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Three recent developments – the emergence of the Omicron variant, the Fed’s signal that it may further accelerate the pace of policy normalisation, and China’s move towards policy easing – have combined to create crosswinds for currency markets. While we …
9th December 2021
We think US headline CPI inflation rose to just under 7% in November (13.30 GMT) UK GDP growth probably slowed in October (07.00 GMT) Peru’s central bank likely to hike rates by another 50bp, to 2.0% (23.00 GMT) Key Market Themes While the real has …
Higher food prices probably sent China’s CPI inflation higher last month (01.30 GMT) We think that inflation in Mexico jumped in November too (12.00 GMT) Peru’s central bank likely to deliver a 50bp rate hike (23.00 GMT) Key Market Themes We think the new …
8th December 2021
We think that Poland’s central bank will hike its policy rate by 75bp… …and the Bank of Canada to keep its policy rate & forward guidance unchanged (15.00 GMT) We expect a 150bp hike from Brazil’s central bank (21.30 GMT) Key Market Themes We doubt that …
7th December 2021
We expect China’s trade surplus to reach a record high RBA not likely to make major policy changes this month, may taper in early 2022 (03.30 GMT) Industrial production in Germany probably declined again in October (07.00 GMT) Key Market Themes The recent …
6th December 2021
After rallying to its highest level of the year last week, the US dollar seems set to end this week broadly unchanged. In our view, this reflects the offsetting effects of rising short-term yields in the US (particularly after Chair Powell’s comments to …
3rd December 2021
Inflation in Turkey probably held steady last month, but will soon rise sharply (07.00 GMT) Euro-zone retail sales may have slipped back in October (10.00 GMT) We expect another 500,000 gain in November’s US non-farm payrolls (13.00 GMT) Key Market Themes …
2nd December 2021
The South African rand has rallied over the past few days after reaching its lowest level against the US dollar in more than a year following last week’s news about the Omicron variant. Even if the new variant doesn’t lead to a major round of renewed …
1st December 2021
We expect the Caixin Services PMI to show activity slowed further in China (01.45 GMT) We think that unemployment in the euro-zone continued to edge lower (10.00 GMT) Output in Brazil probably rose a bit last quarter but remains very weak (12.00 GMT) Key …
Given the uncertainty around Omicron, and the revealed preference of the SNB in recent weeks to largely stay out of the FX market, we would not be surprised to see the Swiss franc rise further against the euro in the near term. But any upside is limited, …
We think that China’s Caixin manufacturing PMI edged up in November … (01.45 GMT) … but the US ISM manufacturing index was probably broadly stable (15.00 GMT) Headline inflation in Switzerland likely to have fallen slightly last month (07.30 GMT) Key …
30th November 2021
Fed Chair Powell will testify to Congress and could hint at an acceleration of Fed tapering We think China’s official PMIs will show a pick-up in manufacturing activity (01.00 GMT) We forecast that headline euro-zone HICP inflation rose to 4.7% in …
29th November 2021
News late yesterday of a new and potentially more dangerous variant of COVID-19 emerging in South Africa has made a dramatic impact on financial markets today. In general, market shifts have been similar to those in previous periods of renewed uncertainty …
26th November 2021
We think the end of lockdowns boosted Australia’s retail sales in October (00.30 GMT) Switzerland’s GDP growth probably slowed a bit in Q3 (08.00 GMT) Find our latest analysis of Turkey’s currency crisis here Key Market Themes While the accounts of the …
25th November 2021
The Israeli shekel has appreciated sharply in the past few weeks, making it one of the best performing currencies during the pandemic. While we don’t expect this recent strength to continue in the very near term, we think that Israel’s macro fundamentals …
24th November 2021
Sweden’s Riksbank may strike a slightly less dovish tone at its policy meeting (08.30 GMT) Brazil’s inflation probably remained very high in early November (12.00 GMT) We expect Korea’s central bank to raise its policy rate by 25bp Key Market Themes We …
