Tag Archive: Articles

Drivers for the Week Ahead

President-elect Biden will be inaugurated Wednesday; security in Washington DC and many state capitols has been beefed up due to concerns of violence; the Senate reconvenes Tuesday and will immediately begin work on confirming Biden’s cabinet choices; reports suggest that if asked, Yellen will disavow a weak dollar policy whilst affirming commitment to a market-determined exchange rate.

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Dollar Regains Some Traction as Markets Search for Direction

House Democrats will move ahead with impeachment proceedings today; December CPI data will be the US highlight; heavy UST supply this week wraps up with a $24 bln sale of 30-year bonds; December monthly budget statement will be of interest the Fed releases its Beige Book report; several Fed officials pushed back against notions of tapering anytime soon

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Dollar Runs Out of Steam as Sterling Leads the Way

The US curve continues to steepen; real US yields have become less negative; UST supply will remain an issue as $38 bln of 10-year notes will be sold today; Brazil reports December IPCA inflation.

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Drivers for the Week Ahead

As of this writing, a stimulus deal is close and a US government shutdown Monday may have been avoided; the Fed gave US banks the go-ahead to resume stock buybacks Friday; Fed manufacturing surveys for November will continue to roll out; weekly jobless claims will be reported on Wednesday due to the holiday.

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Dollar Continues to Soften Ahead of FOMC Decision

Optimism on a stimulus deal remains high; the FOMC decision will be key; the dollar tends to weaken on recent FOMC decision days November retail sales will be the US data highlight; Markit reports preliminary December PMI readings; Canada reports November CPI

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Some Thoughts on the Latest Treasury FX Report

The US Treasury’s latest “Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States” report named Switzerland and Vietnam as currency manipulators. Both countries came under scrutiny in the last report and so this week’s announcement was only surprising in that it was made by a lame duck administration that will be gone in a month.

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FOMC Preview

The two-day FOMC meeting starts tomorrow and wraps up Wednesday afternoon. While no policy changes are expected, we highlight what the Fed may or may not do. We expect a dovish hold, with Powell underscoring the growing downside risks facing the US economy in the coming months.

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Drivers for the Week Ahead

The Senate passed a stopgap bill late Friday that will keep the government funded until midnight this Friday; optimism on a stimulus deal appears to be picking up; the two-day FOMC meeting ending with a decision Wednesday will be important.

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Dollar Rally Running Out of Steam Ahead of ECB Decision

Stimulus talks drag on; US November CPI will be today’s data highlight; US Treasury wraps up a big week of auctions today with $24 bln of 30-year bonds on offer. The November budget statement will hold some interest; weekly jobless claims will be closely watched;

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Jittery Markets Keep the Dollar Afloat (For Now)

US fiscal negotiations are taking longer than expected; US Treasury auctions $56 bln of 3-year notes; we believe the Fed is watching the yield curve closely; Brazil reports November IPCA inflation; Chile kept rates on hold at 0.50% and tweaked its asset purchase program.

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Dollar Stabilizes but Weakness to Resume

There are new efforts to pass another round of stimulus sooner rather than later; we warn against getting too optimistic; US bond yields rose in anticipation of stimulus; Fed Chair Powell and Treasury Secretary Mnuchin gave somewhat conflicting outlooks for the US.

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Dollar Plumbs New Depths With No Relief In Sight

Stimulus talks continue but the goalposts have indeed been moved; the good news is that a package before year-end is looking more likely; optimism regarding stimulus continues to buoy US yields. ISM services PMI is expected at 55.8 vs. 56.6 in October; weekly jobless claims data will be reported; Fed Beige Book report was suitably downbeat.

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Drivers for the Week Ahead

Dollar weakness has resumed. This will be a very important data week for the US and the highlight will be November jobs data Friday; we will also get some important manufacturing readings for November; the Fed releases its Beige Book report for the December FOMC meeting Wednesday; Canada also has a busy week.

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Dollar Consolidates Ahead of Thanksgiving Holiday

The divergence in developed markets yield curves continues; the dollar is consolidating ahead of the US holiday. FOMC minutes will be released; weekly jobless claims data will be released a day early; October personal income and spending will be reported; Banco de Mexico releases its quarterly inflation report.

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Dollar Weakness Resumes as Short-Covering Fades

Sentiment is being buoyed by two incrementally positive stories; cross-markets implied volatility measures continue to trend lower; dollar weakness has resumed. President-elect Biden will reportedly officially name his first cabinet picks today; Fed manufacturing surveys for November will continue to roll out; Brazil and Mexico both reports mid-November inflation readings.

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Dollar Weakness Resumes as Markets Start Another Week in Risk-On Mode

Covid vaccine results from AstraZeneca and Oxford University brought another wave of optimism; dollar weakness has resumed; that said, we will refrain from making any longer-term calls for the demise of the dollar. Reports suggest President-elect Biden is pushing House Democrats to reduce the size of their fiscal package demands to unlock negotiations; Republicans have an interest in compromising.

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EM Preview for the Week Ahead

Most EM currencies were up last week, once again taking advantage of broad dollar weakness. In addition, EM equities also performed well, with MSCI EM up for the third week in a row and for seven of the past eight. We expect EM assets to continue benefiting from the global liquidity story as well as the weak dollar trend.

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Dollar Bounce Likely to Fade

The negative virus news stream is taking a toll on market sentiment; the dollar is benefiting from the risk-off price action but is likely to fade. Weekly jobless claims data will be of interest; Fed manufacturing surveys for November will continue to roll out; Judy Shelton’s Fed confirmation is looking less and less likely.

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Dollar Weakness Continues Ahead of US Retail Sales Data

The dollar continues to soften. October retail sales will be the US data highlight; Fed manufacturing surveys for November have started to roll out; Republican Senator Alexander opposes Judy Shelton’s nomination to the Fed.

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Dollar Soft as Markets Start the Week in Risk-On Mode

The odds of national-level action in the US against the second wave virus outbreak remains small, even after Biden takes over; the dollar continues to soften. There is growing speculation about former Fed Chair Yellen becoming Biden’s Treasury Secretary; Fed manufacturing surveys for November will start to roll out; Peru’s interim President Merino resigned under pressure from more demonstrations.

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