Macroeconomic Environment Review The risk of recession in the major economies has increased yet financial markets are not very intimidated, hoping that central banks will prevent the worst. The USD slipped as interest rates and risk aversion declined. In our view, market optimism is premature, especially given the risks in Europe. Moreover, central banks are […]
We bet we know why you’re reading this note and what you’re hoping to get out of spending a few minutes on it. We think we could make good money if we guessed that you’re looking for answers to the same questions everyone has been asking us over the past few months. If you’re a […]
Macroeconomic Environment Review The US Dollar has been the supreme performer so far this year. The US Dollar Index rallied 9.7% from the start of the year through the middle of May. USD strength was broad-based versus all other major currencies with only the AUD and the CAD falling less than their peer. The performance of […]
Macroeconomic Environment Review The US Dollar rallied across the board in April. The Dollar Index (DXY) surged nearly 5% in April with all other major currencies down significantly versus the greenback. The worst-hit was the Japanese Yen (-6.3%) thanks to the BoJ’s reconfirmation of its low-interest rate policy. The Swiss Franc (-5.2%) also failed to benefit from […]
Macroeconomic Environment Review The Russia-Ukraine war remains a source of uncertainty but has not derailed financial markets. Europe is still most at risk and commodity currencies remain a good hedge but the focus is on inflation, growth and central bank reactions. The Fed is expected to hike rates the most, but the ECB has the […]
Macroeconomic Environment Review Russia’s attack on Ukraine and the firm response by Western allies are both sea changes with far-reaching consequences. The near-term outlook is very uncertain but the crisis is not systemic in our view. We think the war will slow but not derail the global recovery. Central banks will take that into account […]
Macroeconomic Environment Review Currency markets have been on a rollercoaster ride since the start of the year, primarily affected by two major themes: rising global growth optimism and a more hawkish Fed. In our opinion, the key question is not what theme will prevail but how they will affect each other and any outcome can […]
Macroeconomic Environment Review The economic activity across the developed world has reaccelerated in the fourth quarter of last year. The Omicron variant is expected to temporarily disrupt but not to derail the recovery path. The decoupling of social and economic mobility from Corona cases should continue, while bottlenecks in the supply chains start to ease. […]
Macroeconomic Environment Review The Dollar was the winner of 2021, appreciating 6.9% year-to-end of November versus the other major currencies and 11% versus EM currencies. However, Dollar’s performance was mixed both over time as well as versus individual currencies. The greenback rallied in late February and March while the US-led in the deployment of vaccines […]
Macroeconomic Environment Review Currency performances diverged in October. The US Dollar was broadly stable, but the Japanese Yen fell while most other major currencies rallied. The different currency moves reflect the market’s repricing of changing monetary policy positions. The divergence may also lead to more FX volatility as central banks focus more on inflation and […]
