Tag Archive: Articles

EM Preview for the Week Ahead

2020-10-19

by

2020-10-19

Risk assets are coming off a tough week. The dollar was bid across the board except for the yen, which outperformed slightly. The only EM currencies to gain against the dollar were KRW and CLP. The major US equity indices somehow managed to eke out very modest gains but stock markets across Europe sank as the viral spread threatens to slam economic activity again.

Read More »

Dollar Gains as Market Sentiment Goes South

2020-10-17

by

2020-10-17

FX Implied Volatility, 2019-2020
Virus restrictions across Europe continue to sour sentiment; the dollar is benefiting from the risk-off backdrop. The stimulus package is deader than Elvis; Fed manufacturing surveys for October will start to roll out; weekly jobless claims will be reported; Chile is expected to keep rates steady at 0.5%.

Read More »

Dollar Bounce Remains Modest as Headwinds Build

2020-10-15

by

2020-10-15

UK Hospital Admissions
The dollar is making a modest comeback; stimulus talks have hit a dead end; we get more US inflation readings for September. Brexit talks continue ahead of the EU summit Thursday and Friday; a new bill by the UK government could change the investment landscape in the country.

Read More »

Dollar Bleeding Stanched as Markets Search for Direction

2020-10-14

by

2020-10-14

2020 Senate Control
Markets have a bit of a risk-off feel today; the dollar bleeding has been stanched for now; IMF releases its updated World Economic Outlook. A stimulus package before the election appears doomed; Fed’s Barkin and Daly speak; a big data week for the US kicks off with September CPI today.

Read More »

Drivers for the Week Ahead

2020-10-12

by

2020-10-12

Dollar losses are accelerating; the virtual IMF/World Bank meetings begin Monday. A big stimulus package before the election still seems unlikely; there are a fair amount of Fed speakers during this holiday-shortened week.

Read More »

Dollar Slide Continues as US Fiscal Stimulus Remains Questionable

2020-10-11

by

2020-10-11

2020 Senate Control
The dollar remains heavy; stimulus talks may or may not be dead; the White House is still sending mixed signals. This is another quiet day in terms of US data; Canada reports September jobs data. We got some more eurozone IP readings for August; following Greece yesterday, it’s Italy’s turn today to register another record low for its 10-year bond yield.

Read More »

Dollar Remains Heavy as Markets Await Fresh Drivers

2020-10-09

by

2020-10-09

The US Vice Presidential debate was a comparatively cordial affair, though the impact on the election is likely to be limited; polls continue to move in favor of Biden, including in swing states. The weak dollar narrative under a Democratic sweep continues to play out; the outlook for fiscal stimulus is as cloudy as ever; FOMC minutes contained no big surprises.

Read More »

Dollar Softens and US Curve Steepens as Odds of Democratic Sweep Rise

2020-10-07

by

2020-10-07

2020 Presidential Elections Odds
The dollar remains under pressure; the US curve continues to steepen; a compromise on fiscal stimulus before the election still seems unlikely; this is another quiet day in terms of US data. President Lagarde said the ECB is prepared to inject fresh monetary stimulus to support the recovery; we expect the ECB to increase its PEPP in Q4.

Read More »

Drivers for the Week Ahead

2020-10-05

by

2020-10-05

The US political outlook has been upended by recent developments; lack of a significant safe haven bid for the dollar so far is telling. This is a very quiet week in terms of US data; FOMC minutes will be released Wednesday; there is a full slate of Fed speakers.

Read More »

Dollar Remains Soft but Sterling Pounded by Brexit Risks

2020-10-04

by

2020-10-04

2020 Senate Control
The dollar remains under pressure as market sentiment continue to improve; stimulus talks were extended. Two major US airlines announced significant job furloughs starting today; US data for September will continue  to roll out; weekly jobless claims will be reported.

