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BoE holds rates at 5.25% in “finely balanced” decision
The BoE today voted 5-4 in favour of holding rates at 5.25% as opposed to hiking a further 25bps, with Governor Bailey playing kingmaker in the decision. read more
Swiss National Bank holds rates at 1.75% and retains preference for stronger CHF
Today, the SNB held its policy rate at 1.75%, in line with our forecast but against the market and economist consensus for a final 25 basis point hike. read more
Equities giveth and Powell taketh away
Yesterday, the Canadian dollar weakened by a tenth of a percent, but intraday volatility was high despite the small daily change read more
Fed signals US rates will be much higher for far longer
The Federal Reserve held interest rates steady today at the current target range of 5.25-5.5%, in line with their inter-meeting commentary. read more
Few surprises from the BoC’s summary of deliberations
The Bank of Canada’s summary of deliberations for September had little in terms of new information, leaving traders shrugging their shoulders. read more
Loonie bulls take profits after hot inflation numbers
We warned in yesterday’s morning report that inflation would likely come in hotter than the consensus had forecast, and indeed it did. read more
UK inflation supports one and done view for BoE
A shock deceleration in UK inflation provides good news for the Bank of England heading into tomorrow’s rate decision. read more
August’s inflation data poses a major risk to the BoC’s hold
Headline inflation for August surged to 4.0% YoY in Canada, rising seven tenths of a percentage point to beat expectations for a 3.8% rise. read more
Loonie continues to outperform as oil rally is unimpaired
After topping the G10 FX charts last week, the loonie continued to strengthen on Monday, gaining a third of a percent against the dollar. read more
All eyes on Saudi Arabia as oil approaches $95
Markets will be paying close attention to a speech by the Saudi Kingdom’s Energy Minister Abdulaziz bin Salman later today. read more
Buckle in, it’s going to get bumpy
In the coming week, the data calendar looks incredibly dense with market-moving events, including 9 major central bank policy decision announcements. read more
An improving report card
Having misbehaved over much of the summer period, USDCAD has begun the new school term with a much improved attitude. read more
ECB hikes and holds on for hope
Today the European Central Bank raised all three of its interest rates by 25 basis points, bringing the key deposit rate to 4%, in line with our expectation read more
Navigating a narrow path
Today, CAD traders will continue to fixate on the price of oil and how fixed income markets trade given key rate decisions out of the ECB. read more
US core inflation beats but doesn’t change the Fed narrative
Headline inflation reaccelerated in the US for the second consecutive month, rising from 3.2% to 3.7% YoY. read more
Loonie likely to U-turn on hot US inflation report
In order for CAD to continue climbing, we think traders will need to see another benign US inflation release which takes the Fed out of the question. read more
Loonie rally takes a breather before US CPI
An extension of USDCAD downside will likely need tomorrow’s US inflation data to print in line with expectations. read more
The peak may be in for wages, and close for the BoE
Today brings with it the release of the first of two key sets of data leading into the Bank of England’s latest policy decision on September 21st. read more
Loonie rallies on stronger jobs data
The loonie has taken a beating the last few weeks, but Friday’s session saw the currency fight back, with the trend continuing once again this morning. read more
All hail King Dollar
With growth data out of the US suggesting the consumer remains on a solid footing, the dollar reigned supreme for the eight consecutive week. read more
August job gains slows the normalisation in Canada’s labour market
Canada added 40,000 net jobs in August, doubling the median expectation for a 20,000 increase. This fell slightly short of the increase in labour supply. read more
Jobs data could confirm BoC completion
Today, loonie traders will be watching August’s jobs data. Economists anticipate a mild 20k rebound in hiring, and expect that wage growth eased to 4.7%. read more
BoC joins the RBNZ at its terminal rate
The BoC’s rate statement came with few surprises. No change to the 5% policy rate, growth has slowed, core inflation is still too strong. read more
Bank of Canada surprises no one, sounds a touch too hawkish
The Bank of Canada met our expectations in holding the policy rate at 5% today, a decision that was unsurprising given last week’s GDP data. read more
US ISM services PMI adds gas to the dollar rally
The release of August’s ISM services PMI was the marquee event for the dollar this week, and for good reason. read more
Oiling up the loonie
Oil markets served as the primary driver for the loonie as Saudi Arabia extended its production cuts and Russian officials announced the size of the cuts. read more
Loonie languishes again as local markets reopen
The 0.35pp pickup in USDCAD to begin this morning's session is notable, with both US and Canadian traders yet to return to the office. read more
Weak GDP numbers to lead the BoC to indefinite pause
In our view, the Canadian GDP data, showing the economy contracting 0.2% on an annualised quarterly basis, puts paid to any prospect for further BoC hiking. read more
Hike, pause, shouldn’t cut
Recent months and weeks have seen central banks around the world increasingly moving towards a data dependent stance. read more
Monex’s September 2023 FX Forecasts
Our Monex analysts continue to favour the greenback against yield (JPY) and growth sensitive (EUR and CNY) currencies over the next month. read more
Soft growth means the Bank of Canada is at its terminal rate
Data today showed the Canadian economy came to a complete halt in Q2, with the 0.0% growth reading coming in much weaker than the consensus estimate. read more
It’s looking more likely that the Fed’s done
The US economy added 187k jobs in August, marginally exceeding economist expectations. read more
Inflation still cooling off in the Alps
Swiss inflation data out this morning is unlikely to shift the balance for the SNB’s upcoming policy announcement on September 21st. read more
Traders piling into the long CAD trade
Today is the day that loonie traders have been waiting for. GDP figures for Q2 will be the final test of our thesis for the BoC decision next week. read more
Loonie continues to recoup some losses
Wednesday’s trading was similar to the day before, with US data giving traders a reason to trim back some of the loonie’s losses. read more
ECB to hike again in September as inflation data doesn’t improve
Data out of the eurozone over the past week has only increased concerns over inflation persistence. read more
Soft US job openings help loonie recoup some losses
The latest developments in the loonie were US-driven, with the most crucial event being the release of the latest JOLTS survey. read more
Volatility is likely to return after a flat day for USDCAD
