South African Reserve Bank Likely to Cut Rates This Week

South African Reserve Bank meets Thursday and is widely expected to start an easing cycle with a 25 bp cut. Meanwhile, President Cyril Ramaphosa must grapple with poor fundamentals and ongoing corruption investigations. Continue reading “South African Reserve Bank Likely to Cut Rates This Week”

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”

Bank of Korea May Cut as Economic Headwinds Build

Bank of Korea meets Thursday and may begin an easing cycle. However, it’s a tough call and markets are pretty much split. Meanwhile, Japan and Korea are in the midst of a diplomatic spat that risks putting further headwinds on the economy. Continue reading “Bank of Korea May Cut as Economic Headwinds Build”

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”

Drivers for the Week Ahead

  • The dollar came under pressure after Powell’s testimony last week
  • The US data highlight this week will be June retail sales Tuesday
  • The UK has a heavy data week
  • Canada reports June CPI Wednesday; RBA minutes will be released Tuesday; New Zealand reports Q2 CPI Tuesday
  • In EM, the central banks of Korea, Chile, Indonesia, and South Africa meet Continue reading “Drivers for the Week Ahead”

EM Preview for the Week Ahead

EM FX was mixed last week despite the dovish signals from the Fed’s Powell. Weak data from emerging Asia support the notion that the ongoing US-China trade war will continue to weigh on global growth and trade, which is negative for EM. We remain cautious on EM, especially given our less dovish take on the Fed. Continue reading “EM Preview for the Week Ahead”

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”

Drivers for the Week Ahead

  • The June jobs data support our view that the US economy remains in solid shape
  • FOMC minutes will be released Wednesday; Fed Chair Powell gives his semiannual Humphrey-Hawkins testimony
  • US data highlights are June CPI Thursday and PPI Friday
  • UK reports May GDP, IP, construction output, and trade Wednesday
  • Bank of Canada meets Wednesday and is expected to keep rates steady at 1.75%
  • EM FX remains vulnerable; the shock firing of central bank Governor Murat Cetinkaya over the weekend may weigh on wider EM Continue reading “Drivers for the Week Ahead”