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- Louise Cooper: Twitter and the Bank of England drag central banking into the gutter
- Bernanke’s speech in San Franciso on Friday – link to full text
- Bernanke late speech in San Francisco on Friday: “Quite costly” to pull back easing too soon
- ForexLive Americas wrap: Markets sequestered for the weekend
- S&P 500 closes up 0.2%
- Commitments of Traders: Market quickly switches to short euro
- CFTC positioning data upcoming
- Biggest mover this week: NZD/USD
- A round of applause for RBS
- Weekend wind down
- An unexpected budget deficit right before the election … hmmmmm
- Oil at the lows of the year
- A Friday funny you’ll be thinking about on Monday morning
- A man, a plan, a canal — Panama
- You win some, you lose some (badly)
- USD/JPY breaks through 93.50 as volatile week continues
- One sentence to tell you everything you need to know about USD, CAD and AUD for the next 2-3 years
- Obama leaves door open for talks
- Euro may look unwanted but against the GBP and CHF ?
- European equity close: Italy leads the way lower
| Louise Cooper: Twitter and the Bank of England drag central banking into the gutter Posted: 02 Mar 2013 12:27 AM PST Has the term "twitter row" been incorporated into the Oxford English Dictionary yet? Because it should be. From Chris Brown's argument with the comic Jenny Johnson to Piers Morgan and his endless rows with any he can find to argue with, there are numerous examples. Controversial radio hosts love them to provoke and increase ratings (and boost their careers) and celebrities use them for further exposure (literally for Rihanna) to sell records or movies. But central bankers? Rowing on Twitter? They're supposed to be responsible people, deeply intellectual, profound thinkers, worrying about inflation for decades to come. Sober, sensible, suited, a bit boring to be honest. Monetary policy, currency stability, inflation targeting, bank regulation, credit system monitoring, managing exchange reserves, the Lenders of Last Resort. Any of that sounds like the tawdry and bitchy world of showbiz? No, not to me either… And yet, here in the UK two ex Monetary Policy Committee members have been indulging in a vicious twitter row. Obviously there were fewer F-bombs than @chrisbrown and less self-publicity than @piersmorgan, but still a full on twitter row. Its been simmering for some time but really kicked off last Sunday when Andrew Sentance and Danny Blanchflower both appeared in different newspapers. Mr Sentance in the Tory favourite, the Sunday Telegraph and Mr Blanchflower showing his political bias, in the left wing Independent. Both were comments following the loss of the UK's AAA rating. The row was at least over economic policy, with Blanchflower calling for more monetary stimulus and Sentance favouring more economic reform and a harder stance on inflation. But it wasn't just a dove against a hawk. This was a bitter exchange although to be fair, mostly unpleasant from Blanchflower who seems to have a bit of a reputation amongst Twitter (and at the Bank of England) for his caustic arrogance. (@connarmcbain calls him "corrosive and completely hubristic"). The "debate" lasted most of the day, involved hundreds of tweets, pulled others into the argument( as often happens) and even restarted again later on Wednesday after the publication of revised UK GDP figures for 2012. Once it got going, Blanchflower didn't hold back: In some sort of high school popularity contest, @D_Blanchflower boasted "fortunately four times as many people follow @D_Blanchflower.." And in numerous exchanges @D_Blanchflower returned to the playground with his "I told you so" message to @asentance, Sentance engaged in the debate and he helped stir the pot. But to be fair, he didn’t drop to the gutter, despite the onslaught of vitriolic criticism.