On Monday, the loonie traded in an extremely tight range against the dollar, moving sideways for most of the day. read more
Time for the data that central banks are dependent on
The market focus next week is likely to return back to the economic data, with some marquee releases scheduled ahead of the next round of policy decisions. read more
Downside in USDCAD to appear if Powell underwhelms
Today, price action in FX markets will likely have a better foundation as the Fed’s Jackson Hole symposium formally starts. read more
Early signs of USDCAD topping out
After a few days of failed attempts to break USDCAD out of its recent ranges, yesterday saw traders take a run at the 1.36 handle. read more
The next leg in a soft landing
Today's PMI report shows economic conditions slowing more than expected in the US in the middle of the third quarter. read more
Clear signs of consumer softness in Canada despite better headline
Canadian retail sales looked relatively unchanged on a headline basis in June, with receipts rising by 0.1% from the previous month to a total of $65.9bn. read more
Shifting pricing behaviour lessens feedback worries for the BoE
Today's flash PMI reading for the UK reinforces our view that a September rate hike from the Bank of England will likely be the last of this cycle. read more
Weak eurozone PMIs dash hopes for a September hike
Today’s Eurozone flash PMIs confirmed what financial markets feared; that the eurozone economy was heading into recession in Q3 if it wasn’t already in one. read more
Another choppy but rudderless day for CAD
For the third trading session in a row, Tuesday’s price action in USDCAD was choppy intraday but relatively directionless overall at the close. read more
Canadian dollar stable, but in turbulent waters
Volatility in USDCAD was high on Monday, although the currency pair was hardly changed by the end of the North American session, breaking a 5-day streak of gains. read more
Jackson Hole on the horizon is likely key for USDCAD
The loonie continues to trade sideways against the dollar, as a slow news weekend meant there was little to catalyse moves for USDCAD. read more
Pay attention to Jackson Hole
Flash PMI data from key economies will provide an update on global growth conditions, but the main event will be the Jackson Hole Economic Policy Symposium. read more
Risk off moves take the loonie lower
While we view the recent loonie weakness as unsustainable, news that China’s Evergrande Group filed for bankruptcy could keep markets in risk-off mode. read more
Fed dovishness hold the key for USDCAD
Today, the only Canadian data release will be international securities transactions for June, a low-priority report. read more
Canadian inflation surprises to the upside, raising pressure on the BoC
Between now and the Bank of Canada decision, we do not expect the currency pair to break out of recent ranges, and view a reversal as more likely. read more
UK inflation data does little to move the needle for the BoE
UK inflation data out this morning took a step lower, but marginally outperformed consensus expectations. read more
Still-hot inflation creates a headache for the Bank of Canada
Canadian inflation still isn’t under control, with July’s report showing a strong uptick in headline inflation and continued strength in underlying core measures. read more
Today’s CPI signal if inflation has turned a corner
Importantly for markets will be today’s CPI report for Canada, where traders are keen to see whether core inflation has finally turned a corner. read more
An upside shock to UK wage data raises the likelihood of further BoE hikes
Labour market data, out this morning, is unlikely to settle any debates for Bank of England watchers. read more
CPI key for the loonie
With last week's US CPI failing to spark much action for USDCAD, traders will be hoping that inflation data north of the border brings more excitement. read more
Snoozefest
Next week, things should heat up a bit, as markets will receive a whole range of updates on inflation and labour markets. read more
USDCAD does a round trip as US inflation fails to surprise
Intraday volatility picked up after the release of US CPI data, but after all was said and done, the loonie was still where it roughly started prior. read more
US inflation comes in soft as expected, cementing the case for a continued Fed pause
Today’s CPI report appears to put another nail in the coffin for the prospects of further Fed rate hikes this year. read more
US inflation the main risk event for USDCAD
Today’s market should pick up with US CPI set for release, as markets look for confirmation that the Fed will remain on pause through year-end. read more
The calm before the storm settles on markets with US CPI coming up tomorrow
Today is likely to be spent looking towards tomorrow's CPI release, an event that will be critical for markets in judging the path forward for the Fed. read more
A quiet start to the week for the loonie
With local markets in Canada shut for a civic holiday, there was limited excitement in USDCAD on Monday. read more
Soft jobs data supports a BoC hold, but US CPI holds the key for USDCAD
While much of Friday's attention was focused south of the border, a soft Canadian number added to the growing body of evidence for a forthcoming BoC hold. read more
All eyes stateside
Looking ahead to next week, the data calendar points to a quieter week, with the biggest event risk posed by US CPI. read more
Soft jobs report reduces the risk of Q4 hike from the Bank of Canada
Today’s data offers a clearer signal of a true softening in the Canadian labour market, making it even more supportive of a hold from the BoC. read more
US payrolls provides something for everyone
Today’s release of July’s US payrolls data does little to settle the Fed's hiking cycle debate as it contains something for both sides. read more
Higher unemployment rate would dash hopes of a BoC hike
We expect the loonie to come back to life today due to the data risk stemming from jobs reports set for release out of both Canada and the US. read more
The end is nigh for the BoE’s tightening cycle
The Bank of England today voted 1-6-2 to hike Bank Rate 25bps to 5.25%, marking a deceleration in its hiking cycle after June’s surprising 50bp increase. read more
Loonie loses out as the US yield curve bear steepens
Much of the loonie's weak sentiment had to do with a re-steepening in the US yield curve, which equity analysts say is a poor omen for stocks. read more
Monex’s August 2023 FX Forecasts
With the risk of the Fed hiking once more in Q4 still credible, we expect the shallow and bumpy downtrend in the dollar to continue throughout Q3. read more
Loonie gets hit by risk-off wave
With global risk remaining under pressure this morning, the Canadian dollar continues to trade on the back foot at the start of the European session. read more
Loonie looks rangebound ahead of Friday’s payrolls
We don’t expect USDCAD to break out of its recent range until Friday’s payrolls, meaning the next few days are likely to be driven by external factors. read more
Loonie loses out as end to BoC hikes is more probable
While markets are slowly coming around to our base case for the BoC, a further hike is still 50% priced in other the next two meetings. read more
How many more hikes?
