Weekly Assessments

Week ending Friday August 18th 2017 Two weeks ago here we suggested that the ECB would have to follow the Bank of England in calling a halt to the weakness in the USD. Last week they did. All western central banks need easier monetary policy, not by beggar-thy-neighbour currency weakness, but by altering their targets

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Week ending Friday August 11th 2017 War talk, especially from the opposition, sends the USD up and bond yields and equities down. It is undoubtedly a bad thing for growth expectations. War itself tends to cause rapid recoveries in bond yields and equities and send the USD down, most famously on the actual outbreak of

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Week ending Friday August 4 2017 USD flat over the week but very volatile within it. More declines occurred on the back of continued political turmoil in the Trump administration plus some modest evidence of Eurozone economic strength raising expectations for monetary tightening by the ECB. Yet it was mostly US politics that drove the USD

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Week ending Friday July 28th 2017 The slump in the USD continued for a third week. This time it was only domestic drivers as the FOMC statement sparked a strong downward move of 0.5%, before a gradual recovery later on hopes of a Trump victory on Obamacare. This recovery was then crushed on Trump’s Obamacare

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Week ending Friday July 14 2017 The USD slumped twice last week and both slumps coincided with jumps in the S&P 500. If the direct impact on equities is from stronger overseas revenues and earnings, then there seems little impact from monetary policy. But if the weaker dollar is implying easier monetary policy ahead, then

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Week ending Friday July 7th 2017 The holiday week in the US was marked by some consolidation of the previous week’s action. The bond curve steepened somewhat, both in the US and UK/Europe, continuing to reflect concerns over a reduction in the size of central bank balance sheets. The fact that shorter-term rates rose less

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Week ending Friday 30th 2017 A much more significant week for US markets and thus US monetary policy than many we have seen in recent months. That said, the biggest driver was actually the confused, but generally, hawkish tone from non-US central bankers – especially the ECB’s Draghi and the BoE’s Carney. The action was

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Quiet week after Fed normalization, economy can do nothing but slow

Week ending Friday 23rd 2017 The small rollercoaster on which short term interest rate expectations have been riding continued early this week as in a pre-market speech on Monday Bill Dudley reaffirmed the consensus FOMC case for one more rate rise this year. What else could he say so soon after the permanent members (had

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Week ending Friday 16th 2017 Inflation data, of all varieties, certainly do not support the Federal Reserve´s tightening plans. It seems even some at the FOMC are beginning to realize that fact. While in March there was just one member who thought rates should end 2017 at the 1-1.25% range, after the June meeting that

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