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- US-China tensions are still rising; we retain our strong dollar call
- FOMC minutes will be released; Canada reports March retail sales
- Brexit headlines came roaring back yesterday; we remain bearish on sterling
- Japan exports contracted for the fifth straight month; Korea is getting more concerned about the weak won
- South Africa reported softer than expected April CPI; SARB on hold tomorrow Continue reading “Rally Stalls as Dollar Consolidates Recent Gains”
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- The dollar rally has resumed as the divergence theme remains alive and well
- There is mounting political risk in the UK; sterling remains heavy
- Japan reported weak April department store sales; dovish RBA minutes were released
- Thailand Q1 GDP growth slowed as expected to 2.8% y/y; Korea reported weak trade data for the first 20 days of May
- Turkish central bank effectively loosened policy after taking limited steps to stabilize the lira Continue reading “Dollar Firm as Divergence Theme Returns”
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- We believe the dollar rally remains on track
- Eurozone political noise came from an unexpected source
- Japan Q1 GDP grew 2.1% SAAR vs. -0.2% expected; AUD bounce from the shock weekend election results has run out of steam
- India exit polls suggest that Prime Minister Modi has won another term; Chile Q1 GDP is expected to grow 1.8% y/y
- Bank of Israel is expected to keep rates steady at 0.25% Continue reading “Dollar Rally Derailed by Surprise Election Results in Australia and India”
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- Rhetoric from both sides is getting more heated, making a US-China deal seem a long way off (if at all)
- We would downplay headlines claiming the PBOC won’t let the yuan weaken past 7 per dollar
- Jitters about Italy helped push the euro lower yesterday and that has continued today
- The US announced it would cut tariffs on Turkish steel by half to 25%
- Singapore reported weak April trade data; BRL real continues to underperform Continue reading “Dollar Firm as Trade Tensions Rise”
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- The Trump administration is fighting a trade war on many fronts
- Recent developments suggest that China has become the sole focus for the trade hawks
- We see no letup in the hardline stance being taken against all US trading partners
- The Atlanta Fed’s GDPNow model is now tracking 1.1% SAAR for Q2, down from 1.6% previously
- Australia reported April labor market data
- Bank Indonesia kept rates steady at 6.0%, as expected; Banco de Mexico is expected to keep rates steady at 8.25% Continue reading “Dollar Mixed as Markets Await Fresh Drivers”
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- The dollar is getting traction even as US rates continue to fall
- The US data highlight is April retail sales
- Trump’s efforts to influence the Fed continue
- China reported weak April IP and retail sales
- Canada reports April CPI
- Turkish lira remains under pressure; Poland is expected to keep rates steady at 1.5%.
- Argentina April CPI is expected to rise 56.3% y/y; Brazil COPOM minutes were surprisingly dovish Continue reading “Dollar Firms Even as US Rates Fall and Curve Inverts”
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- Global markets have calmed down after yesterday’s bloodbath
- Yet the tit for tat continues; the big surprise was that China is reportedly discussing the sale of UST holdings
- The dollar remains firm even though markets are pricing in more than one rate cut this year
- UK reported mixed labor market data; implied rates on short sterling futures continue to fall
- Sweden reported April CPI
- MSCI EM FX has given up over 75% of this year’s rally; Brazil COPOM minutes will be released Continue reading “Dollar Mixed as Some Calm Returns to Global Markets”
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- Trade tensions are feeding the negative tone of global financial markets as the week begins
- The yuan is the worst performing currencies in EM over the past week at -1.6% vs. USD
- We retain our bullish dollar call for now with the expectations that the trade war will eventually end with a compromise and no recession
- Australia reported weak March home loans; Norway reported weak Q1 GDP
- A long and protracted trade war is another headwind for EM to contend with
- Turkey April current account came in at -$589 mln; India April CPI is expected to rise 2.99% y/y Continue reading “Dollar Firm as Friday’s Optimism Gives Way to Greater Pessimism on Trade”
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- Higher US tariffs on Chinese goods went into effect today at midnight; markets should go further into risk-off trading
- US data highlight today is April CPI; Fed’s Brainard, Bostic, and Williams speak
- Canada highlight will be April jobs data; RBA released its Statement on Monetary Policy
- RBA released a dovish quarterly Statement on Monetary Policy
- UK reported Q1 GDP; Norway reported April CPI
- Japan reported March household spending and cash earnings; risk-off trading should push USD/JPY lower
- ANC is headed to a solid victory; Brazil April IPCA inflation is expected at 5.0% y/y Continue reading “Eerie Calm in Global Markets as Trade War Escalates”
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