Saturday , January 16 2021
Home / Win Thin
Win Thin

Win Thin

Win Thin is a senior currency strategist with over fifteen years of investment experience. He has a broad international background with a special interest in developing markets. Prior to joining BBH in June 2007, he founded Mandalay Advisors, an independent research firm that provided sovereign emerging market analysis to institutional investors. He received an MA from Georgetown University in 1985 and a B.A. from Brandeis University 1983. Feel free to contact the Zurich office of BBH

Articles by Win Thin

Dollar Runs Out of Steam as Sterling Leads the Way

4 days ago

The US curve continues to steepen; real US yields have become less negative; UST supply will remain an issue as $38 bln of 10-year notes will be sold today; Brazil reports December IPCA inflation
Yields in Europe and UK are following the trend higher in the US markets, but not as fast; Italy is facing another bout of political instability; BOE Governor Bailey pushed back against negative rates
Japan’s government will declare a state of emergency for Osaka, Kyoto, and Hyogo prefectures as soon as tomorrow; Malaysia assets are underperforming on further lockdowns
The dollar bounce may be running out of steam. Market sentiment has improved, with equity markets higher and bond prices lower. DXY is down today after four straight days higher.  Given the position skew,

Read More »

Drivers for the Week Ahead

27 days ago

As of this writing, a stimulus deal is close and a US government shutdown Monday may have been avoided; the Fed gave US banks the go-ahead to resume stock buybacks Friday; Fed manufacturing surveys for November will continue to roll out; weekly jobless claims will be reported on Wednesday due to the holiday
All eyes remain on Brexit; things are getting very tricky now in terms of timing; with the UK going into stricter lockdown, we believe the pressure is building on Prime Minister Johnson to strike a deal
Japan has a busy week; the BOJ will keep markets guessing after it unexpectedly announced a policy framework review; Australia begins reporting November data
Brexit concerns are weighing on market sentiment as the new week gets under way.  This  is giving the

Read More »

Dollar Continues to Soften Ahead of FOMC Decision

28 days ago

Optimism on a stimulus deal remains high; the FOMC decision will be key; the dollar tends to weaken on recent FOMC decision days November retail sales will be the US data highlight; Markit reports preliminary December PMI readings; Canada reports November CPI
The latest Brexit headlines are sounding optimistic; UK November CPI came in weaker than expected; eurozone December preliminary PMI provided an upside surprise; EU regulators lifted their curb on bank dividends
Japan reported weak November trade and mixed preliminary December PMI readings; Australia will challenge China at the WTO
Improved market sentiment continues to weigh on the dollar.  DXY is down for the third straight day and four of the past five, and traded today at a new low for this cycle near

Read More »

Some Thoughts on the Latest Treasury FX Report

December 18, 2020

The US Treasury’s latest “Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States” report named Switzerland and Vietnam as currency manipulators. Both countries came under scrutiny in the last report and so this week’s announcement was only surprising in that it was made by a lame duck administration that will be gone in a month.
RECENT DEVELOPMENTS
This is the first Treasury FX report since January. In previous administrations, the semi-annual reports were typically released in April and October. However, the trade war disrupted this cycle. In 2019, only one report was issued and that was in May. Under President Trump, the report has become highly politicized but that is likely to change under President Biden. Please see A Brief

Read More »

FOMC Preview

December 15, 2020

The two-day FOMC meeting starts tomorrow and wraps up Wednesday afternoon. While no policy changes are expected, we highlight what the Fed may or may not do. We expect a dovish hold, with Powell underscoring the growing downside risks facing the US economy in the coming months.
RECENT DEVELOPMENTS
The US outlook has worsened since the November FOMC meeting. Infection numbers are making new highs with no sign of abating. There is no national strategy to contain the virus, so we are getting a hodgepodge of state level responses. With the pandemic stretching on, markets are realizing that the current phase of the recovery is stalling out right now, and that the full recovery will be pushed out further into next year with the likelihood of tighter restrictions

Read More »

Drivers for the Week Ahead

December 13, 2020

The Senate passed a stopgap bill late Friday that will keep the government funded until midnight this Friday; optimism on a stimulus deal appears to be picking up; the two-day FOMC meeting ending with a decision Wednesday will be important
November retail sales Wednesday will be the US data highlight for the week; Fed manufacturing surveys for December will start to roll out; weekly jobless claims Thursday will be important; Canada has a busy data week
Brexit talks have been extended; BOE, Norges Bank, and SNB decisions come Thursday and no changes are expected; UK reports some key data; eurozone has a fairly quiet week
Japan has an eventful data week; BOJ wraps up its two-day meeting Friday; Australia has a fairly busy week
Optimism on Brexit and US stimulus is

