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The US dollar has risen sharply this week, reaching its highest level of the year as continued fears about the spread of the “delta” variant and further evidence of growing risks in China (around its economic slowdown, the widening regulatory crackdown on …
20th August 2021
The US dollar remains somewhat above its “fair” value on most of the metrics we track. But its overvaluation is not extreme by historical standards, nor is that of many other currencies (see Chart 1), and we do not think that it will prevent the greenback …
This Focus provides an overview of the concepts and models underpinning our new FX Markets Valuations Monitor . It is split into three sections. The first explains our framework for thinking about currency valuations. The second provides details on the …
US durable goods orders probably saw another decent rise in July (Wed.) The account of July’s ECB meeting may reveal views on changes to forward guidance (Thu.) We don’t expect a definitive statement on tapering from the Fed’s Powell at Jackson Hole …
We expect China’s central bank to leave its benchmark rate on hold for now (02.00 BST) We think retail sales growth in the UK fell back in July... (07.00 BST) ... but it probably rebounded strongly in Canada in June (13.30 BST) Key Market Themes The muted …
19th August 2021
We think employment in Australia fell last month due to lockdowns (02.30 BST) We expect Norway’s central bank to leave policy unchanged until next month (09.00 BST) Housing price gains in Canada probably accelerated in July (13.30 BST) Key Market Themes …
18th August 2021
We expect policymakers in New Zealand to hike rates by 25bp (03.00 BST) We think that inflation in the UK fell back a bit last month (07.00 BST) FOMC minutes from July could provide more details on tapering discussions (14.00 BST) Key Market Themes We …
17th August 2021
US retail sales for July likely to be consistent with slower Q3 consumption growth (13.30 BST) We expect that Euro-zone employment growth picked up in Q2 (10.00 BST) In the UK, underlying wage pressures probably remained subdued in June (07.00 BST) Key …
16th August 2021
The US dollar looks set to end the week little changed against most currencies, as US inflation data – this week’s main data release – failed to push up the currency further. Next week, the minutes of the Fed’s July meeting may shed more light on …
13th August 2021
Euro-zone employment probably rebounded in Q2 (Tue.) FOMC minutes may provide some clarity on the central bank’s plans for tapering (Wed.) We expect the RBNZ to surprise with a 50bp hike (Wed.) Key Market Themes In our view, most ‘ risky’ assets are …
We expect further rises in US Treasury yields to support continued gains in the US dollar against most other developed market (DM) currencies, especially the yen and the Swiss franc. Since near the start of the month, the yields of 10-year US Treasuries …
We expect Mexico’s central bank to hike its policy rate by 25bp later today (19.00 BST) Sweden’s core inflation was probably very weak in July (08.30 BST) Virus concerns likely to have weighed on US consumer confidence in August (15.00 BST) Key Market …
12th August 2021
Although the currencies of most commodity exporters appear undervalued in the context of high commodity prices, we still think most commodity currencies will depreciate further against the US dollar. The run-up in commodity prices this year has not been …
11th August 2021
US headline and core consumer prices probably rose at a slower pace last month (13.30 BST) US Senate on the cusp of passing the bipartisan infrastructure package Brazil’s tightening cycle probably has much further to go, as inflation hits 9% Key Market …
10th August 2021
We think that core inflation fell further below target in Norway in July (07.00 BST) Headline inflation in Brazil probably rose again, to nearly 9% (13.00 BST) US Senate moving closer to passing bipartisan infrastructure package Key Market Themes Our …
9th August 2021
The US dollar is ending the week higher against most currencies, extending its gains alongside rising US Treasury yields following the stronger-than-expected July payrolls data . With Fed officials earlier this week suggesting that several more months of …
6th August 2021
US July CPI data likely to point to another strong monthly rise in prices (Wednesday) China’s headline inflation probably eased further last month (Monday) We expect the central bank of Mexico to hike its policy rate by 25bp, to 4.5% (Thursday) Key Market …
