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The US dollar had spent much of the week on the back foot amid a growing belief that banking sector issues might prove a largely US-specific problem. But that narrative, and price action, has (again) been turned on its head today as European banks …
24th March 2023
We expect China PMIs for March to suggest economic momentum there is fading (Fri.) Updated UK Q4 GDP data may reveal a recession there after all (Fri.) Euro-zone headline CPI inflation probably dropped in March (Fri.) Key Market Themes We suspect some …
The ongoing struggles of the banking sector in the US and elsewhere has muddled the outlook for the dollar. But while we think the balance of probability has shifted against the greenback, we continue to expect a near-term rebound in the dollar, in …
We think UK retail sales edged up again in February (07.00 GMT) Flash PMIs for the euro-zone probably declined a little in March (09.00 GMT) We expect US durable goods orders fell in February (12.30 GMT) Key Market Themes With major central banks …
23rd March 2023
We expect the Fed to raise its policy rate by 25bp later on Wednesday (18.00 GMT) The SNB and Norges Bank are both likely to hike rates on Thursday (08.30 & 09.00 GMT) The latest UK inflation data support our view that the BoE will hike by 25bp too …
22nd March 2023
We think CPI inflation edged lower in the UK… (07.00 GMT) …and continued to soften in South Africa in February (08.00 GMT) The Fed will probably press ahead with a 25bp rate hike (18.00 GMT) Key Market Themes A risk-on mood has prevailed today amid …
21st March 2023
Clients can access all our latest research on the banking sector crisis here … … and catch-up on today’s Drop-in on the topic here Canada’s CPI inflation probably fell to 5.4% in February, from 5.9% in January (12.30 GMT) Key Market Themes Financial …
20th March 2023
In a week dominated by headlines about bank failures and the risk of another financial crisis, resulting in extraordinary volatility in government bond markets as interest rate expectations have plunged, the foreign exchange market has been a haven of …
17th March 2023
We expect the Fed to press ahead with a 25bp hike next week (Wed.) The Bank of England and Norges Bank will probably also hike by 25bp (Thu.) But we think the SNB may raise rates by 50bp (Thu.) Key Market Themes Despite a better day for financial …
While the backdrop has shifted dramatically, we still think there’s a strong case for our existing forecasts of a further rally in long-dated bonds by the end of the year, and some near-term strength in the US dollar and weakness in equities. The Swiss …
The ghosts of 2008 have made a sudden reappearance. Many metrics of core market functioning have worsened worryingly fast, but the overall situation is still long way short of the type of strains seen during the worst parts of the Global Financial …
16th March 2023
We expect Russia’s central bank to leave its policy rate on hold (10.30 GMT) US industrial production probably fell back in February (13.15 GMT) Clients can watch today’s Drop-In on banking sector turmoil and central banks here Key Market Themes The ECB …
We think Japan’s exports rebounded by 7.0% y/y on February (23.50 GMT) The ECB may not hike rates tomorrow due to fears of a banking crisis (13.15 GMT) Sign-up here for our US Drop-in on our outlook for the US economy (15.00 GMT) Key Market Themes The …
15th March 2023
A preferential rate to facilitate wine exports is the latest addition to Argentina’s myriad exchange rates, but it doesn’t address the fundamental problem that the peso is overvalued. We estimate that the currency needs to fall by around 30% to restore …
Euro-zone industrial production probably edged up in January (10.00 GMT) The UK’s Spring Budget may contain limited short-term fiscal loosening (12.30 GMT) We think that US retail sales fell by 0.8% in February (12.30 GMT) Key Market Themes How the …
14th March 2023
Clients can find our coverage on the SVB collapse on our designated landing page here … …and sign-up here for our Drop-In on the policy outlook for the ECB (10.00 GMT) We think US consumer price inflation fell only slightly, to 6.1%, in February (12.30 …
13th March 2023
The dollar’s sharp rally after Fed Chair Powell’s hawkish testimony to Congress on Tuesday sent US interest rate expectations soaring now looks like ancient history. Instead, after unexpected turmoil in the US banking sector and today’s …