You can score it for yourselves… I tweeted @D_Blanchflower and @asentance to get their take on the row but got no reply. But I shall give my advice to them and other central bankers as to how to behave on twitter, anyhow. My first top tip is to avoid hubris – acceptable in a rock star but more dangerous in a central banker. The one thing that two decades of working in finance has taught me is that markets and economics teach us humility. The once Great God Greenspan? No longer. Secondly, the rise in prices should be a central banker's main concern and not the rise in retweets and recommendations. And clearly if you're in charge of monetary stimulus, growth in the economy is more important than growth in follower count (@D_Blanchflower is clearly proud of his 13,000 followers but has a way to go to get @chrisbrown's 13m). And twitter should preserve the dignity of office and not demean it – gravity and substance are important attributes for central bankers. But I think my sign off has to go to @forexleeches who advises us all:
Which I think translates to next time I have a boozy City lunch or night out, I need to leave my Iphone turned off. (Editors note: We invite you to follow Louise Cooper at @louiseaileen70 and @forexlive) |
| Bernanke’s speech in San Franciso on Friday – link to full text Posted: 01 Mar 2013 08:44 PM PST Bernanke was speaking at the Annual Monetary/Macroeconomics Conference: The Past and Future of Monetary Policy, in San Francisco: |
| Bernanke late speech in San Francisco on Friday: “Quite costly” to pull back easing too soon Posted: 01 Mar 2013 08:26 PM PST
Fed Chief Stands Pat on Easy Money (gated) |
| ForexLive Americas wrap: Markets sequestered for the weekend Posted: 01 Mar 2013 01:29 PM PST
No one would have complained about a quiet day after such a rousing week but it was not to be. The euro sank through important support at 1.3020 in European trading and continue through 1.3000 and to a low of 1.2967. After Europe closed, it was all about squaring positions and the pair closed at 1.3023. The yen crosses took off after the upbeat ISM numbers. USD/JPY jumped nearly 75 pips and closes out the week close to 93.50 after touching as high as 93.68. Cable barely made a stand at 1.5000 and sank as low as 1.4986. The market got some jitters after breaking the big figure and positions were covered in the final hours of trading. Last at 1.5030. USD/CAD turned around after the Canadian GDP numbers. I suspect it was more about paring back longs for the weekend than anything upbeat in the report. From an eight-month high of 1.0345, the pair last traded at 1.0269. Have a great weekend. |
| Posted: 01 Mar 2013 01:07 PM PST The S&P 500 gained 3.6 points to 1518. On the week, the index was up 0.2% after falling 1.8% on Monday. It’s the weekend! |
| Commitments of Traders: Market quickly switches to short euro Posted: 01 Mar 2013 12:38 PM PST Futures speculative positioning data from the CFTC as of the close on Tuesday:
The market, understandably, jumped in to short the euro after the Italian election. The speculative market has also piled into CAD shorts and is the most negative since January 2012. Perhaps the biggest takeaway continues to be GBP. I have repeatedly warned that the lack of speculative interest in cable meant it could continue to go lower. On Feb 1, I wrote:
Even now, there is room to add to cable shorts, although the risk/reward ratio isn’t nearly as favorable.  GBP positioning CFTC commitments of traders |
| CFTC positioning data upcoming Posted: 01 Mar 2013 12:26 PM PST Around the bottom of the hour, the CFTC will release the weekly Commitments of Traders report. One of the interesting ones to watch will be AUD, where longs have been cut in half since late January.  AUD CFTC positioning data weekly COT |
| Biggest mover this week: NZD/USD Posted: 01 Mar 2013 12:13 PM PST The best trade this week, in percentage terms, was short NZD/USD as it fell 1.4%. In reality, selling the euro as the Italian elections results were announced was a much better trade. The cable chart has broken down in many ways but the weekly NZD/USD chart has also slid below any trend line you can draw.  NZDUSD weekly w 55-week moving avg |
| Posted: 01 Mar 2013 12:01 PM PST On December 14, with GBP/USD around 1.6130, RBS issued a cable sell recommendation targeting 1.5050. They said it was their top trade of the year. Cable spiked as high as 1.6381 so I’m not sure if their stop was hit. If not, that’s one heck of a trade. |
| Posted: 01 Mar 2013 11:40 AM PST It was a tough week to trade after the Italian election. Hope everyone is looking forward to a great weekend. |
