Dollar Firms Even as US Rates Fall and Curve Inverts

  • The dollar is getting traction even as US rates continue to fall
  • The US data highlight is April retail sales
  • Trump’s efforts to influence the Fed continue
  • China reported weak April IP and retail sales
  • Canada reports April CPI
  • Turkish lira remains under pressure; Poland is expected to keep rates steady at 1.5%.
  • Argentina April CPI is expected to rise 56.3% y/y; Brazil COPOM minutes were surprisingly dovish Continue reading “Dollar Firms Even as US Rates Fall and Curve Inverts”

From the Securities Lending Trading Desk – Week of May 13th

In the Americas, lending fees have skyrocketed for coal mining company, Cloud Peak Energy. In Asia Pacific, there’s an increase in demand for Softbank Corp following an announcement that it will become the largest shareholder of Yahoo Japan. In Europe, demand continues for Purplebricks as one of its founding partners exits the company.

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Dollar Mixed as Some Calm Returns to Global Markets

  • Global markets have calmed down after yesterday’s bloodbath
  • Yet the tit for tat continues; the big surprise was that China is reportedly discussing the sale of UST holdings
  • The dollar remains firm even though markets are pricing in more than one rate cut this year
  • UK reported mixed labor market data; implied rates on short sterling futures continue to fall
  • Sweden reported April CPI
  • MSCI EM FX has given up over 75% of this year’s rally; Brazil COPOM minutes will be released Continue reading “Dollar Mixed as Some Calm Returns to Global Markets”

Some Thoughts on the Upcoming Semiannual US Treasury FX Report

The US Treasury will soon release its semiannual report to Congress on “Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States.” As well as adjusting the criteria for being named a currency manipulator, more countries will reportedly come under scrutiny. Yet despite the current trade frictions, we do not think China will be named as a manipulator. Continue reading “Some Thoughts on the Upcoming Semiannual US Treasury FX Report”

Dollar Firm as Friday’s Optimism Gives Way to Greater Pessimism on Trade

  • Trade tensions are feeding the negative tone of global financial markets as the week begins
  • The yuan is the worst performing currencies in EM over the past week at -1.6% vs. USD
  • We retain our bullish dollar call for now with the expectations that the trade war will eventually end with a compromise and no recession
  • Australia reported weak March home loans; Norway reported weak Q1 GDP
  • A long and protracted trade war is another headwind for EM to contend with
  • Turkey April current account came in at -$589 mln; India April CPI is expected to rise 2.99% y/y Continue reading “Dollar Firm as Friday’s Optimism Gives Way to Greater Pessimism on Trade”

Drivers for the Week Ahead

  • Trade tensions should dictate the tone of global financial markets this week, and it won’t be pretty
  • The US data highlight this week is April retail sales Wednesday
  • A deeper and more protracted trade war is one of those exogenous shocks that could tip the US into recession
  • In the eurozone, the focus this week is more political than economic
  • UK reports labor market data Tuesday; Canada reports April CPI Wednesday; Australia reports April labor market data Thursday
  • In EM, several central banks meet this week Continue reading “Drivers for the Week Ahead”

EM Preview for the Week Ahead

EM FX ended last week on a firm note on optimism that a trade deal will be reached. We think that optimism is misplaced and so look for EM weakness to resume this week. Indeed, rhetoric from both sides over the weekend suggest things will get worse before they get better. Continue reading “EM Preview for the Week Ahead”

From the Securities Lending Trading Desk – Week of May 6th

In the Americas, New Age Beverages Corp. (NBEV) remains a directional focus name. In Asia Pacific, Chinese automobile manufacturer Great Wall Motor Company’s shares slipped. In Europe, securities lending demand for Thomas Cook (TCG LN) increased.

Continue reading “From the Securities Lending Trading Desk – Week of May 6th”