We expect US non-farm payrolls to have risen by about 650,000 in July (13.30 BST) We think Germany’s industrial production rose by 2% m/m in June (07.00 BST) Wage growth in Japan probably edged up to around 2% in June (08.30 BST) Key Market Themes The …
5th August 2021
The Bank of England is likely to keep policy unchanged at its upcoming meeting… (12.00 BST) … but we expect central banks in Brazil and Czechia to hike rates We think inflation rose further in Russia (17.00 BST) Key Market Themes The share prices of most …
4th August 2021
We think that the upside risks to our US dollar view have increased. On a trade-weighted basis, we forecast a ~4% rise from its current level by the end of 2022; this Update considers what factors might deliver a more significant (10%+) rally in the …
US ADP report will give first clues about the health of the labour market in July (13.15 BST) We expect Brazil’s central bank to hike its policy rate by 100bp, to 5.25% (22.30 BST) Euro-zone retail sales probably rose by around 2% m/m in June (10.00 BST) …
3rd August 2021
We expect the RBA to push back tapering its asset purchases to November (04.30 BST) We forecast that headline inflation in Turkey rose to 19% y/y in July (08.00 BST) Read our highest conviction macroeconomic forecasts and their market implications here …
2nd August 2021
Following a strong run over the past month, the US dollar has weakened across the board this week after some softer-than-expected US data and a non-committal FOMC. Next week’s key data releases include the ISM manufacturing survey and the all-important …
30th July 2021
We think that US non-farm payrolls rose by about 650,000 in July (Friday) Early end to the BoE’s assets purchases looks unlikely (Thursday) RBA may delay the tapering of its asset purchases in light of recent lockdowns (Tuesday) Key Market Themes Although …
We think that inflation edged up in the euro-zone last month … (10.00 BST) … while Q2 GDP data are likely to show that the recovery there accelerated (10.00 BST) Personal spending in the US probably rose in June even as income dropped back (13.30 BST) Key …
29th July 2021
Sweden’s GDP likely to have risen back above pre-pandemic level (08.30 BST) We think the euro-zone’s ESI rose to a 22-year high this month (10.00 BST) US GDP growth probably accelerated in Q2, but Q3 looks less promising (13.30 BST) Key Market Themes The …
28th July 2021
We continue to think that the US dollar will rise further in the second half of the year as the divergence between the US and other major economies in terms of growth and, especially, inflation persists. The US dollar’s initial sharp rise after the June …
27th July 2021
Fed unlikely to be ready to issue tapering guidance (19.00 BST) Canada’s headline inflation probably fell from 3.6% to about 3.2% in June (13.30 BST) We are now anticipating a faster tightening cycle in Hungary Key Market Themes Although equity indices in …
While the US dollar has fallen back a little against most currencies in the second half of the week as the sharp sell-off in risky assets and currencies on Monday was reversed, it looks set to end the week slightly stronger, continuing its strong run …
23rd July 2021
We have revised down our forecasts for many of the G10 “high-beta” currencies and several currencies in EM Asia and LatAm. This update sets out the rationale behind those revisions and updates our key calls. Since the June FOMC meeting, currency markets …
We think UK retail sales fell further in May as consumption shifted to services (07.00 BST) Markit PMIs for the euro-zone are likely to indicate a continued expansion in July (09.00 BST) Russia’s central bank is likely to raise its policy rate by 100bp …
22nd July 2021
We think central banks in Indonesia and South Africa will leave policy on hold tomorrow Inflation in Mexico probably remained high in the first half of July (12.00 BST) The ECB will probably amend its policy statement to account for its new target (12.45 …
21st July 2021
UK government borrowing probably undershot the OBR’s forecast in June (07.00 BST) We think Korea’s exports levelled off in the first 20 days of June (00.00 BST) Read our highest conviction macro forecasts and their implication here Key Market Themes We …
20th July 2021
