reports
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Markets firm up the Hassett trade
News overnight that the Trump administration had abruptly cancelled interviews with finalists for the Fed chair nomination has firmed up the view that Kevin Hassett will replace Jerome Powell next May. The market response to Hassett's dovish leaning is a weaker dollar, a steeper yield curve and a rally in risk assets
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Last chance for the hawks
This week's data will present the last chance for markets to reconsider a December Fed cut that is now fully priced in. While the market's dovish bets appear too high, we think the ISM, ADP and PCE figures will validate them. The dollar remains vulnerable this week, and the yen could extend gains as a BoJ hike this month is now suddenly much more likely
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Waiting for a peace deal breakthrough
Volatility should remain capped due to tight US volumes today. The main driver into next week is a potential build-up in expectations of a breakthrough in the Russia-Ukraine peace negotiations, which should weigh on the dollar and asymmetrically favour high-beta European currencies
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Reeves keeps sterling afloat
The pound has welcomed yesterday's UK Budget announcement, as improved fiscal headroom is seemingly not coming at a hefty price for growth. Still, a Bank of England cut in December is still on the table. Expect thinner liquidity into the weekend, with the dollar potentially stabilising after this week's correction
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Sterling faces dual risks on Budget day
The UK Budget announcement (12.30 GMT) will see markets weigh both fiscal and inflationary implications. Sterling faces moderate downside risks in a non-inflationary, fiscally tight scenario, and severe risks if fiscal sustainability is called into doubt. Elsewhere, the dollar has more potential to depreciate despite yesterday's correction
- Francesco Pesole
Treasury FX Report preview: Tighter scrutiny, no manipulator tags
The November FX Report has been delayed but should be released soon. We expect an emphasis on the changing approach towards a tighter scrutiny on US partners' FX practices, but we don't think we'll see any FX manipulator designation by Treasury. Thailand should, however, join the Monitoring List, and Switzerland will remain a focus point for markets
- Francesco Pesole
Treasury FX Report preview: Tighter scrutiny, no manipulator tags
The November FX Report has been delayed but should be released soon. We expect an emphasis on the changing approach towards a tighter scrutiny on US partners' FX practices, but we don't think we'll see any FX manipulator designation by Treasury. Thailand should, however, join the Monitoring List, and Switzerland will remain a focus point for markets
- Chris Turner
- Francesco Pesole
FX Daily: The dollar is due a correction
A December Fed cut is back as a baseline scenario for markets, but the dollar has remained relatively strong. Our short-term valuation metrics point to significant risks of a USD correction, unless data prompts a hawkish repricing. Geopolitics will remain in focus, both for European FX (Ukraine peace talks) and the yen (Japan-China tensions over Taiwan)
- Francesco Pesole
Reserve Bank of New Zealand preview: Last cut of the cycle
We expect the Reserve Bank of New Zealand to cut rates by 25bp to 2.25% on 26 November. However, upside risks to inflation and growth mean, in our view, that this will be the last cut of the cycle. With markets still speculating on further easing, there is room for NZD to benefit from a more hawkish RBNZ assessment this week
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Prospects of Ukraine peace starting to show
We've been here before, but prospects of a peace deal in Ukraine are starting to show in FX. CEE FX is holding last week's gains, and EUR/CHF is now also edging back above 0.93. Lower energy prices should be supportive for the euro. Further progress on peace discussions and potentially a softer Fed Beige Book on Wednesday could see EUR/USD hold 1.1500
- Chris Turner
- Francesco Pesole
FX Daily: EUR/USD hanging in there
It could have been a lot worse for EUR/USD this week. A set of FOMC minutes that poured cold water on a December rate cut and a strong headline rise in the US jobs report could have seen 1.1500 taken out again. But instead, investors seemed to have just delayed rather than abandoned pricing for Fed easing. And Europe may still being showing some signs of life
- Chris Turner
- Francesco Pesole
FX Daily: Dollar rally overdone despite December's cut in doubt
EUR/USD has dropped significantly more than what the swing in rate differentials can justify. So, while a December Fed cut has clearly decreased in probability, there are downside risks for the greenback ahead of today's payrolls. A bad payroll print could prompt FX intervention on USD/JPY, which has kept marching towards 160
- Chris Turner
- Francesco Pesole
FX Daily: Bracing for the tech shock
Global markets are trading in a slightly nervous fashion as they brace themselves for a potential correction in US tech stocks. So far, the correction has been modest compared to the 25% fall in bitcoin, but events over the next 24 hours will have a say in whether moves extend. We'll have FOMC minutes, Nvidia earnings and the September jobs report
- Chris Turner
- Francesco Pesole
FX Daily: Yen missing out on equity sell-off
The souring in risk sentiment before tomorrow's Nvidia earnings is hitting high-beta currencies and offering some support to the dollar ahead of Thursday's September jobs reports. The yen is being held back by escalating tensions between China and Japan, as well as soft data and speculative flows testing the intervention threshold
- Chris Turner
- Francesco Pesole
FX Daily: Fed looks better priced
In a week when we should finally start to see US data releases coming through, it is important to note that the outcome of the next Fed rate decision in December looks better priced at a 50% chance of a cut. That means that the dollar probably does not have to rally too much on the FOMC minutes released this Wednesday and can take its cue from Thursday's jobs report
- Chris Turner
- Francesco Pesole
FX Daily: Fiscal risk hitting the pound
The drop in USD this week seems to be linked to expectations that US data will come in soft. But hearing Fed speakers, the move seems a bit premature, even if it looks like we could get September payrolls data soon. In the UK, the government is scrapping its income tax hike plans. GBP downside risks have suddenly increased
- Chris Turner
- Francesco Pesole
FX Daily: Japan may wait for US data to intervene in FX
USD/JPY continues to test the highs in a low-volatility, risk-on environment. Key US data won't be released as soon as the government reopens, but Japan may wait for a USD-negative event to intervene. Meanwhile, UK growth underwhelmed, adding some pressure to GBP, which is already hit by political risk. Strong jobs data support our bullish AUD view
- Francesco Pesole
- Chris Turner
- Deepali Bhargava
- Francesco Pesole
- James Wilson
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