Weekly Market Update
The Jackson Hole annual conference of central bankers delivered few surprises. The Federal Reserve is less convinced than markets appear to be that inflation has been beaten, and rates are likely to remain at or above 5% for an extended period of time. By contrast, the European Central Bank is caught between a rock and […]
Weekly Market Update
An unsettling updrift in US government bond yields, particularly long-term ones, continued to hobble the performance of both European and emerging market currencies. The market had perhaps become too complacent about the move lower in the dollar after the Fed suggested that it may be done hiking rates. Short dollar positions are stretched, and the […]
Weekly Market Update
The worsening economic data out of the Eurozone didn’t help, but what finally did the euro in last week was a surprisingly dovish European Central Bank meeting. At its meeting last week, the ECB raised rates as expected, although surprisingly hinted that this could be the final one in the current tightening cycle. The euro […]
Weekly Market Update
We’d said the Euro rally against the dollar was looking stretched, and last week’s market action seemed to confirm our view. The dollar rallied across the board on no particular news, a sign of a trend driven by technical factors rather than fundamentals. The bearish consensus on the dollar as disinflation takes hold in the […]
Weekly Market Update
The significant positive surprise in US inflation numbers for June sent financial markets roaring higher on expectations that the Federal Reserve is very close to ending its rate hike cycle. US rates dropped sharply, hikes beyond July were priced out, and unsurprisingly the dollar lost ground against every major currency worldwide, as investors cheered and […]
Weekly Market Update
A spate of US labour market reports came out a touch softer than expected last week, culminating in the headline payrolls number for June. The data cannot be described as weak, and in fact US yields continued to head higher throughout the week, but FX markets took it as a sign that the recent dollar […]
Weekly Market Update
Currencies trade in tight ranges as central banks hint at further tightening. G10 currencies all ended the week within less than 1% of where they had started it. Rates continued to rise in the main economic areas, as central bankers at the ECB’s Sintra conference generally delivered a hawkish message and core inflation remains stubbornly […]
Weekly Market Update
Risk assets struggled all last week as global economic sentiment took a turn for the worse. The PMIs of business activity, perhaps the most timely indicator of economic activity, surprised to the downside, particularly in the Eurozone, reviving recession fears. The dollar generally benefits from uncertainty and flight from risk, and last week was no […]
Weekly Market Update
Both the Federal Reserve and the ECB struck hawkish surprises last week. However, the latter hiked rates while the former did not, and markets chose to believe facts, rather than rhetoric. The dollar sold-off sharply against every major currency in the world, with the expectation of the Japanese yen, hurt by the Bank of Japan’s […]
Weekly Market Update
The dollar struggled in lackluster trading last week, as the rebound in commodity prices and improving investor sentiment meant the main 2023 trends continue to drive markets: a soft dollar, and a particularly strong showing by commodity currencies. Latin American currencies continue to shine, and at the other end, we have the Turkish lira, spiralling […]