Marc Chandler - Brown Brothers Harriman

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Last quote by Marc Chandler

The key issue is about trade and protectionism. I don't think anything changes. I'd say G-7 heads of state has nice photos, but substance, not so much. The meetings are important. Trump is still an unknown quantity for Europe.feedback
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NEW May 22 2017 Trump Presidency
We can learn a lot about a person if we know what types of things he or she talks about or comments on the most frequently. There are numerous topics with which Marc Chandler is associated, including Fed and U.S.. Most recently, Marc Chandler has been quoted saying: “The escalation of the investigation into Russia's involvement in the recent U.S. election threatens to take resources, time, and attention away from the economic agenda, which had already begun meeting some scepticism.” in the article Asian stocks set to drift higher on U.S. cues; dollar weak.
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Marc Chandler quotes

The key would be not so much the German election, but the Italian election.feedback

If the U.S. has 3 percent growth like he thinks we can achieve, and Europe is struggling at 1 percent growth, how do we get a weaker dollar.feedback

We've been wavering back and forth on health care and tax reform. Now he's back to health care.feedback

On the margin, it's an easing of tension. ... The U.S. missile attack is not the beginning of a wholesale military involvement in Syria. North Korea, not clear.feedback

I think the odds have to favor more dots, favoring more rate hikes, rather than fewer. Maybe it's going to be a hawkish hike finally. I think the market is underestimating the hawkishness of the regional Fed presidents. Why shouldn't the Fed raise rates once a quarter this year. ... With the employment number and the other readings on the economy, the economy is not fragile. Some of the words they've used are more confident on the economy. I think in the Dutch election, we'll see that the populist party does not shape the government.feedback

I'd say the greatest uncertainty around what is happening is the Fed. I feel pretty confident the Dutch populist is not going to win. I feel confident May is going to trigger Article 50. I don't think the EU summit amounts to much. I still lean against it, and the reason I lean against is the discipline in the FOMC statement is the clearest articulation of what the Fed is going to do.feedback

It's hard to imagine a better month than where the Dow rallies to records 12 days in the month, and where the S&P is only down four times.feedback

There are a lot of things people are watching for. ... If he talks about protectionism and how he might have a reciprocal tax, it could go the other way [higher]. Initially the dollar moves higher on protectionism. It partly means stronger growth.feedback

The dollar could sell off if he doesn't address the border-adjustment tax or says it's too complicated.feedback

He talks about how the dollar has appreciated since Trump got elected. There's a little problem with his understanding of a strong dollar policy. It's not about the level. It's about telling your trade partners that we will not use the dollar as weapon.feedback

The verbal intervention by the new U.S. administration and the unexpected weakness in wage growth may be factors extending the correction.feedback

I don't think people are going to change their forecasts based on a dozen comments ... The market is trying to wrestle with these new developments, but ultimately policy is what dictates the currency prices. We have to wait and see. If there is deregulation, tax cuts and infrastructure spending, as well as some protectionism, like a border tax, I don't like it but I could see how it could be good in the short run for the U.S. economy.feedback

Part of the problem is he's breaking all kinds of conventions. The whole playbook is out. That alone becomes important to investors. He might believe it, but I don't think that's how the world perceives it. We're in the middle of a correction. This just pushes on the open door. The dollar was already falling. the stock market was already weak.feedback

They can't say the euro is undervalued and at the same time pursue policies that could send the dollar up another 20 percent.feedback

We don't know how much credence to give it. Some people take him literally. Should people take him literally? The Chinese don't know.feedback

It also begs the question of where is power going to be. My sense is power is going to be in the White House, not in the cabinet.feedback

This is the first time we have a president-elect say the dollar has gone too far. He's saying things and doing things that no president has ever done before.feedback

It raises questions. Are we back to Lloyd Benson? He talked the dollar down and the dollar collapsed. Is this a jettison of the Rubin strong dollar policy? We don't know.feedback

There may be no good options with the yuan. Slowing the decline can be costly. Allowing the full decline would be disruptive.feedback

If they step away from the intervention to support the yuan and let it fall, it would likely spur a speculative attack.feedback

We've got the Brexit, the Trump election. What's the next point? I don't think it's going to be France. I don't think it's going to be Germany. I think it's going to be the Netherlands.feedback

The dollar weakened against the euro. I think it's been because they've been waiting for the stimulus talk and there hasn't been anything.feedback

The EU says to the U.K., This is not a smorgasbord. If you do not expect the free movement of people you cannot have the free movement of goods.feedback

The most important thing now is the [U.K.] Supreme Court decision, and that will be out in the next two to three weeks.feedback

If the intervention can push the peso below 21 (to the dollar), we could see some consolidation. If the peso can break below 20.70, it would be even more convincing.feedback

If the U.S. gives up being a global leader, in the short term, it's good for the U.S. In the long run, it's probably not.feedback

I don't see the logic of why it would be good for the dollar. I don't see the logic of taxing imports is good for the dollar. It could boost inflation which would make the Fed more likely to hike.feedback

Right now I think Fed policy and underlying growth are more important than these trade issues. There are a lot of unknowns.feedback

The nationalism is like an acid that eats away at the glue that holds Europe together. We have bid up stocks. This is tax breaks. This is less regulation. They think Trump is better for business.feedback

The short-term market is still short euros and I think they might be nervous - time to square up a little bit more ahead of the ECB meeting.feedback

If the [euro] doesn't sell off on bad news, I think it's telling us something. I think it's going to correct higher.feedback

Look what happened this week. Italian bonds have done the best in Europe. Italian stocks have done the best in Europe. Italian banks are up 5.2 percent. It means that people think that it's going to be a nonevent.feedback

