EXCHANGE CORNER

View in your browser Tapering Impact on FX, Gold; High Credit Scores Drive Housing By Blu Putnam, Chief Economist Erik Norland, Senior Economist CME Group FX, Gold Market Volatility Could Rise With Tapering U.S. jobs recovery could slow down in second half of 2021. Fed expected to stay on course to taper asset purchases by … Read More

View in your browser Technology Can Keep Inflation at Bay By Blu Putnam, Chief Economist, CME Group Scaling Up Business Without Raising Output Costs Price hikes due to supply chain bottlenecks could ease in 12-18 months. Technology can help in boosting supply without raising production costs. Output cost could even fall as companies scale up … Read More

Will EUR/USD Volatility Snap Back? By Erik Norland, Senior Economist, CME Group EURUSD Volatility Has Declined Sharply 30-day EUR/USD options implied volatility in 2021 is down sharply to 5%-6%. Implied volatility ranged from 5%-10% past few years, and 10%-15% before 2016. U.S. and eurozone budget deficits, inflation rates have diverged since pandemic. Widely traded EUR/USD … Read More

View in your browser Inflation Dichotomy and Equities vs. Real Estate By Erik Norland, Senior Economist CME Group Surging Inflation Unique to U.S. U.S. core inflation at 4.5%, U.K. at below 2.5%, eurozone 1%. China’s inflation below pre-pandemic level at 1%, Japan at around zero. Massive U.S. fiscal spending led to a surge in consumer … Read More

View in your browser Inflation Lacks Persistent Driver and Bonds Price Unique Fed Move By Blu Putnam, Chief Economist Erik Norland, Senior Economist CME Group Weak Dollar Drove Inflation in the 1970s Inflation has exceeded Fed’s 2% target, yet bond yields barely moved. Ten-year Treasuries are yielding less than 1.3%, below actual inflation rate. Weaker U.S. … Read More