Tag Archives: Articles

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...

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...

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...

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...

Increasing virus numbers have pushed European governments to once again start imposing national measures; the week is starting off on a risk-off note Today may see the official end of stimulus talks; odds for Biden victory are increasing again but is already mostly priced in US manufacturing surveys for October will continue to roll out; Chile’s referendum on a new constitution passed in a landslide Brexit negotiations have been extended; Germany’s October IFO survey...

EM FX took advantage once again of broad dollar weakness. Most EM currencies were up last week against the dollar, with the only exceptions being ARS, TRY, INR, THB, PEN, and MYR. We expect the dollar to remain under pressure this week and so EM should remain bid. However, the growing spread of the virus in Europe and the US supports our view that Asia is likely to continue outperforming. AMERICAS Chile held a referendum Sunday on whether to draft a new constitution....

Geopolitical tensions have risen after US officials accused Russia and Iran of meddling in the elections; the dollar has caught a modest bid today Stimulus talks continue; Pelosi warned that a deal may not come together before the November 3 election; whether Republican Senators change their minds after the elections depends on the outcome Measures of cross-asset volatility suggest a far too generous interpretation of the odds for a clean Democratic sweep; KC Fed...

The dollar is coming under pressure again; markets are finally waking up to the fact that a stimulus deal before 2021 is unlikely; 10-year Treasury yields have been trading in a narrow range for months The quiet US data week continues; Ireland broke from the pattern of how other European countries are tightening mobility rules; Hungary is expected to keep the base rate steady at 0.60%. Japan reported September convenience store sales; dovish RBA remains dovish;...

Some are holding out hope but we think the stimulus package remains dead; Fed releases its Beige Book report Wednesday; there is a full slate of Fed speakers this week Fed manufacturing surveys for October will continue to roll out; weekly jobless claims will be reported Thursday; BOC releases results of its Q3 Business Outlook Survey Monday Renewed virus restrictions are weighing on the economic outlook for the eurozone; no wonder ECB officials are sounding very...

Risk assets are coming off a tough week. The dollar was bid across the board except for the yen, which outperformed slightly. The only EM currencies to gain against the dollar were KRW and CLP. The major US equity indices somehow managed to eke out very modest gains but stock markets across Europe sank as the viral spread threatens to slam economic activity again. Yet we have seen time and time again that the safe haven bid for the dollar eventually gives way to...