Next week, growth conditions are going to remain front and centre with Chinese PMIs and eurozone GDP data released. read more
Firm in the face of stronger US growth
The Canadian dollar once again outperformed in yesterday’s session as strong US growth conditions boosted growth expectations in Canada. read more
ECB lays more dovish foundations as it vies for maximum optionality
The ECB raised its three key interest rates by 25bps, bringing the marginal lending facility to 4.5%, refinancing rate to 4.25% and deposit rate to 3.75%. read more
Loonie remains in ranges
Today, the loonie is playing catch-up slightly on yesterday’s price action alongside other higher-beta currencies, although it remains in recent ranges. read more
Fed hikes to what is likely its terminal rate
The Federal Reserve today hiked the Fed funds target range by 25bps to 5.25-5.5%, its highest level in 22-years. read more
BoC minutes may sound more dovish
This morning, price action in Europe once again suggests there is a bearish CAD bias at current levels. read more
ECB’s rate hikes continue to be “forcefully” transmitted
The ECB's Q2 Bank Lending Survey report highlighted that the monetary tightening since summer 2022 continues to be transmitted “forcefully” to the real economy. read more
Back to winning ways
While its peers still sit in the red over the course of the two trading sessions, the loonie managed to tip its nose into the green. read more
UK PMIs compound case for BoE to hike by 25bps in August
July’s preliminary PMIs out of the UK continued the theme of weaker-than-expected economic activity data out of Europe. read more
CAD flexes its defensive characteristics once again
The loonie flexed its defensive characteristics against a stronger dollar environment last week as it effectively closed flat against the greenback. read more
Stress testing the disinflation trade
The data calendar will further stress test the disinflation trade as a mix of central bank decisions, growth, and inflation data are all set to be released. read more
Strong retail sales to extend CAD rally
Today, the loonie is on the offensive in what is setting up to be a risk-on session, although the extent CAD's rally depends on how May’s retail sales land. read more
Expect more GBP downside on underwhelming BoE
Our analysts expect the Bank of England will hike 25bp in August following weak inflation data leading to further depreciation in the pound. read more
Loonie has a midweek slump
Today, cross-asset price action is likely to once again dominate how USDCAD trades, with little data released either side of the border. read more
An inconclusive inflation report
In our view, the main takeaway from yesterday’s data is that during this part of the cycle, the incoming releases are unlikely to provide a clear signal. read more
Another 50bp hike now looks less likely
The last inflation report before the BoE’s August 3rd meeting provided signs of relief for MPC members this morning. read more
Mixed Canadian inflation report leaves one further hike in question
June’s CPI report today didn’t settle the debate over whether the BoC has hit its terminal level at 5% or whether one further hike would ensue. read more
US retail sales and Canadian CPI land in an otherwise quiet day for markets
Today, the loonie is likely to be driven by more local factors as June’s inflation report is published at 08:30 ET/ 13:30 BST. read more
Loonie lines up for key CPI report as gains become slow going
Strength in inflation pressures this week could see CAD end the week closer to the top of the G10 pile, a marked turnaround from last week’s performance. read more
Shocked to the core (by the core)
Markets are likely to turn their attention now to the other potential drivers of the broad dollar. The standout one next week will be China’s growth data. read more
That’s more like it
The loonie picked up some momentum on Thursday as a wave of US dollar selling continued, allowing CAD to break new ground. read more
Loonie rally underwhelms despite bullish triggers
It seems that FX traders have run out of reasons to add to bullish CAD positions, even with all the macro factors working in the loonie’s favour. read more
Bank of Canada hikes 25bps to 5%, signals greater concern about over-tightening risk
The Bank of Canada raised its policy rate by 25bps to 5% as expected, its highest level in 22 years. read more
Core inflation slumps, leaving the door open to just one more Fed hike in July
The latest US CPI report confirms what markets had assumed earlier in the week following the decline in the Manheim used car auction prices for June. read more
USDCAD could hit fresh YTD lows on the right mix
The loonie's 0.3% gain against the dollar saw it sit in middle-of-the-pack within the G10, with the rally helped along by a mildly positive risk tone. read more
Preliminary positive signs open the door for a BoE deceleration
UK wage data has once again surprised to the upside, in an outturn that is likely to cause yet more concern amongst BoE policymakers. read more
Housing data adds to the case for BoC tightening
With the BoC placing emphasis on housing over the past few years, officials will likely continue to signal greater concern about upside risks to inflation. read more
USDCAD is back below 1.33 ahead of BoC decision on Wednesday
Friday proved a dramatic day for the loonie, with USDCAD falling by close to three quarters of a percent. read more
More DM central banks to hit terminal levels, while EMs eye rate cuts
Scandi inflation data is likely to draw attention for traders, but the week's main event looks likely to be the latest BoC policy decision. read more
Canada’s job market is still hot, leading markets to buy into a July hike
The Canadian economy added 59.9k jobs in June, a 0.3% increase that strongly beat the consensus estimate of 20k. read more
Slowing US employment growth casts doubt over November hike
The FX market response to today’s US NFP report confirms our view that the broad dollar will likely trade in a range bound nature over a tactical horizon. read more
Canadian jobs data holds the key for the BoC’s next move
Our analysis suggests that today’s Canadian jobs report will likely show a solid pace of job growth. read more
Markets begin to believe Fed’s dots after a suite of US releases
Recent economic releases have forced short-term interest rate traders to price in higher odds that the Federal Reserve delivers on its June forward guidance. read more
Friday jobs data comes into focus on both sides of the border
Tomorrow's jobs data will be the crucial piece of information that could shift market pricing for the Bank of Canada meeting next week. read more
Loonie nudges lower as attention shifts to Friday’s jobs data
Weak data out of China has seen the loonie trade lower, as traders weigh up the possibility for more Chinese economic support to boost growth conditions. read more
Monex’s July 2023 FX Forecasts
Although the global tightening cycle is approaching its final phase, monetary policy remains one of the primary drivers of FX market price action. read more
The loonie takes off Canada day too
Whilst Americans might be taking the day off to celebrate independence day today, Monday saw Canada day being celebrated north of the border. read more
Friday’s jobs report to tip the balance for BoC pricing
With markets now viewing the BoC’s decision next week as a coin toss, the main event for USDCAD will indeed be Friday’s jobs report. read more
The defensive dollar is back
Next week the question will be if divergence in the economic surprises will continue, with jobs data out of the US and growth data out of China. read more
Flat April GDP slightly raises risk of BoC inaction but hike remains our base case with strong growth expected in May
The Canadian economy didn’t grow or shrink in April, missing economist expectations for a 0.2% gain. read more
It’s a major day for BoC expectations
Today is perhaps the most important day ahead of the July 12th meeting, with monthly GDP and the BoC’s business and consumers surveys all being released. read more
Loonie continues to slide as yield gap re-opens
The Canadian dollar weakened against the greenback for the second day in a row, with the -0.5% sell-off picking up pace from Tuesday. read more
Loonie slumps on widening rate differentials
The loonie underperformed along with a few other commodity currencies amid a sell-off in energy and agricultural commodity futures. read more
Canada CPI shows signs of improvement, but the coast isn’t clear
Headline inflation in Canada fell from 4.4% to 3.4% YoY in May, matching consensus expectations and largely driven by base effects. read more
CAD continues to climb ahead of CPI
The consensus expects headline CPI to fall from 4.4% to 3.4% YoY, which at first glance seems like it would be a big win in the fight against inflation. read more
Loonie hits resistance at September 2022 highs ahead of critical data week
In a week in which the dollar broadly rebounded against G10 currencies, the Canadian dollar’s positive return over the five days was notable. read more
