Global Macro Trading Journal

Quote from Martinghoul:
And here I thought it was the debt ceiling shenanigans that were to blame for the weak USD.
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You should start making Zero Hero your start page like Ralphie did. No more guessing the reason why markets moved one way or another!
 
Quote from Butterball:

You should start making Zero Hero your start page like Ralphie did. No more guessing the reason why markets moved one way or another!
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Could it be that the USD is weak because of both the debt ceiling shenanigans and also expectations of QE3?

And maybe also wider (ongoing) diversification by central banks away from the USD and into a range of currencies, including, but not limited to gold, EUR, GBP, CHF, JPY, AUD, CAD.
 
I read somewhere that the gov could tap the exchange stabilization fund to prevent a default, its true. To me there is little doubt that the Aug 2 deadline was created just to lead congress to a sense of urgency. The actual date the US starts defaulting on obligations is probably quite a bit in the future, and to default on interest or debt payments is probably even more in the future still
 
Quote from Daal:
I read somewhere that the gov could tap the exchange stabilization fund to prevent a default, its true. To me there is little doubt that the Aug 2 deadline was created just to lead congress to a sense of urgency. The actual date the US starts defaulting on obligations is probably quite a bit in the future, and to default on interest or debt payments is probably even more in the future still
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This is a reasonably detailed look at it and it says "bipartisan" on the cover :).
http://www.bipartisanpolicy.org/sites/default/files/Debt Ceiling Analysis FINAL.pdf
 
Quote from Martinghoul:

And here I thought it was the debt ceiling shenanigans that were to blame for the weak USD.
More...

Well, dollar-based assets are doing just fine. Treasuries up again today, stock market is at multi-year highs. Commodities are all rocking. If it wasn't for the debt ceiling nonsense in the headlines, one would think the Fed just announced more easing. Really, you should know better.

I would argue the action in the dollar has approximately zero to do with this debt ceiling posturing. I would further argue that Treasury running out of cash could be strongly dollar positive.

In any case the U.S. has weeks, if not months, or even a year before Treasury runs out of money. There are several options. This is a completely made up issue.
 
Quote from ralph00:
Well, dollar-based assets are doing just fine. Treasuries up again today, stock market is at multi-year highs. Commodities are all rocking. If it wasn't for the debt ceiling nonsense in the headlines, one would think the Fed just announced more easing. Really, you should know better.

I would argue the action in the dollar has approximately zero to do with this debt ceiling posturing. I would further argue that Treasury running out of cash could be strongly dollar positive.

In any case the U.S. has weeks, if not months, or even a year before Treasury runs out of money. There are several options. This is a completely made up issue.
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I am going to have to disagree with some, if not all, of what you say.
 
Quote from ralph00:

I would argue the action in the dollar has approximately zero to do with this debt ceiling posturing. I would further argue that Treasury running out of cash could be strongly dollar positive.
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Is this because our funding costs would go up in the form of higher interest rates, thus attracting inflows? If so, I also disagree on the basis that non-paying paper makes poor collateral, which is the biggest thing going for the dollar because payments are taken for granted.

Also, you perceive the treasury deadline to be much further in the future than the mainstream view. What will be cannibalized to extend it out?
 
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