• UK Prime Minister May is facing a wave of resignations; the odds of a no-deal Brexit have risen significantly
• UK reported weak retail sales in October
• The European Commission (EC) must now decide how to deal with Italy’s defiance
• During the North American session, US October retail sales will be reported
• Australia reported strong October jobs data
• Indonesia and Philippines hiked 25 bp; Mexico expected to follow suit and hike 25 bp

Continue reading “Sterling Pounded as Risks of No-Deal Brexit Rise”

• The dollar remains bid as the usual drivers remain in play
• The highlight today will be the US October CPI report
• Oil is making new lows for this move as recent Saudi plan to cut output next year was just a speed bump
• Eurozone reports Q3 GDP; UK reports October CPI
• Japan reported Q3 GDP; China reported October retail sales and IP
• Mexican assets remain under pressure as political risks are rising
• Bank of Thailand kept rates steady, as expected; Colombia reports September retail sales and IP

Continue reading “Dollar Firm as Risks Pile Up”

• The dollar is consolidating its recent gains as global equity markets try to stabilize
• Italy must respond to the EU’s request to revise its draft budget proposal by today
• UK reported labor market data
• During the North American session, the US reports October budget data
• China reported slower than expected money and loan growth in October
• We would downplay reports of talks between Mnuchin and Liu; EM should remain under pressure
• Poland reports September trade and current account data; Brazil September retail sales are expected to rise 1.6% y/y

Continue reading “Dollar Consolidates as Equity Markets Stabilize”

• The dollar rally has resumed in the wake of the FOMC meeting last week
• The US reports October budget data, CPI, and retail sales this week
• Italy must respond to the EU’s request to revise its draft budget proposal by Tuesday; Eurozone reports Q3 GDP Wednesday
• The UK has a busy data week; Brexit uncertainty has intensified with the resignation of another minister
• China reports money and new loan data this week, but no date has been scheduled
• The central banks of Thailand, Indonesia, the Philippines, and Mexico meet this week

Continue reading “Drivers for the Week Ahead”

• Risk off sentiment is picking up
• The FOMC left rates steady yesterday, as expected; it painted a fairly upbeat picture
• To repeat, we think the US drivers that have proven dollar-supportive this year will reassert themselves
• Italian officials are pushing back against EU criticism of the budget
• EM FX remains under pressure as the dollar recovers and risk off sentiment picks up

Continue reading “Dollar Firms as Risk Off Sentiment Picks Up”

• The two-day FOMC meeting ends with a decision today at 2 PM ET
• The US drivers that have proven dollar-supportive this year will reassert themselves
• China reported stronger than expected trade data for October
• The EU sees Italy’s budget deficit rising above the -3% of GDP limit
• RBNZ kept rates steady at 1.75%, as expected; Bank Negara kept rates steady at 3.25%, as expected
• MXN has been underperforming this week; Peru central bank is expected to keep rates steady at 2.75%

Continue reading “Dollar Firms as US Rates Edge Higher”

• The big story is the US midterm elections
• The current US fiscal stance and macro outlook remain intact and the Fed will feel comfortable tightening rates further
• While the knee-jerk reaction today is to push US yields down and sell the dollar, we think the previous drivers will re-assert themselves
• RBNZ decision will come in the North American afternoon
• EM FX is rallying as the dollar comes under broad-based pressure; Poland is expected to keep rates steady at 1.5%

Continue reading “Dollar and US Yields Soften After Midterm Elections”

• Markets await the results of today’s US midterm elections
• US rates are struggling to maintain upward momentum
• Italian Finance Minister Tria refuted press reports that he was going to present a revised draft budget to the EU
• Eurozone reported final services and composite PMI readings for October
• RBA left policy unchanged last night, as expected
• Philippines October CPI remained steady at 6.7%y/y; Brazil COPOM released its minutes

Continue reading “Dollar Firm, Markets Calm Ahead of US Midterm Elections”

• The US mid-term elections will be held Tuesday
• The two-day FOMC meeting ends with a decision Thursday
• The US 10-year yield rose to trade near 3.22% Friday
• China continues its data deluge; President Xi appears to be taking a hardline approach
• RBA meets Tuesday and RBNZ meets Thursday; neither are expected to move on rates
• EM FX got some traction last week as the dollar rally stalled but has come under pressure again this week

Continue reading “Drivers for the Week Ahead”