Read More »

Dollar Rally Running Out of Steam Ahead of ECB Decision

December 10, 2020

Stimulus talks drag on; US November CPI will be today’s data highlight; US Treasury wraps up a big week of auctions today with $24 bln of 30-year bonds on offer
The November budget statement will hold some interest; weekly jobless claims will be closely watched; Brazil left rates unchanged at 2.0% but made some important hawkish changes to its forward guidance; Peru is expected to keep rates steady at 0.5%
Brexit negotiations have been extended again; two-day EU summit begins; ECB is widely expected to add more stimulus; UK data was mostly weaker in October
Japan estimates the latest stimulus package will boost GDP by JPY20.1 trln; China will start collecting extra duties on Australian wine starting tomorrow; default risk in the Chinese corporate sector remains a

Read More »

Jittery Markets Keep the Dollar Afloat (For Now)

December 9, 2020

US fiscal negotiations are taking longer than expected; US Treasury auctions $56 bln of 3-year notes; we believe the Fed is watching the yield curve closely; Brazil reports November IPCA inflation; Chile kept rates on hold at 0.50% and tweaked its asset purchase program
UK Prime Minister Johnson is going to Brussels for high-level Brexit negotiations with EC President von der Leyen; there are no signs of progress in the EU budget and recovery fund negotiations; Germany reported a firm December ZEW survey
Japan reported October household spending, real cash earnings, current account, and final Q3 GDP; stimulus efforts continue in Japan
The dollar is stabilizing a bit. Given all the event risk this week, it’s not that surprising that markets on the defensive.

Read More »

Some Thoughts on a Potential US Government Shutdown

December 6, 2020

The US Congress has returned from recess with a lot on its plate.  Priority must be given to passing an omnibus spending bill that prevents a government shutdown after December 11. The next round of fiscal stimulus has taken on greater urgency and may be attached to the wider spending bill.
RECENT DEVELOPMENTS
The Senate returned from recess Monday and the House returns today. Much of the work ahead will be done behind the scenes as lawmakers negotiate passage of an omnibus spending bill by December 11 in order to avert a government shutdown.  While we expect a deal to be struck, it is possible that Congress will be forced to pass another continuing resolution that would keep the government temporarily funded as negotiations continue.
We are in this current

Read More »

Dollar Stabilizes but Weakness to Resume

December 5, 2020

There are new efforts to pass another round of stimulus sooner rather than later; we warn against getting too optimistic; US bond yields rose in anticipation of stimulus; Fed Chair Powell and Treasury Secretary Mnuchin gave somewhat conflicting outlooks for the US
The Fed releases its Beige Book report for the December FOMC meeting; ADP releases its private sector jobs estimate, with consensus at 430k; Brazil outperformed yesterday on positive fiscal comments from President Bolsonaro
The UK became the first country to approve a Covid-19 vaccine; on the Brexit front, headlines have been mixed but that’s nothing unusual
Reports suggest the EU is likely to delay previously agreed funding to Poland and Hungary as punishment for their veto threats; Germany reported

Read More »

Dollar Plumbs New Depths With No Relief In Sight

December 3, 2020

Stimulus talks continue but the goalposts have indeed been moved; the good news is that a package before year-end is looking more likely; optimism regarding stimulus continues to buoy US yields
ISM services PMI is expected at 55.8 vs. 56.6 in October; weekly jobless claims data will be reported; Fed Beige Book report was suitably downbeat
The noise level around Brexit continues to rise are we approach the finish line; eurozone and UK data came in firmer than expected; Turkey November CPI came in well above expectations
BOJ is likely to extend its emergency measures at the December 17-18 meeting; Australia reported mixed October trade data; Caixin reported strong November services and composite PMI readings
Dollar weakness continues. DXY traded at the lowest level

Read More »

Dollar Consolidates Ahead of Thanksgiving Holiday

November 28, 2020

The divergence in developed markets yield curves continues; the dollar is consolidating ahead of the US holiday
FOMC minutes will be released; weekly jobless claims data will be released a day early; October personal income and spending will be reported; Banco de Mexico releases its quarterly inflation report
UK Chancellor Sunak’s spending review will lay out his plans for next year; South Africa reported higher than expected October CPI
Japan’s Cabinet Office maintained its “severe” assessment of the economy; RBNZ gave an upbeat outlook in its FSR, further lowering odds of negative rates; cryptocurrencies remain in the spotlight as bitcoin trades at record highs above $19,000
The divergence in developed markets yield curves continues. The US and Australian

