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The Indian rupee hit a record low against the US dollar today, but the big picture is that RBI intervention has helped it hold up better than most EM currencies recently. Given that the RBI has ample FX reserves, we expect the rupee to remain more stable …
9th May 2022
The US dollar looks set to eke out small gains against most currencies this week as US bond yields rose further and equities whipsawed. While the net effect of the FOMC’s policy announcement and today’s US payrolls report on currency markets was …
6th May 2022
China’s trade, credit and inflation data may reveal the impact of virus disruptions We think annual CPI inflation fell in the US in April, for the first time in eight months (Wed.) Clients can register for a Drop-In on our forecasts for global bonds, …
We think the euro will eventually weaken further, falling to parity against the US dollar, as the euro-zone economy falters, the terms of trade shock from higher energy prices feeds through, and the global economic outlook continues to worsen. While the …
German industrial production probably fell by as much as 2% in March (07.00 BST) We think non-farm payrolls rose by a solid 375,000 in April … (13.30 BST) … and clients can register for a Drop-In on the April US payrolls numbers here (15.00 BST) Key …
5th May 2022
We think that the surprising stability of the Turkish lira so far this year will not last much longer and we forecast it to weaken against the dollar over the coming months, from ~14.8/$ now to 18/$ by end-2022. This would be a fall of around 20% and, …
Fed likely to raise rates by 50bp and start quantitative tightening (Wed. 19.00 BST) We think the Norges Bank will leave its policy rate unchanged… (Thu. 09.00 BST) …and anticipate a 25bp hike from the Bank of England (Thu. 12.00 BST) Key Market Themes …
4th May 2022
Euro-zone retail sales may have risen slightly in March (10.00 BST) US Federal Reserve likely to raise rates by 50bp and commence QT (19.00 BST) Sign up for our Drop-In on the global inflation outlook here Key Market Themes We don’t subscribe to the view …
3rd May 2022
The US dollar rose for a third week in a row, reaching its strongest level since early 2017 as the growing policy divergence between the major Asian central banks and the rest of the world as well as concerns about Europe’s energy supply added fuel to …
29th April 2022
We think the Fed will hike by 50bp next week ... (Wed.) ... and expect rate hikes in the UK, Australia, Brazil, Chile, Czechia and Poland as well US non-farm payrolls probably continued to grow at a healthy pace in April (Fri.) Key Market Themes The …
The combination of aggressive tightening from the Fed and worsening risk appetite has driven the dollar to its strongest level, in aggregate, since the early 2000s. While the greenback looks due a pause, we now expect it extend those gains over the coming …
We think euro-zone core inflation edged up further in April … (10.00 BST) … and that the economy probably stagnated in Q1 (10.00 BST) Clients can register for our Drop-In on the Bank of Japan here (08.00 BST) Key Market Themes We wouldn’t be surprised if …
28th April 2022
The Bank of Japan may widen its 10-year JGB tolerance band to ±50bp We expect Sweden’s Riksbank to hike its policy rate by 25bp to 0.25% (08.30 BST) A fall in net exports probably caused US GDP to stagnate in the first quarter (13.30 BST) Key Market …
27th April 2022
Rising inflation in Australia may strengthen the case for a June rate hike (02.30 BST) We think that Brazil’s inflation jumped in the first half of April (13.00 BST) Russia’s March activity data likely to point to the onset of a deep recession (17.00 BST) …
26th April 2022
We think that economic activity in Korea held up relatively well in Q1 (00.00 BST) We expect the central bank in Hungary to raise its base rate by 100bp (13.00 BST) Core durable goods orders in the US probably rebounded in March (13.30 BST) Key Market …
25th April 2022
Another week of broad-based appreciation has seen the US dollar edge higher even as US bond yields have stalled. Instead, it is the sell-off in equity markets over the past couple of days which has driven the greenback to a new high. In some sense, the …
22nd April 2022
We expect rate hikes in Sweden, Hungary, and Colombia next week We think that US GDP growth slowed in the first quarter (Thu.) Euro-zone headline inflation probably edged higher in April (Fri.) Key Market Themes Financial sector equities have sold off in …
