Weekly Market Update
It has been our view for some time now that traders were getting ahead of themselves pricing in central bank cuts generally, and particularly so in the case of the Federal Reserve. Last week we saw further vindication of this view, as the strength of US economic data continues to surprise markets, notably the latest […]
Weekly Market Update
Last week was remarkable in how little major currencies moved. Nearly all of the major ones ended the week within 0.5% of where they had started, an unusual level of quiescence. The hotter-than-expected consumer inflation report out of the US initially made some waves, and helped the dollar rally modestly. By the end of the […]
Weekly Market Update
Currency markets have executed a 180 degree turn so far in 2024, as have financial markets generally. The furious bond rally in the last few weeks in 2023 has stopped in its tracks and reversed, as markets pare back expectations of Federal Reserve interest rate cuts in 2024. Markets dutifully followed the leads from interest […]
Weekly Market Update
We said that last week would be a volatile one, with three key central bank meetings in quick succession, and currency markets did not disappoint. The Federal Reserve executed a clear pivot towards rate cuts, both in terms of rhetoric and its actual forecasts for rates in the “dot plot”. By contrast, the ECB and […]
Weekly Market Update
The undisputed winner in currency markets last week was the Japanese yen, which soared as the Bank of Japan finally hinted that it is ready to start normalising monetary policy. The other theme in FX was the rebound in the dollar, as US interest rates rose on the back of a very strong labour report, […]
Weekly Market Update
The Thanksgiving holiday in the US usually makes for quiet markets and a lack of volatility, and last week was no exception. The main market movers were the PMIs of business activity in the Eurozone and the UK, the former remained weak, while the latter was stronger than expected and moved back into expansionary territory. […]
Weekly Market Update
The Federal Reserve received yet another positive surprise from the October US inflation report. Inflation surprised again to the downside, and financial markets celebrated the likely end of rate hikes by sending stocks and bonds soaring worldwide. The resulting fall in US rates, and the flight away from safe-havens and into risk assets, slammed the […]
Weekly Market Update
Financial markets were becoming increasingly comfortable with the idea that the worldwide hiking cycle was over and were beginning to look forward to rate cuts, until Fed chair Powell sounded less convinced at a speech last week. In response, bond rates increased again and currencies partially reversed recent moves, as the dollar rallied against almost […]
Weekly Market Update
Bonds and stocks rallied in tandem worldwide last week on relief at the Federal Reserve’s caution regarding future rate increases, and a general sense that the fastest hiking cycle in history is now over. A soft nonfarm payrolls report out of the US on Friday added fuel to these hopes, and nearly every major currency […]
Weekly Market Update
The US dollar traded in a fairly tight range against most of its peers last week, ending slightly lower against most European currencies, save the pound. The moves were all modest, although it is remarkable that yet another week of rising long-term rates in the US failed again to boost the greenback significantly. This suggests […]