UBS - "Financial markets expect the Federal Reserve will continue purchasing $85bn a month of assets until its March 18-19 Open Market Committee meeting. Friday's employment report showed November payrolls growth again exceeded 200k. But the dollar lost ground against the euro, pound, Swiss franc and commodity currencies while the S&P rose 1.1% to 1805. Stronger growth prospects supported the Australian and New Zealand dollars. Expectations the Fed will still delay tapering pushed the…Continue
Added by Francesc Riverola on December 10, 2013 at 12:26pm — No Comments
Rabobank - "EUR/USD: A weaker euro would be supportive for growth in peripheral Europe.
However, not all currencies can be simultaneously weak and the EUR is losing the battle. Insofar as the market remains obsessed with the timing of Fed tapering, threats of further policy action from the ECB are proving to have limited power over the direction of EUR/USD. Not only that, but the strength of Germany’s external sector and current account remains a source of strength for the EUR. The…
Added by Francesc Riverola on December 4, 2013 at 11:04am — No Comments
UBS - "In the week ahead, most of the Fed's doves including Chairman Bernanke, New York Fed President Dudley, current FOMC voting members Evans, Rosengren and Bullard, and non-voting FOMC member Kocherlakota - are scheduled to speak. In addition, the October 29-30 FOMC meeting minutes will be released. Together, the upcoming communications will provide more insight into whether policymakers are willing to consider tapering as early as the December 17-18 FOMC meeting.
Added by Francesc Riverola on November 18, 2013 at 12:01pm — No Comments
This morning I woke up to this. As of 08:20 EST, the descending trend-line drawn from the September 6, 2013 highs has been violated in force with this daily candle. If the data this morning continues in favor of the USD, the next theoretical supply zone is 0.9180 where I have drawn…Continue
Added by Jason Justin Macko on November 1, 2013 at 12:30pm — No Comments
"(...)Anyway, we (our trading desk, Strategy and RBS's economics team) think a Fed market risk will emerge sooner than December 18th and that's in mid-November when Janet Yellen is allegedly slated to begin her nomination proceedings in the Senate. In the past few months the futures markets have moved the first full 25bp of tightening to May 2015 from September 2014 ( where we were on September 5th). Part of that shift came when Larry Summers dropped out and Janet became the lead horse in…Continue
Added by Daologic on October 31, 2013 at 12:01pm — No Comments
"If there was a small surprise in the FOMC communiqué, it was that the Fed was deliberate in hammering home that tapering is very much intact. Despite an economy…Continue
Added by Daologic on October 31, 2013 at 6:26am — No Comments
Royal Bank of Scotland - "My base case it that the Fed kicks off with a 10bn taper, 5 each for Tsy and MBS; this firms up the full taper projection. Our economists are calling for a 20bn taper. But our Treasury trader pointed out that this is per quarter. It makes sense that the Fed begins to use its quarterly full forecast/press conference meetings to announce QE taper steps, rather than adjusting every meeting. This gives them decent increments to assess the economic growth outlook between…Continue
Brown Brothers Harriman - "In the first part of next week, ahead of the FOMC meeting, we expect a generally firmer dollar. It seems to be a much more forgivable to be long dollars ahead of the decision that has been awaited for a third of the year than to be short dollars. That said, we suspect the dollar may weaken after the FOMC decision. The Fed is more likely to do less rather than more relative to market expectations.
That sell-off can extend into the end of the week. However, we…
Rabobank - "Late August brought signs that the market was taking renewed interest in the USD. This was largely the result of a step-up in risk stemming from Syria which resulted in an increase in demand for a safe-haven. Over the coming months developments in the mid-East could continue to impact the direction of the USD. That said, the USD is also likely to be heavily influenced by economic developments and in particular the policy decisions taken by the FOMC. CFTC data suggest that…Continue
Added by Francesc Riverola on September 4, 2013 at 4:21pm — No Comments
UBS - "The dollar index DXY remains at the bottom of its 81-85 summer trading range. Ten year US Treasury yields have traded through 2.80% for the first time in two years as America's economy continues to recover. But stronger Eurozone and UK data at the same time is preventing the dollar benefiting from the dovish stance of the European Central Bank and the Bank of England.
