The Riksbank and Norges Bank both meet this week. The two are on different trajectories that should be underscored by the meeting outcomes; while the Riksbank is widely expected to stay on hold, we see the risk of hawkish language from the Norges Bank. This in turn could lead to some NOK outperformance that sees the NOK/SEK cross recover some of its recent losses. Continue reading “Scandie Central Bank Preview”
EM currencies are coming off a solid week. The dollar remains on its back foot after the Fed delivered a dovish hold and US economic data continue to soften. Broad-based dollar weakness is likely to continue this week, and EM currencies should once again take advantage of this. That said, we continue to see divergences. TRY and BRL are likely to continue underperforming, while the Asian currencies should continue to outperform due to strong fundamentals. Continue reading “EM Preview for the Week Ahead”
The Bank of England wraps up its meeting tomorrow. It is widely expected to remain on hold whilst likely setting the table for further easing by year-end. Below is a list of what the BOE may or may not do. Continue reading “Bank of England Preview”
The two-day FOMC meeting starts today and wraps up Wednesday afternoon. While no policy changes are expected, we highlight what the Fed may or may not do. We expect a dovish hold that should weigh on the dollar, with Powell underscoring the ultra-dovish message he sent at Jackson Hole. Continue reading “FOMC Preview”
Many at the ECB continue to jawbone the euro. While this may help slow the single currency’s gains, we believe it will have limited lasting impact as the fundamentals favor a stronger euro over the near-term. Furthermore, we do not think that the scale of those gains warrant a panicked response from policymakers just yet. Continue reading “Recent Euro Moves Far From Brutal”
EM currencies were mixed last week as the dollar got some traction against the major currencies. We think the dollar is likely to come under broad-based pressure this week as the FOMC is likely to re-emphasize its ultra-dovish stance established at Jackson Hole. EM FX should benefit but divergences should continue. US data is also likely to continue sequentially weakening. Continue reading “EM Preview for the Week Ahead”
The ECB meets tomorrow and is widely expected to stand pat. Macro forecasts may be tweaked modestly and there are some risks of jawboning against the stronger euro, but it should otherwise be an uneventful meeting. Looking ahead, a lot of room remains for further ECB actions. We expect the ECB to increase QE at the December 10 meeting. However, another rate cut seems very unlikely, as does activation of OMT. Continue reading “ECB Preview”