Thu, Oct 17, 2019 @ 06:13 GMT
USDHKD has continued flirting slightly below 7.85, the weak end of its trading band. Since late-February, the market has been speculating about what and when the Hong Kong Monetary authority HKMA, the de facto central bank of Hong Kong,...
GDP growth should have moderated in 4Q18 and would remain lukewarm 1H19. Although the Italian government eventually backed down in the budget plan, political risks in the region have not yet abated. European Parliament election scheduled in mid-May and...
Recent spike in HIBOR has sent HIBOR-LIBOR spread to the positive territory, a situation not seen in a decade for both 1-month and 3-month spreads. In our opinion, the upside for HIBOR is limited although it could stay elevated...
The consensus forecast that USD’s rally, which began in February this year, is coming to an end hinges on the theses of overvaluation and stretched FX market longs, the slowdown in US economic growth and the end of current...
Since our last discussion in May, the financial situation in Argentina has not improved. Rather, it has deteriorated rapidly over the past few months. Last week, President Mauricio Macri announced that he had asked the IMF to accelerate disbursement...
Sharp moderation of Hong Kong GDP growth in 2Q18 and the recent intervention by the Hong Kong Monetary Authority (HKMA) to prevent HKD from weakening below 7.85 against USD have once again revealed the challenge facing Hong Kong –...
As suggested in the CFTC Commitments of Traders report in the week ended April 9, NET LENGTH in USD Index increased +598 contracts to 29 446. Both speculative long and short positions dropped as the market awaited the FOMC...
While US sanctions against Turkey have dominated news headlines, recent selloff of Turkish lira is a vote of dissent to the policy of the new government. After his “re-election”, President Tayyip Erdogan has grabbed tighter control of the economic...
Although Hong Kong dollar (HKD) had approached the weak side (7.85) of the trading band against US dollar (USD) in May and June, after HKMA’s intervention in April, the gap between HIBOR and LIBOR has narrowed significantly since then....
We are not convinced that the "flash crash" of USDJPY last Thursday was driven by Apple.Inc's lowering of guidance, especially on China. The rally in Japanese yen during the time did not just appear in USDJPY, but also other...
(Update: The Italian government has announced that it would now set the budget deficit targets to 2.4% of GDP for 2019, 2.1% for 2020 and 1.8% for 2021. Given short-lived and fractious nature of Italian government, we view these targets...
As the anti-extradition protests enter the fourth month, the market is increasingly concerned about the liquidity and economic slowdown in Hong Kong. Goldman Sachs' report has unnerved investors about the financial stability in Hong Kong. However, we believe the...
As suggested in the CFTC Commitments of Traders report in the week ended March 26, NET LENGTH in USD Index fell as both speculative long and short positions dropped. NET LENGTH for USD index slipped -650 contracts, to 25...
While it is not a practice for Fed chairs to offer hints on the monetary policy outlook at the annual Jackson Hole symposium, their speeches at the event have always caught market attentions and sometimes move the market. At...
As suggested in the CFTC Commitments of Traders report in the week ended August 14, NET LENGTH of USD index increased further, by +1 931 contracts, to 30 102 for the week. This was driven by the fact that...
Opinion polls suggest that the upcoming US midterm elections, scheduled on November 6, would lead to a split Congress – Democrat regaining control of the House and Republic retaining majority of the Senate. Such outcome could lead to political...
UK PM Theresa May demonstrates to us that her way to end dispute is compromise (to counterparty) and threat (to own people). After months of negotiation, the Withdrawal Agreement for Brexit was approval unanimously by EU member states on...
Donald Trump confirmed that the US would withdraw from the Iran nuclear deal, an agreement reached in 2015 between Iran, the P5+1 (5 UNSC permanent members including US, France, Russia, UK, China + Germany) and the European Union. New...
Policy Divergence was once a hot topic back in 2015 through early 2017, when the FOMC began to increase the Fed funds rate, while other major central banks maintained extra accommodative monetary polices as they struggled to boost the...
In our report last week, we pointed out that monetary policy divergence between the Fed and other major central banks has re-emerged since April. While economic developments in the first several months of the year have reinforced FOMC’s commitment...
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