Dies meint M. Chandler im folgenden Artikel
Currencies
Setback Won't Alter Greenback Bull Case
By Marc Chandler
3/1/2006
The bullish dollar case I have argued remains intact as March gets under way, despite some near-term vulnerability to a setback. This setback will coincide with a slight narrowing of short-term interest rate differentials as the market awaits fresh trading incentives.
In this phase, the risk is that the euro will firm to test $1.1920, and possibly even $1.1970, before a fresh low-risk sale opportunity presents itself. Sterling could head back toward $1.7600. The dollar made a new high for the year earlier Tuesday but then reversed, posting a technically key reversal. Potential for the greenback against the Swiss franc, lately around CHF 1.3145, extends toward CHF 1.2900-50. The dollar may not suffer as much against the yen as cross positions are adjusted. A break of the JPY 115.70 level would be significant and warn of a potential move toward JPY 114.00.
But these movements will not shake the bull case, which is based on the conviction that the U.S. economy has an underlying resilience, which in turn will prompt more tightening of short-term interest rates by the Federal Reserve than the market appreciates. Widening interest rate differentials would lend support to the greenback.
At the end of last year, the market had discounted a 4.75% peak in the fed funds rate. Second thoughts were seen in January, and the July fed funds futures contract finished February about 30 basis points below where it finished 2005 as the market anticipates a 5.00% fed funds at midyear.
While this still seems to be the most likely scenario, what seems less reasonable to me is the belief that fed funds will peak there. The market has yet to fully appreciate the magnitude and duration of the current tightening cycle.
There are several reasons additional Fed tightening is likely. First, look at the macroeconomic performance. To use the vernacular, the U.S. economy is kicking butt here in the first quarter. GDP looks to be growing at a heady pace that might even sport a 5-handle. The unemployment rate stands at 4.7%.
The capacity-utilization rate eased in January below 81%, but this reflected a sharp drop in utility output due to the unseasonably warm weather throughout much of the country. Manufacturing-capacity utilization rose to 80.5% from 80.1% in December to stand at its highest level since July 2000. I would not draw much significance from these two items but for the fact that the Federal Reserve has suggested that "resource utilization" is a concern. Moreover, to the extent that the course of its policy is data dependent, the Federal Reserve has not ended a tightening cycle with such a macro performance.
Second, the fact that the long-term interest rates have not risen much over the past 18 months, while short-end rates have been hiked, suggests that the Fed will have to do more of the heavy lifting if it is going to achieve the desired degree of tightening.
But it is not just the price of money (interest rates) that implies less restrictive monetary conditions; the quantity of money continues to grow at a robust pace.
[...kein Wunder, wenn die Fed Geld druckt wie verrückt und an Chinesen verteilt... A.L.]
For example, the year-over-year growth rate of M3 rose at an 8.1% pace in January, accelerating from the 4.9% pace seen in June 2005 and 5.7% pace in June 2004, when the Fed began its tightening cycle. Money supply, as measured by M-3, is rising at its fastest rate since early 2002.
Whenever I paint this picture, the doom-and-gloomers ask, "What about the inverted curve, which portends a recession?" It is true that the yield curve has an excellent track record of preceding recessions. It is also true that during periods in which the U.S. curve is inverted, the dollar tends to appreciate [aufwerten, A.L.].
Another useful rule of thumb is that the stock market tends to peak six to eight months before the economy does. As you know, the Dow Jones Industrial Average is at it highest level since 2001 and has held above the 11,000 threshold since Feb. 15. The S&P 500 index is also at its highest level since 2001. It is even true for a broader index like the Wilshire 5000, which hit new multiyear highs Feb. 27.
What these observations have in common is liquidity. This is in contrast to the fair-valuation models, formal or informal, that market participants often use. The belief that certain prices, such as for gold or money, tell us something about the economy or larger market assumes a fair-value model. However, if it is a question of liquidity, what may be generated by a fair-value model is not a signal but noise.
The liquidity hypothesis explains a lot of the seemingly anomalous price action, such as the collapse of quality spreads -- corporate bonds and U.S. Treasuries or emerging markets and U.S. Treasuries -- in the fixed-income space. It is true that corporate America's balance sheets are vastly improved, with a significant minority of U.S. companies having more cash than debt. It is also true that economic conditions for a number of emerging-market countries have improved in recent years. Many East Asian countries enjoy current account surpluses. Russia and a number of Latin American countries have paid down debt. While there has been some fundamental improvement, the abundance of liquidity seems to be a key critical force.
|
1 |
... |
123 |
124 |
|
126 |
127 |
...
| 173
Thread abonnieren
ETF-Sparplan