Blog Posts

Recently, rates in the overnight USD funding market – of which the repo market is a subset – spiked higher. The effective fed funds rate (EFFR) also went higher, which also happened to be the eve of FOMC lowering the rate 25 basis points (0.25 percent).   Some wire houses reported repo levels at or […]

At the end of August, the US 10-year Treasury bond was yielding 1.43 percent. It is now back up to nearly 2 percent. For those who missed the first rally, this gives another opportunity. At least to those who believe in some version of the narrative of a reasonably high probability of a recession within […]

All market watchers know the details by this point. Drone strikes on Saudi Arabia’s Abqaiq facilities sent crude oil prices flying 10 percent or more depending on the type of crude. Brent crude, shown above, is more susceptible to a Saudi outage than WTI. It was the largest daily gain in 28 years, back when […]

Experienced currencies traders know that government sponsored currency intervention is part of the game and can come out of the blue even when you may not expect it. Forex as a whole is a difficult asset class to trade with any degree of precision because there are so many factors that ultimately influence its behavior. It’s […]

In a recent article, we took a look at the issues confronting the Argentinian economy. For those who trade emerging market currencies (“EM FX”), it’s important to understand the fundamentals of what makes a currency move and idiosyncrasies governing these currencies. Unlike when you’re trading a G-7 currency pair, you don’t regularly have to worry […]

If you have a proprietary trading operation, multi-strategy hedge fund, family office, or other business designed to make money trading the financial markets, at some point you will probably want to hire traders to work for you (beyond the execution kind). It’s a way to scale and diversify your trading business. However, for anyone who’s […]

Argentina has been in the global markets headlines for over a year, with its tribulations with its economy and the volatility and severe depreciation in the Argentina peso. It is, once again, quite likely to default on its debt within the next few years unless it receives significant help from external sources (i.e., the IMF) […]

Negative bond yields don’t make sense at first glance. Why would anyone pay somebody to hold their money for them? Normally when you put up a lump sum of cash to invest, you expect a return stream out of that in the future. It doesn’t seem prudent to see that pile of money decrease in […]

Let’s start with a basic trading principle: When one country slaps tariffs on another country’s tariffs that is bullish for the tariff-implementing country and bearish for the country on the receiving end of them. It is an external shock that reduces national income for the recipient. The ongoing trade conflict between the US and China […]

US dollar liquidity refers to the amount of dollars available in the commercial banking system. The US Federal Reserve lends dollars to other central banks through swap lines, which the commercial banks in those other countries can use as a funding source. Many traders believe the US dollar will decline in the coming months. Speculative […]