The derivatives market is beginning to price in a more aggressive Fed. A few days before the election, investors learned that average hourly earnings rose by 2.8 percent year-over-year. This is the fastest in several years, and although one month a trend does not make, it is consistent with a tightening of the labor market, and rising core inflation pressures.feedback

It's mostly (U.S.) yields and nervousness about the unknown. When U.S. yields go up, emerging market's get hit, largely because they have dollar denominated debt.feedback

Copper imports fell to their lowest level since February 2015. The drop in copper imports seems to reflect 'import substitution' as domestic output is rising with new smelters coming online.feedback

As long as there's no surprise, I think it's going to be anticlimactic. I am long euros against the Swiss franc – the anti safe-haven trade. I think Trump's not going to win.feedback

Everybody's got their bets on the table. There hasn't been any earth-shattering economic data. Things are quiet.feedback

This is just sort of a knee-jerk reaction, not representative of what's going to happen.feedback

The main consideration seems to be the contrast between Fed officials like Fischer and Dudley who have been signaling a rate hike before the end of the year, while the ECB has arguably signaled a likely extension of its asset purchases.feedback

We've had some disappointing U.S. economic data. I think that it's spurring a little bit of a correction. It's mostly a technical correction after the run-up.feedback

The dollar's gotten stronger as more people think the Fed will hike rates in December.feedback

Economic data does not help very much to explain sterling's movement. The fact of the matter is that the UK has fared well in the three and half months since the referendum.feedback

The depreciation of sterling will have an impact on the UK current account balance. It will be reduced, but do not be surprised if it comes from reduced volume of imports as much as an increase in value of exports.feedback

The dollar looks firm against the yen after the 100 yen level was repeatedly tested. However, the upside may be blocked near 102.00 yen.feedback

The RMB joins the SDR formally on Oct 1. Some people would argue that ahead of the formal entry, they've been bending over backwards to keep the currency stable so afterwards, they might have less of a reason to keep it stable.feedback

I do think there's a knee-jerk reaction. A Trump victory is bad for stocks, bad for the dollar. For the dollar, what happens after cooler heads prevail is a different story.feedback

It appears to be stabilizing at lower levels.feedback

Many argue that monetary policy is reaching its political and/or ideological limit, even if theoretically interest rates can go deeper into negative territory than the ECB or BOJ have.feedback

When was the last time that London as cheap for Americans? Thirty years ago. For the Chinese it's almost 10 years ago.feedback

The jobs data is not weak enough to get people to give up on their Fed view.feedback

If we get a strong number above 200,000, I would say the odds would go up. If we get a number much below ... 150,000, I would say the odds fall much further. I would expect the dollar to go in the direction of the odds.feedback

I think the technical tone, not only for U.S. stocks, but emerging market equities as well has really deteriorated. You'd expect people to take some profits on the summer rally of risk assets.feedback

The next barrier is in the 102.00-102.60 band. A campaign through 103 would negate the potential head and shoulders potential continuation pattern we previously identified.feedback

I think that what is driving the yen – mostly Japanese lifers, pensions, corporates hedging their foreign investments or dollar assets – may not be blunted by prospects of higher [U.S.] rates.feedback

The world could live with higher U.S. rates.feedback

For me to be convinced on a September rate hike, I would have wanted to see more dissents. The reason I lean against it and say the bar is high, is because I think they're still worried about the international developments. There is an Italian vote in October that could rattle markets and China's yuan becomes part of the IMF's key currency basket.feedback

The nervous Nellies have likely been reassured by both the improvement in the labor market, renewed consumption and the general resilience of the capital markets in light of the UK's referendum.feedback

Uncertainty clouds the picture, but Turkey is not so important to the economic channels. It's more important politically.feedback

The market is fickle. If we get a few more good jobs reports, upward pressure on wages and prices in general and the global economy is not very disruptive, the Fed could raise rates … I do think the stars need to be aligned.feedback

Markets are crazy and it's going to be awhile before we can get a sense of security. The important thing is you don't have full participation. You have big volumes going through but a lot of people are going to avoid the market – asset managers, corporations… they don't need to be heroes, let the other guys pick the bottom.feedback

Ahead of the referendum, many look for sterling to underperform and the yen and Swiss franc to outperform. The euro and central and eastern European currencies are vulnerable, while risk assets, in general, are expected to weaken on a Brexit victory.feedback

While February's machinery orders fell less than anticipated, Japan markets remain weighed down by a strengthening yen and uncertainty surrounding when, or if, the Bank of Japan will intervene.feedback

There have been a few weekly downdrafts of the dollar that were larger, without sparking an intervention.feedback

I've been arguing the Fed can't go in April because they want to put their spin on it, but they're paying attention to this loss of credibility issue.feedback

You've had three regional Fed surveys for the month of March all stronger than expected. Plus four or five Fed officials have sounded like they want to raise rates.feedback

I think this credibility issue is sufficient and economic data is stronger. Core PCE deflator was 1.7 percent. The Fed may under promise and over deliver.feedback

The attack in Brussels, on the back of terrorist attacks in Turkey over the weekend ... is bad news for the U.K., because it plays into the hands of those who want to leave, thinking that somehow if they leave they're safe.feedback

I think it's too soon to expect Japan to do anything.feedback

Changing the 'dot plot' is capitulation on the part of the Fed.feedback

Core CPI inflation and core PCE picked up. Inflation expectations picked up. Another month would make the Fed feel more comfortable.feedback

To me, the real thing that happened is inflation expectations.feedback

Weaker oil prices mean interest rates stay lower for longer.feedback

I could not imagine a better report from the Fed's point of view. I can't think of one time when the U.S. had a recession with this kind of jobs growth.feedback

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