Article Archives (2008)

Displaying Articles written in 2008

Euro Gains on Geopolitics & USD Strains

Dec 29, 2008 14:03 | by Ashraf Laidi | 1 Comment
Euro strength and dollar weakness emerge in thin trading activity as geopolitical uncertainty creeps higher, propping gold to a 10-week high.
Zero-Bound Fed Breaks Dollar

Dec 16, 2008 19:32 | by Ashraf Laidi | 14 Comments
The Fed's shift to a range-driven fed funds target intensifies the yield assault to the world's main reserve currency.
Detroit Spoils Dollar Party

Dec 11, 2008 14:18 | by Ashraf Laidi | 4 Comments
Detroit may be just an excuse, but the dollar's non-fundamental run is showing more cracks.
More Risk Appetite as Stimuli Gone Wild

Dec 8, 2008 19:10 | by Ashraf Laidi | 4 Comments
Global equities, high yielding currencies and commodities pursue their rallying ways in US trading as stimulus hysteria grips the worlds leading economies.
Yen Leads Risk-Driven Jobs Reaction

Dec 5, 2008 16:22 | by Ashraf Laidi
Aside from the shocking 533K decline in US November payrolls (expectations -330K), the ward revisions in layoffs in prior months were as horrendous, with September payrolls revised to -403K from initial -284K.
Fed's Quantitative Easing Extends Seasonal Reversals

Nov 25, 2008 15:00 | by Ashraf Laidi | 19 Comments
As the Fed's quantitative easing policy reaches a new landmark, markets are set to make their seasonal reversal, typical of the last 5-6 weeks of the calendar year.
Beware of Seasonal Forex Reversals

Nov 19, 2008 22:40 | by Ashraf Laidi | 13 Comments
Beware of temproary but sharp FX reversals as seasonal shifts emerge in the last 5-6 weeks of the year, paring the flows prevailing in Sep-Oct.
Consumers Further Erode Retail Payrolls

Nov 14, 2008 16:06 | by Ashraf Laidi | 6 Comments
October's record breaking decline in retail sales underscores the deepening implications of falling demand on retail sector payrolls.
Risk Aversion Fills Data Vacuum

Nov 11, 2008 15:19 | by Ashraf Laidi | 2 Comments
Market turmoil deepens as US auto manufacturers, retailers and shippers, are forced into making fresh waves of layoffs, feeding off the negative loop from rising employment, falling consumption, lower earnings and eroding bank credit.
Bank of England Plays Catch-up at Expense of Sterling

Nov 6, 2008 14:54 | by Ashraf Laidi | 9 Comments
UK interest rates are now below those of the Eurozone for the first time in the life of the euro. Today's 150-bp cut is a grave assault to the British pound's central bank reserve currency role.
Elections, the Dollar, Stocks & the Economy

Nov 3, 2008 15:51 | by Ashraf Laidi | 9 Comments
How the Dollar, Stocks and the Economy Fared in the last 38 years of US Partisan Politics.
Reflationary Trade Here to Stay

Oct 29, 2008 19:59 | by Ashraf Laidi | 6 Comments
The combination of market and macroeconomic elements will maintain global monetary policy in a rare unison of easing mode (again typical of global recession), hence, paving the way for the reflationary trade (explained below).
Yen's Path of Least Resistance

Oct 24, 2008 12:29 | by Ashraf Laidi | 15 Comments
The collapsing sterling makes the news, but the plunging USDJPY to 13-year lows sends a vocal message to global markets.
Yen Still Outperforms in Forex Meltdown

Oct 22, 2008 15:32 | by Ashraf Laidi | 6 Comments
As the dollar continues to rally against higher yielding currencies, the yen remains the clear outperformer during the latest market sell-off, making GBPJPY and NZDJPY the greatest losers in today's forex activity.
USDJPY Strategy and Yield Curve Analysis

Oct 16, 2008 23:06 | by Ashraf Laidi | 12 Comments
USDJPY is set for another short-lived attempt of 103 yen while prolonged yield curve steepening in the US, EU and UK tells about the probabilities of incoming rate cuts.
Retail Sales' Message from Main Street

Oct 15, 2008 15:39 | by Ashraf Laidi | 9 Comments
The attached chart shows the year on year change in retail sales of 1.03% was the first decline since October 2002. There has been only 3 annual declines since 1992 (September 2001 and October 2002).
FX Performance Since the Storm

Oct 10, 2008 15:44 | by Ashraf Laidi | 4 Comments
The charts show the performance of major currencies as measured against gold and each other, since September 2-- two weeks before the makets' plunge.
Margin Debt Shows More Selling Ahead

Oct 7, 2008 13:55 | by Ashraf Laidi | 12 Comments
There is one concrete reason why US indices could lose at least another 20-25% from current levels. The powerful correlation between margin debt usage by member firms of the NY Stock Exchange and the trend of major indices such as the S&P500 and the Dow Jones Industrials Average suggests further selling ahead in the main indices.
What Retail Layoffs are Telling us

Oct 3, 2008 16:32 | by Ashraf Laidi
Rather than looking at just overall payrolls or the unemployment rate, focus also on the duration of layoffs in retail jobs, which tell us a great deal about the prospects for the US consumer.
More EUR, GBP Selling Ahead

