CAD – The Canadian dollar edged higher on Wednesday. The currency rebounded from its lowest level in nearly eight weeks as investor sentiment picked up and the Bank of Canada raised interest rates to a 14-year high. Commenting on the Bank of Canada’s September meeting, Reuters stated: “The BoC hiked its benchmark rate by three-quarters of a percentage point to...
GBP FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE The outlook for the UK economy remains bleak, with CPI above 10% and recession expecting to hit in 4Q22 and last for 5 quarters, it has kept pressure on Sterling despite ongoing BoE rate hikes. Even though the bank followed through with a 50bsp hike in July, it wasn’t enough to offset the recession forecasts....
Strength in GBP is largely the result of media reports that incoming UK Prime Minister Liz Truss could announce a freeze on energy bills which could otherwise increase by 80% for UK households in October. The European session also saw the release of UK Construction PMI. Despite indicating contraction for the industry at 49.2, the print still beat expectations of...
AUD FUNDAMENTAL OUTLOOK: NEUTRAL BASELINE Despite a decent recovery from the start of the year, the AUD gave back most of its 1Q22 gains throughout 2Q22 due to China’s continued struggles with Covid breakouts, and more recently the big slump in key commodities (Iron Ore & Coal). China’s economy is always a key focus for the AUD. While other major economies...
AUD FUNDAMENTAL OUTLOOK: NEUTRAL BASELINE Despite a decent recovery from the start of the year, the AUD gave back most of its 1Q22 gains throughout 2Q22 due to China’s continued struggles with Covid breakouts, and more recently the big slump in key commodities (Iron Ore & Coal). China’s economy is always a key focus for the AUD. While other major economies...
EUR FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE Persistently high inflation has seen the ECB tilt more hawkish by hiking rates 50bsp in July. Additional pressure on inflation from gas supply shortages and drought-linked supply constraints has seen ECB members get more uneasy about price pressures, with recent comments suggesting growing support among the GC...
EUR FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE Persistently high inflation has seen the ECB tilt more hawkish by hiking rates 50bsp in July. Additional pressure on inflation from gas supply shortages and drought-linked supply constraints has seen ECB members get more uneasy about price pressures, with recent comments suggesting growing support among the GC...
USD – The dollar index hit a 20-year high on Thursday, and notched a 24-year peak against the rate-sensitive JPY after data showed a resiliently strong economy, giving the Federal Reserve more room to aggressively raise interest rate to curb inflation. Furthermore, Generali argues that “even after hitting fresh records, USD strength has scope to extend somewhat...
CAD FUNDAMENTAL OUTLOOK: NEUTRAL BASELINE The CAD has enjoyed far more upside in the past few weeks than we anticipated. We’ve been cautious on the currency given Canada’s dependency on the US (>70% of exports) where the clear signs of a faster than expected slowdown and possible recession should deteriorate the growth outlook for Canada. Apart from that,...
EUR FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE Persistently high inflation has seen the ECB tilt more hawkish by hiking rates 50bsp in July. Additional pressure on inflation from gas supply shortages and drought-linked supply constraints has seen ECB members get more uneasy about price pressures, with comments last week suggesting that there is growing...
EUR FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE Persistently high inflation has seen the ECB tilt more hawkish by hiking rates 50bsp in July. Additional pressure on inflation from gas supply shortages and drought-linked supply constraints has seen ECB members get more uneasy about price pressures, with comments last week suggesting that there is growing...
USD FUNDAMENTAL OUTLOOK: BULLISH BASELINE With headline CPI at 8.5%, the Fed is under pressure to continue hiking rates and ramping up QT in September to try and tame price pressures. They hiked rates by 75bsp in July, and odds between a 50bsp and 75bsp in September are too close to call. At the Jackson Hole Symposium they took a further hawkish shift by...
EUR FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE Persistently high inflation has seen the ECB tilt more hawkish by hiking rates 50bsp in July. Additional pressure on inflation from gas supply shortages and drought-linked supply constraints has seen ECB members get more uneasy about price pressures, with comments last week suggesting that there is growing...
EUR FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE Persistently high inflation has seen the ECB tilt more hawkish by hiking rates 50bsp in July. Additional pressure on inflation from gas supply shortages and drought-linked supply constraints has seen ECB members get more uneasy about price pressures, with comments last week suggesting that there is growing...
GBP – Sterling edged lower on Tuesday and was set for its biggest monthly fall against USD in 16 months as the UK’s energy crisis renewed recession fears in Britain. Commenting on GBP, Commerzbank explains that “the continued rise in gas prices entails the risk that the recession will be more pronounced and longer than previously expected. Strikes are already...
USD FUNDAMENTAL OUTLOOK: BULLISH BASELINE With headline CPI at 8.5%, the Fed is under pressure to continue hiking rates and ramping up QT in September to try and tame price pressures. They hiked rates by 75bsp in July, and odds between a 50bsp and 75bsp in September are too close to call. At the Jackson Hole Symposium they took a further hawkish shift by...
EUR FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE Persistently high inflation has seen the ECB tilt more hawkish by hiking rates 50bsp in July. Additional pressure on inflation from gas supply shortages and drought-linked supply constraints has seen ECB members get more uneasy about price pressures, with comments last week suggesting that there is growing...
EUR FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE Persistently high inflation has seen the ECB tilt more hawkish by hiking rates 50bsp in July. Additional pressure on inflation from gas supply shortages and drought-linked supply constraints has seen ECB members get more uneasy about price pressures, with comments last week suggesting that there is growing...