The hawks take flight as Sintra looms
Next week, we'll hear directly from major central bank heads themselves, as they meet in Portugal for Sintra, the ECB's annual forum. read more
Loonie squeaks out another high
With a marginal gain against the dollar, the loonie nevertheless squeaked out another fresh high since last September. read more
Bank of England hits the panic button
The Bank of England surprised markets today by reaccelerating their hiking cycle, exceeding market expectations and economist consensus. read more
Punchy retail sales, hawkish minutes, and a new high
The North American session kicked off with some punchy numbers, with Canadian retail sales demolishing expectations for a print of 0.4% on the headline. read more
ECB forces markets to reconsider 4% terminal rate
The European Central Bank today raised all its key interest rates by 25bps, taking the deposit rate to 3.5%, the refinancing rate to 4% and the marginal lending facility rate to 4.25%. read more
BoC draws more attention than usual following RBA hike
The loonie’s gains were related to the Aussie, as market speculation that the BoC could hike later today picked up following the RBA’s surprise hike. read more
Monex’s June 2023 FX Forecasts
Market price action over the past month was dominated by the twin themes of political dysfunction and economic convergence. read more
Loonie jumps as rate spreads narrow
Yesterday, the loonie rose by just a little less than a percent against the dollar, one of the strongest performances in the G10 arena. read more
USDCAD hovers around 1.36 as markets return to fundamentals
The loonie strengthened by about 0.2% against the greenback yesterday on mildly positive risk sentiment as terms of the US debt ceiling deal were finalised. read more
Monex’s May 2023 FX Forecasts
With central banks in the US and elsewhere hitting the end of their hiking cycles, we see near-term policy expectations losing some impact on FX volatility. read more
Monex’s April 2023 FX Forecasts
Whilst our FX Analysts' March forecasts have broadly panned out, it was the driving force behind these moves that came as a surprise to them. read more
Monex’s March 2023 FX Forecasts
Our FX analysts expect a reversal in some of February's price action on the back of reduced upside risk to US rates and potentially reduced volatility within the space. Here's a look at the latest Monex FX Forecasts for March 2023. read more
A hangover from Friday’s payrolls
Today, markets have slightly retraced yesterday’s price action, with equity futures tentatively trading in the green and a minor sell-off in the dollar. read more
Monex’s February 2023 FX Forecasts
The market's repositioning has been quite aggressive to date, leading us to believe that the dollar is overdue a period of consolidation in the near-term. read more
Macro Outlook 2023: The macro climate remains challenging for investors
Following a volatile year defined by rising inflation pressures, the macro environment is unlikely to ease up for investors in 2023. read more
Monex’s December 2022 FX Forecasts
Our house view has now shifted tactically neutral on the US dollar in the near term and await a shift in structural factors to trigger a secular decline in the dollar. read more
Monex’s November 2022 FX Forecasts
For now, our outlook on the dollar remains constructive until jobs and inflation data allow the Fed to downshift. read more
Monex’s October 2022 FX Forecasts
Although a high level of bond market volatility is filtering through to FX markets our analysts believe the dollar has a structural basis to grind higher in Q4. read more
Week Ahead: Fire sale in markets may not ease despite thinner data calendar
In the week ahead, the economic calendar dies down slightly, although the start to the week might not be frictionless as traders return with the results of Italy’s latest election. read more
The not so “mini” UK budget
At today’s mini-budget, newly appointed Chancellor Kwasi Kwarteng announced a substantial easing of fiscal policy that awoke the bond vigilantes and sent the gilt curve substantially higher, led by the front-end. read more
Week Ahead: Deluge of central bank decisions populate next week’s calendar
In the week ahead, the data calendar is dominated by a torrent of interest rate decisions as nine major central banks prepare to adjust their monetary policy. The main event, however, will be Wednesday’s Federal Reserve decision. read more
Monex’s September 2022 FX Forecasts
Our forecasts are more bullish on the dollar as we no longer expect the Fed’s downshift to 50bps in September to be as supportive for risk conditions. read more
Monex’s August 2022 FX Forecasts
DXY index is likely to stay supported, owing to our expectation that the euro-area’s growth outlook will force another run on parity this month. read more
Monex’s July 2022 FX Forecasts
Read Monex's July 2022 FX Forecasts. Find our what our top forecasters expect for currency markets, amid ongoing recession concerns and higher inflation. read more
Spooked by services inflation, the BoE doves fall back in line
The Bank of England voted 6-3 in favour of raising rates by 25bps to 1.25%. The dissenters (Haskell, Mann, and Saunders) all voted to hike rates by 50bps, in order to mitigate against risks that wage growth, firms’ pricing decisions, and inflation expectations fuel persistence in above-target inflation. read more
Loonie under pressure as interest rate differentials narrow
The loonie depreciated on Friday despite a strong job market print that put more pressure on the Bank of Canada to expeditiously raise its policy interest rate. Amid this backdrop, the loonie continues to trade weaker, with losses likely to be extended should North American equity performance deteriorate further after markets cash open. read more
Monex’s June 2022 FX Forecasts
Read Monex's June 2022 FX Forecasts. Find our what our top forecasters expect for currency markets, amid ongoing global growth and inflation concerns. read more
Monex’s May 2022 FX Forecasts
Read Monex's May 2022 FX Forecasts. Find our what our top forecasters expect for currency markets, amid current geopolitical events and uncertain conditions. read more
CAD Outlook: Loonie strength to continue in Q2 on higher oil and BoC support
The Canadian dollar has been highly sensitive to monetary policy actions and price action in global commodities over the course of Q1. Under our base case for commodities and the Bank of Canada in Q2, which envisages two 50bp hikes, we believe gains in the Canadian dollar are likely to continue. However, our flatter forecast for the BoC policy rate in H2 will likely weigh on the loonie at the margin as the pace of Fed tightening overtakes that of the Bank of Canada. read more
Monex’s April 2022 FX Forecasts
While the limited progress in peace talks towards the end of the month blurred the overall dollar dynamics due to a positive boost to regional risk sentiment, we still expect some of the dominant drivers of FX markets from March to remain in play in April. read more
Russia-Ukraine makes central banks think twice about hikes
Risk sentiment chopped and changed throughout the week as all eyes remained on Russia-Ukraine developments. This week monetary policy decisions by the FOMC and BoE are set to show similar levels of caution to the ECB, although both central banks are still expected to hike interest rates by 25bps. read more
Loonie set to limit weekly losses as energy producer stocks rise
Today, at 13:30 GMT, markets will get an update on the status of the Canadian labour market, which by all accounts is expected to show employment rose by 127.5k. The data is likely to confirm expectations of continued policy tightening by the BoC if the data prints in line with expectations. read more
Euro jolts above 1.11 as ECB surprises markets with hawkish move despite war in Ukraine
Today’s European Central Bank decision came as music to the ears of EUR bulls. With the Russian invasion of Ukraine having materially changed the eurozone risk profile in a matter of weeks, the last thing markets expected was for the ECB - which is usually very cautious around its wording - to come out with a definitive announcement of a faster taper to their QE programme. read more
US inflation highest since January 1982, but markets unfazed
US headline inflation today printed at 7.9% YoY for February, up from 7.5% in January, to record the fastest pace of price growth in 40 years. Unlike in previous readings, however, the core reading was much more muted at just 0.5% MoM. read more
Loonie rallies off of market optimism despite sharp drop in oil
The loonie rose half a percent against the greenback on Wednesday, following a market-wide positive shift in risk sentiment. Nevertheless, CAD’s gains lagged many of its peer currencies in the G10 space, owing potentially to the limited sell-off in the loonie during risk-off periods over previous weeks. read more
EUR Update: European currencies battered by latest Russia-Ukraine headlines – is there a floor?
