Poland, the Natural Ally for Post-Brexit Britain
By Nora Kalinskij
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Poland, the Natural Ally for Post-Brexit Britain
By Nora Kalinskij
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"My best regards to dollar bears": Bulls cheer buck’s resurgence
Bets against the dollar feel the heat, with more gains now expected
Katie Martin
The dollar is back, and those who had always kept the faith in the currency are running a victory lap. With bells on.
The dollar index, which tracks its value against a basket of other major currencies, is now up by 2.4 per cent from the middle of this month to reach its highest point since early January. The euro, meanwhile, continues to sink in the wake of the latest European Central Bank press conference, which delivered a note of caution, albeit measured caution, over the region’s economic soft patch.
“My best regards to all dollar bears,” writes Ulrich Leuchtmann, currencies analyst at Commerzbank. (A saucer of milk for Table 12 please, thanks.)
He continues:
The amount of ridicule, malice and criticism my colleagues and I had to face over the past months, was overwhelming! Our view that the dollar depreciation in December and January was fundamentally unfounded, that the market would not be able to ignore the dollar-positive arguments forever and that therefore we would see a recovery of the US currency was rejected by many: by readers, by clients, by colleagues.
I have to admit that in view of a wall of dollar bears I too had my doubts sometimes — as I am happy to admit. Perhaps everything really was going to be different this time round? Perhaps I had overlooked important arguments or mistakenly dismissed them as circumstantial? Perhaps the whole approach of our FX analysis was incorrect after all?
So it makes me particularly happy to see that the development of the markets is now proving us right.
Yep, we got that last bit. But he’s not done…
All these fabricated, sometimes absurd arguments that were used at the start of the year to extrapolate and justify dollar weakness have collapsed (a) because they are devoid of content and (b) because the development of the exchange rates can no longer disguise the fact this fact. As a result the dollar recovery is a self-perpetuating process. In a way it could be claimed that the dollar weakness was a speculative bubble that is currently bursting.
A Fed that is on track for several more interest-rate rises this year (compare and contrast with the ECB) and robust US inflation both mean that the buck can keep climbing from here, he said, quite aside from the rise in US bond yields, which he considers to be a distraction.
Michael Sneyd at BNP Paribas, meanwhile, argues that fickle traders have abruptly latched back on to signals from the US bond markets as a driver for the buck. “US rates didn’t matter for the dollar, now they do,” he said, adding that bets against the currencies are now folding under unbearable pressure.
We do not see events over the weeks ahead triggering a return to the weaker dollar theme, unless the FOMC delivers a dovish surprise on 2 May, which we consider unlikely, or April’s non-farm payrolls disappoint sharply (again, we do not expect this). Rather, we view that a catalyst for a euro or yen recovery would need to come from Europe or Japan in the coming weeks, which also appears unlikely.
ING sympathises with those who are caught on the wrong side of this, saying it “had thought the end point to the Fed policy cycle was nearly priced, but instead short rates are still moving and making dollar hedging costs very expensive.”
“It has been a tough week for those short dollars,” the bank adds.
HSBC’s David Bloom says he expects the euro to sink to $1.15.
Cyclical drivers are becoming dominant again, pointing to dollar strength as the Fed tightens and others hesitate.
Deutsche Bank and Barclays: Trans-Atlantic Drift
Investment banks appear to diverge dramatically, but for now, the differences are easy to overstate
By Paul J. Davies
MARKET MOVERS
Change in revenue for first-quarter 2018 over the same period in 2017 in U.S. dollars
Source: the companies
Note: Currencies converted at end of period rates
How Long Until China Cranks Up the Debt Engine?
Its economy’s steady first-quarter growth masks some worrying signs
By Nathaniel Taplin
The Empire Strikes Back, Part 3: “Big Meat” Tries To Define Away The Competition
Silicon Valley is pouring venture capital into startups that use cultured animal cells to grow meat. The hope (now backed with hundreds of millions of dollars) is that they’ll someday replace corn fields, feedlots and slaughterhouses with football-field sized vats from which an entire city’s hamburgers and chicken nuggets emerge sans animal suffering or land degradation.
Most people would probably say that as long as the taste, nutrition and price are comparable to traditional meat, the more the merrier. Let the competition begin.
But not Big Meat. Like most entrenched Establishments, the various factory farming organizations and state farm bureaus have no intention of becoming the next coal industry, virtually wiped off the map by new and better technologies. So they’re trying to head this stampede off at the pass by, among other things, laying claim to the word “meat”:
Nebraska Farm Bureau petitions USDA to limit definition of beef
LINCOLN — Nebraska Farm Bureau is urging the United States Department of Agriculture (USDA) to not use the term “meat” when referring to all lab-grown and plant-based meat alternatives.
The request to limit the definition of “beef” and “meat” to only products from live animals born, raised and harvested in the traditional manner comes from a strong movement to develop and commercialize alternative protein products, particularly “clean meat,” also called lab-grown or cultured meat, as well as plant-based proteins.
“The production and processing of livestock is of vital importance to our members and our state’s economy,” Steve Nelson, Nebraska Farm Bureau president, said in a letter to the USDA’s Food Safety and Inspection Service (FSIS). “This translates into tens of billions of dollars of economic activity as well as thousands of jobs.”
Nelson said consumers depend upon the USDA FSIS to ensure that the products they purchase at the grocery store match their label descriptions. In the letter, he specifically requested FSIS to:
– Prohibit products derived from alternative sources — e.g., synthetic products from plants, insects, non-animal components and lab-grown animal cells — from being labeled as “beef” or “meat.”
– Limit the definition of “meat” to the tissue or flesh of animals that have been harvested in the traditional manner.
– Limit the definition of “beef” to products from cattle born, raised and harvested in the traditional manner.
– Add the definitions above to FSIS’s Food Standards and Labeling Policy Book.