Speaker 1: Broadcasting live to New York, Bloomberg to Washington, d C,
Speaker 1: Bloomberg to Boston, Blueberg, Well Under, to San Francisco, Bloomberg nine,
Speaker 1: to the country, Damn General one, and around the globe
Speaker 1: the Bluemberg Radio plucks Apen Bloomberg Dot gone. This is
Speaker 1: taking stock. Coming up on taking stock, We're going to
Speaker 1: take stock of currencies and the US dollar with rates
Speaker 1: as low, well the ten year US Treasury at one
Speaker 1: point five five would a rate increase even if twenty
Speaker 1: five basis points? Would that change the value of the
Speaker 1: US dollar versus our major trading partners. Will find out
Speaker 1: more coming up, but right now, let's find out about
Speaker 1: news from Charlie Pellett in the Bloomberg news room. All right,
Speaker 1: thank you very much. Pim Fox stocks extending their decline
Speaker 1: led by drugmakers. The SMP five hundred indexes down four
Speaker 1: tenths of one percent. Investors are also waiting Friday speech
Speaker 1: from fed share Janet Yellen. They'll be listening for clues
Speaker 1: on when to expect higher borrowing costs. And Brett Bryan
Speaker 1: is U S economist at Deutsche Bank Securities. He was
Speaker 1: interviewed about a fed share Janet Yellen this morning and
Speaker 1: the interest rate outlook on Bloomberg Television. We're seeing a
Speaker 1: very coordinated effort amongst the Fed speakers to buy that
Speaker 1: optionality for September for the for the Committee. So the
Speaker 1: Fed would love to just you know, whether they're learning
Speaker 1: a hurry or not, they want to have that September
Speaker 1: option available. Well, not even the US Congressional Budget Office
Speaker 1: is buying the federal reserves projected path for interest rates
Speaker 1: in coming years, starting with some Central bankers insistence that
Speaker 1: a hike next month is possible. In the latest update
Speaker 1: of its Budget and Economic Outlook, the CBO says that
Speaker 1: expects the Central Bank to hold its target for the
Speaker 1: federal funds rate at point to five to point five
Speaker 1: percent until the fourth quarter of this year before raising it.
Speaker 1: The tenure down one thirty second, with the yield of
Speaker 1: one point five five percent, Gold tumbling eighteen forty the
Speaker 1: ounce three that's the drop right now of one point
Speaker 1: four percent. Crude oil West Texas Intermediate down two point
Speaker 1: eight percent, tumbling dollar thirty six to forty six dollars
Speaker 1: and seventy three cents. New numbers from the National Association
Speaker 1: of Realtors show Sales of previously owned homes dropped more
Speaker 1: than forecast in July from a nine year high, restrained
Speaker 1: by limited choices for buyers. SMP five hundred index down
Speaker 1: eight to seventy eight, a drop of four tenths of
Speaker 1: one percent. The down down three tenths of one percent,
Speaker 1: lower by fifty two points to thirty two on Wall Street. Now,
Speaker 1: let's take a look at some of the other stories
Speaker 1: making news. Thank you Charlie from the Bloomberg newsroom. I'm
Speaker 1: Jill Schneider. This news update is brought to you by Audie.
Speaker 1: Like a force of nature, the Summer of Out event
Speaker 1: has arrived. Visit your try State Audie Dealer during the
Speaker 1: Summer of Audie Event and get up to a five
Speaker 1: thousand dollar bonus on select out vehicles. Rescue crews continue
Speaker 1: to dig through the rubble in central Italy looking for
Speaker 1: survivors after an earthquake that struck when many people were sleeping.
Speaker 1: At least one twenty people have been confirmed dead. Bloomberg's
Speaker 1: Alessandra Nigliatio is in the small town of Amateurs. They
Speaker 1: are definitely after shops. Not as strong as the first,
Speaker 1: but the unnerving when you're in a Hailltown with the
Speaker 1: ground full of crack. Italian officials say they have set
Speaker 1: up tense cities to care for the thousands left homeless
Speaker 1: by the quake. Vice President Joe Biden is in Turkey
Speaker 1: trying to patch up shaky relations with a Key NATO ally.
