Dollar Firm as Trade Optimism Grows

  • Signs are still pointing to a Phase One trade deal in the coming weeks
  • Eurozone and UK reported final manufacturing PMIs
  • Moody’s lowered the outlook on South Africa’s Baa3 rating to negative; Fitch raised Turkey’s outlook to stable from negative whilst affirming its BB- rating
  • Philippine central bank Governor Diokno said easing for this year is over; Kiwi rose to a two-month high on positive trade developments Continue reading “Dollar Firm as Trade Optimism Grows”

Drivers for the Week Ahead

  • There are no major US data releases this week, which means that the dollar is likely to remain on its back foot
  • US-China trade talks are progressing
  • The US economy remains solid; Canada has a heavy data week; eurozone reports final PMIs for October
  • The Brexit Plot thickens; UK PMI readings continue; BOE meets Thursday
  • Japan has a light data week; RBA meets Tuesday Continue reading “Drivers for the Week Ahead”

EM Preview for the Week Ahead

EM should continue to benefit from the generalized improvement in the global backdrop.  Trade tensions have eased whilst the risks of a hard Brexit have fallen, at least for now.  Yet recent developments in some major EM countries underscores how important it is for investors to differentiate between the strong credits and the weak ones.  For instance, South Africa, Hong Kong, Argentina, and Chile all come with idiosyncratic risks.  Continue reading “EM Preview for the Week Ahead”

Dollar Soft Ahead of US Jobs Data

  • The dollar remains on the defensive ahead of the US jobs report; ISM manufacturing PMI will also be reported
  • UK reported October manufacturing PMI; Nigel Farage will align his Brexit Party with the Conservatives for the upcoming elections
  • Both Moody’s and Fitch are scheduled to rate South Africa
  • Efforts have begun in the US Congress to limit US government pension fund investment in China
  • China Caixin manufacturing PMI surprised on the upside; Korea reported weak trade data Continue reading “Dollar Soft Ahead of US Jobs Data”

Mexico vs. Brazil Near-Term Outlook

Both Brazil and Mexico are in a good position to benefit from the current improvement in market sentiment. However, when comparing the factors driving the currencies of both countries, we think there are relatively more near-term positives for the Mexican peso than for the Brazilian real. Continue reading “Mexico vs. Brazil Near-Term Outlook”

Dollar Softens in Wake of FOMC Decision

  • The dollar was unable to hang on to its post-FOMC gains after the Fed delivered a hawkish cut
  • With the November 16-17 APEC summit in Chile cancelled, US-China trade talks will continue over the phone
  • There is a full slate of US data reports; Colombia is expected to keep rates steady at 4.25%
  • Eurozone Q3 GDP and October CPI were reported; Turkey central bank released its quarterly inflation report
  • BOJ left rates unchanged; China reported weak official October PMI; Hong Kong reported very weak Q3 GDP Continue reading “Dollar Softens in Wake of FOMC Decision”
Dollar Mixed Ahead of FOMC Decision

Dollar Mixed Ahead of FOMC Decision

  • The dollar is treading water ahead of the FOMC decision; the Fed is widely expected to cut rates 25 bp for a third time in a row
  • Ahead of the FOMC decision, the US reports Q3 advance GDP data
  • BOC is expected to keep rates steady at 1.75%; Brazil is expected to cut rates 50 bp to 5.0%
  • December 12 elections are on in the UK; ECB is about to restart its QE purchases but Lagarde has already shifted the attention towards fiscal stimulus
  • South Africa will present its medium-term budget statement
  • Australia reported Q3 CPI data; Japan retail sales came in stronger than expected Continue reading “Dollar Mixed Ahead of FOMC Decision”

FOMC Preview

The FOMC begins a two-day meeting today with the decision due out tomorrow afternoon.  The Fed is widely expected to cut rates 25 bp for the third meeting in a row.  What’s next? Continue reading “FOMC Preview”

Dollar Firm as Two-Day FOMC Meeting Begins

  • The dollar continues to gain traction as the two-day FOMC begins; US political uncertainty has entered a new phase
  • Yesterday marked the third time that UK Prime Minister Johnson lost a vote for elections; he will try again today
  • Weak South Africa data support our call for imminent easing; the threat of sanctions against Turkey are back on the table
  • Lower than expected Tokyo October CPI was reported Continue reading “Dollar Firm as Two-Day FOMC Meeting Begins”