by James

When the Vix Index is below 20 and the media is blaming a surprise move in Indian interest rates for a rise in risk aversion, something looks wrong. Smoke and mirrors is an expression that comes to mind. When I was first studying finance, I remember hearing about how traders create volatility. That may be [...]

by James

The big week is over halfway through and it’s time for an update on what’s been happening. Key economic reports from ISM fell either side of the fence. Monday’s manufacturing report showed improvement in October versus September, while today’s (arguably) more important non-manufacturing report missed expectations and retreated on last month. The FOMC decision came [...]

by James

Markets remained choppy last week. The turn of the month always brings increased volatility, and particularly so when first glance GDP data come out, as they did last week, only to be closely followed (this week) by non-farm payrolls. As is well known by now, the GDP data surprised to the upside, but failed to [...]

by James

For some time we have been reporting on the tight correlations between the dollar and various risky assets. Up go risky assets, down goes the dollar. During last month’s G20 meeting, we noted (click here) that the absence of currency issues from the agenda amounted to a free ticket for markets to carry on trading. [...]

by James

“Climbing the wall of worry” it’s up there along side “Green Shoots Recovery” as one of the most overused and misinterpreted expressions in finance. And yet, by now – not least to an investor returning from a two week vacation – it is starting to sound reasonable. Equities hit a high for the year on [...]

by James

Last week’s Outlook & Review contained the following comment: “I am going to stick my neck out and predict that we are going to get a bit of positive movement here. … (In) this business there is no such thing as being slightly wrong.” And, when she flies, she really flies. After a depressing session [...]

by James

As GG says (click here), it is indeed going to be a bumpy ride this year. Anyone who thought that sideways trading would be simple was proven wrong last week, as markets showed every sign of capitulating (yes, that is still possible, given the economic wreck underway). Rather than being met with blind optimism by [...]

by James

We are living one of the most exciting weeks in financial history. Last night the FOMC entered new waters, slashing the target rate to a zero to 0.25% range, effectively we are now living ZIRP. There is nothing more to be done with the key policy rate, so further stimulus will come from quantitative easing. [...]