by Peter Howard

There are many global macro investing strategies that make use of the yield curve. While primarily used to trade bonds, there are also several good uses for trading stocks and currencies as well. In fact as powerful as the yield curve is, there is likely a few yield curve strategies for every asset class out there.

The Treasury yield curve is the curve you get when you plot out the yields for different maturities. For instance if the 90-day T-Bill is at .2 percent and the 10-year T-Note is yielding 3.5 percent you have an up sloping yield curve as the long dated Treasuries are paying a higher yield then the short dated Treasuries. Usually you would also plot out the two year, five year, and thirty year along with the ninety day and ten year. This will give you a better …

A Dang Good Year for AUDCAD … So Far!

If you bought the Australian dollar and simultaneously sold the Canadian dollar at the beginning of the year and you’re still positioned like that then you’re probably a pretty happy camper. That’s because year-to-date AUDCAD (Australian dollar vs. Canadian dollar) has jumped 1,000 PIPs – or 11.4%. And in the world of forex, that’s a huge move.

And having just tested its highest level in more than three years, we begin to wonder if this pair could be running out of gas. Buy-and-hold strategists will tell you the trend is your friend, so keep buying and holding. But we’ve got a different philosophy that keeps us asking: when is the trend not your friend? And when is the trend going to reverse and take you to the cleaners?

 

Right now may be one of those times … or it might not. But

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On Thursday, July 3, the European Central Bank is expected to raise interest rates by 0.25%. That same day, economists expect the U.S. jobs number (”nonfarm payrolls”) to show a 60,000 reduction. Question: How should the two events affect the U.S. dollar’s standing against other currencies? Well, in theory, when a central bank raises interest rates, it makes that country’s assets more attractive to foreign investors. And since the country’s assets are denominated in that country’s currency, it also becomes “more attractive” – i.e. it gains. A weak jobs report speaks for itself. So, come Thursday, the USD should get decimated. Will it? Possibly, but… If you’ve traded forex for a while, you’ve seen many instances when the market would react “illogically” to the news. What’s stopping Thursday from being one of those days? Forex markets often don’t behave as “fundamentals” suggest they should. That’s because what determines the trend ...

MyECheck Inc. is a financial electronic transaction processor and provider of alternative payment solutions for internet and mobile commerce. In the past two days the stock has risen 35.38% and 19.32% respectively. A $10,000 investment on Monday would have resulted in a return of $16,153.85 in just 48 hours.

The consumer services sector has actually lost over 2% as a whole in the same two-day period that MyECheck has shown the impressive gain of over 61%. Monday’s 35% gain took place on 89,882 shares while today’s 19% gain took place with 97,717 shares traded. In that short window of time, the recently volatile Dow Jones Industrial Average has gained only 38 points on below average trading volume.

One advantage to the services offered by MyECheck Inc. is that they are mutually beneficial to both the buyer and seller. Their

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First, I have not done this properly, thank you for the various suggestions left toward the farmland project I have been working on. I have not really thanked you all properly.This is has been a peculiarly busy week, not trading but with every other aspect of my life, so just a few stray items to chew on today.Here is a link to a lengthy speech by Dennis Gartman. Despite how long it is it does read very quickly. One thing he said, which I cannot vouch for but is interesting if correct "In the last 30 centuries, China has been the dominant economy in the world for 28 of them. It’s just a return to the mean as China now becomes the dominant demand-oriented society in the world." I don't doubt the general idea I just don't know about 28 out of 30....

The dollar is gripping tightly to its two-week rally even though the fundamentals have changed very little. So what’s behind the market’s sentiment shift?

Less-dovish rhetoric from the Fed? That could be part of it. After the FOMC meeting last Wednesday, the Fed is now expected to stop cutting rates for the foreseeable future.

The latest economic news could also be lending a hand to the buck’s strength. For example, last Friday’s U.S. jobs report suggested the labor market may be entering recovery mode.

Still, the dollar’s about-face started before either of those events. And that’s why I attribute its recent rally to something else, something that’s been mostly swept under the rug.

I’m talking about the G7 meeting that went down near the beginning of April. It may not have been given sufficient credit by the market at …

In the last week there has been a rather big flap about LIBOR rates. It is a very serious matter. The Wall Street Journal pointed out a week ago that these rates might be misleading. There have been various stories following up on this and noting the defects in the method of calculation and the implications for US markets.

We believe that the stories capture neither the significance of the implications, nor all of the possible reasons for the problem.

Four months ago we worked on this issue. While we urge readers to revisit the entire article, here were some of the key points:

Readers need to know the following:

Much of the popular discussion of LIBOR moves relates to other currencies, not dollars.
The relevant discussion of LIBOR rates in US dollars pertains to so-called “eurodollars.” These are dollar deposits held outside the US (not necessarily …