Since the publication of our latest FX forecasts at the beginning of the month, significant developments in the Russia-Ukraine war have put increased pressure on European currencies and equities. Over the last month, the respective currencies of these nations have therefore performed even worse than the euro. The question now is; where will price action stabilise? read more
Monex’s March 2022 FX Forecasts
Geopolitical events are likely to continue driving FX markets in the near-term and with no clear end game as things stand, our forecasts remain under review. Our base case scenario at present is that the pace of geopolitical developments slow in March, but recent events result in a material deterioration in Europe’s macroeconomic backdrop and a still tentative risk environment. read more
EUR Update: Fluid backdrop to keep volatility elevated
The ongoing political risk in Europe means EURUSD is going to remain an easy target within the G10, while rising US Treasury yields the euro’s sensitivity to them will also be a risk. Looking over to H2, an improvement in global growth conditions will be more deterministic for the euro when the monetary outlook and political backdrop has become more stable. read more
USDCAD lower, but loonie lags peers as crude slips
Yesterday’s session saw the Canadian dollar advancing against USD, however it underperformed against other higher beta currencies as falling crude oil prices weighed on the petro-linked currency. Today’s focus will be on a speech by Bank of Canada Governor Tiff Macklem, as the BoC is expected to raise rates in March. read more
Weak Canadian jobs report unlikely to derail BoC tightening
An underwhelming jobs report from Canada coupled with a robust report from the US led to a spike in USDCAD on Friday. Most of the loonie’s losses have been recuperated, however, arguably as the jobs report failed to shift expectations for Bank of Canada policy tightening: read more
Monex’s February 2022 FX Forecasts
Looking ahead, our FX analysts expect the dollar’s strength to be more nuanced in February and for it to be isolated against currencies where rates are likely to lag the rise in US rates. In our forecasts, this largely pertains to EUR, JPY and CNY. read more
BoC underdelivers but it took Fed Powell to force the sell-off in the loonie
Following the BoC’s announcement that rates are set to remain at 0.25%, the loonie reversed all of its daily gains to sit flat despite the Bank teeing up a rate hike at March’s meeting. While the Canadian dollar flirted with trading higher, such that half of its lost gains were recovered, during the press conference, the loonie’s bullish bias was soon to be crushed come the Fed meeting. read more
Loonie slides as commodity currencies lead losses vs USD
Traders exposed to commodity currencies such as CAD will be keeping a close eye on geopolitical developments this week, while CAD traders specifically will be focusing on the BoC this Wednesday and its updated monetary policy report. read more
BRL Outlook: Hawkish BCB to offset depreciation, but political risks may tip the balance
As the year progresses, the Brazilian general elections that are set to be held in October will become increasingly relevant for FX markets given the real’s reputation of weakening in times of political uncertainty and upcoming elections. read more
UK economy finally recovers to above pre-pandemic levels of output
Today's release of UK GDP data for November saw economic activity more than double the consensus estimate with a print of 0.9% MoM. In addition to this, October’s monthly GDP reading was revised upwards from 0.1% to 0.2%. read more
Monex’s 12 key market themes for 2022
Trade ideas tend to have a short shelflife in today's market, so instead of issuing trade suggestions for 2022, we have opted to outline the main themes we think will dominate market price action in the coming 12 months. read more
US inflation near 40-year high, but financial markets are underwhelmed
Despite the US CPI release showed that headline inflation is sitting at its highest point since June 1982, the reaction in the Treasury market was counterintuitive and the dollar sold-off against its G10 peers. read more
US and Canadian labour market reactive
Expectations for today’s US payrolls data were high after multiple sell-side forecasters revised their projections for the net employment figure upwards following the higher ADP and Homebase data from earlier in the week. read more
FOMC meeting minutes strike hawkish tone, but it’s one for the fixed income traders
It seems today's FOMC meeting minutes is one for the fixed income traders as opposed to the FX space. For FX markets, the impact of today’s meeting minutes will likely play out over the course of the week, especially as December’s jobs data is released on Friday following bumper ADP and Homebase indicators earlier in the week. read more
Monex January 2022 FX Forecasts
Looking ahead to 2022, our forecasts have been adjusted to take into account the new sensitivities of central banks to inflation, continuing virus risks and the likely slowdown in growth in Q1. Omicron risk continues to dominate as policymakers conduct a balancing act in order to mitigate the health and economic impacts. read more
Loonie falls after the BoC renews its inflation mandate with a twist
CAD was under pressure for most of yesterday’s session as the fall in oil amid a risk-off market resulted in commodity currencies selling off across the board. The loonie also faced its own challenge as the Bank of Canada released the details of its inflation framework review. read more
Bank of Canada formalises its implicit employment goal in new inflation mandate
While today’s announcement falls in line with what economists were largely expecting and is merely a formalisation of the mandate that has been in practice since the onset of the pandemic, it is being viewed as a marginal dovish development by markets. read more
Omicroncerns clouding the monetary outlook ahead of year end
Next week’s (13th - 17th December) calendar includes nine central banks scheduled to announce their policy decisions, which means FX volatility is likely to pick up. All of which are likely to be clouded by concerns over the impact of the Omicron variant. read more
Loonie traders turn to Gravelle’s economic assessment
For today, the emphasis is on Deputy Gravelle’s economic assessment for further guidance on the economic outlook at 18:00 GMT, especially as yesterday’s meeting came without a press conference. read more
Tight labour market brings focus back to Bank of Canada
The rapid tightening of the labour market in Canada could see the Bank of Canada turn more hawkish in the year to come, especially if wages continue to rise sharply along with inflation. read more
BoC and NBP to keep markets busy ahead of US CPI
Next week’s (6th - 10th November) calendar includes a BoC meeting and an NBP meeting, along with several CPI releases including the US. While the BoC is expected to hold fire on Wednesday, Thursday’s speech from BoC Deputy Governor Gravelle will be heavily watched. read more
Lower growth profile and rising US yields call for downgraded EUR calls
In November, significant downside risks to our November forecasts materialised, with growth concerns and rising US yields pushing EURUSD down from 1.16 to the 1.12 level. Growth concerns arose as some eurozone countries went into light lockdowns. read more
Loonie hits 7-week low as oil markets tumble and US 2-year rises
The Canadian dollar continues to slide against its US counterpart as US equities print in the red, oil markets continue to slump on news of more strategic reserve drawdowns. read more
Projected rate paths are key for NZD and SEK
Next week (22nd - 26th November), focus remains on how markets price central bank tolerances to inflation and global growth conditions as Covid cases begin to rise and force major nations to impose tighter containment measures. read more
Loonie stabilises as oil pressure moderates
A stabilisation in oil markets yesterday helped the loonie stem its losses and stabilise around lows not seen since early October. With crude now sitting just shy of $80 per barrel again, the Canadian dollar might start retracing recent losses. read more
UK CPI, labour market data keep BoE on track for December hike
