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Price action in markets deprived of tier-one macro data over the Christmas and New Year period has centred on acute volatility in US and global equities, with sizeable intra-day swings including a temporary flash crash in the USD/JPY cross below 105 on 3rd January. The US government shutdown, ongoing concerns about the US-China trade war, the slowdown in global economic
Read moreToo little attention has been paid to the global rise in central bank policy rates in the past 6-7 months and its implications for economic growth, CPI-inflation and currency and rates markets. Central bank rate hikes in Emerging Market (EM) economies, along in some cases with central bank FX intervention and other policy measures, have helped stabilise under-pressure currencies, particularly
Read morePrime Minister May Theresa May yesterday evening survived a Conservative Party leadership vote, in line with our forecast, by 200 votes to 117. She will likely remain in office but it is debatable whether she is still in power. We now expect the delayed House of Commons’ vote on the draft Brexit deal to take place in the new year
Read moreIn the past three weeks, British and European Union (EU) negotiators have formally reached an agreement on a draft “Brexit deal”, in practise two separate albeit inter-linked documents: 1) The terms and conditions of the UK’s exit from the EU – the legally binding Withdrawal Agreement (WA) and 2) The non-legally binding “Political Declaration on the UK’s future relationship with
Read moreThis is a summary – Read the full research piece here Olivier DesbarresOlivier is an economist and rates & FX strategist with over 22 years experience in financial markets. He is Director and Founder of 4X Global Research, an independent, London-based consultancy which provides institutional and corporate clients with substantive research, high-quality analysis and insight on emerging and
Read moreThis is a summary – Read the full research piece here Olivier DesbarresOlivier is an economist and rates & FX strategist with over 22 years experience in financial markets. He is Director and Founder of 4X Global Research, an independent, London-based consultancy which provides institutional and corporate clients with substantive research, high-quality analysis and insight on emerging and
Read moreFX market turbulence in August, led by sharp moves in emerging market currencies, has so far in September given way to more placid price action. The Dollar has weakened, Nordic and in particular high-yielding emerging market currencies have on the whole appreciated while Asian currencies have underperformed. Since 4th September, all major currencies, bar the Philippines Peso, Yen, Indian Rupee
Read moreSo far this year we have identified six broad phases for the US Dollar which have lasted from a couple of weeks to two-and-a-half months. This provides a useful starting point to analyse how the Dollar, Renminbi and major currency groupings, including developed and EM currencies and low-and high-yielders, have performed during these distinct phases and how they may fare
Read moreSince 5th August the Turkish Lira is down about 17% versus the Dollar and 15% in nominal effective exchange rate (NEER) terms and the concern remains that any further Lira depreciation will again spread to other high-yielding emerging market currencies. Conversely, recent precedent suggests that renewed Lira weakness would result in FX flows to traditional safe-haven currencies – the Japanese
Read moreOlivier DesbarresOlivier is an economist and rates & FX strategist with over 22 years experience in financial markets. He is Director and Founder of 4X Global Research, an independent, London-based consultancy which provides institutional and corporate clients with substantive research, high-quality analysis and insight on emerging and G20 economies and financial markets.
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