Salient to Investors: Jim O’Neill writes: Too much of the world’s trade and finance is conducted in dollars. The exorbitant privilege has lasted too long. It is time one or two of the emerging-market governments did something about the US’s ability to borrow in its own currency – an advantage the rest
READ MORE... →Salient to Investors: Mansoor Mohi-uddin at UBS said the euro and pound will weaken to $1.20 and the pound will fall to $1.41, more than 3-year lows against the dollar, by year-end 2013 as the commitment by the ECB and the BoE to keep interest rates low for extended periods. Mohi-uddin said policy
READ MORE... →Salient to Investors: Ian Stannard at Morgan Stanley says the British pound’s subdued response to recent signs of UK growth points to declines to $1.45 by the end of Q3 and to $1.41 by the end of 2013. Stannard said the UK services sector is the most important part of the UK economy
READ MORE... →Salient to Investors: US companies are poised to post some of their weakest quarterly earnings reports in 4 years, in part due to a stronger dollar. The IMF cut its forecast for global growth in 2013 to 3.1 percent, and for the US to 1.7 percent. Analysts who reduced earnings forecasts
READ MORE... →Salient to Investors: Dan Dorrow at Faros Trading said the strong jobs numbers suggests tapering sooner because the cumulative strong momentum is there. Bill Gross at Pimco sees a stronger dollar ahead, but not US-growth friendly as the ECB and BOE ease while Fed tapering looms. Fed-funds futures indicate the probability
READ MORE... →Salient to Investors: Alexander Friedman at UBS says: What Fed has done is not unexpected and the market reacted because it was ahead of itself. All the Fed was saying was that the US is doing OK, that the data is trending as it should, and that it has confidence
READ MORE... →Salient to Investors: A. Gary Shilling at A. Gary Shilling & Co. writes: Short stocks and commodities, go long the dollar and Treasuries – if stocks continue to decline, the safety of Treasuries and investment-grade bonds will outweigh concerns about the end of QE. World economies are growing slowly at
READ MORE... →Salient to Investors: The euro has strengthened 4.6 percent in 2013, the most among 10 developed-market currencies, indicating revealing how far Draghi is falling behind in the foreign-exchange wars. The gain shows investors are confident that Draghi et al are doing enough to hold the euro region together, but threatens the ability
READ MORE... →Salient to Investors: Eric Viloria at Gain Capital said expectations of QE tapering is positive for the US dollar because it means a slowing in the expansion of the Fed balance sheet. Alan Ruskin at Deutsche Bank said the tapering story is very much in play, and the employment data suggests
READ MORE... →Salient to Investors: Tom Levinson at ING said emerging-market currencies are at the beginning of perhaps longer and deeper correction, while this is where the dollar starts to rally potentially for the right reasons because the US business cycle is further developed. Kit Juckes at SocGen said the bull market is over
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