Category Archives: Front Page

Today’s Front page

How to Trade US Employment Data.

By Andrew Busch | Published: May 3, 2012

Here’s the currency trade for today’s appearance at 12:50 ET on CNBC’s Halftime Report.

US Employment Currency Playbook
1. If NFP<125k, then sell USD/buy MXN
2. If NFP175k, then sell AUD/buy USD

If the NFP is between 125K and175K, do nothing as the market will be going back and forth trying to figure out what to do.

I think the biggest payoff will be from #1, especially after the market thinks (incorrectly) that today’s jobless claims improvement have anything to do with tomorrow’s numbers.

A weak US NPF number will drive QE3 news flow on the FOMC and should weaken the US dollar … …READ MORE

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Milken Conference Panel on the Global Liquidity Glut and Currencies

By Andrew Busch | Published: May 3, 2012

Tuesday, I was on a panel with five very sharp minds discussing the risks from the extraordinary global central bank quantitative easing. We had two authors present and I recommend reading their books: Barry Eichengreen’s “Exorbitant Privilege” and James Rickards’ “Currency Wars.”

If you want to watch the panel, click here.

Here are my points that started the discussion:

1. My biggest concern is not the amount or level of the quantitative easing, but how and when the central banks begin to exit from the programs. The Bank of Japan, the European Central Bank, the Bank of England, and … …READ MORE

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Comments from the Milken Conference: Why Investors Are Worried

By Andrew Busch | Published: May 1, 2012

On Monday, the lunch panel entitled, “Global Overview: Shifting Fortunes,” was charged with providing a big-picture look at the global economy to provide clarity to a very muddled picture. The panel covered macroeconomic trends around the world, including U.S. recovery and Europe’s slowdown; the world’s new balance of economic power, which emerging markets will be able to sustain growth over the long term – and which might be headed for turbulence; geopolitical risk in the Middle East and beyond, plus the effects of spiking oil prices; elections are coming up in many of the world’s largest nations; and finally what … …READ MORE

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The Busch Update: Middle Market Indicator focus

By Andrew Busch | Published: April 25, 2012

Topics Today: The Busch Update April 25th, 2012: Middle Markets, FOMC, Spring Data, and Social Security

The Middle Market The National Center for the Middle Market has produced a new indicator for the middle market that looks promising. The indicator is a quarterly business performance update and economic outlook survey conducted among 1,000 C-suite executives of companies with annual revenues between $10MM – < $1B. Here are their key findings and interesting graphics...

FOMC Quickie: Status QuoThe three legged stool of Bernanke, Dudley and Yellen all support the language of 2014 and believe the data is too mixed to change it.

Speaking of mixed data… Our Jennifer Lee writes, … …READ MORE

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FOMC Quickie: Status quo

By Andrew Busch | Published: April 25, 2012

The three legged stool of Bernanke, Dudley and Yellen all support the language of 2014 and believe the data is too mixed to change it. Don’t be confused by the other member forecasts on rates and alternative policy paths The only three that matter are BDY (Bernanke, Dudley and Yellen).… …READ MORE

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European Fiscal Rebellion

By Andrew Busch | Published: April 24, 2012

From the Netherlands to France, European citizens and politicians are shifting their views on austerity and growth. The straitjacket of Maastricht is forcing countries into downward debt spirals that exacerbate not alleviate the descent. Growth is paramount to sustainability not just reducing spending or raising taxes. If you don’t grow, you can’t grow your tax receipts and you can’t service your debt at any level. This is the lesson of Greece and why it will remain a ward of the European Union until it restructures the remaining debt to levels that can be supported by current tax receipts. Therefore, it … …READ MORE

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US Social Security: out of cash in 7 years

By Andrew Busch | Published: April 24, 2012

Yesterday, Social Security released their Trustee’s report on the state of the fund’s finances and it wasn’t pretty. Here’s their sobering commentary: “Social Security and Medicare are the two largest federal programs, accounting for 36 percent of federal expenditures in fiscal year 2011. Both programs will experience cost growth substantially in excess of GDP growth in the coming decades due to aging of the population and, in the case of Medicare, growth in expenditures per beneficiary exceeding growth in per capita GDP. Through the mid-2030s, population aging caused by the large baby-boom generation entering retirement and lower-birth-rate generations entering employment … …READ MORE

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Breaking Bad….politics and economics

By Andrew Busch | Published: April 23, 2012

Over the weekend, the newsflow was decided negative as both economics and politics “broke bad” to drive Risk-Off trading. Stating the obvious, the key for any market is the consistency of the information that is received to enhance or detract from the current themes. Clearly, mixed data or newsflow produces mixed market reaction. If the information is decided in one direction, the moves can be substantial especially given the advent of technology that allows for instantaneous trading across all instruments. This drives the “Risk-On” or “Risk-Off” trades.

Given this, let’s take a look at what happened over the weekend. First, … …READ MORE

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CNBC currency trade reminder: don’t put it on unless it lines up

By Andrew Busch | Published: April 23, 2012

When I recommend trades for CNBC’s Money in Motion and in the Busch Update, I try to present a playbook for how to trade an event instead of just providing levels to buy or sell. Clearly, the FX markets are complex and have numerous moving parts to them that necessitate flexibility to remain profitable for traders. This is why you need several areas to line up to give you the edges to not only get the trade on, but also to have it be profitable. Here’s what I presented on Friday and here’s the link for the video:

CNBC: http://video.cnbc.com/gallery/?video=3000085474&play=1… …READ MORE

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EUR in focus: Spain, Sarkozy, Weidman and BAC

By Andrew Busch | Published: April 18, 2012

Overnight, there were two important sets of commentary from Europe: France’s Sarkozy and the ECB’s Weidman (head of Germany’s central bank). First, French President Sarkozy: “If the euro rises too much then our exporters can’t sell and they lose money not because they’re not competitive but because the euro is too expensive….These are debates that we should have with the governor of the European Central Bank.” (RTRS) This is important as the ECB is the de facto manager of the currency due to its ability to manage monetary policy. European political leaders lost their traditional sovereign role to manage the … …READ MORE

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