We think the RBNZ will raise its policy rate by 50bp (02.00 GMT) US durable goods orders probably dropped back in October (13.30 GMT) FOMC minutes may show extent of support for a faster taper (19.00 GMT) Key Market Themes Turkey ’s currency crisis – the …
23rd November 2021
President Biden nominates Powell to a second term, but three Fed Board vacancies remain Supply chain problems probably weighed on PMIs in the euro-zone and the UK BoE MPC member Haskel could provide insight on December’s rate decision (11.00 GMT) Key …
22nd November 2021
The US dollar is set to end another week higher against nearly all major currencies. To a large extent, this latest rally appears to be driven by the rise in short-term government bond yields in the US relative to other major economies, notably the …
19th November 2021
Euro-zone PMIs may point to growth slowing in November (Tue.) US household consumption probably rose quite strongly in October (Wed.) Central banks of Korea and New Zealand both likely to hike rates by 25bp next week Key Market Themes We think the recent …
The dollar has risen to its strongest level in more than a year and, though it is not our central forecast, we think the risk of a more sustained dollar bull market is increasing. The incoming economic data – in particular, continued well-above-target …
We think that retail sales in the UK edged higher last month … (07.00 GMT) … but that retail sales in Canada fell in September (13.30 GMT) President Biden could announce his pick for Fed Chair in the next few days Key Market Themes The Turkish lira has …
18th November 2021
The fresh falls in the Turkish lira following the CBRT’s interest rate cut today have left Turkey firmly in crisis territory and echoes of previous “sudden stops” during major EM currency crises in the past are growing louder. Without an aggressive policy …
Turkey’s central bank may cut its policy rate despite recent lira weakness (11.00 GMT) In contrast, we think policymakers in South Africa will keep interest rates on hold You can find our latest research on major DM and EM central banks here Key Market …
17th November 2021
The UK labour market probably weathered the end of the furlough scheme well (07.00 GMT) We think Hungary’s central bank will raise its policy rate by 30bp (13.00 GMT) US industrial production may have rebounded by 0.7% last month (13.30 GMT) Key Market …
15th November 2021
High inflation may have lifted US retail sales values in October (Tuesday) UK inflation probably rose sharply last month (Wednesday) We expect a 100bp rate hike from Turkey’s central bank (Thursday) Key Market Themes After its most recent surge on the …
12th November 2021
The US dollar has continued to grind higher against major currencies following the release of US inflation data on Wednesday, with the DXY index reaching its strongest level in over a year. Recent data, in particular the strong inflation figure this week …
We think that the recent pick-up in bond market volatility will persist and that volatility in currency markets will also rise further as uncertainty around the economic outlook and monetary policy remains high. Bond market volatility across most …
We expect central banks in Mexico and Peru to hike rates by 25bp and 75bp, respectively Supply chain issues may have hampered euro-zone industry in September (10.00 GMT) We think US consumer confidence remained low this month (15.00 GMT) Key Market Themes …
11th November 2021
We think UK GDP rose by just 0.1% m/m in September (07.00 GMT) Mexico’s central bank likely to raise its policy rate by 25bp, to 5.0% (19.00 GMT) Australia’s unemployment rate probably edged up in October (01.30 GMT) Key Market Themes US Treasury yields …
10th November 2021
Inflation in China probably picked up to 1.3% in October (01.30 GMT) The Bank of Thailand is likely to keep rates on hold at 0.5% (07.05 GMT) We think US inflation reached 5.9% in October (13.30 GMT) Key Market Themes The weakness in China’s real estate …
9th November 2021
We expect the yen to weaken a bit more against the US dollar as we think that government bond yields in the US will resume their rise before long. Since the start of October, the yen has been the worst performer among G10 currencies . (See Chart 1.) The …
We expect Romania’s central bank to raise its policy rate by 50bp Inflation in Mexico probably rose further above target last month (12.00 GMT) US producer price data likely to show costs continuing to rise rapidly (13.30 GMT) Key Market Themes Last …
8th November 2021