UK CPI massively outstripped expectations to print at its highest 12-month rate since December 2011, and the month-on-month change saw the pace of price increases reach a high not seen since April 1993. While today’s data exceeded the consensus estimate from economists, it is broadly in line with the BoE’s projections, which envisage CPI peaking at 5% in April 2022 when Ofgem adjusts its price cap again. read more
Loonie recovers from Friday’s lows despite lower oil prices
The loonie is crawling back against the dollar after Friday’s 1-month high in USDCAD, as moves in Treasury markets meant the dollar is trading softer this morning. The rally in CAD comes despite crude oil prices having fallen slightly after US President Joe Biden faced even more calls to tap the Strategic Petroleum Reserve in an attempt to tackle the elevated gas prices and push back against inflation expectations. read more
US CPI keeps markets volatile following the central bank bonanza
Next week (15th - 19th November), CPI remains top of mind as a number of nations are set to release reports highlighting above target price growth, however, we believe these releases will have less of an impact on broader markets relative to the US release this week. Additionally, central banks from South Africa and Turkey are expected to deliver fresh rate decisions. read more
Loonie shaken by strong US CPI print and lower crude prices
No one was safe from the broad USD rally in yesterday’s market following the CPI release. USDCAD rallied close to 0.5% as the CPI release reinforced expectations of earlier policy tightening by the Fed, while on the loonie’s side, softer crude oil prices following the rising dollar undermined the petro-linked currency further. read more
US inflation tracks back above 6%, placing pressure on transitory messaging
With expectations for October’s CPI print to rise from 5.4% to 5.9% YoY already in play, today’s inflation release had to be big to disrupt markets beyond what had already been priced into the Treasury curve and in the FX space during the morning session. read more
Loonie climbs on broad USD weakness, but tight ranges form again
The loonie was no exception to the USD weakness story yesterday and climbed some 0.15% against the greenback as crude oil prices rose, while Bank of Canada Governor Macklem hit the media to reiterate his view on inflation. Macklem stated the surging inflation is transitory but not short-lived, and reassured the BoC would keep inflation under control. read more
Loonie continues to weather broad US dollar strength as BoC set to remain hawkish
The Canadian dollar continues to trade in a relatively subdued manner despite the broad bounce in the US dollar last week. Expectations of the Bank of Canada remaining one of the hawkish outliers in the G10 central bank space, which is generally pushing back market expectations, is helping support the loonie. read more
ECB and Fed speakers in scope after dovish retaliation
Next week (8th - 12th November), despite the absence of any major central bank meetings, the focus will remain on monetary policy pricing, especially as the Fed’s media blackout period ends. Notable speeches from Chicago Fed Evans and San Francisco’s Daly will be in scope for US rate traders, while opening remarks from the ECB’s Chief Economist Lane will be top of mind for euro money markets. read more
Strong payrolls keep US front-end yields firm, boosting the dollar
Amid the dovish pushback from G10 central banks this week and the broad rally in bond markets, front-end US Treasury yields have remained fairly resilient. This theme was extended in early trading today, helping the dollar gain ground ahead of October’s payroll data. While Canada’s net employment change undershot expectations by 10.4k with a print of 31.2k, today's LFS largely met our expectations. read more
Labour force survey likely to confirm the BoC’s hawkish position
With the level of employment in Canada now back to pre-pandemic levels, and the sectoral damage from lockdown limited on an employment basis, net employment gains are likely to slow. Emphasis will therefore be on signs of a tight labour market appearing in underlying metrics such as wage growth and average hours worked. read more
Bank of England bats back market expectations, sends sterling plummeting
The Bank of England today shocked markets by voting 7-2 to hold rates at 0.1% while voting 6-3 to maintain the current stock of assets at £875bn. While we largely expected the Bank to hit back against aggressive market pricing of rate hikes by holding rates, we anticipated a tighter split in the vote in order to signal to markets that tighter policy was imminent at December’s meeting. read more
Markets turn a blind eye to Fed and ECB guidance, loonie off the lows from USD weakness
After touching its lowest point since October 13th, the loonie reversed losses to close the day out on a stronger footing yesterday after the Federal Reserve underdelivered on market expectations and broad US dollar weakness rang through FX markets. Today will be another quiet session for loonie traders today ahead of Friday’s labour market data. read more
Time to taper, but that is all from the Fed for now
The Federal Reserve largely met the market consensus today by announcing plans to taper its QE programme by a maximum of $15bn per month until year-end. Powell opened the door further to give policymakers greater optionality going forward. read more
Loonie trades in tight ranges ahead of the Fed
The Federal Reserve could force USDCAD to breakout to the upside given the right mix of policy tightening and commentary from Chair Powell, however, the possibility of the Fed under delivering on a hawkish message also remains a viable risk. read more
The Canadian dollar continues to grind out gains ahead of Friday’s data
This morning, the Canadian dollar is seeing more notable losses against the US dollar compared to other G10 currencies, but this is likely a retracement from yesterday’s moves. Today’s calendar is sparse for Canada, with building permits being the only data release of note at 12:30 GMT ahead of the crucial FOMC meeting. read more
Loonie struggles to continue rally to 1.22, but labour market data could change this
The loonie remains trading near recent highs, but broad USD buying towards month-end reversed all of last week’s gains. With oil markets looking as if they’ve stalled just north of the $80 mark recently, and equity markets pivoting on whether they post marginal gains, the loonie’s tailwinds have seemingly weakened. read more
The central bank magic trick: turning a dove into a hawk in plain sight
Price action in G10 FX markets this week has been driven predominantly by pricing in bond markets and the actions of central banks. This dynamic is set to continue next week (1st - 5th November) as the battle against rising inflation migrates from the Bank of Canada and the ECB to the Reserve Bank of Australia, the Federal Reserve, and the Bank of England. read more
Loonie looks to August GDP data to assess economic performance in Q3 vs the US
Today, loonie traders will be keeping a close eye on August’s GDP data at 13:30 BST following the slip in US growth in Q3 and the Bank of Canada’s downgrade to 2021 GDP on Wednesday. The data is expected to show the economy expanded by 0.7% MoM in August, following a tentative start to the third quarter when July’s data printed at -0.1%. read more
ECB meeting: Inflation, inflation, inflation
Despite the suppressed expectations, the ECB managed to dull the event down even further by adjusting their opening statement such that it indicates the decision would not include an assessment of the economic outlook. The lack of excitement was visible across markets, as EURUSD remained unfazed after the release of the initial rate statement. read more
Not to be left out, the BoC joins the leading pack of hawks
Yesterday, all eyes switched firmly to the Bank of Canada as the central bank not only finalised its QE programme by entering the reinvestment stage but also brought forward its expectation of when the output gap would close from H2 2022 to “the middle quarters of next year”. read more
Bank of Canada ends QE and emboldens hawkish market pricing
The Bank of Canada today announced that it would taper its QE programme by a further C$1bn a week, therefore entering the reinvestment stage, while it also brought forward its forecast for the output gap closing from H2 2022 to “the middle quarters” of next year. read more
