GBP FUNDAMENTAL BIAS: WEAK BULLISH 1. Monetary Policy Hawkish surprise with a hint of dovish undertones sums up the Feb BoE decision. The bank announced the start of passive QT and also hiked rates by 25bsp as expected, but the vote split was unanimous (9-0) but with a big hawkish surprise being 4 MPC members voting for a 50bsp hike. Inflation forecasts saw...
EUR FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy Hawkish! This sums up the Feb ECB policy meeting. The initial statement was in line with Dec guidance and offered very little surprises (which was initially seen as dovish). However, during the press conference President Lagarde explained that the upside surprises in CPI in Dec and Jan saw unanimous concern...
USD – The dollar declined to a more than a one-week low on Wednesday after ADP data showed a drop in private sector employment in January due to the increase in COVID-19 infections. Commenting on the release, Reuters noted that “because ADP has been so detached from payrolls recently, the impact pf the severe drop was limited. Moreover, White House and Fed...
USD FUNDAMENTAL BIAS: BULLISH 1. Monetary Policy The Jan FOMC decision was hawkish on multiple fronts. The statement signalled a March hike as expected, but the press conference from Chair Powell portrayed a very hawkish message. Even though Powell said they can’t predict the rate path with certainty, he stressed the economy is in much better shape compared...
AUD FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy In Dec the RBA kept rates at 0.10% and weekly bond purchases at A$4bln until mid-Feb, as expected. They reiterated their commitment to maintain highly supportive monetary conditions and won’t raise rates until actual inflation is sustainably within their 2%-3% target range. They noted that the economy is...
NZD FUNDAMENTAL BIAS: WEAK BULLISH 1. Monetary Policy The RBNZ underwhelmed some market participants who were looking for a 50bsp hike at their last policy meeting and the bank delivered a 25bsp hike as consensus was expecting. Even though the NZD took a plunge after the meeting, we don’t think markets are really giving NZD the upside it deserves after the...
GBP FUNDAMENTAL BIAS: WEAK BULLISH 1. Monetary Policy They did it again! After leading markets to believe that a Dec hike was unlikely, the BoE wrong footed markets again with their 15bsp hike. Recall that BoE’s Saunders (who voted for a Nov hike) suggested there could be benefits in waiting before moving on rates, and BoE’s Mann said it was premature to...
EUR FUNDAMENTAL BIAS: BEARISH 1. Monetary Policy Less dovish than expected can sum up the ECB Dec decision. As expected, they announced that PEPP will discontinue from March 2022, but also announced a surprise decline in monthly purchases under the APP, which will see purchases increased to EUR 40bln from the current EUR 20bln from2Q22 and then subsequently...
EUR FUNDAMENTAL BIAS: BEARISH 1. Monetary Policy Less dovish than expected can sum up the ECB Dec decision. As expected, they announced that PEPP will discontinue from March 2022, but also announced a surprise decline in monthly purchases under the APP, which will see purchases increased to EUR 40bln from the current EUR 20bln from2Q22 and then subsequently...
AUD FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy In Dec the RBA kept rates at 0.10% and weekly bond purchases at A$4bln until mid-Feb, as expected. They reiterated their commitment to maintain highly supportive monetary conditions and won’t raise rates until actual inflation is sustainably within their 2%-3% target range. They noted that the economy is...
NZD FUNDAMENTAL BIAS: WEAK BULLISH 1. Monetary Policy The RBNZ underwhelmed some market participants who were looking for a 50bsp hike at their last policy meeting and the bank delivered a 25bsp hike as consensus was expecting. Even though the NZD took a plunge after the meeting, we don’t think markets are really giving NZD the upside it deserves after the...
GBP FUNDAMENTAL BIAS: WEAK BULLISH 1. Monetary Policy They did it again! After leading markets to believe that a Dec rate hike was unlikely, the BoE wrong footed markets again by announcing a 15bsp hike. Recall we had external member Saunders (who voted for a hike in Nov) suggest there could be benefits in waiting before moving on rates BoE’s Mann a few days...
USD FUNDAMENTAL BIAS: BULLISH 1. Monetary Policy The Fed turned a lot more hawkish than expected in Dec. They doubled the pace of tapering to $30 billion per month which will see QE concluded by March 2022 as was widely expected. Surprisingly though the Summary of Econ Projections showed the median dot plot pencilled in 3 hikes for 2022 (up from the previous...
AUD – The Australian dollar got a much-needed lift on Thursday after a resoundingly strong set of jobs data reinforced market wagers on an early rise in interest rates, keeping short-term bond yields up at three-month highs. Following the report, Capital Economics noted that “the upshot is that the labour market is now at its tightest in years, and the continued...
AUD FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy In Dec the RBA kept rates at 0.10% and weekly bond purchases at A$4bln until mid-Feb, as expected. They reiterated their commitment to maintain highly supportive monetary conditions and won’t raise rates until actual inflation is sustainably within their 2%-3% target range. They noted that the economy is...
USD FUNDAMENTAL BIAS: BULLISH 1. Monetary Policy The Fed turned a lot more hawkish than expected in Dec. They doubled the pace of tapering to $30 billion per month which will see QE concluded by March 2022 as was widely expected. Surprisingly though the Summary of Econ Projections showed the median dot plot pencilled in 3 hikes for 2022 (up from the previous...
USD FUNDAMENTAL BIAS: BULLISH 1. Monetary Policy The Fed turned a lot more hawkish than expected in Dec. They doubled the pace of tapering to $30 billion per month which will see QE concluded by March 2022 as was widely expected. Surprisingly though the Summary of Econ Projections showed the median dot plot pencilled in 3 hikes for 2022 (up from the...
USD FUNDAMENTAL BIAS: BULLISH 1. Monetary Policy A lot more hawkish than expected is how the Fed’s Dec decision can be summed up. The Fed doubled the pace of tapering to $30 billion per month which will see the QE program conclude by March 2022 as was widely expected. The big change came from the updated Summary of Econ Projections where the median dot plot...