Speaker 1: Biden condemned last month's failed coup after meeting with Turkish
Speaker 1: President Urdwan. The people of the United States of America
Speaker 1: a poor what happened and under no circumstances with support
Speaker 1: and a remotely approaching the cowardly act of the treasonous
Speaker 1: members of your military. Turkey has demanded that the US
Speaker 1: extradite Fatula guland the Islamic cleric it blames for the
Speaker 1: coup attempt. This week marks the two anniversary of the
Speaker 1: Battle of Brooklyn, when fierce fighting between the British and
Speaker 1: Continental armies broke out, engulfing an area that encompassed what
Speaker 1: is today Park Slope, Prospect Heights, and a section along
Speaker 1: the Gojanas Canal. About three thousand Americans died. Global News
Speaker 1: twenty four hours a day, powered by more than journalists
Speaker 1: and analysts in more than one twenty countries. I'm Jill
Speaker 1: Schneider and this is Bloomberg, Charlie, and we thank you,
Speaker 1: and again recapping stocks LA R S and P five
Speaker 1: hundred index dropping eight points now to one, a drop
Speaker 1: there of four tenths of one percent. I'm Charlie Tallaton.
Speaker 1: That's sub Bloomberg Business Flash. This is taking stock the
Speaker 1: FED in focus on Bloomberg Radio. And here to focus
Speaker 1: on the FED with us is Stephen Casey for an
Speaker 1: exchange trader and senior market analyst at Cambridge Global Payments.
Speaker 1: Joining us the New York studio. Stephen, we have you know,
Speaker 1: um yell in coming up, we have Jackson Hole for
Speaker 1: our currencies perspective. What is number one on your mind
Speaker 1: going into the next couple of weeks here, Um, from
Speaker 1: a currency perspective, probably a little clarity. I think the
Speaker 1: Fed has given the dollar a little bit of a
Speaker 1: crisis of confidence over the last few weeks, especially over
Speaker 1: the last seven days. When the FED minutes were released
Speaker 1: a week ago, UM, the dollar I personally didn't think
Speaker 1: it should deserve the slide that it received, but it
Speaker 1: was sold across the board. It's been very weak over
Speaker 1: the last week, and we've had a little bit of
Speaker 1: profit taking recently. But UM, I think we need to
Speaker 1: see some clarity from the Fed, some um, some consistency
Speaker 1: with what with what, what's going to be coming up next?
Speaker 1: Do you think we will see that clarity? I think
Speaker 1: the the driving factor here UM that we talked about
Speaker 1: a little bit earlier with Joe Wisenthal of of Bloomberg
Speaker 1: Markets is debate seems to be UM the overlying status
Speaker 1: quo for what's going on with the Fed, and a
Speaker 1: lack of decisiveness. Do you think we'll see I'm optimistic
Speaker 1: we'll see that. I think UM. The comments over the
Speaker 1: weekend from by Chairman Stanley Fisher were a good indicator
Speaker 1: of what we might see from Chairman Yellen on Friday.
Speaker 1: I think she's gonna do her best to keep September live.
Speaker 1: I personally don't think there's any chance they're gonna hike
Speaker 1: before the election. I think it's a fifty fifty shot.
Speaker 1: At the December meeting. I think she's gonna want to
Speaker 1: be a little bit more optimistic, and I think she's
Speaker 1: gonna try to write the ship for the dollar. It's
Speaker 1: sold off quite a bit over the last six weeks
Speaker 1: or so, so it's got some room to recover. UM
Speaker 1: and I'm optimistic that her comments will kind of kick
Speaker 1: it off. Stephen Casey, is it possible we could go
Speaker 1: through some of the currency pairs. For example, the dollar
Speaker 1: euro right now trading at one twelve sixties six. Do
Speaker 1: you expect the euro to strengthen or weaken against the dollar?
Speaker 1: I expect the euro to the euro rate to kind
Speaker 1: of tumble over UM. It's fallen off about a little
Speaker 1: less than one percent over the last twenty four hours.
Speaker 1: I think if we do see some optimism from Janet Yellen,
Speaker 1: I think it could continue to gravitate back towards that
Speaker 1: one ten area. I think the fundamental picture as we
Speaker 1: get deeper into Q three points for a euro a
Speaker 1: lower year at all the rate UM. And I think
Speaker 1: if we do see some of those similar comments from
Speaker 1: Yelling that we saw from Fisher, that should really get
Speaker 1: the engine going. All right. How about the pounds sterling
Speaker 1: at one four? I think it's a similar story. The
Speaker 1: pound is kind of twisting in the wind right now.
Speaker 1: Whenever you see a twelve cent drop in just over
Speaker 1: one day, it's kind of in no man's lands, and
Speaker 1: it's been kind of hanging around there for the last month.
Speaker 1: UM Fundamentally, I still favor UM Sterling dropping back below
Speaker 1: that one thirty area. I think, UM, as we see
Speaker 1: a little bit more optimism from the Fed, a little
Speaker 1: bit more confidence with what they want to do towards
Speaker 1: the end of the year, that should favor Sterling tipping
Speaker 1: below one and the Canadian dollar one right now. Yeah,
Speaker 1: that's been kind of a pain as well. UM, it's
Speaker 1: been been a kind of a rocky summer. Well, it's tough, right.
