Tag Archive: macro

Week Ahead: US CPI and Import Prices may keep Fed’s Stand Pat Decision Unanimous amid Threats of a Higher Universal Tariff

2025-07-12

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2025-07-12

The dollar rose against most of the G10 currencies last week. The Australian dollar and Swedish krona were the exceptions. The Aussie was helped by the central bank's surprise decision not to cut rates. The krona may have been helped by stronger than expected June inflation, with the key measure jumping to 3.3% from 2.5%), …

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Week Ahead: US Liberation Day Redux after Jobs Data Reinforce Fed’s Patience, and RBA to Cut

2025-07-05

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2025-07-05

Fresh off the passage of the the budget, judicial victories, and achieving a cease fire between Israel and Iran, the Trump administration is on the verge of closing its initial chapter in its dramatic changes of America's foreign economic policy. The 90-day hiatus since Liberation Day comes to an end in the week ahead. Ahead …

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July 2025 Monthly

2025-06-28

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2025-06-28

The second half of 2025 begins not with optimism, but with fatigue. The global economy is not collapsing, but it is clearly bending under strain—economic, geopolitical, and institutional. What is taking shape is not a soft landing, but something more sobering: a slower, structurally weaker cycle in a more dangerous and fragile world.Three developments define …

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Week Ahead: All but Oil, Nonplussed over the New Phase in Israel-Iran War

2025-06-21

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2025-06-21

The Israel-Iran war continues, but outside of oil, the capital markets have barely reacted. WTI rose by about 2.7% last week after a 13% rally the previous week. It reached levels not seen since early January. The average retail price of unleaded gasoline has risen by almost 2.5% this month.

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Week Ahead: Geopolitics, Tariffs, and Central Banks

2025-06-14

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2025-06-14

The response of the US dollar and Treasuries to Israel's attack on Iran and the palatable risk of escalation was uninspiring. It supports the popular narrative about the changing role of the US dollar and assets in the world economy. US stocks and bond sold off ahead of the weekend. It should not be regarded … Continue...

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Week Ahead: Stable Unemployment + Firm CPI = USD Recovery?

2025-06-07

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2025-06-07

Last week, the US dollar fell to new lows for the year against half the G10 currencies, including sterling, the Norwegian krone, and Canadian, Australian, and New Zealand dollars. A key question is whether it is a breakout and a signal that ana acceleration of the dollar's decline is at hand. On balance, and within …

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June 2025 Monthly

2025-05-31

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2025-05-31

Navigating the global economy and managing capital market volatility has always posed challenges, but the uncertainties emanating from Washington make this task exceptionally treacherous. The so-called reciprocal tariffs announced on April 2 were postponed for 90 days just one week later, ostensibly to usher in a period of intensive negotiations. Yet a few weeks into …

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Week Ahead: Greenback Begins Off on the Defensive

2025-05-24

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2025-05-24

Between its trade war and the "big, beautiful budget", which is both regressive and adds on more debt, the US has roiled the capital markets. Before the weekend, the US said the EU was not negotiating in good faith. President Trump threatened a 50% tariff as of June 1. This looks harsher than the current … Continue reading »

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Week Ahead: Greenback’s Recovery Looks Poised to Continue

2025-05-17

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2025-05-17

The dollar traded choppily last week but settled higher against all the G10 currencies. It finished the week on a firm note. The messy upside correction for the dollar may continue. Despite disappointing retail sales and manufacturing output, and softer than expected CPI and PPI, the market has pushed the next Fed cut into Q4 …

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Week Ahead: Reaction to Sino-American Trade Talks, US CPI, Japan and UK Q1 GDP, and Banxico to Cut 50 bp Featured

2025-05-10

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2025-05-10

Many seemed optimistic that the weekend trade talks between the US and China will de-escalate the tension. We are less sanguine. Even if the tariffs on both sides were halved, there would still be an effective bilateral embargo. In the larger picture we are concerned that blocking PRC's  exports and denying it a direct investment …

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Week Ahead: FOMC in No Hurry to Cut Rates while BOE Easing set to Accelerate

2025-05-03

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2025-05-03

President Trump says there are trade talks with China. Beijing denies it. Around the time the US reports that the world's largest economy contracted slightly in Q1 (0.3% annualized), US Treasury Secretary Bessent said that the effective embargo was shutting down the China's economy. The week ended with China's Commerce Ministry statement that it was …

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The Week Ahead: Trade War and Price Action are More Important than US and China’s CPI

2025-04-05

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2025-04-05

April 2, what President Trump called, "Liberation Day" will indeed go down in history. The markets quaked. A trade war with China escalated as Beijing took strong retaliatory measures, with not only a sharp rise in its tariff on US imports but imposed (more) restrictions on rare earth exports. Canada and Mexico were spared the "reciprocal tariffs,” but both made clear declarations of intent to diversify their trade and economic...

