Is Angela Merkel seeing the beginning of the end of her long run as German Chancellor? Yesterday’s vote for her party’s parliamentary head suggests as much. The Christian Union parties unexpectedly dumped Volker Kauder, a close Merkel ally, and instead elected Ralph Brinkhaus...
Budget talks in Rome end on Thursday, and there is risk that it could exceed investors’ expectations, putting additional pressure on the Euro. Early September estimates were 1.50% of GDP; recent estimates are 2% - still below the EU’s 3% limit...
Tightening supply is pushing oil prices higher. The USA has sanctioned Iranian crude exports, while at home capacity constraints and pipeline bottlenecks are tightening, and inventories have hit their lowest level since 2015. This, despite US crude production reaching an all-time high June...
Although Switzerland’s balance of payments increased CHF 2 billion to CHF 22 billion in Q2, we expect the trend to reverse in Q3, as the US-China trade war weighs on the franc, which has appreciated against the Euro and US dollar by -2% and -2.80% since the beginning of June...
Q4 should see a US slowdown: we suspect China retaliations will erode US growth. This means the tightening cycle is pretty much priced in: 80% probability of a December hike and another 0.8% of tightening over the next 12 months...
The American economy has underwhelmed: the Federal Reserve will raise rates only 0.25% next week. Lack of a steeper hike has taken steam out of the USD rally and given risky emerging markets room to recover. The Turkish lira recovered, despite an inept economic plan...
Japan August inflation report came in roughly in line with expectations and left investors with no choice but to look abroad for a driver. Headline inflation beat forecast as it rose to 1.3%y/y compared to 1.1% expected and 0.9% in the previous month...
Today’s South African Reserve Bank MPC decision is expected to maintain its Repo rate stable at 6.50% due to moderating inflation expectations within target corridor of 3-6% along with improving framework conditions for EM countries...
Switzerland’s foreign trade remained subdued in August amid weak demand from the US and Asia. Exports rose 0.6%m/m in August, while previous month figure was downwardly revised to -2%m/m from -1.4%. Imports contracted 2.8%m/m, compared to -1.3% in July. The trade balance rose to CHF 1...
Ahead of today’s meeting in Salzburg, sterling is strengthening, currently trading along 1.3205 USD and approaching the 1.3215 range in the short-term. At stake is whether the pound will benefit or not. This depends on EU’s view: many disparities remain, and the October deadline looms...
As widely expected the BoJ kept interest rate unchanged at its September monetary meeting. The policy balance rate was maintained at -0.1%, while the 10-year yield target was left unchanged at 0...
The Canadian dollar continues to strengthen, pushed by higher expectations of North American Free Trade talks. USD/CAD is trading lower at 1.2948 and weakening since the beginning of the week (-0.68%). The pair is expected to approach the 1.2930 range in the short-term...
Yesterday central banks' schedule was quite packed. Starting with the Turkish central bank decision to raise interest rates to 24%, a rise of 625 bps, while investors were expecting that the CBTR would target 21...
Even though central banks’ meetings took centre stage yesterday, investors were also keeping an eye on key economic data from the US. The August inflation report was released yesterday and came in slightly below market expectations. Headline inflation eased to 2.7%y/y versus forecast of 2...
Crude oil is in full hesitation. Multiple events colliding, putting traders in a difficult situation. In June US inventories fell to a 2-year low and supply risks from both Venezuela and Iran boosted prices. But the trend is reversing...
Today will see action by the Central Bank of Turkey, expected to increase the one-week repo rate by 3.25% to 21%. Any smaller increase would trigger another sell-off in the Turkish lira, which could bring USD/TRY back above 7.0. After falling 1.35% yesterday, USD/TRY edged higher to 6...
Canadian dollar bulls are celebrating. Renewed optimism on NAFTA has pushed USD/CAD lower, as US-Canada trade talks resumed yesterday. Both US President Trump and Canadian Foreign Minister Chrystia Freeland confirmed that negotiations are on track, with both ready to make concessions...
Brexit continues to grab attention: still unsolved are the customs union and the Irish border. A pound rally remains driven by talk, thus driving currency volatility higher...
After falling to a 13-month last Friday, EUR/CHF rose 1% yesterday and continued to grind higher this morning amid improving risk sentiment. Indeed, risk aversion has decreased substantially lately amid positive development in the UK...