| An unexpected budget deficit right before the election … hmmmmm Posted: 01 Mar 2013 11:18 AM PST Reports from Greece said the tax collectors took the month off before the election. Maybe it’s the same thing in Italy with the country’s budget office saying the February deficit was 12.5 billion euros compared to 8B last Feb. Of course, it could also be due to the moribund economy. Italian 10 year yields ended the week at 4.79%.  Italian 10 year yields weekly chart |
| Posted: 01 Mar 2013 10:54 AM PST US gasoline prices have risen nearly non-stop for the past month but that’s unlikely to last with oil prices in full retreat. Higher OPEC production and the stronger US dollar have weighed heavily on oil prices since mid-Feb and today’s decline brings crude to a key point on the chart.  oil daily |
| A Friday funny you’ll be thinking about on Monday morning Posted: 01 Mar 2013 10:38 AM PST I’ve tried lots of things to get out of bed early but I’m just not a morning person. I don’t think I’ll be trying this one — This guy asks his wife to wake him up by slapping him in the face for 15 straight days. |
| A man, a plan, a canal — Panama Posted: 01 Mar 2013 10:24 AM PST …it’s a palindrome (reads the same forwards and backwards). Panama reports that GDP was up 10% year-over-year in the fourth quarter. Double-digit growth is always impressive but that’s also a good sign for global trade and Latin America. |
| You win some, you lose some (badly) Posted: 01 Mar 2013 09:52 AM PST On Wednesday, CitiFX recommended a short trade in AUD/JPY at 93.13 and I mentioned it here. It turns out they nearly picked the absolute bottom and the pair has jumped 250 pips. Their stop loss at 95.20 was tripped a short time ago. I’ve been a fan of Tom Fitzpatrick at CitiFX for a long time and that won’t change.I’ve made my share of terrible calls and I try to learn from them. I heard a great line the other day — you always get experience right after you need it most. I think the mistake here was underestimating the effects of politics. Something about elections makes markets stupid and emotional; the same thing happened after Obama was re-elected — it’s a time when the technicals can send some false signals. |
| USD/JPY breaks through 93.50 as volatile week continues Posted: 01 Mar 2013 09:32 AM PST The weekly USD/JPY chart demonstrates the huge amount of volatility (and indecision) this week.  USDJPY weekly A candlestick like that most-often points to more volatility, rather than a period of consolidation.
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| One sentence to tell you everything you need to know about USD, CAD and AUD for the next 2-3 years Posted: 01 Mar 2013 09:17 AM PST Investment is the most under-appreciated and misunderstood driver in the foreign exchange market. This story in The Australian says everything you need to know about the 2-3 years ahead.
The company said it’s expecting to spend $16 billion annually on US capital projects, including $2.5 billion for exploration. ConocoPhillips has huge investments in Australia and Canada that will yield big profits in the years ahead changes in the market come at the margins, and investment in US energy is the marginal change. |
| Obama leaves door open for talks Posted: 01 Mar 2013 08:56 AM PST
It’s been a refreshing January and February with minimal US political headlines but the ides of March will surely bring more headlines like these. Markets will be patient but only up to a point, I’m guessing 2-3 weeks. |
| Euro may look unwanted but against the GBP and CHF ? Posted: 01 Mar 2013 08:54 AM PST The euro’s knockdown today is one story but it’s relative position against fellow europeans – the pound and the swiss tell a slightly different tale. EURGBP looks to be a decent buy down to trend line support at 0.8600 which happens to be almost the 0.236 of 2013 low to high ! target 0.8800 and stations north. Sterling’s comparative weakness should ensure the move methinks: I am not alone – heard a couple of banks of the same view.  EURGBP DAILY EURCHF: anyone following my posts this week will be aware of my fondness for this pair. In the earlier panic of the week we traded down to approx 1.2120 and have gently recovered composure, just as Mr Jordan may have wanted. The trade is a no-brainer as a buy on dips and a break above the upper resistance trendline should give much more encouragement to the shaky !  EURCHF Daily
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| European equity close: Italy leads the way lower Posted: 01 Mar 2013 08:42 AM PST
FTSE higher on the week while the DAX, CAC and IBEX were slightly lower. Italian shares were lower for the fifth consecutive week and lost 3.2%. |
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