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On Monday we have the first of three Trump- Clinton debates . Rare is the cut and thrust of these Presidential debates decisive. Kennedy-Nixon moments are few and far between. The ‘winner’ of the coming debates may well be the candidate that can

EUR/USD – NEUTRAL BIAS – (1.1100-1.1400) The US dollar has weakened modestly following the Fed’s decision to leave policy unchanged which has prompted some initial relief. Still the Fed has signalled strongly that it moving closer to resuming rate

The FOMC kept the funds rate unchanged, while signalling a near-term hike.  Our US economists think the statement signals a clear bias to tighten in the relatively near future. The statement indicated that “the case for an increase in the

USD/JPY – NEUTRAL BIAS – (99.00-102.00) USD/JPY has pulled back to the 100-level, in line with our view, in the wake of the two monetary policy events at the Fed and BoJ this week. Monetary policies in the US and Japan have not diverged further

A frustrating year in G10 FX. FX market moves have often been counterintuitive this year, with seemingly very little to do with fundamentals.  Bad news is still good news, but investors we talk to are very concerned about stretched valuations in

German Finance Minister Wolfgang Schaeuble ratcheted up his criticism of European Central Bank President Mario Draghi this week ahead of Draghi's visit to the German parliament next week, the Bild newspaper reported on Saturday. Schaeuble, a fierce

This past week the BoJ extended the life of its fading QE programme ‘on the cheap’ while the Fed remained cautious, assessing the need for further tightening.  The markets took this as a risk-on/ USD-off outcome.  The USD-off lean could

The German regulator has promised to "intervene" - but what does this mean? Over the weekend German newspaper Die Welt published an interview with Elisabeth Roegele, Head of Consumer Protection at German financial markets regulator BaFin. She was

The lighter data calendar this week will see market risks shift to idiosyncratic risks. Notably, following last week’s central bank bonanza, the market will start to ponder whether political risks will start to upset the subdued macro conditions

Last week, the US equity market posted its best gains since July and it seems that further gains could be in store. Nowcast models suggest the US economy has expanded by about 3% in Q3, but our US economics team suggests that Q4 growth is set to slow

The FX market will now revert to watching bond and equity markets.  10year Treasury yields edged back up to 1.61%, which keeps them nicely in the middle of the month’s range, and our rates strategists tell me they need 1.57% to hold to avoid a

First, the flow picture is a greater drag on the Aussie than the kiwi.  Net bond inflows to Australia have turned negative sooner and at wider yield spreads to USTs than we predicted in the May Blueprint. So far this year net outflows have run

Euro buyers are daring to venture back out to play on DB rescue talk 28 Sept The woes of Deutsche Bank have helped to undermine the euro in the past few sessions but rumours of proposed  government support  are helping to find

If OPEC fails to deliver anything, or if Mr Trump’s advance in the polls isn’t halted by the debate scoring, we could go even further even as the euro meanders trendlessly. And the more the dollar does find broader support, the more that limits the

In January, Fed Vice Chair Stanley Fischer predicted that four rate hikes were "in the ballpark" for 2016. Of course here we are at the end of September, with only two Fed meetings remaining for the year, and the Fed has yet to hike rates even once

The Australian economy remains an outperformer in the G10 as it continues a successful transition away from a commodity-driven investment boom towards more consumption, exports and services-oriented growth. Indeed, Australia is experiencing the

The Federal Reserve official who sent the market into its most volatile week of the summer over fears of more aggressive interest-rate increases couldn’t have been a more unlikely candidate for that distinction. Boston Fed President Eric Rosengren

We think the likelihood of a Fed rate hike remains considerably higher than market pricing (20%) and we remain broadly bullish on the USD ahead of the Wednesday meeting. Our economists continue to forecast the Fed delivering a 25bp ‘dovish’ hike

While the Fed will express caution over rate increases on Wednesday, just prior to that on the same day, the BoJ may well be perceived as being cautious over easing monetary policy further. The announcement comes in a holiday-interrupted week with a