Tag Archive: Brazil

FX Daily, July 11: Powell Spurs Equity and Bond Market Rally, While the Greenback Falls Out of Favor

2019-07-11

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2019-07-11

Overview:  Fed's Powell confirmed a Fed rate cut at the end of this month by warning that uncertainties since the June FOMC had "dimmed the outlook" and that muted price pressures may be more persistent.  It ignited an equity and bond market rally (bullish steepening) while the dollar was sold.

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Emerging Markets: Preview of the Week Ahead

2018-09-17

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2018-09-17

EM FX ended mixed in Friday, capping off an up and down week. RUB and TRY initially firmed on their respective rate hikes but gave back some of those gains heading into the weekend. Trade tensions are likely to remain high, as press reports suggest President Trump is pushing ahead with tariffs on $200 bln of Chinese imports even as high-level talks are planned.

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Emerging Markets: What has Changed

2018-09-10

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2018-09-10

Philippine central bank signaled another big hike. Poland central bank appears to be moving its forward guidance out further. Russia officials are sending confusing signals regarding monetary policy. Russia officials stand ready to support the ruble debt market if new US sanctions negatively impact it. South Africa’s African National Congress pledged to undertake land reform responsibly.

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Emerging Market Week Ahead Preview

2018-09-04

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2018-09-04

EM FX ended last week on a firm note, but weakness resumed Monday. Higher than expected Turkish inflation hurt the lira, which in turn dragged down BRL, ARS, ZAR, and RUB. We expect EM to remain under pressure this week when the US returns from holiday Tuesday.

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As Emerging Market Currencies Collapse, Gold is being Mobilized

2018-09-03

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2018-09-03

EM-cartoon
In recent weeks, global financial markets have been increasingly spooked by an intensifying crisis in emerging market currencies including those of Turkey and Argentina. Add to this the ongoing currency crisis in Venezuela and the currency problems of Iran.

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FX Weekly Preview: Macroeconomic Considerations

2018-08-27

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2018-08-27

The force that had pushed the US 10-year Treasury yield to 3% and the dollar above JPY113 at the start of the month, and the euro to $1.13 a couple of weeks ago has dissipated. The 10-year yield is near 2.80%. The dollar was near two-month lows against the yen a week ago, and the euro was back toward the middle of its previous $1.15-$1.18 trading range.

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Emerging Markets: Week Ahead Preview

2018-08-27

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2018-08-27

EM FX was whipsawed last week but ended on a firm note. We look past the noise and believe that the true signals for EM remain higher US interest rates and continued trade tensions, both of which are negative. Turkish markets reopen after a week off. Nothing fundamentally has changed there, and so it still poses some spillover risk to wider EM.

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Emerging Markets: Preview of the Week Ahead

2018-08-20

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2018-08-20

EM FX stabilized last week as the situation in Turkey calmed somewhat. Reports Friday that the US and China are hoping to resolve the trade dispute also helped EM FX ahead of the weekend. However, TRY remains vulnerable as the US threatens more sanctions due to the pastor. Both S&P and Moody’s downgraded it ahead of the weekend and our own ratings model points to further downgrades ahead. Turkish markets are closed this week for holiday.

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Emerging Markets: Preview of the Week Ahead

2018-08-06

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2018-08-06

EM FX has come under pressure again due to ongoing trade tensions and rising US rates but saw some modest relief Friday after the PBOC announcement on FX forwards. This helped EM FX stabilize, but we do not think the negative fundamental backdrop has changed. Best performers last week were MXN, PHP, and PEN while the worst were TRY, ZAR, and KRW.

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Emerging Markets: Week Ahead Preview

2018-07-30

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2018-07-30

EM FX enjoyed a respite from the ongoing selling pressures, with most currencies up on the week vs. the dollar.  Best performers were CLP, MXN, and ZAR while the worst were TRY, CNY, and COP.  BOJ, Fed, and BOE meetings this week may pose some risks to EM FX.