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April 2025 Monthly

2025-03-29

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2025-03-29

The world is different. After a four-year restoration of the traditional globalist US elite, a majority of the American electorate seems to have rejected it. President Trump is indeed a transformational president, and his reversal of many traditional elements of US domestic and foreign policy are triggering dramatic action in other parts of the world. Many Americans and European had been critical of Germany's self-imposed fiscal strait jacket   In...

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Week Ahead: Is the Dollar Bottoming?

2025-03-22

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2025-03-22

After falling steadily since from the end of Q3 24 through the first part of January, the dollar stabilized last week, despite the dovish market takeaway from the Federal Reserve. The median projection for growth was shaved while the inflation project was raised. Still, despite the Atlanta Fed's GDP Now tracking a contraction here in Q1, few are that pessimistic. None of the 58 economists in Bloomberg's survey see a contraction, and only one...

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Week Ahead: New FOMC Projections; BOE, BOJ, and Riksbank Standpat, While SNB to Approach Zero -Bound (Again)

2025-03-15

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2025-03-15

The architects of the new US foreign economic policy expected dollar appreciation to absorb some of the cost of US tariffs and expected some exporters to cut prices. Instead, the dollar has mostly fallen against the major currencies. Last week, the greenback recorded new lows for the year against the Chinese yuan, Mexican peso, euro, sterling, the Japanese yen, the Swedish krona, and Norwegian krone. Beijing acted forcefully against Walmart's...

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Week Ahead: US Growth Worries and Europe’s Fiscal Initiative Weaken American Exceptionalism’s Bull Case

2025-03-08

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2025-03-08

The combination of continued growth concerns in the US and the fiscal/defense initiatives in Europe saw the dollar fall every day last week. The Atlanta Fed's GDP tracker says the US economy is contracting at an annualized rate of 2.4%, which seems exaggerated. After falling by about 50 bp in a seven-week slump, the US 10-year yield rose by about 15 basis points last week. Eurozone 10-year benchmark yields rose around 35 bp. The US premium on...

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March 2025 Monthly

2025-03-01

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2025-03-01

In recent weeks, while Russia's war on Ukraine continues and Beijing continues to harass its neighbors, the U.S. tariff threats and doubts that its defense commitments will be sustained, have emerged as the most significant challenge for businesses, investors, and policymakers. These tariffs are aimed at protecting domestic industries, forcing a re-shoring of production, and raising revenue. If, and when implemented, the tariffs can be expected to...

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Week Ahead: Tariffs Loom and the State of the Trump Trade

2025-02-22

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2025-02-22

Many observers seem confused. They express disappointment that the so-called "Trump trade", a rally in the dollar has not materialized. Yet, in some ways, isn't that what happened from late last September, ironically around the Federal Reserve's 50 bp rate cut, around the time investors began taking US election polls more seriously? In Q4 24, the Federal Reserve's real broad trade weighted dollar index rose by 4.9%, the best quarterly...

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Week Ahead: RBA to Begin Easing Cycle and USD Downside Correction may be Nearly Over

2025-02-15

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2025-02-15

The US threat of aluminum and steel tariffs and reciprocal tariffs initially shook the markets, but the implementation at some future date gives the impression that the threats are negotiating ploys helped take away the sting. In his first term, Trump converted some of the tariffs to quotas, and that is one possible scenario now. Still there is great uncertainty of the US intent and strategy. For its part, the greenback finished last week lower...

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Week Ahead: Firm US CPI may Underpin Dollar, Barring New Drama from Washington

2025-02-08

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2025-02-08

Many market participants appear to have forgotten the drama of Trump's first term. It was driven home with the tariff threat on Canada and Mexico, which was postponed at the last minutes. The apparent fascination with his "authenticity" seemed to have overshadowed his ability to dissemble during the election but it has been underscored in the past few weeks, including apparently on what the US Navy will be charged for using the Panama...

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