July 23, 2021 Not “risk-on” or “risk-off”, rather What’s the risk? FX, Investment Strategies, Macro Olivier Desbarres In the past fortnight US Treasury yields across the maturity spectrum have oscillated in reasonably wide ranges, with the highs coinciding with the release on 13th July of US CPI-inflation data. The shape of the yield curve today is... Read More...
July 19, 2021 Sterling’s coming home…albeit slowly FX, G7, UK GBP Olivier Desbarres Despite buoyant domestic expectations (or at least hope) football will not be coming home after the England football team lost on penalties to Italy in Sunday’s final of the Euro Championship but Sterling is arguably coming home, albeit slowly. The... Read More...
June 29, 2021 Sterling leads Euro 1-0 at half-time in dull encounter but could extend advantage FX, G7 EURUSD Olivier Desbarres With England due to play Germany in the last-16 round of the Euro Championships in a few hours time, now is a good time to revisit the Sterling-Euro exchange rate. Football fans will be hoping for a pulsating sporting encounter... Read More...
May 14, 2021 US markets playing along to Fed tune…for now FX, Global, Macro USD Olivier Desbarres Treasury Secretary Yellen’s comments ten days ago were merely a temporary distraction. Perhaps more surprisingly, at first glance, the release on Wednesday of a much larger-than-expected increase in US CPI-inflation in April has not had much “sticking power”. Core CPI-inflation... Read More...
April 1, 2021 Crunch time for Singapore Dollar and Renminbi China, Emerging Markets, FX, Global, Singapore RMB, SGD Olivier Desbarres We estimate that the USD-value of central bank FX reserves – adjusted for currency-valuation effects – in China, India, Indonesia, Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand rose by about $342bn (1.5% of GDP) between end-March 2020 and end-February... Read More...
March 26, 2021 Non-Japan Asia: NEERs and FX intervention Asia, FX, Global USD Olivier Desbarres Non-Japan Asian (NJA) central banks’ foreign currency (FX) reserves have gradually increased since end-March 2020, arguably the peak in global risk aversion. We estimate that the aggregate US Dollar-value of FX reserves in China, India, Indonesia, Korea, Malaysia, Philippines, Singapore,... Read More...
March 19, 2021 EM currencies: Central bank friends and foes Emerging Markets, FX, US EMFX, USD Olivier Desbarres The Fed updated “dot-chart” of all FOMC members’ expectations of the appropriate policy rate points to only an incrementally less dovish stance. Based on a weighted average FOMC members still only expect one 25bp hike by end-2023, according to... Read More...
Forecasting Track record March 5, 2021 US and UK: The Comeback Kids FX, Global, UK, US editorial, GBP, USD Olivier Desbarres The US Dollar NEER has since 12th February appreciated about 2.3% to a 4-month high and its inverse correlation with the S&P 500 (-4.2%) has re-established itself. This is in line with our forecast that the Dollar’s sell-off in... Read More...
March 1, 2021 Transitional UK budget unlikely to rattle markets FX, G7, UK editorial, UK Budget Olivier Desbarres The British Chancellor of the Exchequer Rishi Sunak will on 3rd March, at around 12.30 UK time, present to the House of Commons the annual budget for the United Kingdom. The ruling Conservative Party has a significant working majority of... Read More...
February 12, 2021 Dollar’s recent weakness – Blip, not new trend Asia, Emerging Markets, FX, G7, Global, Latam, Macro USD Olivier Desbarres In the past nine weeks major currencies and global equity markets have traded broadly in line with our expectations. The US Dollar has traded in a very narrow range, confounding consistently bearish market expectations. Similarly, most emerging Asian currencies... Read More...
