report October 22, 2020 PBoC likely to keep Renminbi on tight leash Only four currencies have appreciated by more than 4% versus US Dollar since end-July: the high-yielding South African Rand (4.6%) and Mexican Peso (5.8%), the Chinese Renminbi (4.4%) and Korean Won (5.2%). The Renminbi’s steady pace of appreciation will,... By Olivier Desbarres 4X Global Research (4XGR)
report October 8, 2020 Event risk and market volatility: Partners in crime Market volatility has been reasonably subdued in recent weeks, despite acute event (and macro data) risk in the next four weeks, including of course US presidential elections on 3rd November, and a number of significant macro, policy and geopolitical... By Olivier Desbarres 4X Global Research (4XGR)
report September 24, 2020 Global growth: Collapse, Recovery, Slowdown…repeat? We are sticking to our forecast, first set out in Shape of Recovery: Square Root & Hockey Stick (5th June 2020) that global GDP, which contracted about 7.0% qoq in Q2 (a number flattered by China’s GDP), will rise... By Olivier Desbarres 4X Global Research (4XGR)
report September 17, 2020 Dollar, Euro & Sterling in focus, Asian currencies under the radar screen Much of the market focus in recent months has been on major reserve currencies, namely: The US Dollar which, contrary to bearish expectations and in line with our benign Dollar view, has treaded water in the past six weeks... By Olivier Desbarres 4X Global Research (4XGR)
report September 9, 2020 Brazen ECB verbal intervention against Euro unwarranted and unlikely Markets bereft of key macro data releases and policy events in recent days will be turning their attention tomorrow to the European Central Bank’s policy meeting. The consensus forecast, which we share, is that the ECB will leave its... By Olivier Desbarres 4X Global Research (4XGR)
report September 4, 2020 UK & Sterling facing potential quadruple whammy Sterling has enjoyed a strong, if bumpy ride, since late-June. It has been the second strongest major currency against the US Dollar and appreciated 3.7% in NEER term, thanks in part to a build-up of speculative long-Sterling positions. Markets... By Olivier Desbarres 4X Global Research (4XGR)
report August 4, 2020 Warnings about US economy and USD overblown The United States’ post-war record GDP contraction in Q2 of 9.5% qoq and the Dollar’s recent depreciation have been making headline news but some perspective is required. The US GDP contracted about 10.6% in H1 2020, far more than... By Olivier Desbarres 4X Global Research (4XGR)
report July 30, 2020 Retail sales key to UK economic growth recovery The volume of retail sales – the value of the sale of goods adjusted for domestic inflation – rose a faster-than-expected 14% mom in June. In level terms UK retail sales were only 1% below the average recorded in... By Olivier Desbarres 4X Global Research (4XGR)
report July 20, 2020 China’s V-shaped recovery under the microscope Chinese GDP growth (seasonally-adjusted) was 11.5% qoq in Q2. This was stronger than consensus forecast (+9.6% qoq) and more than reversed Q1 contraction of 9.8% qoq. This record-high growth reflects both a post-lockdown bounce in economic activity and of... By Olivier Desbarres 4X Global Research (4XGR)
report July 13, 2020 Major economies & currencies – What to look out for and why it matters Price action in major currencies was again subdued last week. With few tier-one macro data releases for markets to trade off the focus was on the reaction function of governments and central banks to covid-19 related developments. Only a... By Olivier Desbarres 4X Global Research (4XGR)
report June 18, 2020 United Kingdom: Anatomy of economy on lockdown life-support Part One of this Five-part series of Insights into the UK economy and financial markets examines the devastating impact which the national lockdown – introduced on 23rd March – has had on domestic economic activity and the implications for... By Olivier Desbarres 4X Global Research (4XGR)
report June 5, 2020 Shape of Recovery: Square Root & Hockey Stick While GDP data for Q1 are now “old” and seemingly of limited use, it makes little sense to forecast global growth in Q2 and beyond without at least knowing the starting point. We estimate, based on data for 19... By Olivier Desbarres 4X Global Research (4XGR)
report May 21, 2020 Lessons learnt from Q1 collapse in global GDP Global GDP growth, in year-on-year terms, slowed to -2.7% in Q12020 from +3.1% in Q4 2019 and in quarter-on-quarter terms to -4.5% from +0.6% in Q4, based on growth rates in 14 major economies accounting for close to 90%... By Olivier Desbarres 4X Global Research (4XGR)
report May 7, 2020 Conservative FX markets testing (some) extremes FX markets’ conservative approach in face of acute coronavirus and macro uncertainty We argued in the 20th April edition of Armchair Trader’s Daily Newsletter that the currency range-trade was making a comeback. In the past 13 trading sessions most... By Olivier Desbarres 4X Global Research (4XGR)
report April 28, 2020 US GDP growth – One extreme to another The BEA will release tomorrow its first estimate of US GDP growth in Q1. Consensus estimate for the quarter-on-quarter seasonally-adjusted annualised rate of growth is -4.0%. If correct this would imply that growth in Q3 and Q4 2019 was... By Olivier Desbarres 4X Global Research (4XGR)
report April 24, 2020 Growth interrupted: World was in recession in Q1 2020 Forecasts of the scale of a likely global economic recession and the shape of the recovery often give little thought to the economic variables being measured or their timeliness. Based on 4X Global Research’s own quarterly global GDP series... By Olivier Desbarres 4X Global Research (4XGR)
report April 13, 2020 National economic recessions – The price to pay The consensus forecast is that GDP contracted in many major economies in Q1 and will most definitely contract in Q2 as a result of the negative impact of national lockdowns on supply and demand. The implication is that these... By Olivier Desbarres 4X Global Research (4XGR)
report March 27, 2020 Governments and policies adapting to critical known unknown We argued in Lack of US market & macro volatility both reassuring and troubling (17 January) that “the market’s willingness to look through domestic political and geopolitical events suggests that only a significant exogenous or endogenous shock currently beyond... By Olivier Desbarres 4X Global Research (4XGR)
report March 17, 2020 Emerging market central banks playing catch-up Developed central banks in the past week have been falling over themselves to loosen monetary policy and secure the proper functioning of financial and credit markets. The Fed, RBNZ, Bank of Canada, Bank of England and Norges Bank have... By Olivier Desbarres 4X Global Research (4XGR)
report March 6, 2020 Global growth shaken, central banks stirred The drastic measures which governments across the world have taken so far to mitigate the spread of the coronavirus have few precedents outside of war times and therefore quantifying their economic, financial and social impact remains challenging. However, there... By Olivier Desbarres 4X Global Research (4XGR)
