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7 Jan 2015
Oil falls, safe havens thrive – SG
FXStreet (Barcelona) - Kit Juckes of Societe Generale, explains that with oil and US yields declining, investors hunt for safe havens and for better yields.
Key Quotes
“We're half-way through the first week of trading in 2015, and we've made plenty of multi-year lows: in EUR/USD, in oil, in yields. It's about time to return to mundanity in the form of Friday's US payroll data, with the pre-cursor today in the form of the ADP, as well as the Minutes of the December FOMC meeting, US trade data, German unemployment and Euro Area CPI.”
“The dollar continues to appreciate, despite falling Treasury yields and even more strikingly, falling forward interest rates (US 1-year rates, 5 years forwards, are now back under 2 ½% for the first time since May 2013, completely reversing the ‘taper tantrum' move).”
“The hunt for safe havens and the hunt for yield combine to send investors scurrying for dollar duration, and as the end-Dec CFTC data showed, the speculative community is caught out with big short positions. However, at some point the dollar is going to need some interest rate support.”
Key Quotes
“We're half-way through the first week of trading in 2015, and we've made plenty of multi-year lows: in EUR/USD, in oil, in yields. It's about time to return to mundanity in the form of Friday's US payroll data, with the pre-cursor today in the form of the ADP, as well as the Minutes of the December FOMC meeting, US trade data, German unemployment and Euro Area CPI.”
“The dollar continues to appreciate, despite falling Treasury yields and even more strikingly, falling forward interest rates (US 1-year rates, 5 years forwards, are now back under 2 ½% for the first time since May 2013, completely reversing the ‘taper tantrum' move).”
“The hunt for safe havens and the hunt for yield combine to send investors scurrying for dollar duration, and as the end-Dec CFTC data showed, the speculative community is caught out with big short positions. However, at some point the dollar is going to need some interest rate support.”