EM Preview for the Week Ahead

EM has been able to get some traction as markets basically shrugged off the risk-off sentiment after the Iran attacks.  This week’s planned signing of the Phase One trade deal should help boost EM further, but we remain cautious.  The Iran situation is by no means solved, and we see periodic bouts of risk-off sentiment coming from smaller skirmishes.  The World Bank also sounded a warning bell last week with its downward revisions to its global growth forecasts. Continue reading “EM Preview for the Week Ahead”

Dollar Remains Firm Ahead of US Jobs Data

  • The debate over the cause of Ukrainian jet crash continues to rage on, but with few consequences for markets; we remain bullish as the dollar continues to edge higher
  • The US December jobs data is the highlight; Canada also reports December jobs data
  • Brazil December IPCA inflation is expected to rise to 4.24% y/y
  • UK Prime Minister Boris Johnson pushed his Withdrawal Agreement bill through the final hurdle in the House of Commons yesterday
  • Japan reported weak November household spending; Australia reported firm November retail sales Continue reading “Dollar Remains Firm Ahead of US Jobs Data”

Dollar Builds on Gains as Iran Tensions Ease

  • Markets have reacted positively to President Trump’s press conference yesterday, while the dollar continues to gain traction
  • The North American session is quiet in terms of US data
  • Mexico reports December CPI; Peru is expected to keep rates steady at 2.25%
  • German November IP was slightly better than expected but still tepid; sterling took a hit on dovish comments by outgoing BOE Governor Carney
  • Israel is expected to keep rates steady at 0.25%
  • China reported December CPI and PPI; Thailand announced new measures to lean against currency strength Continue reading “Dollar Builds on Gains as Iran Tensions Ease”

Outcomes and Opportunities from the Iran Conflict

In this piece we try to answer some of the lingering questions following the events in Iran and explore resulting opportunities. Continue reading “Outcomes and Opportunities from the Iran Conflict”

Dollar Firm, Markets Fairly Calm After Iran Retaliates

  • Markets didn’t have to wait long for Iran to retaliate; the dollar continues to gain traction
  • The spike in oil prices should be on the Fed’s radar screen; WIRP suggests that a 25 bp rate cut is now fully priced in for 2020
  • ADP jobs, weekly mortgage applications and November consumer credit will be reported
  • German factory orders for November contracted sharply by -1.3% m/m (-6.5% y/y), far worse than expected; BOE Governor Carney made some dovish comments
  • Japan reported weaker than expected November cash earnings; AUD made a new low for this move overnight near .6850 but has since stabilized Continue reading “Dollar Firm, Markets Fairly Calm After Iran Retaliates”

Some Thoughts (and Prayers) on the Australian Wildfires

The wildfires rage on in Australia. Here, we discuss the potential economic impact and the implications for fiscal and monetary policy. Ongoing uncertainty is likely to weigh on the Australian dollar for now, but there is scope for equities and bonds to outperform in 2020. It is very difficult to bring a dispassionate, analytical voice to such a tragedy, and our hearts go out to our friends and colleagues in Australia.

Continue reading “Some Thoughts (and Prayers) on the Australian Wildfires”

Dollar Firm as Risk-Off Impulses Ease

  • Risk-off impulses have eased but the situation remains fragile
  • US and Canada data schedule is heavy today
  • Eurozone preliminary December inflation accelerated to 1.3% y/y, as expected; After eight months of deadlock in Spain, it looks as if Pedro Sanchez will be able to form a government
  • Markit reported weak final December Japan services and composite PMI readings; AUD continues to underperform
  • Onshore CNY has appreciated 0.4% to its strongest level against USD since August; Philippines December CPI came in much higher than expected Continue reading “Dollar Firm as Risk-Off Impulses Ease”

Dollar and Equities Soft as Markets Return to Risk-Off Territory

  • We are facing a classic risk off move from recent geopolitical events
  • Recent price action in the FX market has proven difficult to analyze
  • The US has a busy data week, capped off with December jobs data Friday
  • UK and eurozone reported strong final December services and composite PMIs
  • The Chinese government appointed a new head of the liaison office for Hong Kong Continue reading “Dollar and Equities Soft as Markets Return to Risk-Off Territory”

Drivers for the Week Ahead

  • Geopolitical concerns are roiling global markets
  • Recent price action in the dollar has been confounding, to put it mildly
  • The US has a busy data week, capped off with December jobs data Friday; the US economy is still doing better than anticipated in Q4
  • Canada has a busy data week; final eurozone and UK services and composite PMI readings will be seen Monday Continue reading “Drivers for the Week Ahead”