10th March 2023
We think US consumer price inflation fell slightly to around 6% in February (Tue.) Retail sales in China probably rebounded in January and February (Wed.) We expect the ECB to hike by a further 50bp (Thu.) Key Market Themes US government bond yields …
The South African rand has weakened sharply against the US dollar so far this year, markedly underperforming other emerging market (EM) currencies. We expect domestic and global headwinds to drive a bit more depreciation, to 19.0/$, later this year. But …
9th March 2023
The Bank of Japan could abandon Yield Curve Control tomorrow We think UK GDP growth picked up in January, but recession looms (07.00 GMT) We expect US payrolls data to confirm that January strength was a blip (13.30 GMT) Key Market Themes We think …
Fed Chair Powell’s testimony to Congress has prompted a material revision to our forecast for the path of the fed funds rate and suggests the near-term risks to that forecast are skewed to the upside. This Update sets out some of the likely implications …
8th March 2023
China inflation data likely to show rising price pressures (01.30 GMT) We expect interest rates to be left on hold in Malaysia… (07.00 GMT) …and also expect Peru’s central bank to leave rates unchanged (23.00 GMT) Key Market Themes Most “risky” assets …
Germany’s industrial production probably fell a bit further in January (07.00 GMT) We think Poland’s central bank will leave its policy rate on hold… (13.00 GMT) …and the Bank of Canada will keep its policy rate unchanged as well (15.00 GMT) Key Market …
7th March 2023
We expect Australia’s central bank to hike by 25bp (04.30 GMT) Fed Chair Powell may reveal whether his outlook for interest rates has changed (15.00 GMT) We think China’s exports weakened, but imports strengthened, in January and February Key Market …
6th March 2023
Currency markets have mostly gone sideways this week, with the US dollar set to end it a touch weaker against most other major currencies. (See Chart 1.) With both activity and price data continuing to surprise to the upside in the US , Europe and China, …
3rd March 2023
We expect Australia’s RBA to hike by another 25bp (Tue.) Japan’s central bank will probably abandon Yield Curve Control (Thu./Fri.) We think US non-farm payrolls rose by 200,000 in February (Fri.) Key Market Themes Notwithstanding the partial …
We think inflation in Turkey eased slightly to 54% in February (07.00 GMT) Final PMIs in Europe may confirm that activity is holding up better than expected (09.00 GMT) We expect the US ISM services index to have fallen back in February (15.00 GMT) …
2nd March 2023
As political risks appear to be largely discounted by investors, we expect the Colombian peso to outperform other major EM currencies over the next couple of years. Although the Colombian peso is broadly unchanged against the greenback so far this year, …
Strong data in France and Spain suggest to us euro-zone inflation rose in February (10.00 GMT) We think Brazil GDP figures will confirm the economic growth was flat in Q4 (12.00 GMT) Clients can sign-up here to our Drop-In on the impact of elections in …
1st March 2023
The Israeli shekel has been amongst the worst performing currencies over the past month amid a rise in risk premia in Israel. We think it may remain under pressure against the US dollar over the coming months; but we doubt it will keep underperforming its …
We think Australia’s GDP growth softened a touch in Q4 (00.30 GMT) Germany’s HICP inflation probably fell in January (13.00 GMT) We expect the ISM manufacturing index for February to have remained weak (15.00 GMT) Key Market Themes We think the recent …
28th February 2023
We expect Hungary’s central bank to leave its policy rates on hold (13.00 GMT) US consumer confidence may have recovered a bit but is probably still low (15.00 GMT) Join our Drop-In on the long-run economic and market impacts of fracturing (15.00 GMT) …
27th February 2023
The US dollar looks set to end a third week higher against most major currencies amid mounting evidence that the US economy started the year on strong footing . In particular, hawkish FOMC minutes and a strong monthly rise in US PCE supported the dollar …
24th February 2023