Oct 1, 2008 15:10 | by Ashraf Laidi
Further dollar gains seen ahead on European banks' short-term funding problems and the eroding fundamentals in the Old Continent. Gains in equity indices are seen limited.
Fed Cut May Come Before Oct 29

Sep 25, 2008 14:01 | by Ashraf Laidi | 12 Comments
The Swiss Franc outperform the yen as forex traders seek refuge to the least risky currency on soaring LIBOR rates, weak US data, GE earnings downgrade and rising odds of a Fed cut.
IFO Sustains Euro Weakness

Sep 24, 2008 23:33 | by Ashraf Laidi
Fresh 3-year lows in German IFO survey will sustain further euro weakness and slow the rate of deterioration in the dollar.
A Super Tuesday for the Dollar ?

Sep 23, 2008 13:10 | by Ashraf Laidi | 4 Comments
Todays quadruple testimony (Fed's Bernanke, Treasury's Paulson, SEC's Cox and OFHF's Lockhart) at the Senate Banking Committee is expected to priduce a solid day for the US currenct and equity indices.
Implications of Gold's Rise Relative to Oil

Sep 18, 2008 19:12 | by Ashraf Laidi | 23 Comments
In recent months, I warned of the ominous implications of a rebounding gold/oil ratio. Yesterday, gold further outpaced oil in relative terms, giving more credence to the thesis of intensifying declines in US fundamentals.
Bridge Loans to ... Everywhere

Sep 17, 2008 8:23 | by Ashraf Laidi | 12 Comments
Despite another historic intervention by US authorities, the intended market reaction evaporates in the midst of heightened market worries and risk aversion. Forex traders pare down earlier yen losses and maintain pressure on the dollar.
Confluence for a Dollar Top? (with Charts)

Sep 15, 2008 14:45 | by Ashraf Laidi | 1 Comment
The confluence of forces in the dollar, oil and gold sugests a powerful signal of a top in the dollar's upward cocrrection. The historical faillures of US banks and their bailouts strike a vocal reminder of the fundamental deificiencies of the US dollar.
Fed Forced Back to Easing Mode

Sep 12, 2008 17:10 | by Ashraf Laidi | 4 Comments
Today's unexpected declines in US retail sales and PPI coupled with the worsening state of conditions with US banks make interest rate cuts a foregone conclusion in Q4, supporting my calls since May that the next interest rate change is down, rather than up.
Risk Aversion Drives JPY, GBP in Opposite Ways

Sep 10, 2008 2:55 | by Ashraf Laidi
Increased risk aversion continues to benefit the low yielding JPY and CHF, while punishing GBP, as the Bank of England hast yet to cut rates in H2 2008. Even bad news in the US are becoming GBP negative as risk appetite is eroded.
GSE Bailout Good for Confidence Not for Fundamentals

Sep 8, 2008 18:45 | by Ashraf Laidi
The FX and stock market reaction to the US Government takeover of Fannie and Freddie will be temporary. The unwinding of previous gains in USD and JPY is expected to reverse course and see fresh selling in GBP, AUD and EUR.
FX Implications of Latest US Jobs Report

Sep 5, 2008 14:31 | by Ashraf Laidi
The US August jobs report clears doubts of a US recession, but the currency implications remain kinder to the US dollar due to relative global macro strengths. The yen, however, is the exception.
Secular Currency Performance

Aug 28, 2008 5:35 | by Ashraf Laidi | 4 Comments
Why the dollar has outperformed and which currencies have fared the worst. A secular FX performance measure since the beginning of H2 and YTD.
Sterling's Olympian Dive

Aug 13, 2008 17:18 | by Ashraf Laidi
The dollar regains composure following a brief retreat following the US retail sales report, but the tumbling pound remains the headliner in foreign exchange markets.
US vs Eurozone Weakness

Jul 25, 2008 17:33 | by Ashraf Laidi
We disagree with the notion that emerging weakness in Europe would be a reason for a 5-7% decrease in the EURUSD exchange rate . Rather, such weakness is an obstacle to further record highs in the euro against the dollar.
EUR Share of FX Reserves vs USD

Jun 30, 2008 18:22 | by Ashraf Laidi
The Q1 2008 IMF data on currency composition of Official Foreign Exchange Reserves shows a continued gradual fall in USD claims along with continued increase in the EUR claims.
Warning Signal from S&P's 50 and 100 Week MA

Jun 19, 2008 14:07 | by Ashraf Laidi
The 50-week moving average of the S&P500 is approaching the 100-week moving average. A break below the 100 MA would suggest accelerating declines in the S&P500 and other equity indices.
Rate Hike Expectations Must be Abandoned

Jun 6, 2008 14:05 | by Ashraf Laidi
Today's jump in the unemployment rate to by 0.5 to 5.5% highlights our stark disagreement with the market pricing a rate hike this year, which was largely a result of Fed speeches rather than actual data.
Margin Data Suggest Prolonged Bear Market

Jan 25, 2008 19:24 | by Ashraf Laidi
Falling margin debt at the New York Stock Exchange indicates prolonged declines ahead in US equities. The historical significance proves extremely valid.

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