Blog Posts

This article was published on October 9, 2019. Even with the Federal Reserve cutting the fed funds rate – which is the predominant feeder into cash rates in the US economy – cash is still one of the best returning financial assets. Treasury bonds return even less or about the equivalent. Stocks do not provide […]

Like any financial instrument, short-term interest rates are tradable. While the federal funds rate is under the purview of the Federal Reserve, traders can anticipate the future direction of interest rates several years into the future. Traders price the fed funds rate to move down to just below 100bps (1 percent) in perpetuity. (This chart […]

So first, you’re probably thinking, what does the Manhattan real estate market have to do with day trading? My belief is that it’s important to have as broad of a view as possible of what’s going on in different asset classes – i.e., what are the forward returns of cash relative to bonds, and the […]

This article was published on September 26, 2019 Because negative interest rates will be a part of the euro area economy for a long time, central bankers are increasingly focusing on the harmful side effects that they might bring and getting around the matter with a tiered interest rate system. Namely, there is the issue […]

This article was published on September 19, 2019. 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).   […]

This article was published on September 17, 2019 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 […]

This article was published on September 17, 2019 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 […]

This article was published on September 9, 2019 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 […]

This article was published on September 6, 2019 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 […]

This article was published on August 29, 2019 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 […]