Some Thoughts on Potential US FX Intervention

Press reports suggest an intense debate is raging within the Trump administration regarding a weak dollar policy. That it’s even being discussed marks a significant departure from previous administrations, where a strong dollar has typically been viewed as being in the best interests of the US. Continue reading “Some Thoughts on Potential US FX Intervention”

DM Sovereign Rating Model For Q3 2019

We have produced this ratings model to assist investors in assessing relative sovereign risk over a wide range of Developed Markets (DM), 33 in all. We have decided to adhere to MSCI methodology and have moved Hong Kong, Israel, and Singapore from EM to DM. Continue reading “DM Sovereign Rating Model For Q3 2019”

Drivers for the Week Ahead

  • The dollar has strengthened as we enter what is perhaps the most eventful week of the year
  • The FOMC meets Wednesday and is widely expected to cut rates 25 bp
  • White House advisor Kudlow ruled out any sort of currency intervention by the US
  • The US July jobs report Friday will be the key data release this week
  • US-China trade talks resume Monday in Shanghai; China reports official July PMI readings Tuesday
  • Bank of Japan meets Tuesday; Bank of England meets Thursday
  • In EM, the central banks of Brazil and Czech Republic meet Continue reading “Drivers for the Week Ahead”

Drivers for the Week Ahead

  • The dollar is coming off a volatile week
  • The most important US data release this week is the June Chicago Fed National Activity Index Monday
  • Preliminary July eurozone PMI readings will be reported Wednesday; ECB meets Thursday
  • Japan has a busy data week; Prime Minister Abe’s ruling coalition won weekend elections for the Upper House
  • In EM, the central banks of Hungary (Tuesday), Turkey, (Thursday), Russia, and Colombia (both Friday) meet Continue reading “Drivers for the Week Ahead”

Some Thoughts on the Looming US Debt Ceiling Issue

The White House and Congress are trying to reach a deal before the August recess, as recent studies suggest that the money will run out in early September. Using the 2011 debt ceiling fight as an example, equities may be vulnerable near-term, while the outlook for bonds and the dollar are not so clear-cut. Continue reading “Some Thoughts on the Looming US Debt Ceiling Issue”

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”