Drivers for the Week Ahead

  • The dollar has finally gotten some traction; the media embargo has ended and Fed speaking engagements pick up this week
  • CFNAI remains the single best indicator to gauge US recession risks; the US economy remains in solid shape
  • Markit reports eurozone flash PMI readings Monday; Brexit talks will continue this week at the technical level
  • RBNZ meets Wednesday and is expected to keep rates steady at 1.0%; the central banks of Colombia, Mexico, Hungary, Czech Republic, Thailand, and Philippines meet this week Continue reading “Drivers for the Week Ahead”

Bank of Japan Preview

The Bank of Japan meets Thursday. No change in policy is expected ahead of the October 1 consumption tax hike. Risks of easing will rise if the economy continues to soften as we move toward year-end. Continue reading “Bank of Japan Preview”

Some Thoughts on the Fed and Oil Shocks

Oil prices have spiked after the weekend attack on Saudi oil facilities.  Will it impact the Fed tomorrow?  No.  We compare the current (but still unfolding) situation to past oil shocks from the 1970s and discuss the policy responses taken.     Continue reading “Some Thoughts on the Fed and Oil Shocks”

Drivers for the Week Ahead

  • The weekend bombing of Saudi oil facilities is the major story
  • The FOMC meeting Wednesday is the main event; Fed Funds futures continue to adjust
  • US rates continue to adjust, as they should; US economy remains in solid shape
  • BOE, BOJ, SNB, and Norges Bank all meet Thursday
  • In EM, the central banks of South Africa, Brazil, Indonesia, and Taiwan meet Continue reading “Drivers for the Week Ahead”

ECB Preview

The ECB meets Thursday and is widely expected to deliver a package of easing measures.  Here, we preview some of the possible actions as well as implications for the euro and other risk assets. Continue reading “ECB Preview”

Drivers for the Week Ahead

  • Despite last week’s setback, we remain dollar bulls
  • The US data highlight of the week will be August retail sales; August PPI will be reported Wednesday and CPI Thursday
  • ECB meets Thursday and is expected to cut rates and restart QE
  • The UK has a heavy data week that’s front-loaded; at this point, the fundamentals are secondary as all eyes are on Brexit
  • Despite some positive developments last week, we think the three key issues for risk assets have not been resolved yet
  • In EM, the central banks of Poland, Turkey, and Peru meet Continue reading “Drivers for the Week Ahead”

Latest Thoughts on the US Economic Outlook

The US economy is starting to show cracks from the ongoing trade war.  While we do not want to make too much from one data point, we acknowledge that headwinds are building whilst US recession risks are rising.     Continue reading “Latest Thoughts on the US Economic Outlook”

Drivers for the Week Ahead

  • We remain dollar bulls; this is an important data week for the US
  • Final August eurozone manufacturing PMIs will be reported Monday; UK reports August PMIs this week
  • RBA meets Tuesday and is expected to keep rates steady at 1.0%; BOC meets Wednesday and is expected to keep rates steady at 1.75%
  • Swedish Riksbank meets Thursday and is expected to keep rates steady at -0.25%; in EM, the central banks of Chile and Russia meet Continue reading “Drivers for the Week Ahead”

Drivers for the Week Ahead

  • It turns out that Powell’s Jackson Hole speech was one of the least important developments last Friday
  • Recession fears spiked again after China announced retaliatory tariffs on $75 bln of US goods; Trump “hereby ordered” US companies to leave China and also hiked tariffs again
  • The US economy remains in solid shape, at least for now; we must acknowledge that the risk of recession has risen sharply
  • Trump said that a US-Japan trade deal has been agreed to in principle; Abe demurred
  • In EM, the central banks of Hungary, Israel, and Korea meet; China reports official August PMI readings Saturday Continue reading “Drivers for the Week Ahead”