We think the yen will drop even further as policy divergence widens. We now forecast USD/JPY to reach 140 by the end of this year, before dropping back as the Fed takes its foot off the gas in 2023. While it has stabilised over the past couple of days, …
We think retail sales fell in the UK in March (09.00 BST) Euro-zone PMIs may have fallen sharply in the euro-zone in April ... (09.00 BST) ... and declined a bit in the US as well (14.45 BST) Key Market Themes Even if incumbent President Macron wins …
21st April 2022
With the yen falling to a 20-year low against the dollar, talk of foreign exchange market intervention is growing. While we think the bar for any intervention is high , this Update answers some key questions. 1. Who decides whether to intervene? Bank of …
Final HICP print should shed some more light on drivers of eurozone inflation (10.00 BST) Fed Chair Jerome Powell may strike hawkish tone at IMF discussion panel tomorrow Clients can sign up for tomorrow’s drop-in on France’s presidential election here …
20th April 2022
The Aussie and the Kiwi have been amongst the best performing G10 currencies against the US dollar so far this year but, while we expect both to remain resilient in 2022, we eventually expect them to weaken. Both the Aussie and the Kiwi have outperformed …
We expect a small cut in China’s Loan Prime Rate (02.15 BST) Canada’s inflation may have reached a fresh multi-decade high last month (13.30 BST) Sign up for our Drop-In on the potential consequences of France’s election here Key Market Themes Growing …
19th April 2022
Chinese activity data will reveal a sharp slowdown in March … (Mon.) … which reinforces our view that the PBOC will cut the Loan Prime Rate (Wed.) Register for our Drop-In on the key implications of the French election here Key Market Themes While the ECB …
14th April 2022
The US dollar continued to edge higher against most major currencies, with the DXY index (and 10-year US Treasury yields) reaching a new high for the year. The renewed rise in Treasury yields today reversed the dollar’s weakness following a …
The sharp rally in the Brazilian real against the US dollar since the start of the year has shown tentative signs of ending, and we think that it will weaken a bit through the end of 2022. The Brazilian real has appreciated by nearly 19% against the US …
We expect Korea’s central bank to hike its policy rate by 25bp (02.00 BST) Australia’s unemployment rate may have fallen to a multi-decade low in March (02.30 BST) We think the ECB will leave policy unchanged tomorrow (12.45 BST) Key Market Themes While …
13th April 2022
We expect an above-consensus 50bp rate hike in New Zealand (03.00 BST) UK inflation probably rose even further last month (07.00 BST) Canada’s central bank may also raise rates by 50bp (15.00 BST) Key Market Themes While we think US inflation peaked in …
12th April 2022
We think the UK unemployment rate remained at 3.9% in February (07.00 BST) We forecast US CPI inflation reached a new high of 8.4% in March (13.30 BST) Sign-up for our Drop-In on global inflation here Key Market Themes Even if the US earnings season – …
11th April 2022
The US dollar has risen across the board this week as the Fed’s hawkish message on “quantitative tightening”, renewed sanction risks in Europe, and the polling shift in favour of far-right candidate Marine Le Pen ahead of France’s presidential election …
8th April 2022
US CPI inflation looks set to have hit a new high in March, but this could be the peak (Tue.) We expect rate hikes in Canada, Korea, New Zealand and Israel next week... ... but think China’s central bank may announce an unscheduled rate cut Key Market …
While the prospect of a euro-zone break-up looks more remote than during the 2017 French presidential campaign, the possibility of Marine Le Pen taking power is still a major risk to euro-zone financial markets. As we discussed here and here , the recent …
7th April 2022
We expect India’s central bank to leave rates on hold for now (05.30 BST) We think CPI inflation rose slightly in Brazil and Chile last month... ... while it may have reached nearly 20% in Russia (17.00 BST) Key Market Themes While the gold price has been …
