Follow the Dollar Trend

A cura di Walter Snyder Forex traders know that following a tread is usually a good bet and leads to profitable trades. Always setting a stop loss is necessary to be sure that sudden reversals are only minimally painful. Only rash traders will neglect setting a stop loss, and they sometimes rue the day that they started trading. The US dollar has been discussed several times in this Newsletter, and...

Servicing the Debt

bond obbligazione treasury
A cura di Walter Snyder The US Debt Clock notes that the current expense of servicing the federal government debt of US$ 21.2 trillion is $303 billion. This means that the Treasury has been paying interest of “only” about 1.4% on the debt. The amount of money that the Treasury will be paying out in interest on the debt is going to increase markedly very soon. It could easily double. One reason...

Deep in Debt

bond obbligazione treasury
A cura di Walter Snyder The next crisis is going to be due to debt. 2000 saw the dot-com bubble, and the Great Recession was due to subprime housing securitization. This time is different. A decade of QE, ZIRP and NIRP has resulted in misallocation of capital, which is naturally bad for capitalism. Corporate share buyback programmes have buoyed Wall Street and increased corporate debt. At the same...

Less Credit and More Debt

A cura di Walter Snyder, Swiss Financial Consulting More and more market observers fear a financial crisis in H2 2018 or in 2019. John Mauldin, David Stockman, Nomi Prins and others are pessimistic about the future. The last Newsletter mentioned some of the problems underlying this negative attitude while it seems that Wall Street has not yet priced in the inherent dangers lurking clearly in sight....

Bce, il Qe resta invariato fino a settembre. Dimezzato fino a dicembre e poi stop. Tassi invariati

At today’s meeting, which was held in Riga, the Governing Council of the ECB undertook a careful review of the progress towards a sustained adjustment in the path of inflation, also taking into account the latest Eurosystem staff macroeconomic projections, measures of price and wage pressures, and uncertainties surrounding the inflation outlook. Based on this review the Governing Council made the...

Oil price volatility can present a buying opportunity ahead of Opec meeting

petrolio
A cura di State Street GA Oil continues to make headlines this year as price volatility has shone a light on uncertain supply and demand dynamics as well as continued geopolitical risks. Headlines and threats of a supply increase have recently caused oil prices to go lower, but we do not expect the drop to be sustained. Capacity constraints among OPEC participants make it difficult to imagine the supply...

Up and Down Wall Street

A cura di Walter Snyder, Swiss Financial Consulting Stocks can go up, down or sideways. Investors have seen Wall Street undergo a correction in February and since then the market has recovered somewhat without succeeding in reaching new highs. With some ups and downs, stock prices seem to be consolidating and have created a channel that is apparently trending upwards after a positive earnings season....

Trump’s metal tariffs are an early negotiating tactic

Di Michael Salice, Director of Research, Sky Harbor Capital Management The Trump administration announced it would not extend steel and aluminum tariff exemptions for the European Union, Canada, and Mexico, subjecting US allies that supply over 40% of the nation’s imported metals to duties originally levied in March.  The move was somewhat anticipated by the EU following failed attempts to establish...

Geopolitical considerations

mondo mappa
A cura di Walter Snyder, Swiss Financial Consulting The US Congress is set to approve a defense spending bill of epic proportions to fund operations and “build up” the military. The House version is presently at $717 billion. It is obvious that a good bit of that money will be used for “offense” and to maintain the over 800 overseas bases. Geopolitical considerations should be based on the...

The Tipping Point

federal reserve
by Swiss Financial Consulting         It has been suggested that a 3% yield on ten-year US Treasury bonds (10s) is a sort of magic number that indicates that one should start shifting from stocks to bonds. Opinions vary from 2.85% up to 5% as to what the percentage should be, but one thing is clear. The higher bond yields rise, the more the shift from equities to fixed income will become pronounced....

Agli investitori conviene investire sui Treasury?

Stati Uniti, Usa
Di Wolfgang Bauer, gestore M&G (Lux) Absolute Return Bond Fund di M&G Investments With the notable exception of the upcoming royal wedding, it would be pretty difficult to find a topic that is currently more over-analysed than the flattening of the US Treasury yield curve. On this blog as well we have pondered potential implications for credit valuations and possible counter-measures the Fed...

Yield Curve Shape and Recessions

Di Mark Holman, CEO di TwentyFour AM The rapidly flattening US Treasury yield curve is prompting a lot of questions about the shape of the curve and it being a good predictor of upcoming recession. We have also had a lot of questions about the steepness of the very front end of the US curve between overnight swap spreads and 3 month libor, and whether this steepness is of concern, as it was during...

Stocks Down, Bonds Up

A cura di Walter Snyder, Swiss Financial Consulting This Newsletter advised against investing in bonds because the interest rates were simply too low. The risk was too high that the price of the bond would fall as soon as higher interest rates would come. What has happened is that the Fed has raised interest rates to the point where investors can get 2.87% on ten-year Treasuries and 2.49% on two-year...

The 3 percent yield that really matters

forex, grafico
by Richard Turnill, BlackRock’s Global Chief Investment Strategist Rock-bottom short-term interest rates over the past decade have driven income-hungry investors to riskier assets in search of higher yields. The chart above shows that yields on short-term IG corporate bonds have mostly languished below 2% since 2010 while two-year Treasury yields have hobbled below 1%. Yields on both have increased...

Oil and Recession

A cura di Walter Snyder, Swiss Financial Consulting Sometimes there are swift changes in the economy, and we are currently witnessing an era of ever more rapid transition. Even so oil remains the main energy source for the global economy, and the price of oil has risen. The black gold now costs  US$ 70 as opposed to US$ 50 a year ago for the benchmark WTI. Of course there are 143 different grades...