Read More »

Dollar Softens as Risk-Off Sentiment Ebbs

2020-09-30

by

2020-09-30

EM FX YTD Performance, 2020
The dollar continues to soften as risk-off sentiment ebbs; the first presidential debate will take place tonight. House Democrats have staked out their latest position at $2.2 trln; there is a fair amount of US data out today; Brazil has come under renewed pressure from fiscal concerns.

Read More »

Dollar Soft as Markets Ignore Virus Numbers and Switch to Risk-On Mode

2020-09-29

by

2020-09-29

GBP Risk Reversals and Positioning, 2019-2020
Virus numbers are rising across Europe and the US; the dollar is softening as risk-off sentiment ebbs. It is a fairly quiet day in the US; there is a glimmer of hope about a fiscal deal in the US; recent US data support the widely held view that more stimulus is needed.

Read More »

EM Preview for the Week Ahead

2020-09-28

by

2020-09-28

Persistent risk-off impulses weighed on EM last week and that may continue this week. The Asian currencies outperformed last week while MXN, ZAR, and COP underperformed, and we expect these divergences to continue. Despite optimism about a stimulus package in the US, we think it remains a long shot. Meanwhile, virus numbers are rising in Europe and the US, with data from both regions likely to continue weakening.

Read More »

Dollar Firm as Markets Digest Rising Virus Numbers

2020-09-26

by

2020-09-26

Low Death in the "Second Wave", 2020
Markets are digesting the rising infection rates across Europe; the dollar is taking another stab at the upside. Speculation is picking up that a compromise on a stimulus package could be reached; reports suggest House Democrats are working on a new $2.4 trln package as a basis for these negotiations.

Read More »

Dollar Remains Firm Ahead of Powell Testimony

2020-09-23

by

2020-09-23

Sweden Data and Central Bank Rate, 2016-2020
The dollar remains firm on continued safe haven flows but we still view this situation as temporary. Fed Chair Powell appears before the House Financial Services Panel with Treasury Secretary Mnuchin; the text of Powell’s testimony was released already.

Read More »

Dollar Gains from Risk-Off Trading Unlikely to Persist

2020-09-22

by

2020-09-22

Markets are starting the week in risk-off mode; the dollar is firm on some safe haven flows but this is likely to prove temporary. US politics is coming in to focus as the election nears; we fear that the likely horse-trading and arm-twisting will take away any residual desire to get another stimulus package done.

Read More »

Risk Appetite Ebbs Ahead of BOE Decision

2020-09-19

by

2020-09-19

US Curve, Breakevens, Real Yields, 2020
The dollar has gotten some limited traction despite the dovish FOMC decision; the FOMC delivered no surprises. We are seeing some more movement on fiscal stimulus; August retail sales disappointed yesterday.

Read More »

Dollar Bounce Ends Ahead of ECB Decision

2020-09-13

by

2020-09-13

FX Implied Volatility, 2019-2020
The dollar rally ran out of steam; US Senate will hold a vote today on its proposed “skinny” bill. US reports August PPI and weekly jobless claims; US will sell $23 bln of 30-year bonds today after a sloppy 10-year auction yesterday BOC delivered a hawkish hold yesterday; Peru is expected to keep rates steady at 0.25%.

Read More »

Sterling Pounded by Brexit Developments

2020-09-11

by

2020-09-11

The dollar rebound continues; odds of a near-term stimulus bill in the US are falling; ahead of inflation readings later this week, the US holds a 10-year auction today. Bank of Canada is expected to keep policy steady; Mexico reports August CPI; Brazil reports August IPCA inflation.

Read More »

ECB Preview

2020-09-10

by

2020-09-10

Balance Sheets, USD Trin, 2007-2019
The ECB meets tomorrow and is widely expected to stand pat. Macro forecasts may be tweaked modestly and there are some risks of jawboning against the stronger euro, but it should otherwise be an uneventful meeting. Looking ahead, a lot of room remains for further ECB actions.

Read More »