proclaimed a “Trump Effect” on the markets. The media reported back then the market expectations of economic growth resulting from forecasted … Continue reading What is the Trump Trade? At a minimum, pre-mature.
Lawyers Write the Bets. Bankers Sell the Bets. 