US Economics Update Record-high dollar not a threat to the economy Despite President Donald Trump’s complaints that the strong dollar is holding back the economy, the dollar’s rate of appreciation matters more than its level and it has risen by only 3% in trade... 22nd August 2019 · 3 mins read
Global Markets Update SEK & NOK likely to continue testing all-time lows While the Swedish krona and the Norwegian krone are now near the record lows they reached against the euro in 2008-09, we think that monetary policy and rising risk aversion will push them down... 21st August 2019 · 3 mins read
Emerging Markets Economics Update Emerging Markets Capital Flows Monitor (Jul. 2019) After a relatively calm first half of 2019, EM capital outflows probably picked up significantly in August as US-China trade tensions escalated. And outflows are likely to remain larger over the... 21st August 2019 · 4 mins read
Australia & New Zealand Economics Focus Current account won’t remain in surplus for long A lower cost of funding via foreign liabilities, a higher return on overseas assets and falling capital goods imports should all support Australia’s current account over the next couple of years... 20th August 2019 · 13 mins read
Global Markets Update Risks to the yen still lie to the upside The Japanese yen has continued to appreciate and is now close to our year-end forecast of ¥105/$. Though the drivers behind its strength may shift, we expect upward pressure on the yen to persist. 16th August 2019 · 3 mins read
Global Markets Update Further downside ahead for EM currencies We think that emerging market (EM) currencies will continue to struggle over the rest of 2019 as the global economy remains weak for longer than investors anticipate, the trade war escalates further... 15th August 2019 · 3 mins read
Emerging Markets Economics Update What happens after EM currency collapses? Emerging economies whose currencies have fallen by 15% or more against the dollar in a single day – as the Argentine peso did yesterday – have fallen into recession in 85% of cases in the last 25... 13th August 2019 · 3 mins read
Emerging Markets Economics Update Argentina’s (new) crisis and the hit to EMs The falls in EM currencies today suggest that the South African rand, Turkish lira and many of those in Latin America will remain in the firing line if, as we think likely, concerns about Argentina’s... 12th August 2019 · 3 mins read
Africa Economics Update South Africa: Rand weakness will continue We’ve cut our end-year rand forecast from an already below-consensus ZAR15/$ to ZAR16.5/$. While risks are growing, we’re holding to our view that the SARB will cut its policy rate by 25bp in... 12th August 2019 · 3 mins read
China Economics Weekly The pros and cons of a weaker renminbi The recent weakening of the renminbi has revived a debate over the economic impact of currency depreciation. There will be both winners and losers domestically. But given that China’s government... 8th August 2019 · 7 mins read
Australia & New Zealand Economics Weekly Don’t worry, there’s still more “in the tin” The 50 basis point cut by the RBNZ took markets by surprise this week and we now expect the Bank to cut rates to 0.75% by early next year. If the economic outlook deteriorates by considerably more... 8th August 2019 · 6 mins read
Asia Economics Weekly New currency forecasts, trade war escalates, rate cuts While we had been expecting an escalation in US-China trade tensions, China’s decision to allow the renminbi to weaken through 7.0/US$ in response to Trump’s latest tariffs means events are moving... 8th August 2019 · 5 mins read
Japan Economics Weekly Stronger yen adds to speculation over policy easing The renewed escalation of trade tensions has pushed the yen to a 17-month high against the dollar. We consider it very unlikely that the government will respond by intervening on the foreign exchange... 8th August 2019 · 5 mins read
China Data Response FX Reserves (Jul.) The latest FX reserves figures are consistent with the People’s Bank (PBOC) having remained on the sidelines of the FX market last month. But the relative calm of July will give way to a more eventful... 7th August 2019 · 3 mins read
Nordic & Swiss Economics Update SNB will not fear being branded a ‘manipulator’ While much of the market’s focus has been on China, Switzerland appears set to become the first country to meet all three of the US Treasury’s criteria of being a ‘currency manipulator’ later this... 7th August 2019 · 3 mins read
Emerging Europe Economics Update Turkish lira’s resilience built on shaky foundations The Turkish lira has held up remarkably well in the face of the escalation of the US-China trade war and the recent rise in global investor risk aversion. But with the threat of US sanctions lingering... 6th August 2019 · 3 mins read