Inflation in Japan may have turned positive in June (00.30 BST) China’s benchmark loan prime rate unlikely to change despite RRR cut (02.30 BST) US housing starts probably rebounded in June (13.30 BST) Key Market Themes In recent weeks, it has often …
19th July 2021
While the US dollar rose sharply after Tuesday’s exceptionally strong inflation print, that was partly offset by Fed Chair Powell’s relatively dovish comments in his testimony to Congress. But overall, the greenback continues to trade on the front foot as …
16th July 2021
ECB unlikely to change policy settings, but may amend forward guidance (Thu.) We expect Russia’s central bank to hike its policy rate by 100bp (Thu.) Flash composite PMIs probably rose in the euro-zone, but fell in the UK, this month (Fri.) Key Market …
We expect a 25bp policy rate hike in Chile later on Wednesday (23.00 BST) We think that activity data will point to a further slowdown in China’s economy (03.00 BST) Supply constraints may have caused US manufacturing output to fall in May (14.15 BST) Key …
14th July 2021
New Zealand’s central bank is likely to strike a hawkish tone (02.00 BST) UK headline inflation probably edged up last month (07.00 BST) We think that the Bank of Canada will taper its asset purchases further (15.00 BST) Key Market Themes While the …
13th July 2021
The US dollar has risen significantly since the June FOMC meeting, with another surge after today’s strong inflation data , and we think the greenback will make further headway in the second half of the year. Since the start of 2021, the dollar has gone …
We think that US core CPI inflation rose above 4% last month (13.30 BST) China’s June trade data should show how much disruption port closures caused Read our highest conviction macro forecasts and their market implications here Key Market Themes The …
12th July 2021
Although it has fallen back a bit today after China delivered a surprise cut to banks’ reserve requirements, the US dollar has otherwise continued to appreciate against most currencies. The dollar’s strength appears increasingly driven by concerns about …
9th July 2021
ECB announces revamp of its policy framework, including new inflation target China’s June inflation data may point to easing price pressures (02.30 BST) UK GDP probably grew strongly in May as COVID-19 restrictions lifted (07.00 BST) Key Market Themes …
8th July 2021
We expect Poland’s central bank to stay on hold but revise up its forecast for GDP and inflation Inflation probably remained unchanged in Mexico last month (12.00 BST) … … while inflation is likely to have edged up in Brazil and Chile (13.00 BST) Key …
7th July 2021
While the shift towards rate hikes in several key emerging markets has provided a boost to their currencies, we doubt that the carry trade will fare as well in the second half of the year. In 2020 interest rates fell sharply almost everywhere as central …
6th July 2021
Fed minutes may shed more light on officials’ latest thinking about tapering (14.00 BST) We expect Germany’s industrial production to have edged up in May (07.00 BST) Russia’s headline inflation probably rose last month (17.00 BST) Key Market Themes …
The US dollar is ending the week stronger against most currencies, although it has fallen back a little this afternoon despite the stronger-than-expected non-farm payrolls report . While that reaction is perhaps a bit puzzling, the bigger picture is that …
2nd July 2021
EZ retail sales for May likely to underline the strength of economic recovery (Tue.) FOMC minutes may provide detail on tapering discussion (Wed.) Reopening probably boosted UK GDP in May (Fri.) Key Market Themes Although the 10-year Treasury yield hardly …
The Russian ruble appreciated to a one-year high against the dollar recently but we think the rally will fade as oil prices fall back and US Treasury yields rise further. That said, the central bank’s determination to rein in inflation should keep Russian …
We expect US non-farm payrolls to have risen by around 500,000 in June (13.30 BST) The US trade deficit probably widened again in May (13.30 BST) Read our highest conviction macro forecasts and their market implications here Key Market Themes The US …
1st July 2021
We think that the Norwegian krone will continue to strengthen against the euro over next year or so. This is despite our forecast for a pull-back in oil prices and reflects our view of the relative prospects for monetary policy in Norway and the …
