Dollar Rally Derailed by Surprise Election Results in Australia and India

  • We believe the dollar rally remains on track
  • Eurozone political noise came from an unexpected source
  • Japan Q1 GDP grew 2.1% SAAR vs. -0.2% expected; AUD bounce from the shock weekend election results has run out of steam
  • India exit polls suggest that Prime Minister Modi has won another term; Chile Q1 GDP is expected to grow 1.8% y/y
  • Bank of Israel is expected to keep rates steady at 0.25% Continue reading “Dollar Rally Derailed by Surprise Election Results in Australia and India”

Drivers for the Week Ahead

  • We believe the dollar rally remains on track
  • FOMC minutes will be released Wednesday; there is a full slate of Fed speakers this week
  • Eurozone flash PMIs will be reported Thursday; UK reports April CPI Wednesday
  • Japan has a heavy data week; RBA minutes will be released Tuesday
  • In EM, the central banks of Israel and South Africa meet Continue reading “Drivers for the Week Ahead”

EM Preview for the Week Ahead

EM remains hostage to global trade tensions. Last week’s moves by the US to with regards to Japan, EU, Canada, and Mexico should only be viewed as a change in tactics. China is now the sole focus, but these other trade skirmishes are likely to flare again. We remain negative on EM within this environment. Continue reading “EM Preview for the Week Ahead”

Four Takeaways From the 2019 Finadium Investors in Securities Lending Conference

BBH was pleased to sponsor the Finadium Investors Securities Lending conference on May 2- 3 in New York City, and represented the industry on several panels.  The forum was well attended by Asset Managers, Beneficial Owners, Agent Lenders, Prime Brokers, Hedge Funds, as well as a variety of industry vendors, and provided comprehensive insights on the market trends influencing our industry.  Continue reading “Four Takeaways From the 2019 Finadium Investors in Securities Lending Conference”

What Has Changed in EM

  • Pakistan reached agreement with the IMF for a $6 bln 3-year Extended Fund Facility
  • Philippines central bank cut reserve requirements by two percentage points to 16%
  • The US announced it would cut tariffs on Turkish steel by half to 25%
  • Egypt reached agreement with the IMF to unlock $2 bln of aid in final review of its 3-year Extended Fund Facility
  • Brazil saw nationwide protests against proposed cuts in the education budget Continue reading “What Has Changed in EM”

Dollar Firm as Trade Tensions Rise

  • Rhetoric from both sides is getting more heated, making a US-China deal seem a long way off (if at all)
  • We would downplay headlines claiming the PBOC won’t let the yuan weaken past 7 per dollar
  • Jitters about Italy helped push the euro lower yesterday and that has continued today
  • The US announced it would cut tariffs on Turkish steel by half to 25%
  • Singapore reported weak April trade data; BRL real continues to underperform Continue reading “Dollar Firm as Trade Tensions Rise”

Italian Political Outlook Hinges on European Parliamentary Elections

Italy is back in the spotlight as Deputy Prime Minister Salvini turns up the rhetoric ahead of European Parliamentary elections. His controversial statements reopen old wounds from last fall and suggests similar market turmoil may be in store for the eurozone. Much will depend on the outcome of European Parliamentary elections this month. Continue reading “Italian Political Outlook Hinges on European Parliamentary Elections”

Dollar Mixed as Markets Await Fresh Drivers

  • The Trump administration is fighting a trade war on many fronts
  • Recent developments suggest that China has become the sole focus for the trade hawks
  • We see no letup in the hardline stance being taken against all US trading partners
  • The Atlanta Fed’s GDPNow model is now tracking 1.1% SAAR for Q2, down from 1.6% previously
  • Australia reported April labor market data
  • Bank Indonesia kept rates steady at 6.0%, as expected; Banco de Mexico is expected to keep rates steady at 8.25% Continue reading “Dollar Mixed as Markets Await Fresh Drivers”

Frontier Sovereign Rating Model For Q2 2019

We have produced the following ratings model to assess relative sovereign risk in Frontier Markets. A country’s score directly reflects its creditworthiness and underlying ability to service its external debt obligations.  Continue reading “Frontier Sovereign Rating Model For Q2 2019”