NZD FUNDAMENTAL BIAS: WEAK BULLISH 1. Monetary Policy The RBNZ underwhelmed some market participants who were looking for a 50bsp hike as the bank only delivered on 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 Nov RBNZ decision. Not...
EUR FUNDAMENTAL BIAS: BEARISH 1. Monetary Policy Less dovish than expected can some of the ECB Dec pol decision. As expected, the bank announced that PEPP will discontinue from March 2022, but they announced a surprise decline monthly purchases under the APP, which will see purchases increased to EUR 40bln from EUR 20bln from2Q22 and then subsequently...
USD – The dollar extended its fall on Thursday to a two-month low due to position unwinding following this week’s CPI report, which fell short of offering any new impetus for the Federal Reserve’s policy normalization efforts. TD Securities summarized that “coming into the new year the dollar positioning was very much skewed to being long. Yesterday’s inflation...
USD – The dollar edged lower on Tuesday after Fed Chair Powell’s testimony signaled that while the Fed will be normalizing policy, it has not made a decision on reducing its nearly $9 trillion balance sheet. Commenting on Powell’s testimony, Cambridge Global Payments noted that “Powell defied the hawkish commentary of others on the Fed’s rate-setting committee,...
USD – The dollar edged higher against a basket of currencies on Monday as recent employment data prompted some Wall Street banks to raise their estimates for how quickly the Federal Reserve will raise interest rates this year. Among those banks which raised their FOMC projections are Goldman Sachs, J.P. Morgan, Deutsch Bank and Jefferies, with the latter stating...
CAD FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy In Dec the BoC left rates at 0.25% as expected and maintained forward guidance where it expects rates at current levels until the middle quarters of 2022. Even though the bank still thinks inflation will ease from 2H22, they did drop the term "temporary" when referring to price pressures, similar to the Fed’s...
GBP FUNDAMENTAL BIAS: WEAK BULLISH Monetary Policy They did it again! After leading markets to believe that a Dec rate hike was looking unlikely the bank surprised by announcing a 15bsp rate hike. Recall we had external member Saunders (who voted for a hike in Nov) suggested there could be benefits in waiting before moving on rates until some of the...
NZD FUNDAMENTAL BIAS: WEAK BULLISH 1. Monetary Policy The RBNZ underwhelmed some market participants who were looking for a 50bsp hike as the bank only delivered on 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 Nov RBNZ decision. Not...
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...
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 that they are committed to maintaining 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...
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 that they are committed to maintaining highly supportive monetary conditions and won’t raise rates until actual inflation is sustainably within their 2%-3% target range. They noted that the...
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 that they are committed to maintaining highly supportive monetary conditions and won’t raise rates until actual inflation is sustainably within their 2%-3% target range. They noted that the...
USD – The dollar rose on Wednesday after the Federal Reserve said it would end its pandemic-era bond purchases in March next year, paving the way for a new cycle of policy tightening and rate normalization. Reuters summarized the Fed’s announcement, stating that “officials at the median projected the US central bank’s benchmark overnight interest rate would need...
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 that they are committed to maintaining 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...
NZD FUNDAMENTAL BIAS: WEAK BULLISH 1. Monetary Policy The RBNZ underwhelmed some market participants who were looking for a 50bsp hike as the bank only delivered on 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 Nov RBNZ decision. Not...
USD – The dollar rose across the board on Monday ahead of this week’s highly anticipated FOMC meeting. Investor expectations are quickly growing around the odds of the central bank announcing it will wrap up its bond purchases sooner than expected while also looking for clues on the timing of interest rate hikes next year. Indeed, Wester Union notes that “the...
EUR FUNDAMENTAL BIAS: BEARISH 1. Monetary Policy In Oct the ECB didn’t offer new info on policy or forward guidance. Inflation was the biggest talking point among the GC. The bank acknowledged price pressures will be higher and last longer than previously anticipated. But also reiterated that CPI will move back below their 2% target in the medterm (2023). The...
NZD FUNDAMENTAL BIAS: WEAK BULLISH 1. Monetary Policy The RBNZ underwhelmed some market participants who were looking for a 50bsp hike as the bank only delivered on 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 Nov RBNZ decision. Not...