Dollar Soft Ahead of Long Holiday Weekend

  • The latest batch of virus numbers from the Italy, Spain, and Germany aren’t encouraging
  • The dollar is under some modest pressure ahead of the holiday weekend
  • US weekly jobless claims today will hold the spotlight; PPI will also be reported; FOMC minutes held no surprises; Canada data highlight will be March jobs data
  • UK announced that the BOE will temporarily finance fiscal spending directly; UK data were mixed
  • Oil continues to move higher ahead of the OPEC meeting today
  • Japan reported weak March machine tool orders; BOJ cuts its assessment of all nine regional economies due to the virus; BOK remained on hold Continue reading “Dollar Soft Ahead of Long Holiday Weekend”

Lessons from Singapore?

Singapore has been hailed for its quick response to the coronavirus that limited initial infections, but the outlook is shifting.  Despite their early success, they will have to revert to a lockdown.  Can Singapore’s experience offer any lessons for European and the US policymakers? Continue reading “Lessons from Singapore?”

Dollar Firm as Europe Fails to Deliver

  • The dollar is stabilizing; reports suggest the White House is developing a plan to reopen the US economy sooner rather than later
  • Both Hong Kong and Singapore just tightened restrictions on gathering and movement
  • FOMC minutes for the March 15 decision will be released today
  • No united action came out of yesterday’s EU finance minister conference call; we suspect the lack of any progress on a package was why the ECB yesterday began accepting Greek bonds
  • Poland is expected to keep policy steady; yesterday, Hungary started asset purchases in an emergency meeting
  • S&P downgraded the outlook on Australia’s AA rating from stable to negative; RBNZ Assistant Governor Hawkesby noted the bank is ‘very open’ to expand the QE program Continue reading “Dollar Firm as Europe Fails to Deliver”

Medium-Term Trade Ideas

With market sentiment improving, equities and other risk assets are rallying sharply.  While we are not sure that we are out of the woods yet, we thought it would be helpful to identify which currencies are likely to outperform on the other side of the crisis.  The timing is of course anyone’s guess at this point, but we are confident that our currency picks below will eventually pay off. Continue reading “Medium-Term Trade Ideas”

Dollar Soft as Risk-On Sentiment Intensifies

  • High-frequency data on coronavirus infections and death rates continue to stabilize; the rebound in equity markets continues
  • Democrats are reportedly planning another round of stimulus; the Fed introduced a new program to help keep credit flowing to small businesses
  • Reports suggest the IMF is preparing a new program to help ease the global dollar shortage
  • Eurozone finance minister will hold a conference call today; UK Prime Minister Johnson remains in intensive care
  • State of emergency declared in seven Japan prefectures; Abe’s stimulus package proposal came in at JPY108.2 trln
  • RBA kept policy unchanged but hinted it may taper its QE and OMOs; MAS eased capital requirements in an effort to boost lending Continue reading “Dollar Soft as Risk-On Sentiment Intensifies”

Restricted Market Trading Comments

By Dara O’Sullivan, Derrick Leonard, and Ilan Solot

With many markets still under lockdown and some going out on Easter holidays this week, we continue to see amended trading hours. The most notable change has been in India with a reduction in trading hours, while in Nigeria we saw a small amount of liquidity being released by the Central Bank of Nigeria (CBN). Below are our updates for the week. Please get in touch if you would like further information or to discuss any of these markets. Continue reading “Restricted Market Trading Comments”

Dollar Mixed, Equities Higher as Virus News Stream Improves

  • It was a relatively good weekend in virus-related news; measures of implied volatility continue to trend lower
  • The dollar is trying to build on its recent gains; investors continue to try and gauge just how bad the US economy will get hit
  • The outlook for oil prices remains highly uncertain and volatile
  • Germany signaled that its stance regarding aid to the weaker eurozone countries remains unchanged; the news stream for the UK has turned negative
  • Prime Minister Abe nearly doubled the size of the next stimulus package to JPY108 trln ($988 bln); Hong Kong Financial Secretary Paul Chan offered a sobering take on the local economy Continue reading “Dollar Mixed, Equities Higher as Virus News Stream Improves”

Drivers for the Week Ahead

  • The dollar is likely to build on its recent gains
  • As one of the few high frequency indicators, weekly jobless claims will continue to hold the spotlight; FOMC minutes for the March 15 decision will be released Wednesday
  • US March budget statement will come out Friday; Canada data highlight will be March jobs data Thursday
  • Oil prices are giving back some of their recent gains on reports that Saudi Arabia and Russia remain at odds
  • Germany has a heavy data week; UK has its monthly data dump Thursday; after a nice break from Brexit-related headlines, they’re back and they’re not good
  • Japan has a heavy data week; RBA meets Tuesday and is expected to keep policy unchanged Continue reading “Drivers for the Week Ahead”

EM Preview for the Week Ahead

EM may get a little support from a potential OPEC+ deal to limit oil.  Even if a deal is struck, the impact is likely to be fleeting as the global growth outlook remains terrible.  We remain negative on EM for the time being. Continue reading “EM Preview for the Week Ahead”