Read More »

Dollar Weakness Resumes as Short-Covering Fades

November 25, 2020

Sentiment is being buoyed by two incrementally positive stories; cross-markets implied volatility measures continue to trend lower; dollar weakness has resumed
President-elect Biden will reportedly officially name his first cabinet picks today; Fed manufacturing surveys for November will continue to roll out; Brazil and Mexico both reports mid-November inflation readings
German IFO Business Climate survey for November was mixed; UK national lockdown will end next week; UK CBI reported its November distributive trades survey
Japan reported October department store sales; markets are reassessing RBNZ dovishness after reports that it may add house prices to its mandate
Sentiment is being buoyed by two incrementally positive stories. First, President Trump has

Read More »

Dollar Weakness Resumes as Markets Start Another Week in Risk-On Mode

November 25, 2020

Covid vaccine results from AstraZeneca and Oxford University brought another wave of optimism; dollar weakness has resumed; that said, we will refrain from making any longer-term calls for the demise of the dollar
Reports suggest President-elect Biden is pushing House Democrats to reduce the size of their fiscal package demands to unlock negotiations; Republicans have an interest in compromising
President-elect Biden has reportedly picked his diplomatic team; it’s a quiet week in the US due to the Thanksgiving holiday
The latest Brexit headlines have been as optimistic as can be for this stage of the process; Eurozone preliminary November PMI readings were weaker than expected; UK preliminary November PMI readings were stronger than expected
Korea posted a strong

Read More »

EM Preview for the Week Ahead

November 22, 2020

Most EM currencies were up last week, once again taking advantage of broad dollar weakness. In addition, EM equities also performed well, with MSCI EM up for the third week in a row and for seven of the past eight. We expect EM assets to continue benefiting from the global liquidity story as well as the weak dollar trend.
AMERICAS
Brazil reports mid-November IPCA inflation Tuesday. Inflation is expected at 4.15% y/y vs. 3.52% in mid-October. If so, this would be the highest since mid-February and would move back into the top half of the 2.5-5.5% target range for the first time since that month. Next COPOM meeting is December 9 and rates are expected to remain steady at 2.0%. However, the CDI market is pricing in the first hike of the tightening cycle at the

Read More »

Dollar Bounce Likely to Fade

November 21, 2020

The negative virus news stream is taking a toll on market sentiment; the dollar is benefiting from the risk-off price action but is likely to fade
Weekly jobless claims data will be of interest; Fed manufacturing surveys for November will continue to roll out; Judy Shelton’s Fed confirmation is looking less and less likely
The row about EU funding takes center stage today as leaders hold a conference call to iron out their differences; UK CBI November industrial trends survey came in weak; Turkey delivered the consensus 475 bp rate hike; SARB is expected to keep rates steady at 3.5%
Record levels of infections in Japan led officials to raise its virus alert to the highest level; Australia reported strong October jobs data; Indonesia and Philippines both surprised

Read More »

Turkey Central Bank Preview

November 20, 2020

We expect the Turkish central bank (CBRT) to deliver a substantial rate hike at Thursday’s meeting but not as aggressive as consensus. Bloomberg’s median expectation is for a 475 bp hike. Our call is for a somewhat less aggressive move (perhaps around 400 bp) because the recent price action is likely to afford the new CBRT administration the confidence not to have to surprise on the upside. We think this makes sense. A large enough move to reaffirm the change of direction, along with a clear commitment to extend the tightening cycle, should be enough to satisfy investors while also keeping bullets for later. In this scenario, we might get a knee-jerk lira sell-off that soon stabilizes. The real concern comes if they deliver a hike of 200-250 bp or less which

Read More »

Dollar Weakness Continues Ahead of US Retail Sales Data

November 19, 2020

The dollar continues to soften
October retail sales will be the US data highlight; Fed manufacturing surveys for November have started to roll out; Republican Senator Alexander opposes Judy Shelton’s nomination to the Fed
Newswires reported (again) that a Brexit deal is at hand; Hungary and Poland will veto the EU budget and recovery fund; ECB signaled that they are focused on asset purchases and long-term funding for the next round of stimulus; Hungary is expected to keep the base rate steady at 0.60%
RBA released its minutes; concerns over credit risk in China are weighing on local assets, but not the yuan; the Korean won remains unfazed by official verbal intervention
The dollar continues to soften. After peaking near 93.208 last week, DXY is down for the