UK budget: Sunak saves part of the fiscal windfall with 2024 election in mind
Today’s long awaited Autumn budget was a damp squib for FX markets given that the majority of the fiscal pledges were announced in advance of the formal unveiling. The net impact of today’s budget is lower bond issuance going forward, with the OBR now projecting £154bn less in borrowing over the following 5-years. read more
Loonie’s tight ranges set to be broken by key BoC meeting
The loonies’ tight ranges are likely to be broken today as the Bank of Canada updates investors with its latest policy decision and economic outlook. While we expect larger moves in USDCAD relative to other trading sessions this week, the loonies’ slight depreciation trend may not reverse should the Bank not accompany the end to their QE programme with a more hawkish outlook for rate hikes. read more
Loonie volatility is limited ahead of the Bank of Canada meeting
The Canadian dollar struggled to hold onto the oil rally yesterday as it slipped at the margin against the US dollar. With very little in the way of economic data today, and the Bank of Canada scheduled tomorrow, today’s session is likely to be the calm before the storm. read more
This week’s BoC meeting could give loonie rally fresh legs
The Canadian dollar starts this week on the front foot as oil markets climb to $85.50 per barrel, but the loonie remains far from last week’s highs. A hawkish Bank of Canada meeting may tip the balance in favour of the loonie, although a further taper of the QE programme to the reinvestment level of C$1bn a week is unlikely to be marked as hawkish. read more
Central banks to take centre stage ahead of crucial GDP readings
A flurry of central bank meetings take will place across the globe next week (25th - 29th October), while Q3 GDP prints from the US and eurozone will take centre stage on Friday. Several countries will also release inflation readings. Among the central bank meetings are the Bank of Canada, the Bank of Japan and the European Central Bank - in order of importance. read more
Loonie weakens on oil retreating from multi-years high
With both Brent crude and WTI taking a leg lower yesterday however, while the market mood was not supporting the loonie either, USDCAD gained around half a percentage point on the day. Some of those gains have been pared back this morning, but looking at the remainder of the day any changes in FX direction should come from broader macro flow given the lack of noteworthy data releases from Canada. read more
USDCAD falls to lowest level since June following upbeat market mood
The Canadian dollar continued its climb against the dollar yesterday to reach new highs not seen since July as crude oil prices ticked up higher and risk sentiment remained supportive, while this morning, the loonie climbed up further to June levels. read more
CAD continues to find support in oil rally and weaker USD
Today’s focus turns to CPI inflation from Canada at 13:30 BST, which will be viewed in light of next week’s policy decision. Expectations for the YoY print are set at 4.3%, slightly higher than August’s 4.1% reading, while the MoM figure is expected to remain unchanged compared to last month, non-seasonally adjusted. read more
Loonie shielded by robust oil prices while USD weakens
The loonie was shielded by strong oil prices in yesterday’s session and managed to withstand pressure from the greenback, while the drop in oil prices during the latter part of yesterday’s session did little to dent the loonie as the US dollar weakened simultaneously and crude oil prices remain significantly high in broader terms. read more
EUR Update: Euro weighed down by near-term factors, medium-term outlook rosier
While September’s losses were significant at over 2%, we expect the pressure on the euro to ease over the coming months as supply pressures mitigate, which should help to cool inflation and aid growth conditions. We expect the combination of these developments to be supportive for EURUSD. read more
CAD losses limited by strong oil prices despite cautious market mood
At 15:30 EDT today, the Bank of Canada releases its Q3 Business Outlook ahead of the October 27 policy meeting which comes with fresh projections. Markets will take the survey as an important indicator of what to expect for next week’s meeting. read more
Economic activity and inflation data put stagflation fears to the test
Next week (18th - 22nd October), the data calendar revolves around October’s preliminary PMI prints, while China’s Q3 GDP data also scans as one of the more interesting releases. The focus on activity data is likely to be heightened given growth concerns over previous weeks and the impact higher input costs are having. This is especially the case in the eurozone, UK, and China, where rising energy costs are the most pronounced. read more
USD Update: Defiant dollar in Q4
Amid the global backdrop of lower growth and higher inflation, the dollar is likely to stay well bid in Q4. However, our latest forecasts now see the DXY index trading a percentage point lower than current spot levels and back towards highs of its previous trading range as the aggressive repricing in FX markets overextended in early October given our views on back-end US rates this year. read more
Big miss in ZEW fails to dent EURUSD as G10 yields moderate
Today’s miss in the German ZEW data highlights how German activity is struggling to expand at the start of Q4 as current conditions are no longer improving. The current situation gauge tumbled from 31.9 in September to 21.6 in October, well below expectations of 28.5. EURUSD escaped the lack of optimism spilling into FX markets despite the big miss in today’s ZEW data, as at the same time yields in G10 markets have been moderating today after yesterday’s dramatic climb higher. read more
Macro backdrop of slower growth and rising inflation set to dominate FX markets
Next week (11th - 15th October), with a limited data calendar, markets are likely to continue focusing on the inflation backdrop and the impact it will have on growth conditions. We take a brief look at the environment in Europe this week and what it means for ECB and BoE pricing. read more
Diverging labour reports play out in North America
It was our expectation that today’s Canadian and US labour market reports would show a stark divergence, not only in net employment but also in underlying metrics. This ultimately played out, with the US jobs market adding 194k jobs in September compared with expectations of a 500k increase, while Canada added 157.1k jobs relative to expectations of just a 60k net employment gain. read more
Grappling with the stagflationary backdrop
Next week (27th September - 1st October), the focus shifts from policy announcements to individual central bankers. The RBA, RBNZ and NBP will have to announce their policy decisions given the latest downturn in the global economic outlook, while on the data front, US and Canadian labour market data stands out. read more
From policy announcements to central bank speakers
Next week (27th September - 1st October), the focus quickly shifts from policy announcements to individual central bankers as a swathe of speakers fill the economic calendar, largely due to the ECB’s forum on central banking taking place between the 28th and 29th of September. Rather than being in Sintra (Portugal) as has been customary, the event will take place online. read more
Bank of England delivers hawkish surprise, even by the markets standard
The Bank of England today voted unanimously to keep the Bank Rate at 0.1%, while members voted 7-2 in favour of continuing with its existing QE programme. The shift in the QE vote, from 7-1 to 7-2 due to Ramsden joining Saunders in dissenting, set the tone for what was to be a hawkish set of meeting minutes despite their Q3 GDP projection being downgraded by around a percentage point. read more
Fed signals faster tapering in 2023 but under-delivers on next year’s dot plot
For those looking for an explosive Fed meeting, they may have initially been disappointed by the alterations in the dot plot. However, Powell’s comments meant volatility wasn’t absent in the FX space, with the likes of EURUSD swinging within a 0.55% range and USDJPY climbing over half a per cent higher on the day. read more
