After a tepid start to the week on Monday, where US bond markets were closed for Colombus Day, the USD has fallen significantly on Tuesday. Asian currencies led the fall, enthusiastically followed by developed market currencies, including EUR and GBP. Political uncertainty continues to undermine the USD. Trump’s battles with Senator Corker, the NFL, North […]
Surprisingly, futures positioning in the USD moved to a new high in net shorts on 3-Oct, despite the rebound in the USD over the last month. It seems the market is sceptical that the recent rise in the USD will last, and has been in a ‘sell-the-rally’ frame of mind. However, the rise in the […]
Weak retail sales in Australia speak to the biggest fear lurking over the Australian economy; that a high and rising debt load is starting to squeeze households, even before the RBA moves to tighten policy from record low interest rates. Australia is seeing positive signs for business and government capital expenditure, but if consumers retrench […]
The USD has finished each of the last three years with a run higher, and it may again end on a strong note as the market looks forward to tax reform. The market is trading cautiously, facing a number of global uncertainties. There is underlying strength in the US economy that appears to be underappreciated, […]
The Trump tax plan is potentially very positive for the USD, generating a significant incentive for capital inflow and business investment. The market response so far is muted, but may well continue to build. We like the USD/JPY, but the Japanese election may be a sticking point. US tax plan a dollar booster The […]
The rise in US long-term yields may continue, supported by Fed QT, ECB taper, rising oil prices, solid underlying recovery in the USA, solid global growth, diminishing uncertainty from geopolitical risks and hurricane season, and now a clearer focus on tax reform. The USD/JPY is likely to mirror any further rise in yields. The Bank […]
The tide has turned, at least for the moment, for the USD. It has been on a broadly weaker trend this year, often undermined by political uncertainty in the US. Stronger global growth has supported EM, and the EUR has rebounded on declining European political uncertainty and a solid European economic recovery. Lower than expected […]
The AUD executed a pop and drop around the FOMC as the market moved from focusing on over-blown expectations of looming rate hikes in Australia to weaker commodity prices. Signs that the slowdown in the Chinese property market is accelerating add to weaker fixed asset investment growth to suggest that steel prices will fall further. […]
The FOMC pretty much stuck to their outlook for the economy. They indicated that the impacts of Hurricanes are unlikely to impact the broader outlook and the effects will be concentrated in the next two-quarters. However, they did raise their GDP forecasts this year; it seems on rebuilding activity before year-end outweighing the near term […]
The outlook for the AUD is facing bigger headwinds. Chinese economic growth has slowed in recent months, and iron ore and met-coal prices are weaker over the last month. It appears that steel prices in China have turned over as fixed asset investment slows and steel inventories start to build; albeit from low levels. The […]