Read More »

Dollar Soft as Markets Start the Week in Risk-On Mode

November 18, 2020

The odds of national-level action in the US against the second wave virus outbreak remains small, even after Biden takes over; the dollar continues to soften
There is growing speculation about former Fed Chair Yellen becoming Biden’s Treasury Secretary; Fed manufacturing surveys for November will start to roll out; Peru’s interim President Merino resigned under pressure from more demonstrations
Several UK MPs and Prime Minister Johnson were forced to isolate due to a Covid outbreak; contrary to the peak globalization narrative, 15 Asian nations managed to sign a major trade deal; Japan reported strong Q3 GDP data
The week starts off with mostly upbeat data from China; PBOC delivered a net injection of funds through its 1-year MLF but left the rate unchanged at

Read More »

Roadblocks and Opportunities for International Trade in 2021

November 18, 2020

We see significant upside risk for global trade coming from “top down” forces (such as politics), but at the same time we expect the undercurrent reconfiguring many of the existing relationships to intensify. The “Peak Globalization” narrative (at least regarding trade) is being challenged by hopes of a revival of multilateral cooperation under Biden and the latest Asian trade agreement. But this doesn’t change our long-term view that the US and China are in an inexorable trajectory of decoupling. The backdrop is highly complex, involving: a leaderless WTO, changing trade patterns in Asia, the new UK-EU relationship, post-Covid supply chain restructuring, Trump’s final salvos against China, and Biden’s incoming administration, amongst others. We will tackle a few

Read More »

Drivers for the Week Ahead

November 16, 2020

The virus numbers in the US show no signs of slowing; the dollar should continue to soften
October retail sales Tuesday will be the US data highlight for the week; Fed manufacturing surveys for November will start to roll out; the Senate will hold a procedural vote this week to advance Judy Shelton’s nomination to the Fed Board of Governors
Canada has an important data week; Brexit talks will (hopefully) wind up soon; UK reports key data
Japan and Australia have busy data weeks
The virus numbers in the US show no signs of slowing. The US has never fully controlled it and the continued lack of a federal plan under Trump coupled with Trump’s reluctance to help with the transition to the Biden administration suggests things will get much worse before they get

Read More »

Dollar Softens Ahead of CPI Data

November 13, 2020

Pressure on the dollar has resumed; October CPI data will be the US highlight; US bond market was closed yesterday but yields have eased a bit today
Weekly jobless claims data will be reported; monthly budget statement for October will hold some interest; Mexico is expected to cut rates 25 bp to 4.0%; Peru is expected to keep rates steady at 0.25%
UK Q3 GDP rebounded strongly but September data show a loss of momentum; Brexit talks remain unresolved; the domestic political outlook is getting (even more) turbulent; eurozone reported weak September IP
Crude prices remain well supported by the dual engines of positive vaccine news and continued OPEC output restraint; Japan reported soft September core machine orders and October PPI; India reports October CPI and

Read More »

Dollar Consolidates, Weakness to Resume

November 11, 2020

Despite rising infections worldwide, the virus news stream has turned positive; the dollar is consolidating its gains today
With the 10-year yield rising to near 1.0%, US financial conditions are tightening; the Fed released its Financial Stability report yesterday and it pulled no punches; with the Fed media embargo over, many officials will speak today
UK House of Lords altered the Internal Market Bill; UK employment numbers were slightly better than expected; eurozone data were largely disappointing; Turkish President Erdogan appointed Lutfi Elvan as the new Treasury and Finance Minister
Japan reported September current account data; China unveiled new regulations to rein in its big tech companies and reported October CPI and PPI; Philippine Q3 GDP came in

Read More »

Vaccine and Split Government

November 11, 2020

The interplay of a vaccine-driven reflation rally and the (likely) split government in the US are emerging as the driving themes for markets in the months ahead.  We think reflation will win out in the end, but it could manifest itself differently this time around. While the policy-driven (fiscal and monetary) reflation theme from earlier in the year helped backstop the worst of the economic fallout, its reflationary impact was skewed towards asset price inflation. What if it’s different now? The pickup in US inflation breakeven hints at this possibility. If so, we may have a huge readjustment of Fed policy expectations in store. At stake is a massive sector rotation in global equities, a reconfiguration of the cross currents facing the dollar, and a huge new

Read More »

