Tag Archives: Articles

Christine Lagarde will chair her third ECB meeting Thursday.  She faces growing risks of recession but also widespread skepticism within the ECB regarding the efficacy of negative rates.  Markets have priced in several rate cuts this year.  Here, we discuss what measures the ECB may take this week. POLICY OUTLOOK It’s worth noting that even with the complicated voting rights system, a formal vote is not always needed to act.  For instance, at the September 2019...

Global financial markets are finally seeing a measure of calm return; local Chinese media is sounding more confident that the situation is now under control The White House will announce fiscal measures today; five states hold primaries and one holds a caucus with 352 total pledged delegates up for grabs Italy announced that it is extending travel curbs beyond just the north to the entire nation; further fiscal measures there will be seen Japan reported February...

Risk-off sentiment continues to build as the coronavirus spreads Fed easing expectations continue to intensify; February inflation readings for the US will be reported this week The ECB meets Thursday and markets are split; the stronger euro is doing the eurozone economy no favors The UK has a heavy data release schedule Wednesday; UK government also releases its budget that day Japan has a fairly heavy data week; the yen continues to benefit from risk-off sentiment...

Super Tuesday has come and gone. Bloomberg has suspended his campaign after an extremely poor showing, and Warren is expected to follow suit soon. Here is our updated take on the likely Democratic candidate. RECENT DEVELOPMENTS Biden exceeded expectations on Super Tuesday. He won Alabama, Arkansas, Massachusetts, Minnesota, North Carolina, Oklahoma, Tennessee, Texas, and Virginia and leads in Maine. Sander won Colorado, Utah, and Vermont and leads in California. As...

The dollar has softened as Fed easing expectations have picked up Late Friday, Chair Powell issued an unscheduled statement saying the Fed is monitoring the virus and will act as appropriate This is a big data week for the US; the Fed releases its Beige Book report Wednesday Super Tuesday comes this week; Bank of Canada meets Wednesday Final eurozone and UK February PMI readings will be reported this week Reserve Bank of Australia meets Tuesday; BOJ Governor Kuroda...

The virus news stream continues to deteriorate Lower US yields and growing concerns about the spread of the coronavirus in the US are taking a toll on the greenback OPEC officials are trying to work out another supply cut; The outlook for Turkey is going from bad to worse Simply put, there is nothing the Fed can do to address the economic impact of supply chain disruptions and social distancing Japan reported mostly weaker data overnight; China reports official...

Below is a non-exhaustive list of medium- and long-term implications from the Covid-19. We discuss the yuan, China’s competitiveness, its position in the global production chains, the impact on the Phase One trade deal, and rising financial stability risks. Globally, the virus will bring about a new wave of fiscal spending and revive the discussions about the limits of monetary policy. Lastly, we are concerned that the virus may provide further momentum for the...

The still-growing impact of the coronavirus should keep EM and risk sentiment under pressure this week.  The weekend G20 meeting in Saudi Arabia acknowledged the risks to the global economy and said participants agreed on a “menu of policy options.” However, the G20 offered little specific in terms of a coordinated policy response.  AMERICAS Mexico reports mid-February CPI Monday, which is expected to rise 3.56% y/y vs. 3.18% in mid-January. If so, inflation would...

Developed equity markets remain near the highs despite mounting concerns about the impact of the coronavirus MSCI World made a new all-time high last week near 2435 and is up 2.5% YTD Our 1-rated grouping (outperformers) for Q1 2020 consists of Ireland, Israel, New Zealand, Spain, and Switzerland Our 5-rated grouping (underperformers) for Q1 2020 consists of the Italy, Germany, Portugal, Japan, and Greece Since our last update on November 19, our proprietary DM...

Negative news on the coronavirus has kept risk appetite subdued across the board; the dollar rally continues During the North American session, we will get some more clues to the state of the US economy; FOMC minutes were largely as expected UK January retail sales came in firm; ECB releases the account of its January 23 meeting Australia reported firm January jobs data; China commercial banks cut lending rates; Indonesia cut rates 25 bp to 4.75%, as expected The...