We think that euro-zone inflation fell again in February (Wed.) The China PMIs will probably show another acceleration in activity (Wed. & Fri.) We doubt that the February ISM surveys will point to stronger growth (Thu. & Fri.) Key Market Themes Despite …
We think Japan’s headline CPI inflation rose to a four-decade high in January (23.30 GMT) US income and spending data is likely to show a strong rebound in consumption (13.30 GMT) We expect headline and core US PCE price indices to have risen by 0.5% …
23rd February 2023
Stronger-than-expected data out of the US have pushed up US yields more than elsewhere and drove the greenback higher against most currencies for the first time since its cyclical peak in October of last year. While US economic resilience may keep the …
Turkey’s central bank will probably cut its policy rate by 100bp (11.00 GMT) We think Mexico’s CPI edged down to 7.6% in the first half of February (12.00 GMT) We expect policymakers in Korea to keep interest rates on hold Key Market Themes We doubt …
22nd February 2023
We think the RBNZ will hike rates by an above-consensus 75bp (01.00 GMT) Final German HICP data will offer more clarity on inflation’s drivers there (07.00 GMT) February FOMC minutes may give more insight into the Fed’s thinking (19.00 GMT) Key Market …
21st February 2023
The February composite PMI probably rose further above 50 in the euro-zone… (09.00 GMT) … and remained below 50 in the UK and the US We think CPI inflation was unchanged at 6.3% in Canada in January (13.30 GMT) Key Market Themes Those hoping for stellar …
20th February 2023
Another round of robust US economic data and renewed hawkish rhetoric from Fed officials has given the US dollar a boost this week. With economic activity holding up better than we and most others had anticipated and price pressures appearing more …
17th February 2023
We think the Composite PMI rose to just above 50 in February in the euro-zone… (Tue.) …but remained below that threshold in the UK (Tue.) US real consumption probably rebounded in January, reversing declines in past months (Fri.) Key Market Themes While …
UK retail sales volumes probably rose by 0.5% m/m in January (07.00 GMT) We think Russia’s GDP fell by 3.5% y/y in Q4 (16.00 GMT) Catch-up here on yesterday’s Drop-In on our UK economic outlook Key Market Themes The recent strength of the US dollar and …
16th February 2023
The Mexican peso’s outperformance since the start of 2022 has pushed up its valuation substantially, and we think that this leaves it vulnerable to sharp falls against the US dollar if, as we expect, the US economy falls into recession later this year. …
We expect the central bank in the Philippines to raise rates by 50bps to 6%... (07.00 GMT) … and Bank Indonesia to keep rates unchanged at 5.75% (07.20 GMT) US January housing starts may temper economic optimism a bit (13.30 GMT) Key Market Themes This …
15th February 2023
A further decline in US inflation seems largely priced in to financial markets. But we still think investors are too optimistic about how quickly the economy will grow, and as such are sticking with our view that equities will come under renewed pressure, …
14th February 2023
We think the PBOC will cut the interest rate on its Medium-Term Lending Facility UK CPI inflation probably fell further in January (07.00 GMT) We expect US activity data to show some recovery, due partly to easing supply shortages Key Market Themes …
UK labour market probably remained historically tight in December (07.00 GMT) Economies in Central and Eastern Europe likely to have contracted in Q4 We think US headline and core inflation eased further in January (13.30 GMT) Key Market Themes Despite …
13th February 2023
The US dollar is set to end the week a touch stronger against most currencies, adding to its gains last week. But, aside from the Japanese yen round-tripping on news over the next BoJ governor, it’s been a relatively quiet week for the greenback – not …
10th February 2023
Given that US economic outperformance has tended to coincide with a stronger dollar, we suspect a “soft landing” in the US economy would provide a favourable backdrop for the greenback, if it also meant that growth in the US remained more resilient than …
We think annual US core CPI inflation fell to 6.1% in January… (Tue.) …while CPI inflation in the UK declined to 10.2%, from 10.5% in December (Wed.) We think Q4 GDP growth weakened in Colombia, Hungary, Romania, and Israel Key Market Themes Kazuo Ueda …