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Emerging Markets: Week Ahead Preview

2018-07-23

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2018-07-23

EM FX saw some violent swings last week, due in large part to some unhelpful official comments Friday. BRL and TRY were the best performers last week, while RUB and CLP were the worst. When all is said and done, however, we think Fed policy remains unaffected and so we remain negative on EM FX. Also, global trade tensions remain high after Trump threatened tariffs on all Chinese imports entering the US.

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Emerging Market Preview: Week Ahead

2018-07-03

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2018-07-03

EM FX ended Friday mixed, capping off a mostly softer week.  TRY, MXN, and RUB were the top performers and the only ones up against USD, while ARS, CLP, and BRL were the worst.  Looking ahead, US jobs data on Friday pose some risks to EM, coming on the heels of a higher than expected 2% y/y rise in PCE.  China will also remain on the market’s radar screen, with the first snapshots of June economic activity just starting to emerge.  We remain...

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Emerging Markets: What Changed

2018-07-02

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2018-07-02

PBOC fixed USD/CNY at the highest level since December 14. Bank Indonesia delivered a larger than expected 50 bp to 5.25%. Bulgarian Prime Minister Boyko Borissov survived a second no-confidence vote this year. Turkish President Recep Tayyip Erdogan was re-elected but with sweeping new powers. Saudi Arabia, Kuwait, and UAE are reportedly in talks to help stabilize Bahrain.

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Emerging Markets: Preview of the Week Ahead

2018-06-26

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2018-06-26

EM FX ended Friday mixed, and capped off a mixed week overall as the dollar’s broad-based rally was sidetracked. EM may start the week on an upbeat after PBOC cut reserve requirements over the weekend. Best EM performers last week were ARS, MXN, and TRY while the worst were THB, IDR, and BRL.

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Emerging Markets: What Changed

2018-06-25

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2018-06-25

Nor Shamsiah Mohd Yunus was named the new Governor of Malaysia’s central bank. Moody's cut the outlook on Pakistan's B3 rating to negative from stable. National Bank of Hungary tiled more hawkish. Israeli Prime Minister Benjamin Netanyahu’s wife was charged with misusing public funds. MSCI added Saudi Arabia and Argentina to its Emerging Markets index.

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Emerging Markets: Week Ahead Preview

2018-06-19

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2018-06-19

EM FX was mixed on Friday but capped off a largely losing week. MYR, CLP, and CNY were the best performers over the last week, while ARS, TRY, and ZAR were the worst. We expect EM FX to continue weakening, but note that with very few fundamental drivers this week, we may see some consolidation near-term.

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Emerging Markets: Preview of the Week Ahead

2018-06-12

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2018-06-12

EM FX ended Friday on a mixed note, capping off a roller coaster week for some of the more vulnerable currencies.  We expect continued efforts by EM policymakers to inject some stability into the markets. However, we believe the underlying dollar rally remains intact.  Central bank meetings in the US, eurozone, and Japan this week are likely to drive home that point. 

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Emerging Markets: What Changed

2018-06-11

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2018-06-11

The Reserve Bank of India hiked rates for the first time since 2014. Malaysia’s central bank governor resigned. Czech central bank tilted more hawkish. Russia central bank tilted more dovish. Argentina got a $50 bln standby program from the IMF.

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Emerging Markets: Preview of the Week Ahead

2018-06-05

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2018-06-05

EM FX put in a mixed performance Friday, and capped off an overall mixed week. Over that week, the best performers were IDR, TRY, and INR while the worst were BRL, MXN, and ARS. US yields are recovering and likely to put renewed pressure on EM FX.

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Emerging Market Preview: Week Ahead

2018-06-01

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2018-06-01

EM FX has started the week mixed.  Some relief was seen as US rates stalled out last week, but this Friday’s jobs number could be key for the next leg of this dollar rally.  On Wednesday, the Fed releases its Beige book for the upcoming June 13 FOMC meeting, where a 25 bp hike is widely expected.  We believe EM FX remains vulnerable to further losses.

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