Dollar Broadly Firmer Ahead of BOE Decision

  • The dollar rally is intensifying
  • UK Prime Minister May has arrived in Brussels to meet with EU leaders
  • Bank of England is expected to keep rates steady at 1.50%
  • The European Commission updated its economic forecasts; Germany reported weak December IP
  • Reserve Bank of India delivered a dovish surprise; Philippines remained on hold
  • Czech, Mexico, and Peru central banks are expected to stand pat too

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Dollar Firm From Relative Strength in the US Economy

  • The dollar rally continues as developments elsewhere underscore its relative attractiveness
  • President Trump gave his delayed State of the Union address last night
  • Press reports suggest that the ECB is not yet convinced of the need for another TLTRO
  • After holding rates steady this week, RBA shifted more dovish; Canada January Ivey PMI will be reported
  • Bank of Thailand kept rates steady at 1.75%, as expected
  • National Bank of Poland is expected to keep rates steady at 1.5%; Brazil COPOM is expected to keep rates steady at 6.5%

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Dollar Remains Resilient as Eurozone and UK Outlooks Worsen

  • The dollar’s continued resilience is remarkable
  • President Trump will give his delayed State of the Union address tonight
  • Eurozone data show continued weakness; UK reported weak PMI readings
  • Czech Republic, Slovakia, and Hungary reported weak retail sales for December
  • Reserve Bank of Australia left rates steady at 1.50%, as expected
  • Colombia January CPI is expected to rise 3.26% y/y vs. 3.18% in December

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Drivers for the Week Ahead

  • The dollar’s resilience is remarkable; the US economy still looks like a relative star
  • The US data backlog will start to clear up this week
  • President Trump will give his delayed State of the Union address Tuesday
  • Eurozone data this week should show continued weakness
  • Bank of England meets Thursday
  • Canada reports key January data this week; Reserve Bank of Australia meets Tuesday
  • In EM, the central banks of the Philippines, Czech Republic, Thailand, Poland, Brazil, India, Mexico, Peru, and Russia all meet

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Markets Calm, Dollar Resilient Ahead of US Jobs Data

  • Despite low US rates, the dollar remains resilient
  • The highlight today will be the US the jobs report
  • Eurozone reported January preliminary CPI and final manufacturing PMIs
  • UK reported weak January manufacturing PMI; it is mostly quiet on the Brexit front
  • The US-China trade talks wrapped up yesterday
  • China reported weak Caixin manufacturing PMI; virtually every other EM PMI worsened too

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Dollar Remains Soft Post-FOMC, But Losses Limited Today

  • The Fed delivered an extremely dovish hold; US rates have responded accordingly
  • Today, some of the delayed US data will start to trickle out
  • Eurozone Q4 GDP data was reported; Germany reported simply awful December retail sales
  • China reported official January PMI
  • The Fed gave EM a gift yesterday with its dovish messaging
  • Colombia central bank is expected to keep rates steady at 4.25%

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Dollar Mixed, Markets Calm Ahead of FOMC Decision

  • UK Parliament rejected most of the proposed Brexit amendments yesterday
  • Markets seem to be counting on a delay to Article 50 but we think the odds of a no-deal Brexit have risen
  • The FOMC decision is due this afternoon
  • The US Treasury makes its quarterly refunding announcement
  • US-China trade talks begin today in Washington
  • Japan reported firm December retail sales; Australia reported Q4 CPI
  • Turkey central bank released its quarterly inflation report; Mexico Q4 GDP is expected to grow 2.0% y/y; Chile central bank is expected to hike rates 25 bp to 3.0%

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Dollar Mixed as Markets Calm and Await Fresh Drivers

  • Markets have steadied today after risk-off sentiment intensified Monday
  • China’s provinces are submitting lower growth forecasts for 2019
  • US-China relations are likely to remain strained after the US filed criminal charges against Huawei
  • The two-day FOMC meeting begins today, with the decision due Wednesday afternoon
  • There will be some minor US data today
  • UK Parliament will vote today on amendments to Prime Minister May’s Brexit deal
  • The US imposed sanctions on Venezuela’s state-owned oil company PDVSA
  • National Bank of Hungary is expected to keep policy steady

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Drivers for the Week Ahead

  • The shutdown ended Friday, at least temporarily
  • This Friday sees the most important data point for the US, the jobs report
  • The FOMC meets this week, with the decision due Wednesday afternoon
  • The US Treasury makes its quarterly refunding announcement on Wednesday too
  • Chinese Vice Premier Liu joins trade talks that begin Wednesday; China reports official January PMI Thursday
  • Some key eurozone data will be reported this week
  • UK Parliament will vote Tuesday on amendments to Prime Minister May’s Brexit deal
  • EM remains subject to the whims of global developments

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