RBA Underwhelms With Small Rate Hike

AUD/USD started the day with losses, but has since recovered. The Aussie is trading at 0.6540, up 0.37%. RBA surprises with 0.25% hike The Reserve Bank of Australia was widely expected to deliver a fifth consecutive hike of 50 basis points at today’s meeting, but the Bank surprised the markets with a small increase of […]

NZD/USD – All Eyes on RBNZ

The New Zealand dollar continues to rally. In the European session, NZD/USD is trading at 0.5746, up 0.43%. RBNZ likely to deliver 0.50% hike The Reserve Bank of New Zealand holds a meeting on Wednesday. The RBNZ has been aggressive with its rate tightening and is expected to raise rates by 0.50%, which would bring […]

An Unsustainable Rebound?

Stock markets recovered earlier losses on Monday and are adding to that in early trade on Tuesday, with Asia also posting strong gains. The turnaround in risk appetite appears to have been driven by another deterioration in PMI surveys as traders speculate that such weakness could be a precursor to slower monetary tightening. If that […]

Global Sentiment Improves But Caution Lingers

European markets flashed green on Tuesday, building on the previous session’s strong start to the final quarter of the year, as weakening US economic data raised hopes of a less aggressive stance by the Fed on rates. US futures are pointing to a higher open with the positive momentum from Europe potentially finding its way […]

Sunset Market Commentary

Markets Should we call it euphoria or are we simply attending a long overdue short-squeeze after a protracted risk sell-off? Whatever, it has been quite a long time since European equities gained 2.5% to 3.5% intraday across indices. A weaker-than-expected US manufacturing ISM yesterday and the Reserve Bank of Australia hiking rates by a smaller-than-expected […]

Strong Dollar is Brits and Europeans' Fault

We had a bearish start to the week on Monday and the price action across several asset classes remains volatile and chaotic – and that’s especially true for the FX markets shaken by the freefall in sterling. Last week’s ‘mini budget’ announcement didn’t spur growth expectations, but rather fueled debt worries for Britain. After Cable […]

"Ever-Stronger" Dollar Taking a Well-Deserved Breather

Markets We cannot but kick off with the UK again. Aggressive selling in UK bonds and the pound prompted a coordinated response by Treasury and the Bank of England. Markets were all but impressed. UK yields again soared 41.6 (10y) to 55.4 bps (2y). All segments of the curve are now well above 4%. Sterling […]

More Turmoil to Come?

Stock markets have steadied in Asia and early European trade on Tuesday but that is not reflective of the mood in the markets at the moment so it may struggle to hold. The volatility in FX markets at the start of the week has been extreme but it’s also been building for weeks as authorities […]

Has the Crypto Market First Felt the Risk Appetite?

Market picture Bitcoin rose 1.1% on Monday, and on Tuesday morning, it “shot up” another 5.5%, adding 7.5% over the past 24 hours. This growth momentum has brought the price of the first cryptocurrency back above $20K, in stark contrast to the dynamics of falling markets and a strengthening dollar. Ethereum added almost as much […]

Update to Our Fed Funds Forecast: When the Facts Change, We Change Our Minds

Summary We had been forecasting that the FOMC would raise its target range for the federal funds rate by 100 bps more between now and early next year. But two developments have caused us to revise our forecast higher. First, the economy is showing signs of resiliency, which will necessitate more monetary tightening to slow […]