Nevertheless, we think the Federal Reserve's policymaking remains the key driver of foreign exchange markets. With…
Added by Francesc Riverola on August 20, 2013 at 11:25am — No Comments
ING Bank - "The Fed’s campaign to reinforce a message that tapering is not tightening has seen the USD hand back the gains that by early July had, on some measures, taken it to its highest level for three years. Yet we feel that its recent weakening needs to be placed in the context of a USD that is still well within the ranges established so far in 2013. Our base case remains very much for the USD to enjoy a strong recovery into year-end, even if the catalyst for its gains is in danger of…Continue
Added by Francesc Riverola on August 15, 2013 at 11:19am — No Comments
UBS - "The summer weakness of the dollar has extended further this month. The greenback ended the week around 1.33, 96, 1.55 and 0.92 against the euro, yen, pound and Swiss franc respectively. America's currency has been undermined by stronger data in the Eurozone, UK and China. But its current soft patch also reflects investors reducing positions and seasonally lower volumes in the currency markets. That suggests dollar weakness has been exaggerated. The Treasury market is also signaling…Continue
Added by Francesc Riverola on August 12, 2013 at 11:53am — No Comments
UBS - "Mansoor Mohi-uddin, Managing Director Head, Foreign Exchange Strategy at UBS Macro Research:
- During the course of this year our bullish view on the dollar has become more consensus as the Federal Reserve appears likely to be the first of the major central banks to exit unconventional monetary policy.
- But not all investors are long the greenback. American fund managers - the largest holders of dollar- denominated capital in the world - continue to have historically high…
Added by Francesc Riverola on August 7, 2013 at 3:30pm — No Comments
Deutsche Bank - "Our positive dollar view has been driven by two factors over the course of the year. First, the re-pricing of the Fed. The market was pricing a rate path that was even more dovish than the FOMC's own projections at the beginning of the year. This has now corrected, with June 2016 Fed funds inside the 1.3-1.8% range of dovish Fed Taylor rules. Second, flows. While US portfolio inflows remain weak, the big driver has been a surge in short-term flows, a combination of cash,…Continue
Added by Francesc Riverola on August 1, 2013 at 3:37pm — No Comments
HSBC - "Over the next 10 days the markets will be focusing heavily on the policy meetings of the big four
This week: Fed, BoE, ECB
Next week: BoJ, RBA (We expect 25bp cut), BoE Carney inflation report
For those with a weak constitution look away now, because on top of these policy meetings we have crucial data: US GDP data (important benchmark revisions), ISM, Payrolls
By the end of the week we may have a better understanding of where we stand on the tapering debate. This…
Added by Francesc Riverola on July 30, 2013 at 10:25pm — No Comments
UBS - "Our bullish view on the dollar faces key tests in the week ahead. The Federal Open Market Committee meets. US GDP, ISM, payrolls and PCE inflation data are released. The European Central Bank holds its monthly meeting and the Bank of England Monetary Policy Committee also meets.
In the run up to next week's events, the greenback has weakened. US data remains mixed while Wall Street Journalist Hilsenrath suggested the Fed may sharpen its forward guidance. In contrast, Eurozone PMI…
Added by Francesc Riverola on July 29, 2013 at 2:36pm — No Comments
UBS - "The dollar is entering a perfect storm that should see the currency rallying this year to 1.20, 110, 1.41 and 1.03 against the euro, yen, pound and Swiss franc respectively.
First, June's payrolls shows the Federal Reserve is on track to start tapering its asset purchases from the September 17-18 Open Market Committee meeting. Second, the European Central Bank in contrast announced an important dovish shift in policy, signalling interest rates would remain at present levels or…
Added by Francesc Riverola on July 7, 2013 at 5:52pm — No Comments
UBS - "Several of the world's major currencies are experiencing or are close to important turning points. The dollar is starting to trend higher following Chairman Bernanke's suggestion after the June Federal Open Market Committee meeting that the central bank may taper its asset purchases later this year. Similarly, the yen, despite volatility over the last few weeks, is set to trend lower following the Bank of Japan's decision on April 4 to double the monetary base. Our view that the…Continue
Added by Francesc Riverola on July 1, 2013 at 2:50pm — No Comments
Royal Bank of Scotland - "For most of the last year, global markets have been in a period of what we termed 'Mine, Everything'. This was a period of Fed-led liquidity drench euphoria, the period that brought the launch of open ended quantitative easing, and then the period which saw Japan join the money printing party, launching its own QE Abenomics howitzer. For the free liquidity addicted these truly were heady days. In this world, volatility was crushed, cross asset class, globally. In…Continue
Added by Francesc Riverola on June 25, 2013 at 5:26pm — No Comments
Tomorrow the Federal Reserve will take its high wire act to new levels. It will attempt to convince the markets that the U.S. economy is improving but is not so improved that it can do without $85 billion a month in quantitative easing.…Continue
Added by Joseph Trevisani on June 18, 2013 at 10:29pm — No Comments