Category Archive: 5.) Brown Brothers Harriman

Dollar Firm as US-China Tensions Continue to Rise

Tensions between the US and China continue to rise; the dollar is finding some traction. Fed Beige Book contained no surprises; NY Fed President Williams said the Fed is “thinking very hard” about targeting yields; weekly jobless claims are expected at 2.1 mln vs. 2.438 mln last week .

Read More »

Asia Lockdowns vs. Re-Openings

We apply the five-factor model used to analyse lockdowns and openings in developed markets and in Latin America to Asian Markets. It evaluates the restrictions imposed by different countries in the region, how they compare in terms of severity of lockdown, and where they are heading in the spectrum of reopening. The scale we use measures grade restrictions from 1 (open) to 4 (closed) across the following five factors: (a) schools/universities, (b)...

Read More »

Hong Kong Turbulence Likely to Rise as US-China Relations Worsen

Recent moves by China call into direct question the “one country, two systems” approach.  Hong Kong assets have held up surprisingly well but we see turbulence ahead as US-China relations are set to deteriorate further.

Read More »

Restricted Market Trading Comments

By Dara O’Sullivan, Derrick Leonard, and Ilan Solot, Covid-19 related measures for restricted markets remain largely unchanged this week. Philippines, Bangladesh and Kuwait have extended their lockdown periods, while Kenya and Nigeria continue to face limited liquidity.

Read More »

Dollar Firm as China’s Hong Kong Gambit Triggers Risk-Off Trading

Legislation was introduced that allows Beijing to directly impose a national security law on Hong Kong; US-China tensions are still rising; the dollar is bid as risk-off sentiment takes hold. There are no US data reports or Fed speakers today; Canada reports March retail sales; Mexico reports mid-May CPI.

Read More »

Dollar Firm as US-China Tensions Flare

The virus news stream is mixed; the dollar has stabilized; US-China tensions continue to ratchet up. We will get some more US economic data for May; weekly jobless claims are expected at 2.4 mln. Eurozone and UK reported firm preliminary May PMI readings; BOE officials continue to take a very dovish tone.

Read More »

Dollar Treads Water Ahead of FOMC Minutes

The virus news stream is mixed; the dollar has stabilized a bit. FOMC minutes will be released; Canada reports April CPI and March wholesale trade sales; the news from Brazil keeps getting worse. Another group of EU nations will release their own plan in a rebuttal of France and Germany; UK reported April CPI data.

Read More »

Restricted Market Trading Comments

Covid-19 related measures for restricted markets remain largely unchanged this week. Philippines, Bangladesh and Kuwait have extended their lockdown periods, while Kenya and Nigeria continue to face limited liquidity. Please see trading comments below

Read More »

Dollar Firm as Risk-off Sentiment Intensifies

Risk-off sentiment has intensified; as a result, the dollar is getting some more traction. Fed Chair Powell pushed back against the notion of negative rates in the US; US Treasury completed its quarterly refunding. Weekly jobless claims are expected at 2.5 mln vs. 3.169 mln last week; Mexico is expected to cut rates 50 bp to 5.5%

Read More »

Dollar Mixed as Markets Await Fresh Drivers

The virus news stream is mixed; the dollar continues to consolidate; US-China tensions continue to rise. US Treasury wraps up its quarterly refunding; April budget statement is a harbinger of things to come; the next round of stimulus will be contentious. We got some dovish BOE comments yesterday; UK continues to play Brexit hardball; UK data was slightly better than expected but awful nonetheless.

Read More »

Different Type of Crisis, Some Old Concerns

Over the past two months we have witnessed historic turmoil followed by unprecedented intervention by policy makers and central banks in supporting the capital markets (and more). In many ways the 2020 COVID-19 pandemic is very different from the 2008 global financial crisis, but for some, certain old concerns still linger. In the face of short selling bans and worries about market liquidity, we discuss below how best to navigate some of the common...

Read More »

Restricted Market Trading Comments

Covid-19 related measures for restricted markets remain largely unchanged from last week. Sri Lanka and India have extended their lockdown periods, while Kenya and Nigeria continue to face limited liquidity. Please see trading comments below.

Read More »

Dollar Mixed as Doves Fly

Measures of cross-market implied volatility have been stable for a few weeks now. Weekly jobless claims are expected at 3 mln; reports suggest House Democrats are pushing ahead with a possible vote next week on another relief package. Canada reports April Ivey PMI; Peru is expected to keep rates steady; Brazil COPOM delivered a dovish surprise last night.

Read More »

Negative News from Europe Helps Dollar Build on Gains

UK has been confirmed to have the highest death toll in Europe the dollar is getting more traction. Reports suggest Congress is resisting President Trump’s call for a payroll tax cut; ADP private sector jobs data is expected to come in at -21 mln. Brazil is expected to cut rates 50 bp; Fitch cut its outlook on Brazil to negative; Chile is expected to keep rates steady.

Read More »

Restricted Market Trading Comments

Covid-19 related measures for restricted markets remain largely unchanged from last week. Sri Lanka and India have extended their lockdown periods, while Kenya and Nigeria continue to face limited liquidity.

Read More »

Dollar Remains Under Pressure as Europe Unveils Some Plans to Reopen

Global equity markets continue to trend higher; the dollar remains under pressure. The two-day FOMC meeting ends today; the first look at Q1 US GDP comes out. France and Spain laid out plans to reopen; the UK will rely on a contact tracing plan to limit the viral spread.

Read More »

Some Thoughts on Recent Foreign Exchange Intervention

Dollar softness this week will take some pressure off of the foreign currencies but it’s too early to sound the all clear.  This piece focuses on how  central banks around the world may be intervening to influence their currencies.  Most of the world, particularly EM, is grappling with supporting weak currencies but a select few are dealing with stronger currencies. This is a very opaque process and so we are simply making our best guesses.

Read More »

Restricted Market Trading Comments

By Dara O’Sullivan, Derrick Leonard, and Ilan Solot. As the week commences, a few markets such as Sri Lanka and Philippines are extending their lockdown periods while others such as Nigeria and Kenya continue to experience USD liquidity issues. Please see comments below.

Read More »

Dollar Remains Under Pressure as Risk-on Sentiment Persists

The death toll from the virus continues to trend lower in Europe and the US; the dollar remains under some pressure. The Fed announced an expansion of its Municipal Liquidity Facility (MLF); regional Fed manufacturing surveys for April continue to roll out; other data will be reported.

Read More »

Drivers for the Week Ahead

The FOMC meets Wednesday; first look at Q1 US GDP comes out Wednesday; weekly jobless claims Thursday are expected at 3.5 mln vs. 4.427 mln last week. Italy dodged a bullet last Friday; ECB meets Thursday; eurozone reports Q1 GDP and April CPI data ahead of the ECB decision; Sweden’s Riksbank meets Tuesday.

Read More »