Bank of Korea May Cut as Economic Headwinds Build

Bank of Korea meets Thursday and may begin an easing cycle. However, it’s a tough call and markets are pretty much split. Meanwhile, Japan and Korea are in the midst of a diplomatic spat that risks putting further headwinds on the economy. Continue reading “Bank of Korea May Cut as Economic Headwinds Build”

Drivers for the Week Ahead

  • The dollar came under pressure after Powell’s testimony last week
  • The US data highlight this week will be June retail sales Tuesday
  • The UK has a heavy data week
  • Canada reports June CPI Wednesday; RBA minutes will be released Tuesday; New Zealand reports Q2 CPI Tuesday
  • In EM, the central banks of Korea, Chile, Indonesia, and South Africa meet Continue reading “Drivers for the Week Ahead”

Drivers for the Week Ahead

  • The June jobs data support our view that the US economy remains in solid shape
  • FOMC minutes will be released Wednesday; Fed Chair Powell gives his semiannual Humphrey-Hawkins testimony
  • US data highlights are June CPI Thursday and PPI Friday
  • UK reports May GDP, IP, construction output, and trade Wednesday
  • Bank of Canada meets Wednesday and is expected to keep rates steady at 1.75%
  • EM FX remains vulnerable; the shock firing of central bank Governor Murat Cetinkaya over the weekend may weigh on wider EM Continue reading “Drivers for the Week Ahead”

Uridashi Issuance in H1 2019

So far this year, foreign currency Uridashi issuance has totaled $2.6 bln. The Q1 total was about $2.5 bln and so issuance basically came to a screeching halt in Q2. Annualized, this amounts to $5.2 bln and would be the lowest since the $2.2 bln issued in 2002. Continue reading “Uridashi Issuance in H1 2019”

Drivers for the Week Ahead

  • The G20 delivered as much good news for risk sentiment as one could want
  • There will be several major US data releases this week; Fed speaking engagements are surprisingly few this week
  • Eurozone final June manufacturing PMI will be reported Monday; BOJ released its Q2 Tankan report
  • RBA meets Tuesday and is expected to cut rates 25 bp to 1.0%; Swedish Riksbank meets Wednesday and is expected to keep rates at -0.25%
  • China reported weak PMI readings for June; Poland is the only EM central bank to meet and is expected to keep rates steady Continue reading “Drivers for the Week Ahead”

Drivers for the Week Ahead

  • The dollar is likely to remain under pressure this week
  • Atlanta Fed GDPNow is tracking Q2 growth at 2.0% SAAR, down from 2.1% previously
  • The US yield curve is getting less inverted
  • Germany reports preliminary June CPI Thursday
  • RBNZ meets Tuesday and is expected to keep rates steady at 1.5%
  • In EM, the central banks of Mexico, Hungary, Thailand, and Czech Republic meet Continue reading “Drivers for the Week Ahead”

FOMC Post-Mortem

The Fed delivered another dovish surprise. Whilst the Fed did not pre-commit to a rate cut in July, markets are certainly taking it that way. We are maintaining our broad macro calls for now but acknowledge that excessive Fed dovishness will surely keep testing us. Continue reading “FOMC Post-Mortem”

Drivers for the Week Ahead

  • The FOMC begins a two-day meeting Tuesday with decision to be delivered Wednesday
  • The US retail sales data are a game changer
  • Bank of England meets Thursday; the Tory leadership race continues this week
  • Bank of Japan meets Thursday; eurozone June flash PMIs will be reported Friday
  • Norges Bank meets Thursday and is expected to hike rates 25 bp to 1.25%
  • Several EM central banks meet this week; Korea reports trade data for the first 20 days of June Friday Continue reading “Drivers for the Week Ahead”

HKD Gains Despite Growing Unrest

Despite rising social unrest, the Hong Kong dollar traded today at its strongest level since December 18. While we see no threat to the peg, ongoing weakness in EM is likely to prevent HKD from strengthening too much more. Continue reading “HKD Gains Despite Growing Unrest”