Archive for December, 2014

FT: Dollar surges in 2014 on rate rise hopes

Investors have been reversing the trend of the past few years to put money outside the US in search of higher yields and stronger returns in emerging markets as interest rate expectations have shifted and the US economy has powered ahead — a trend that analysts are predicting will continue in 2015.

“The dollar is still a very clear trade,” said Stephen Jen, head of currency hedge fund SLJ Macro Partners. “

Read the original article on the ‘FT’ website.

FT: No relief in sight for battered currencies

“The US has continued to power ahead and the fall in oil prices should be beneficial at least in the short run for the US economy. If that’s the case the Fed should be able to continue to normalise and the combination can’t be good for commodity currencies again,” says Stephen Jen, head of currency hedge fund SLJ Macro Partners.

Read the original article on the ‘FT’ website.

IFR: The Fed put: 2015 interest rate rise edition

“Fed officials can confidently say what Dudley said when equities are at record highs,” hedge fund manager Stephen Jen of SLJ Macro Partners said in a note to clients.

“I would take them more seriously if they say things like this in the midst of a 10 percent sell-off in equities.”

Read the original article on the ‘IFR’ website.

Bloomberg: Don’t Count on Oil Drop Greasing Global Growth

The declining price of crude oil may no longer grease the wheels of the world economy as much as it once did — and as much as International Monetary Fund Managing Director Christine Lagarde expects.

Recent history even may be on the side of contrarians like Fatih Yilmaz from London-based hedge fund SLJ Macro Partners LLP. On top of that, advances in energy efficiency and interest rates already at zero are likely to weaken the potential ripple effects of the 37 percent plunge in Brent crude this year.

“It is hard to make a strong statistical statement about the impact of declining oil prices on the global gross domestic product,” said Yilmaz in a Dec. 4 report.

Between 1970 and 2000, a 20 percent decline in oil typically added 0.25 point to worldwide GDP in the subsequent 20 months, his analysis showed. Since 2000, however, that relationship has broken down with the initial impact of an oil drop on GDP actually negative. It turns positive after a year and then fades

Read the original article on the ‘Bloomberg’ website.