Central bank bonanza
The 20th - 24th September is packed with central bank meetings, with the FOMC’s decision on Wednesday eyed as the most important economic event by markets. On top of that, the Bank of England is set to release their latest policy decision, while the Norges Bank is expected to be the first G10 central bank to raise rates since the pandemic. read more
Inflation to sit top of mind next week
Next week’s data calendar focuses heavily on inflation data in major developed market economies, while core CPI readings from Poland and inflation expectations data in Turkey will be viewed amid historically high CPI readings. read more
Central banks set to stretch hawkish wings
Next week, price action in US fixed income markets will continue to garner a lot of market attention, while increasingly hawkish central bank developments will also be in scope. Of note is the Reserve Bank of Australia, who we expect to press on with tapering their QE programme, the Bank of Russia who are expected to hike by 50bps, the National Bank of Poland who will battle with record high inflation, and the European Central Bank. read more
Focus shifts from Jackson Hole to US jobs data
In the week beginning Monday 30th August, the market’s emphasis shifts to monitoring the severity of the latest Covid-19 waves driven by the delta variant, the economic impact they are having via timely data points, and August’s Nonfarm Payrolls data next week. Fixed income and money markets will be taking their cues from the latest payroll data in order to price expectations of September’s Fed meeting. read more
Jackson Hole arrives after a volatile week for macro conditions
With a tentative macroeconomic backdrop, next week’s data is likely to have a larger market impact than usual, especially with the quantity of preliminary PMI releases for August. The Fed’s annual Jackson Hole symposium should provide markets with a bit more clarity as to its tapering timeline. read more
One week closer to Jackson Hole
Markets are likely to settle somewhat as they await the headlines from the Jackson Hole symposium on August 27th. Next week’s calendar suggests there may be pockets of isolated volatility with policy decisions from both the Reserve Bank of New Zealand and the Norges Bank, while the Reserve Bank of Australia and Federal Reserve both publish meeting minutes. read more
To hike or not to hike, that is the question
Markets this week have largely focused on underlying growth conditions, FOMC speakers and Friday’s labour market data, with US bond markets sending conflicting signals to FX traders. Next week (9th – 13th August), the key pieces of data centre around rate decisions from Banxico and the CBRT, both of which have reasons to hike rates due to rising inflation but also have grounds to stay pat. read more
Canadian employment underperforms, but it isn’t all bad
July’s employment data out of Canada saw the economy add 94,000 jobs. While on the surface, the slip looks seismic, the nature of the job additions and the stage in which the Canadian labour market recovery is at means the underperformance of the net employment data isn’t as concerning as the headline suggests. read more
Bank of England in focus after inflation overshoots and labour market progress
Next week, the focus will be on the Bank of England to announce its policy decision and comment on the recent inflation overshoots and recovery in the labour market. read more
Q2 GDP data and the Fed are in focus amid a global third wave
Markets will pay close attention to commentary by Chair Powell and the Fed’s assessment of current conditions. A first glance at economic performance in advanced economies in Q2 is also pinned for the week, although growing fears over the coming months might cloud the impact positive GDP figures have on markets. read more
ECB guidance to take centre stage next week, CBR set to hike rates
The ECB takes centre stage next week, with a revamped strategy review setting the tone for a persistently more dovish course of action in the months to come, while the CBR is set to hike rates further amid a light data calendar. read more
Central banks in focus next week after Fed’s hawkish shift
Next week will be critical to assessing the way forward as a fresh batch of inflation data is released and several central banks face the press cameras. On the side, political developments might add excitement to markets. read more
Monetary policy in scope with FOMC minutes and ECB strategy review
This week (5th - 9th July), the meeting minutes from the Fed’s June meeting will be scoured by market participants as they try to gain a clearer view on future US interest rates, and the ECB’s Governing Council is set to also meet next week in Frankfurt to discuss the ongoing policy review. read more
First Nonfarm Payrolls since Fed may cause significant volatility
Last week, volatility in FX markets was largely driven by the hawkish shift by the FOMC, as broad dollar moves drove price action in G10 currency pairs. This week, the focus remains largely on the US, with the release of the first Nonfarm Payrolls report since last week’s Fed meeting. read more
Markets to tune into FOMC speakers after the Fed’s hawkish shift
The focus next week will now be on US data and whether that can live up to the expectations set by the Federal Reserve, while a few FOMC speakers will provide markets with a bit more clarity on their position on the economic outlook. read more
A week of central bank decisions but the Fed will draw most of the focus
The Federal Reserve, Central Bank of the Republic of Turkey, and the Central Bank of Brazil are likely to be the most exciting on this week's agenda. Over the weekend, events in the UK will focussed on the government’s decision to stick to its June 21st reopening plan as cases of the delta variant rise. read more
It is all about PEPP
Looking ahead, central banks will come back to the fore next week with the European Central Bank, the Bank of Canada, and the Bank of Russia releasing their latest policy decisions. The ECB is likely to steal the show as speculation over the next PEPP decision rises. read more
All eyes on US and Canada labour market data after underwhelming April reports
Next week (31st - 4th June), the focus turns to labour market data from the US and Canada after April’s underwhelming reports. Also on the agenda are policy decisions from the RBA and Reserve Bank of India and China’s official manufacturing PMI. read more
Limited top-tier economic data puts USD dynamics further into focus
Next week (24th - 28th May), the economic calendar is light on major market-moving events. US PCE inflation stands out as the most high profile data point on the calendar along with the latest RBNZ rate decision, while the focus will remain on central bank speakers. read more
European vaccine rollout takes centre stage while developing countries struggle with a dire Covid situation
We continue to track the evolution of the vaccine rollout in major economies, as a timely gauge of potential reopening and global economic recovery. In this edition, we highlight the European efforts to catch up with front-runners like the UK and US, while stressing the dire picture in some emerging markets. read more
A post Brexit Britain leaves sterling at the mercy of Covid-19 developments
The stale nature of Brexit developments over the course of Q4 means it has been some time since our last GDP outlook. In the latter stage of 2020, despite Covid-19 developments, the pound continued to trade based off no-deal Brexit risk as the clock wound down and negotiations stalled. read more
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#BoE surprises with a “finely balanced” hold, keeping rates at 5.25% in a move seemingly triggered by yesterday's soft #inflation data.
The #Fed sold #FXmarkets a hawkish message last night, to which #centralbanks across #Europe will now have to live up to.
The #FederalReserve kickstarts the deluge of #centralbank decisions this evening, with the updated dot plot likely to do the talking for #FXmarkets.
#Inflation softened unexpectedly in this mornings #CPI release, but this is likely still not enough for the #BoE to pause hiking #BankRate tomorrow.
With #oil rallying and 2-year #Treasury yields trading above 5%, a mild #dollar bid persists in #FXmarkets heading into a blockbuster calendar from Wednesday onwards.