NIBA Journal - Insights from the National Introducing Brokers Association

Gold’s Relationship to the Dollar, Chinese Renminbi Is Changing

Gold prices have been on a wild ride. Between 2000 and 2011, they rose from $280 to around $1,900 per ounce before falling back to $1,050 in 2015. Currently, they are trading close to $1,300 an ounce. Gold has made similar-sized moves when priced in the Chinese renminbi (CNH). From a CNH perspective, prices rose from 2,000 to 12,000 between 2001 and 2011 before falling back to 7,000 in 2015. Currently, it’s trading near 9,000 CNH (Figure 1). The similarity in performance reflects the stability of CNH versus the U.S. dollar, staying within about a 25 percent range during the past two decades. Is Gold a Hedge for Chinese Growth? China’s economic growth sent the prices of most commodities soaring from 2001 until 2011. Many commodities, including wheat, copper, aluminum, platinum, soybean oil and crude oil have had strong positive correlations with both the “Li Keqiang” index (a narrow but...

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CME Updates

July 3, 2019

4 min read

What Happens When The U.S. Dollar Declines?

The U.S. dollar is the most important currency in the world and when it falls, everyone feels the ripples. Over 80 percent of all currency transactions involve the greenback and investors of all asset classes have learned that its ups and downs can have significant ramifications for their investments. But the dollar’s influence is even more far reaching than that – any businesses with customers outside of their own borders need to be mindful of its swings because the moves in the greenback can have a big impact on earnings and equity valuations. Dollar Connection to Gold and Oil In fact, it is hard to find a market that is not impacted by the dollar’s fluctuations. If the greenback declines, the benefits can be widespread. Commodities like oil and gold are priced in dollars so when the dollar falls, oil and gold prices are pushed higher. This drives up prices...

What Happens When The U.S. Dollar Declines?

The U.S. dollar is the most important currency in the world and when it falls, everyone feels the ripples. Over 80 percent of all currency transactions involve the greenback and investors of all asset classes have learned that its ups and downs can have significant ramifications for their investments. But the dollar’s influence is even more far reaching than that – any businesses with customers outside of their own borders need to be mindful of its swings because the moves in the greenback can have a big impact on earnings and equity valuations. Dollar Connection to Gold and Oil In fact, it is hard to find a market that is not impacted by the dollar’s fluctuations. If the greenback declines, the benefits can be widespread. Commodities like oil and gold are priced in dollars so when the dollar falls, oil and gold prices are pushed higher. This drives up prices...

Will The Fed Cut Rates in July? Six Key Dates To Watch

CME Group’s FedWatch Tool expects a rate cut soon. The Federal Reserve (Fed) meets on July 30-31 to decide whether to cut rates and if so, by how much. While some more vocal members of the policy-setting Federal Open Market Committee (FOMC) are ready to accommodate the White House and/or the bond market by cutting rates, others may be more data-dependent, meaning they want to assess and analyze the latest data to see if there are any signs of economic weakness. Here is our take on what the data releases in July 2019 might bring. July 5: Jobs Report: Data from the May report surprised with a relatively weak job creation number of 75,000. Monthly jobs data zigs and zags. Low numbers are often followed by a rebound, and that is what seems most likely. By our calculations, job growth is decelerating, yet still on a path to see 140,000...

Will The Fed Cut Rates in July? Six Key Dates To Watch

CME Group’s FedWatch Tool expects a rate cut soon. The Federal Reserve (Fed) meets on July 30-31 to decide whether to cut rates and if so, by how much. While some more vocal members of the policy-setting Federal Open Market Committee (FOMC) are ready to accommodate the White House and/or the bond market by cutting rates, others may be more data-dependent, meaning they want to assess and analyze the latest data to see if there are any signs of economic weakness. Here is our take on what the data releases in July 2019 might bring. July 5: Jobs Report: Data from the May report surprised with a relatively weak job creation number of 75,000. Monthly jobs data zigs and zags. Low numbers are often followed by a rebound, and that is what seems most likely. By our calculations, job growth is decelerating, yet still on a path to see 140,000...

Market Update: Summertime Surge

After the record-setting first half of the year, the second half started with a surge for equity indexes. Jack Bouroudjian breaks down why we should watch fund flows and why the traditionally slow summer months could be more active this year. The post Market Update: Summertime Surge appeared first on OpenMarkets. Source: CME Open Markets - Market Update: Summertime Surge

Market Update: Summertime Surge

After the record-setting first half of the year, the second half started with a surge for equity indexes. Jack Bouroudjian breaks down why we should watch fund flows and why the traditionally slow summer months could be more active this year. The post Market Update: Summertime Surge appeared first on OpenMarkets. Source: CME Open Markets - Market Update: Summertime Surge

We’re in A New Era of Market Data Sharing

In almost every industry today, effective decision-making depends on having the right data. You can see the evidence in the race to disseminate business analytics. Google, Salesforce and other major firms are investing heavily in getting customers new, reliable data faster and more efficiently. The needs are especially present in financial services. Investors, researchers and risk managers are looking for market data delivered as quickly as possible – everything from futures prices to satellite images of Midwestern crops. As technology rapidly evolves, the way exchanges deliver data to clients has evolved as well. Snail Mail to Click-Through Data In just a few short years, CME Group’s Data Services business has undergone a transformation. In 2016, we were shipping physical hard drives off manual extracts from our data warehouse. Now, customers order online, agree to a click-through license, enter their credit card, and select from several delivery methods (none of which...

Market Update: Looking Ahead to The Second Half

Jack Bouroudjian explains how the first half of the year was record-breaking in equity markets. He then examines how major news stories like trade may influence the appetite for risk as we enter the second half of the year. The post Market Update: Looking Ahead to The Second Half appeared first on OpenMarkets. Source: CME Open Markets - Market Update: Looking Ahead to The Second Half

We’re in A New Era of Market Data Sharing

In almost every industry today, effective decision-making depends on having the right data. You can see the evidence in the race to disseminate business analytics. Google, Salesforce and other major firms are investing heavily in getting customers new, reliable data faster and more efficiently. The needs are especially present in financial services. Investors, researchers and risk managers are looking for market data delivered as quickly as possible – everything from futures prices to satellite images of Midwestern crops. As technology rapidly evolves, the way exchanges deliver data to clients has evolved as well. Snail Mail to Click-Through Data In just a few short years, CME Group’s Data Services business has undergone a transformation. In 2016, we were shipping physical hard drives off manual extracts from our data warehouse. Now, customers order online, agree to a click-through license, enter their credit card, and select from several delivery methods (none of which...

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