FX Markets Update AUD & NZD likely to remain under pressure The cyclically-sensitive antipodean currencies have had a tough year so far, and a fair bit of bad news already appears priced in to both the aussie and the kiwi. Nonetheless, we don’t think their... 1st September 2023 · 4 mins read
FX Markets Update We still expect Gilt yields and sterling to fall Gilt yields and sterling have fallen from their cycle highs over the past month or so, and we think the worsening economic growth outlook in the UK and elsewhere mean that this trend will continue... 24th August 2023 · 4 mins read
Global Markets Update What China’s grim economic picture means for its markets With the headwinds growing for China’s economy, we think its equity markets will struggle, its 10-year yield will continue to fall and its currency won’t rebound as quickly as we’d thought. In view of... 17th August 2023 · 5 mins read
FX Markets Update We think CEE currencies are likely to reverse their gains Exceptionally high inflation in the major economies of Central and Eastern Europe (CEE) relative to elsewhere has left their currencies overvalued against the US dollar and on a trade-weighted basis... 16th August 2023 · 4 mins read
Global Markets Update Summer vibes across most markets, but will they last? Since our last Financial Market Stress Monitor on 13th May, strains have continued to ease. This abbreviated Stress Monitor takes stock of developments since then. Overall, stress across core... 10th August 2023 · 6 mins read
FX Markets Update We expect SNB intervention to continue to buoy the franc The appreciation in the Swiss franc this year has been largely at odds with moves in many of the factors which typically drive the currency. We believe this is mostly due to intervention from the... 7th August 2023 · 3 mins read
Global Markets Update Three thoughts on the US credit rating downgrade The US government losing another one of its “AAA” ratings after Fitch Ratings’ downgrade decision this week is more symbol than substance. But three key related points are worth highlighting. 4th August 2023 · 5 mins read
FX Markets Update What the end of tightening cycles means for the US dollar As major central banks near the end of their tightening cycles, the latest evidence of US economic resilience suggests to us that the dollar is poised to appreciate over the next couple of quarters. 3rd August 2023 · 4 mins read
FX Markets Update Effective end of YCC adds to the case for a stronger yen The BoJ’s decision earlier today to, in effect, end its long-standing Yield Curve Control (YCC) policy means that long-term government bond yields in Japan will become more responsive to economic... 28th July 2023 · 4 mins read
FX Markets Update The Mexican “super peso” looks poised for a sharp fall The Mexican peso’s relentless rise against the US dollar and most other major currencies is increasingly at odds with macroeconomic fundamentals. We think the peso is vulnerable to an abrupt fall over... 25th July 2023 · 4 mins read
FX Markets Update Taking stock of our forecast for a stronger dollar While recent data suggest the US in on a path towards disinflation and a less aggressive monetary policy stance from the Fed, we continue to think that the dollar will rebound in the second half of... 21st July 2023 · 4 mins read
Global Markets Update Why Gilt yields and sterling may have further to fall Despite today’s big reaction in markets in the UK to better-than-expected inflation news, we still think investors are overestimating the peak in interest rates there and underestimating how much... 19th July 2023 · 5 mins read
FX Markets Update The EM “carry trade” looks increasingly stretched Emerging markets (EM) currencies with high short-term yields – i.e., high “carry” – remain the strongest currencies against the US dollar this year, even if their gains over the past week have been... 14th July 2023 · 4 mins read
Global Markets Update How markets might fare as US disinflation continues June’s soft US CPI print seems to have given investors renewed hope that inflation could fall back to normal levels without the economy slowing too much, if at all. We continue to think that the... 13th July 2023 · 3 mins read
Global Markets Update Why don’t TIPS yields matter anymore? Not so long ago, a higher 10-year TIPS yield almost invariably meant an underperformance of US “growth” stocks vis-à-vis their “value” peers, a lower gold price, and a stronger dollar. That’s changed... 13th July 2023 · 5 mins read
FX Markets Update Intervention time: what next for the yen and the renminbi? China has stepped up its support of the renminbi and Japan appears to be edging closer to direct intervention to prop up the yen. While pressure from higher US interest rates may well continue in the... 7th July 2023 · 5 mins read