Weekly Market Update
Dollar soars on hot inflation data, doubts about Federal Reserve cuts Highlights: Dollar outperforms as strong US inflation report delays expected timing of Fed cuts. Middle East tensions fuel safe-haven flows as Iran launches missile attack on Israel. ECB hints at June interest rate cut. UK economy grows in February, easing recession fears. JPY sinks […]
Weekly Market Update
Commodity-dependent currencies rally, as oil prices jump to multi-month highs. USD retraces gains despite very strong US payrolls report for March. ECB to hint at first interest rate cut in June after soft inflation figures. RBNZ and BoC to stand pat. JPY hold its own as markets eye direct FX intervention. The US dollar had […]
Weekly Market Update
Last week was awash with important central bank announcements, and one or two major surprises to boot. Perhaps the most significant announcement was that from the Bank of Japan. The BoJ raised its policy rate for the first time in seventeen years on Tuesday, an historic move that ended eight years of negative rates. The […]
Weekly Market Update
Last week’s US inflation report once again surprised to the upside. The numbers were not high enough to panic the Federal Reserve, although it seems clear that the disinflationary trend in the US has stalled, with annualised core inflation stuck near the 4% level for now. Treasury rates rebounded, ending the recent dollar sell-off and […]
Weekly Market Update
The world’s major central banks are inching closer to cutting rates, as the fight against inflation makes steady progress. While the ECB hinted at a June cut, without entirely ruling out an April move, the soft-ish labour market report out of the US helped make the case for a similar calendar for the Federal Reserve, […]
Weekly Market Update
We just closed an unusually quiet two weeks in markets. There were few headlines, macroeconomic news or policy announcements that would change market perceptions on economic or monetary policy, and the quiet in foreign exchange markets reflected that. There was more action in bond markets, as traders continue to push back their timing for interest […]
Weekly Market Update
The January CPI inflation report out of the US contained everything the Federal Reserve did not want to see. Upward surprises in both the headline and core indices, and a clear sense that the disinflation trend we saw throughout most of 2023 has hit a wall, with price increases running again comfortably north of 4%. […]
Weekly Market Update
Markets continue to celebrate the apparent defeat of inflation by sending stock markets worldwide to fresh all-time highs. Last week, commodity and emerging market currencies joined the party, and traditional safe-havens like the Japanese yen, the Swiss franc and (this time) the dollar suffered, while the New Zealand dollar topped the table of world currencies. […]
Weekly Market Update
The dominant theme in currency markets in 2024 has been US economic strength, which is forcing markets to push back the timing of Federal Reserve rate cuts and is helping the dollar unwound most of the losses it suffered in late-2023. Last week did not buck the trend. While the Fed January meeting did not […]
Weekly Market Update
The ECB left its options open last week. This one will test our view that central banks in the US and the UK need more time before embarking on a rate-cut journey. In spite of the ECB meeting and a flurry of economic activity data, the volatility in the FX market was relatively muted last […]