China’s trade surplus probably fell in October (Sun.) US headline CPI inflation likely to have risen to nearly 6% last month (Wed.) We think policy rates will rise in Romania, Mexico and Peru next week Key Market Themes The decline in long-dated Treasury …
5th November 2021
After another week of wild swings in short-term interest rate markets, the US dollar is ending the week stronger against most major currencies. On a trade-weighted basis it is now near its strongest level since last November. Neither the Fed meeting nor …
We think that the Brazilian real will weaken a bit further against the US dollar over the next year, as fiscal risks and deteriorating terms of trade continue to weigh on the currency. With the exception of the Turkish lira, the real has been the …
4th November 2021
German industrial production probably increased only slightly in September (07.00 GMT) We forecast a 300,000 gain in US non-farm payrolls last month … … but think that the monthly pace of hiring slowed substantially in Canada (12.30 GMT) Key Market Themes …
Fed set to announce the start of asset purchase tapering (Wednesday 18.00 GMT) We expect the BoE to hike its policy rate by 15bp, to 0.25% (Thursday 12.00 GMT) We think the composite PMIs for Italy and Spain fell in October (Thursday) Key Market Themes We …
3rd November 2021
We expect Poland’s central bank to hike rates by 25bp The euro-zone’s unemployment rate probably fell in September (10.00 GMT) The Fed is likely to announce the start of asset purchase tapering (18.00 GMT) Key Market Themes Although near-term inflationary …
2nd November 2021
RBA likely to announce end of its short-term yield target (03.30 GMT) Inflation in Switzerland probably remained low last month (07.30 GMT) We think New Zealand’s labour market recovery stalled last quarter (21.45 GMT) Key Market Themes While the spreads …
1st November 2021
Despite their recent positive correlation, we think that oil and the dollar will go in opposite directions before long: we continue to think that oil prices will fall back as the supply situation improves, while we expect the greenback to stay strong …
Currency markets remained remarkably stable for most of this week, although the US dollar is rallying sharply today on the back of data showing very strong wage growth in the US, even as a major reassessment of the pace of monetary policy normalisation in …
29th October 2021
Fed likely to announce start of tapering, and signal concerns about inflation (Wed.) We think that the BoE will be the next DM central bank to hike rates (Thu.) Labour shortages probably continued to limit US employment growth (Fri.) Key Market Themes …
Japan’s industrial production may have fallen sharply last month (00.50 BST) We think that the euro-zone inflation rose even further, to 3.6% in October (10.00 BST) Colombia’s central bank will probably hike its policy rate by 25bp (19.00 BST) Key Market …
28th October 2021
Brazil’s central bank likely to up the pace of its tightening cycle (Wednesday 22.30 BST) BoJ may revise down growth forecasts, but policy unlikely to change; ECB to stand pat too We think US GDP rose by around 2% q/q annualised in Q3 (Thursday 13.30 BST) …
27th October 2021
We think that the recent re-pricing of near-term interest rate expectations across most developed markets is overdone and that several of the “high-beta” G10 currencies will come under renewed pressure. Over the past few weeks, expectations for interest …
26th October 2021
The UK government is likely to announce stringent new fiscal rules (12.30 BST) The Bank of Canada will probably call time on quantitative easing (15.00 BST) We think Brazil’s central bank will hike its policy rate by a further 150bp (22.30 BST) Key Market …
We think that Korea’s recovery gathered a little momentum in Q3 (00.00 BST) Inflation in Brazil likely to have remained well-above target in mid-October (13.00 BST) We expect that US consumer confidence weakened this month (15.00 BST) Key Market Themes …
25th October 2021
With a couple of exceptions, currency markets have had a quiet week; the US dollar is ending the week a touch weaker against most other currencies, but in aggregate it remains close to its strongest level for the year. With US bond yields continuing to …
22nd October 2021
ECB and BoJ likely to stick to their guns; rate hikes likely in Brazil and Colombia US GDP growth probably slowed significantly in Q3 (Thu.) We think surging energy prices have driven euro-zone inflation higher this month (Fri.) Key Market Themes While …