Speaker 1: I took my vacation in June. I wish I pushed
Speaker 1: it off to August. It's been so quiet. Equities, folks,
Speaker 1: we are each crew right. Well, Unfortunately, I'm gonna take
Speaker 1: the same stance with dollar Cat. I know we've been
Speaker 1: trading just below that one thirty area UM for the
Speaker 1: last few weeks. But I think fundamentally, UM, if you
Speaker 1: want to look at Canada, UM, I think dollar cats
Speaker 1: should favor back towards that one thirty five range as
Speaker 1: we move into UH September October, it's twofold. One. I
Speaker 1: think we're going to see a little bit more optimism
Speaker 1: from the Fed, and two, I think we're kind of
Speaker 1: seeing the the the new progressive policies, UM. Up in
Speaker 1: Canada taking fold. Just last month they were reported one
Speaker 1: of their largest deficits um ever, so I think that's
Speaker 1: going to continue to filter into the market. Yeah, the
Speaker 1: government of Justin Trudeau, he's gonna be spending money stimulate
Speaker 1: the economy. Japanese yen at one hundred dot four four,
Speaker 1: So one hundred. Where is that a key level? One hundred?
Speaker 1: I mean number, it's a pretty number. Well, if you
Speaker 1: think the Fed's got issues, take a look at the
Speaker 1: bank in Japan because it's absolutely a month lungingmatch right
Speaker 1: now between them and the government. UM. I think they're
Speaker 1: going to be meeting the third week of September there
Speaker 1: right now kind of doing a report or an assessment
Speaker 1: um as to what they've seen from a UH policy
Speaker 1: standpoint over the last few months. So we'll get more
Speaker 1: clarity mid in mid September. UM. I don't think we're
Speaker 1: gonna stray too far from from this one, Mark. I
Speaker 1: think we could again bounce a little bit if we
Speaker 1: UM we get what I think is going to happen
Speaker 1: on Friday with Jackson Hall and just tell us about
Speaker 1: d x Y. This is the index that is used
Speaker 1: to track the value of the US dollar versus major
Speaker 1: trading partners. How does that actually get put together? And
Speaker 1: what is it telling you? Well, it's a reading of
Speaker 1: the sixteen most traded currencies versus the US dollar. UM
Speaker 1: in our in our space. Whether or not it's going
Speaker 1: to be too impactful kind of ebbs and flows At
Speaker 1: the moment um, I think it's been kind of leading
Speaker 1: the charge. But um, it's not something that I try
Speaker 1: to keep track of. When we're approaching events such as this.
Speaker 1: It's best to keep an eye on the fundamentals rather
Speaker 1: than technicals. Fundamentals rather than technicals are right, good? Then
Speaker 1: I don't have to learn too much about d x Y,
Speaker 1: although we do track that of course. Um, what about
Speaker 1: emerging market uh currencies? I keep thinking about the Brazilian
Speaker 1: real for example. The stock market there is up with
Speaker 1: thirty percent year to date. Yeah, I mean it's always
Speaker 1: been one of the few areas, especially in these markets,
Speaker 1: where you could chase yield. Unfortunately, there have some piccadillo.
Speaker 1: So if you do rush into those emerging markets currencies,
Speaker 1: you're gonna have to worry about, um, some things kind
Speaker 1: of flying up out of out of nowhere. So um,
Speaker 1: you know in these markets where you've got, you know,
Speaker 1: zero interest rate or negative industrates. With Japan in the
Speaker 1: US and UM in Europe and Canada, you could see
Speaker 1: investors flushing into those im markets, but it's always a
Speaker 1: dicey fly. Stephen Casey, thank you for joining us and
Speaker 1: giving us the rundown on those currency markets. Foreign exchange
Speaker 1: trader and senior market analyst at Cambridge Global Payments joining
Speaker 1: us here UM at Bloomberg Radio. I'm Alex Brenka and
Speaker 1: for Kathleene Hayes, and this is him. Yes, this is
Speaker 1: taking Stock and this is Bloomberg. The FED in Focus
Speaker 1: is brought to you by Willoughby's since eighteen ninety eight,
Speaker 1: New York City's boutique camera store for precision craft at
Speaker 1: Hazelblad and Like A Cameras, plus a full selection of
Speaker 1: GoPro action adventure cameras. Willoughby's corner of Fifth Avenue and
Speaker 1: thirty first Street