Archive for the ‘Markets’ Category.
November 17, 2009, 11:21 am by Christine Birkner
In his speech before the Economic Club of New York yesterday, Fed Chairman Ben Bernanke expressed some conflicting thoughts about dollar policy. He said that the Fed is “attentive to the implications of changes in the value of the dollar.” At the same time, Bernanke reiterated his stance that economic conditions will warrant low levels of the Fed funds rate “for an extended period.” So it appears the Fed will maintain its low interest rate policy, which, in theory, could keep the dollar weak. This seems like a contradiction in terms.
Continue reading ‘Dollar paradox’ »
November 4, 2009, 2:13 pm by Christine Birkner
In this morning’s forex report, Andrew Wilkinson predicted that today’s statement by the Federal Open Market Committee (FOMC) would “convey an unchanged message in which they see a patchy economic recovery warranting an extended period of easy monetary policy.” He was right, as the FOMC said it would maintain the Fed funds rate at 0 to 0.25% and that economic conditions “are likely to warrant exceptionally low levels of the Federal funds rate for an extended period.”
Continue reading ‘Staying the course’ »
October 20, 2009, 4:07 pm by Daniel P. Collins
On the eve of the annual Futures Industry Association’s Futures and Options Expo there is a lot of activity and rumors floating around.
Continue reading ‘Show time’ »
October 14, 2009, 5:20 pm by Daniel P. Collins
When the Dow Jones Industrial Average hit 10,000 for the first time in March 1999, I was standing on the financial floor of the Chicago Mercantile Exchange. A large roar of approval rose from the traders as the Dow hit that historic and unprecedented benchmark.
Continue reading ‘Irrational exuberance on steroids’ »
October 7, 2009, 10:46 am by Daniel P. Collins
Gold futures hit an all time record high of $1,045 on Tuesday spurred on by a story in the London based Independent. The story stated that a cabal of Middle East oil producing nations along with China, Russia, Japan and France where conspiring to replace the dollar as the currency for crude oil.
Continue reading ‘Dollar trouble’ »
September 25, 2009, 4:18 pm by Daniel P. Collins
CME Group announced this week that they would launch a new 30-year bond futures contract, one that would be nearly identical to the contract traded at the Chicago Board of Trade for more than 30 years except that deliverable securities for the new Long-Term Bond future will comprise cash Treasury bonds with at least 25 years of remaining term to maturity. The benchmark 30-year contract accepts deliverables with at least 15 years remaining to maturity. The so called “Ultra” Treasury bond will begin trading in the first quarter 2010.
Continue reading ‘Doubling down on long bond’ »
September 17, 2009, 4:53 pm by Daniel P. Collins
When the Intercontinental Exchange (ICE) wrestled the Russell 2000 index away from CME Group during its battle over the Chicago Board of Trade, it was a big blow for the CME as the 2000 was a vibrant and growing contract. But the deal, at least from the point of view of the index provider, had less to do with the Russell 2000 and more with the Russell 1000.
See the Russell 1000 serves as the benchmark large cap index for a large portion of institutional equity funds. Despite this achievement, few of those professional money managers use the Russell 1000 futures to hedge their cash portfolio. For that, they go to the top dog S&P 500, which is more than 99% correlated with the 1000 and much more liquid.
Continue reading ‘Challenge to the king?’ »
August 28, 2009, 3:44 pm by Daniel P. Collins
Throughout the battle over who or what caused crude oil to spike to $147 per barrel last year CME Group and Intercontinental Exchange (ICE) have consistently contended that despite the bluster from certain members of Congress and analysis of self appointed experts, there has been no empirical study that linked the spike to speculators or the positions held by commodity index funds.
Whether that claim can still be made or not is debatable as Rice University just released a paper calling previous Commodity Futures Trading Commission (CFTC) studies that showed excess speculation was not responsible, flawed.
Continue reading ‘New study on specs sheds little light’ »
August 24, 2009, 5:34 pm by Daniel P. Collins
While reading over Federal Reserve Board Chairman Ben Bernanke’s comments from the symposium in Jackson Hole, Wyoming last Friday a few things stick out. First, he follows a disturbing trend we have noted here for some time that dates the credit crisis to September 2008 instead of much earlier; next, he supports the popular notion that a slower rate of decline equals growth and throughout he is quite loose with details surrounding certain events. Most disturbing is he takes credit for avoiding a disaster but fails to take responsibility for anything. Bernanke pats himself and others on the back for averting a disaster that 1) he was at least partially responsible for creating and 2) he assured us was not going to happen. Both Bernanke and former Treasury Secretary Hank Paulson were on record as saying the worst of the credit crisis was behind us while it was staring us in the face.
Continue reading ‘Back patting and buck passing’ »
July 24, 2009, 3:12 pm by Daniel P. Collins
That is the motto of the Boy Scouts and ELX Futures CEO Neal Wolkoff — in town to host the LaSalle Street Dinner Dance, which benefits the Chicago Area Council of Boy Scouts of America— was prepared to tout the performance of his exchange two weeks after it began trading.
“We have been increasing volume every day. I want to get to the point where [CME Group is] asking us for fungibility,” Wolkoff joked.
Continue reading ‘Always be prepared’ »