Euro-zone retail sales probably rose slightly in February (10.00 BST) We think Mexico’s inflation rose further in March, paving the way for a rate hike (12.00 BST) Canada’s federal budget may unveil a small increase in spending Key Market Themes We think …
6th April 2022
FOMC minutes may provide a clearer steer on plans for balance sheet reduction (19.00 BST) We expect Poland’s central bank to hike its policy rate by 75bp Sign up for our Drop-In on the global inflation outlook here Key Market Themes The recent polling …
5th April 2022
We expect Australia’s central bank to keep its policy rate at 0.1% (05.30 BST) The US trade deficit is likely to have narrowed in February... (13.30 BST) ...while the ISM services index may have rebounded in March (15.00 BST) Key Market Themes Although …
4th April 2022
Another solid gain in US payrolls did little to boost the dollar today, which seems set to end the week little changed against most major currencies. During the course of this week, central banks in Chile, Czechia, and Colombia continued to tighten …
1st April 2022
FOMC minutes may shed more light on the Fed’s plans to shrink its balance sheet (Wednesday) We think the Reserve Bank of Australia will keep its policy settings unchanged… (Tuesday) …whereas central banks in Poland, Romania and Peru will probably hike …
The rally in the dollar seems to have paused this month, and indeed the greenback has fallen against some major currencies – especially those in Europe – this month. We think this largely reflects the rebound in risk sentiment, the stabilisation of …
31st March 2022
Euro-zone inflation probably rose to around 7.5% in March (10.00 BST) We anticipate a headline rise in US payrolls of 450,000… (13.30 BST) …and expect the ISM manufacturing index to have rebounded (15.00 BST) Key Market Themes We think China ’s stock …
China’s official manufacturing PMI may have fallen below 50 this month (02.30 BST) We think euro-zone unemployment declined to a record low in February (09.30 BST) Clients can now view our US Recession Trackers here Key Market Themes While the sell-off in …
30th March 2022
The Bank of Thailand will probably stand pat, despite higher inflation (08.00 BST) We suspect business confidence in the euro-zone has fallen sharply this month (10.00 BST) Sign-up for our Drop-In on how the war is affecting the euro-zone economy here Key …
29th March 2022
We think retail sales in Australia rebounded strongly in February (01.30 BST) Consumer confidence in the US probably fell further this month (15.00 BST) We expect Chile’s central bank to deliver another 150bp rate hike (22.00 BST) Key Market Themes Even …
28th March 2022
Amid the broad-based “risk-on” tone in markets this week, the US dollar has edged down against most major currencies. As was the case last week, an increasingly hawkish tone by the Fed and a rise in 10-year US Treasury yields had little impact on the …
25th March 2022
Virus restrictions probably caused China’s PMIs to drop back in March (Thursday) We suspect that US non-farm payrolls rose by 450,000 this month (Friday) Headline inflation in the euro-zone may have picked up to 6.7% in March (Friday) Key Market Themes …
We estimate that, on balance, the US dollar’s “fair value” has risen alongside an appreciation of the greenback against most major currencies. This increase in fair value largely reflects the relative strength of the economic recovery in the US as well as …
We think Mexico’s central bank will hike its policy rate by 75bp (19.00 GMT) The rising cost of living probably weighed on UK retail sales in February (07.00 GMT) Clients can view our new China Activity Proxy dashboard here Key Market Themes While not our …
24th March 2022
We expect Norway’s central bank to raise its policy rate by 25bp… (09.00 GMT) …and anticipate a 75bp hike from Mexico’s central bank (19.00 GMT) Clients can view our new China Activity Proxy dashboard here Key Market Themes The yield of 10-year Gilts …
23rd March 2022
Claims that the war in Ukraine will prove to be a watershed moment that ends the dollar’s position at the heart of the global financial system are wide of the mark. It could accelerate the development of smaller trading blocs that use alternative …
Our expectation that US Treasury yields will rise further leads us to conclude that the yen will weaken more against the dollar and we have revised up our end-year USD/JPY forecasts for both 2022 and 2023 . The yen has weakened sharply against the dollar …
22nd March 2022
