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Author: Adam Button

A rules-based central bank would be a major win

When I first heard about the idea of a rules-based Fed I scoffed, like most people. To my thinking, using a simple rule like the Taylor Rule would be stupid because it would miss all the nuances that go into analyzing the economy and setting rates.

I've changed my mind.

The thing is, it can't be a simple rule. It needs to take into account all the data available. It needs to be a Watson-level supercomputer that looks at thousands, if not hundreds of thousands of inputs in real-time. If the algorithm can handle news and politics, add that too.

What makes it such a compelling idea is that it could act quickly (why not set rates daily?) and diminish volatility. The value of reducing volatility and uncertainty is enormous. If you could give markets more certainty and confidence while lowering volatility, it would be a huge win.

There is no important central banking function a machine couldn't do. Aside from setting current rates, it could also send signals about future rates in much of the same way as the Fed. Along with daily rates, it could publish 1, 3, 6, 12-month forecasts and even further out.

Developing it and building enough trust could be a process over many years where it's rolled out as an input, slowly refined, turned into some kind of grey box and then used fully. If we're building computers that can diagnose diseases and drive cars, then it's time to get started on interest rates.

The fringe benefit would be that policymakers there would get a taste of the automation job uncertainty facing millions. That might even help them set policy in the meantime.


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Author: Adam Button
17

The problem with trading Trump's tax 'plan'

You can't trust the guy The market didn't make a big move on Friday on the news that Trump was going to be releasing his tax plan on Wednesday. The S&P 500 climbed about 5 points; USD/JPY rose 30 pips.

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Author: Adam Button
14

A terrifying statistic on the retail workforce

E-commerce is coming for your job Not all retail employees are threatened by online sales, but millions are. Retail stores are nearing a tipping point, especially in the United States where retail floor space dwarfs other countries.

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Author: Adam Button
5

You have to wonder what Exxon was thinking

Treasury denies special exemption for Exxon to drill in Russia Maybe ExxonMobile has gotten its way for far too long. You have to wonder what executives there were thinking. They applied to get a special exemption from Russia waivers so they could drill some new wells and were denied on Friday.

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Author: Adam Button
3

Good news if you don't like listening to the Bank of England

The election call means communication will be restricted I didn't know this rule and I'm not sure they have it in too many places but Bank of England Governor Mark Carney and other BOE policymakers are banned from speaking until after the election, except in a few limited circumstances.

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Author: Adam Button
2

ForexLive Americas FX news wrap: Oil below $50, Trump tax plan coming

Forex news for US trading on April 21, 2017: Markets: - Gold up $3 to $1284 - WTI crude down $1.11 to $49.61 - US 10-year yields up 1.4 bps to 2.25% - S&P 500 down 7 points to 2349 There was plenty of news and reasons to trade today but the FX market was on the sleepy side. Almost everything finished up within 20 pips of opening levels.

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Author: Greg Michalowski

US stocks end with modest losses on the day

Not today Trump. France has an election. The major US indices are ending the day lower but losses are somewhat modest.  Even Trumps claim that big tax cuts are coming next week did not have an impact.  France elections this week helped to keep the lid on equities.

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Author: Adam Button
5

Fitch downgrades Italy to BBB from BBB+

Fitch downgraded Italy - Outlook stable - Sees Italy GDP up 0.9% - Sees general government debt to GDP falling to 129.3% in 2020 - Sees debt peaking at 132.7% of GDP in 2017 Here's what Fitch had to say.

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Author: Greg Michalowski

CFTC Commitments of Traders: GBP shorts remain near high levels

Forex futures net speculative positions as of the close of business on Tuesday April 18, 2017 The positions are as of the close of business on Tuesday when the UK announced their snap election. The change in shorts in the GBP saw a decrease of 7K from the near record level of 106K short last week. So despite the market rally, the net speculative shorts remain near record short levels. 

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Author: Greg Michalowski
5

The markets move toward the close...

Stocks not impressed by Trump's "tax plan is coming" talk With 40 minutes to go until the close the:Trump has also just added:I guess, the hope it was around the corner was a bit optimistic.

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Author: Greg Michalowski
1

US crude oil futures settle at $49.62/BBL

Down -$1.09 or -2.15% US crude oil futures settled the day down -$1.09 or -2.15% to $49.62.   For the week. Technically this week, the price fell below the 100 day MA at $51.72 and the 50 day MA at $51.28.  

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Author: Greg Michalowski
5

Technical analysis: EURUSD higher on the week. What about next week?

Holds near the 50% of the weeks range today As we head to the close for the week, the EURUSD is  Overall, the range for the week was  about 176 pips.  That is ok in what is a less volatile 2017. The high trading range for a week in 2017 is 280 pips. The low is 106 pips. In 2016 (by comparison), the low trading range was 123 pips and the high was 515 pips.  We are just not seeing trends for long in 2017. 

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Author: Adam Button
6

Why leaks and rumors will be huge next week

Anything leaking out of Trump's tax plan could have major implications An overhaul of the US tax code is massive market event. Trump it to be released Wednesday or shortly afterwards.

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Author: Adam Button
2

New healthcare bill could be released as soon as today - report

Trumpcare part 2 CNBC reports that Senate Budget Committee staff are working on the language of the healthcare bill now and it will be sent out today or tomorrow. They cite an unnamed senior White House official.

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Author: Adam Button
2

Macron fades in final BVA French election poll

Macron down a point compared to previous There are so many French election polls hitting the wires today. They're banned tomorrow so this is it. The final BVA poll showed Macron down to 23% from 24% but those losses were gains for fringe candidates and Melenchon. Le Pen was stable at 23%. Melenchon gained 0.5 pp to 19.5%. Fillon was stable at 19.0%.

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Author: Adam Button
2

USD/JPY hits a session low as the S&P 500 dips

S&P 500 down 10 points to 2345 The S&P 500 hit some stops as the earlier low just below 2350 broke. It continued down to 2344. There has been some minor selling at the same time in USD/JPY as it slips about a dozen pips to a session low of 108.88.

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Author: Adam Button

Baker Hughes US oil rig count 688 vs 683 prior

US drillers make a few more holes in the latest count - Prior was 683 - Natural gas rigs 167 vs 162 prior - Total rigs 857 vs 847 prior Every time an OPEC member sees this report, they must cringe.

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Author: Adam Button
7

US traders are making big bets on the French election

Check out the volume in the main French ETF The only good way to bet on the French stock market for most US investors iShares MSCI France ETF (EWQ). If you go back to last year, normal volume is around 750,000 shares traded per day. On a big day, it would stretch up to 3 million.

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Author: Adam Button

Fresh lows: OPEC headlines fail to support crude

WTI down 2.6% WTI crude is carving out a fresh low for the day at $49.36 and has broken the 61.8% retracement of the March-April rally. The Baker-Hughes rig count is due out at the top of the hour.

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Author: Adam Button
2

How to trade Sunday's French vote - BTMU

BTMU on the French election Going into the first round of the French elections on Sunday, BTMU FX Strategy Research's base case for a higher EUR is mainly based on the assumption that neither Le Pen nor Melenchon become the next French president.

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