Dollar Soft as Risk On Sentiment Dominates Ahead of FOMC Decision

November 8, 2020

Dollar weakness has resumed as risk on sentiment dominates; the US election outcome is starting to take shape
Senate Majority Leader McConnell said passing a stimulus bill is a top priority during the lame duck session; the two day FOMC meeting concludes today with a likely dovish hold; weekly jobless claims will be reported
BOE increased its asset purchases by GBP150 bln vs. GBP100 bln expected; UK government is due to announce more details of the growing fiscal measures today; eurozone data came in soft; Norges Bank left rates unchanged at 0.0%, as expected
Japan reported firmer final services and composite PMI readings; Australia reported September trade; Indonesia is climbing out of recession
Dollar weakness has resumed as risk on sentiment dominates.  DXY is

Read More »

Markets Gyrate Ahead of Protracted Period of Uncertainty

November 6, 2020

Markets likely facing an extended period of uncertainty; the dollar is seeing some safe haven bid but is well off its highs
Despite President Trump’s claim of victory and his call to halt vote counting and go to the Supreme Court, it’s important to emphasize that the election is simply not over yet; asset prices are sending a cacophony of signals as investors struggle to price multiple possibilities
The two day FOMC meeting starts today and concludes with a likely dovish hold tomorrow; ADP provides its private sector jobs estimate
Europe and Asia reported final services and composite PMIs
Markets are likely facing an extended period of uncertainty. US elections results won’t be known for days, and then there are the likely court fights that will likely crop up in

Read More »

FOMC Preview: Coronavirus Daily Change

November 4, 2020

The two-day FOMC meeting starts tomorrow and wraps up Thursday afternoon. While no policy changes are expected, we highlight what the Fed may or may not do. We expect a dovish hold, with Powell underscoring the growing downside risks facing the US economy in Q4. While we are confident about our call for this meeting, the medium-term outlook will remain highly uncertain until we get a firm result from the US elections and a better grasp of how the pandemic will impact the economy.
 
RECENT DEVELOPMENTS
The US outlook has worsened since the September FOMC meeting. Infection numbers are making new highs with no sign of abating. There is no national strategy to contain the virus, and so we are seeing a hodgepodge of state level responses. Currently, the midwestern

Read More »

Dollar Firm at Start of Very Eventful Week

November 3, 2020

Oil prices continue their rapid decline due to both supply and demand concerns; the dollar is trading at the top end of recent trading ranges
This is one of the most eventful weeks for the markets in recent memory; one day ahead of the elections, the implied odds remain roughly at the same levels as they have been for the last few weeks; October ISM manufacturing PMI will start the ball rolling for a key US data week
The outlook for the virus in Europe continues to worsen; eurozone reported firmer final October manufacturing PMI readings; there appears to have been some progress made in Brexit talks
Japan reported firmer data; Caixin China manufacturing PMI came in slightly higher than expected at 53.6 in October
Oil prices continue their rapid decline due to both

Read More »

Dollar Bid as Markets Steady Ahead of ECB Decision

October 31, 2020

Global equity markets are gaining limited traction today after yesterday’s bloodbath; that sell-off helped test a now prevalent hedging thesis for investors
The dollar remains bid; US Q3 GDP data will be the data highlight; weekly jobless claims will be reported
BOC delivered a dovish hold yesterday; Canada Finance Minister Freeland defended the government’s aggressive fiscal stimulus plans; Brazil left rates unchanged, as expected
ECB is expected to deliver a dovish hold; Germany reports October CPI; Hungary is expected to snug rates higher to help support the forint
BOJ kept policy steady, as expected; Japan reported weak September retail sales; next year is the 100th anniversary of the Chinese Communist Party
Global equity markets are gaining limited traction

Read More »

ECB Preview

October 28, 2020

The ECB meets Thursday and is widely expected to stand pat until the next meeting. Macro forecasts won’t be updated until the December 10 meeting, but the bank will have to acknowledge the deteriorating outlook now. There’s a small risk of more jawboning against the stronger euro, but it should otherwise be an uneventful meeting. We expect the ECB to increase QE in December but another rate cut seems very unlikely, as does activation of OMT.
POSSIBLE NEXT STEPS
Jawbone the euro weaker – POSSIBLE NOW, POSSIBLE IN DECEMBER. Madame Lagarde downplayed concerns about the strong euro at her September 10 press conference, only to be immediately corrected by several of her senior colleagues, including Chief Economist Lane. While the ECB professes not to target the

Read More »