Richard Jones
Summary This week saw a torrent of central bank rate decisions, highlighted by the Bank of Japan (BoJ) ending its negative interest rate policy (NIRP). Also, the Swiss National Bank (SNB) surprised markets by cutting rates by 25bps. The US Federal Reserve (Fed) and Bank of England (BoE) kept policy steady with comparably less fanfare, […]
Bilal Hafeez, Ben Ford
When evaluating the performance of our momentum models we are considering the average performance across the one-, three-, and 12-month momentum models. Summary Momentum models moved sideways over the past week. A positive rates (+0.3% WoW) outing battled poor equity (-0.4% WoW) and FX (-0.1% WoW) performances. Equity momentum models remain the best-performing model over […]
Bilal Hafeez, Viresh Kanabar
Summary In the US, Powell’s congressional testimony (Wednesday) will likely stress the need for more good inflation data before the Fed can cut. Nonfarm payrolls and wages (Friday) are likely to surprise on the upside. In Europe, the ECB should keep rates steady on Thursday but revise forecasts. We still expect a June cut at […]
Bilal Hafeez, Viresh Kanabar
Summary In the US, the Fed meets on Wednesday. We expect them to hold rates steady while preparing markets for a cut in March. In the UK, the BoE will likely hold rates unchanged on Thursday, taking a more dovish profile in the near term. January CPI is the main release of the week for […]
Richard Jones
Summary Since last May, EUR/GBP has traded in a ~0.8500/~0.8800 range. This week, EUR/GBP printed its lowest levels since September, primarily catalysed by a hawkish pricing tilt in BoE expectations. We think this hawkish BoE pricing has gone too far and that ECB easing will be less aggressive than the market currently prices. Market Implications […]
Bilal Hafeez, Viresh Kanabar
Summary In the US, we expect core PCE at 15bp on Friday. That would drop the figure below the Fed’s 2% target and increase ‘lowflation’ risks. Dominique still expects a 50bp Fed cut in March. The ECB should leave rates unchanged on Thursday. We see the first cut in June. In the $-bloc, the NAB […]
Thorsten Wegener
Thorsten looks back from an imaginary future. A Problem With the Kettle… It all started ten years ago one early morning in January 2024. I had switched on my kettle, expecting a nice hot cup of tea, only to be greeted with a gentle pfff followed by utter silence and darkness. As this had happened […]
Richard Jones
Summary The collapse in US yields brought the dollar with it. In previous collapses, the following month saw $-bloc outperformance and GBP underperformance. Similar instances proved neutral for the dollar. Our recent work suggested the December downside will likely come in the second half of the month. CHF is back to record highs. We think […]
Bilal Hafeez
Summary No one expects the European Union (EU) to break up, yet there is increasing public opposition to EU climate laws. Only anti-EU far-right parties clearly oppose EU climate policies, which could force disillusioned voters to pick them in the 2024 European elections. This could set in train an EU breakup as far-right parties dismantle […]
Viresh Kanabar
We consolidate our favourite biases into one, easy-to-read, weekly report! Please find the original pieces linked throughout and a summary table at the end of the document. Reach out to us on Slack or email the author with any questions about the content. Latest Updates FX, Rates, and Commodities: Beware MoF intervention when selling JPY […]
Matthew Tibble
Summary Strikes may be behind Friday’s low US payroll data, suggesting the Fed may discount the print and keep a December hike in play. The BoE may be overestimating future wage growth due to reliance on problematic ONS data. We position for a more dovish outlook. Japan’s Ministry of Finance typically succeeds in supporting the […]
Bilal Hafeez, Viresh Kanabar
Last Week’s Highlights 10Y yields collapsed… What drove the move? Last week’s price action was dominated by the collapse in long-end yields, which fell almost 30bps (Charts 1 and 3). Several factors drove this move. On Monday, the US treasury announced it would need to borrow $76bn less than expected at $776bn in privately held […]
Bilal Hafeez
This week we have a special podcast episode for you! Listen to the Macro Hive Pro Markets Webinar and hear the key views of our leading researchers on their respective markets.
Richard Jones
Despite a challenging macroeconomic backdrop, with less than stellar survey and hard data in the Eurozone, the euro (EUR) has proven resilient in recent weeks.
Richard Jones
Despite a challenging macroeconomic backdrop, with less than stellar survey and hard data in the Eurozone, the euro (EUR) has proven resilient in recent weeks.
Matthew Tibble
Summary A more balanced inflation outlook means the ECB will likely hold the deposit rate at 4% this week. Our EUR/SEK short indicator remains low, meaning it is not time to short the pair. Passing Beige Book peak pessimism suggests being long Antipodean vs major European FX. High-yielding cash has created a high bar for […]
Henry Occleston
Summary We expect the ECB will hold deposit rate steady at 4.0%, this week. Following recent data, upside risks to terminal rate have softened. But, the ECB will push back on near-term cuts and leave the door open to more hikes. Bank lending survey adds to the dovish sentiment, with tightening credit standards and declining […]
Bilal Hafeez, Viresh Kanabar
NFP blew past expectations. Nonfarm payrolls (NFP) were much higher than expected at 336k jobs versus expectations of around 170k, yet wage growth did not pick up. Wages grew by a measly 0.2% MoM...
Richard Jones
The US dollar (USD) has continued its relentless climb as Q4 begins, poised to rise for a 12th straight week. Despite this, signs are emerging that the USD rally is losing steam. This is becoming increasingly evident in the two most heavily traded pairs: EUR/USD and USD/JPY.
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