Dollar Firms on Potential Turnaround Tuesday

  • The dollar has finally gotten some traction
  • The US data highlight this week will be June retail sales today
  • The 3-month to 10-year US curve is finally back to positive territory
  • The UK reported mixed labor market data
  • RBA minutes were released; New Zealand Q2 CPI came in at 1.7% y/y, as expected
  • Pakistan is expected to hike rates 100 bp to 13.25%; Argentina June CPI is expected to rise 2.6% m/m Continue reading “Dollar Firms on Potential Turnaround Tuesday”
US Dollar Weighed Down by Dovish Fed Governors

Dollar Remains Under Pressure Post-Powell

  • The dollar remains under pressure after Powell’s testimony last week
  • The first of the regional Fed manufacturing surveys for July will be reported today
  • There are some signs that US recession fears are receding
  • China data have come in mixed for June; Colombia reports May manufacturing production and retail sales Continue reading “Dollar Remains Under Pressure Post-Powell”

Emerging Market Country Profiles Q3 2019

Our faithful readers will know that we have been relentlessly negative on emerging markets (EM) for most of this year. We are turning a little more constructive now but more needs to be seen. The global liquidity story has turned more positive for EM. However, as we’ve seen in the past, this is not enough to sustain an EM rally.

Continue reading “Emerging Market Country Profiles Q3 2019”

FX Quarterly Outlook for Third Quarter 2019

In the latest FX Quarterly, our strategists provide their views on major events across developed and emerging markets in Q3 2019.

Continue reading “FX Quarterly Outlook for Third Quarter 2019”

Dollar Mixed as US Yields Plunge Ahead of Holiday

  • US yields continue to drop despite the Fed’s dovish capitulation and the US-China trade truce
  • The fact that the dollar is holding up well in this environment suggests the move in US yields is not occurring in a vacuum
  • ADP today will round out the jobs picture, where a 140k gain is expected
  • Swedish Riksbank kept rates steady at -0.25%, as expected; BOJ tweaked its bond purchase program
  • Caixin reported weak June services and composite PMI readings; Poland is expected to keep rates steady at 1.5% Continue reading “Dollar Mixed as US Yields Plunge Ahead of Holiday”

Dollar Mixed as Post-G20 Euphoria Wanes

  • Markets are searching for direction and three of them warn of a reversal in risk sentiment for the worse
  • Just as US tensions with China seem to be easing, they are picking up with Europe
  • The euro is benefiting from reports that Italy is backing down from its budget confrontation with the EU
  • UK PMI readings for June continued today with a much weaker than expected construction PMI of 43.1
  • RBA cut rates 25 bp to 1.0%, as expected
  • Korea June CPI was steady at 0.7% y/y; USD/HKD traded at its lowest level since September Continue reading “Dollar Mixed as Post-G20 Euphoria Wanes”

Dollar Firm in Wake of G20 Summit

  • Market sentiment was given a shot in the arm by the G20 meeting
  • Reduced US recession risk supports our view that the market needs to adjust its Fed easing expectations
  • This process should help the dollar gain even more traction
  • Weak eurozone final June manufacturing PMI readings were reported; UK manufacturing PMI was 48.0
  • Oil prices jumped on reports of an extension of OPEC+ output cuts
  • EM so far has reported weak PMI readings for June Continue reading “Dollar Firm in Wake of G20 Summit”
US Dollar Weighed Down by Dovish Fed Governors

Dollar Ends Eventful Quarter on a Soft Note

  • The dollar is closing out Q2 on a soft note; our upcoming FX Quarterly stresses that Q3 will be a waiting game
  • The G20 highlight is the Trump and Xi meeting Saturday morning at 1130 AM local time
  • During the North American session, the US has a busy data schedule
  • Eurozone reported preliminary June CPI steady at 1.2% y/y; Sweden reported weak May retail sales
  • Japan reported a slew of data; BOJ tweaked its bond purchase plans for July
  • Banco de Mexico delivered a dovish hold yesterday; South Africa reports May trade and budget data Continue reading “Dollar Ends Eventful Quarter on a Soft Note”

Dollar Mixed As Markets Await Fresh Drivers

  • Markets continue to search for direction ahead of this weekend’s G20 meeting in Osaka
  • Trump has already given markets plenty to digest
  • US reports revised Q1 GDP, weekly jobless claims, May pending home sales, and June KC Fed manufacturing index
  • Germany reports preliminary June CPI; Japan reported May retail sales
  • Brazil central bank releases its quarterly inflation report; Banco de Mexico is expected to keep rates steady at 8.25% Continue reading “Dollar Mixed As Markets Await Fresh Drivers”