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Currency Pair of the Week: USD/TRY

The Coronavirus is raging throughout the United States.  The US is now consistently reporting over 150,000 new daily cases.  Lockdowns and restrictions are looming.   There is also a new US President-elect who wants to raise taxes on the wealthy. Yet stock indices are closing at or near all-time highs! ...

Week Ahead: US Politicians – The Ball is in Your Court

During a rare week, the new number of coronavirus cases did not dominate the headlines.  However, lack of a new stimulus package related to the coronavirus from the US federal government did. Payroll reports from both the US and Canada were better than expected.  The US-China feud continues over...

Week Ahead – Sino-US Tech War Heats Up

Country US Further evidence could show that coronavirus is getting under control in the US.  New cases and hospitalizations have been declining, however testing slowed down drastically in the east coast due to Hurricane Isaias.  On Wednesday, inflation data is expected to come back down to earth.  Headline inflation should drop...

Weekly Economic and Financial Commentary: The Second Wave Appears to Have Crested

U.S. Review While Risk Remains, The Worst Appears to Be Behind Us The resurgence in COVID-19 in much of the Sun Belt appears to have topped out, although cases are rising faster in some smaller mid-Atlantic states and in parts of Europe, Asia and Australia. Real GDP declined in line...

Week Ahead – Markets Play Tug-of-War with Covid-19 Concerns and Reopening Momentum

US governors are trying to carefully navigate reopening plans to salvage as many businesses as possible, while several states continue to struggle containing the coronavirus spread.  New York City, once the epicenter of the coronavirus pandemic in the US enters its phase 2 reopening on Monday, with as many...

Week Ahead – Sino-US Tensions Come to the Fore

Hong Kong the Focus of Deteriorating US-China Relations This week the focus has been less on the pandemic itself and instead on economies reopening, recovery funds and the intensifying US-China conflict. What started with the US blaming China for the severity of the pandemic has evolved and is likely to deteriorate...

Week Ahead – Reopening Momentum and China in focus

Brewing geopolitical risks helped investors take some risk off the table heading into the long weekend. The dollar rallied against most of its peers as tensions remain front and center for the world's two largest economies. Renewed unrest in Hong Kong will continue to weigh on the overall outlook...

Week Ahead – More Easing on the Way

No such thing as a dull week It’s been another interesting week in financial markets. One of economic reopening, second waves, stark warnings, recession and much more. The week ahead is going to be no less eventful as investors come to grips with the reality of the situation we’re all...

Traders Should Be Ready When And If USD/TRY Makes New Highs

As Emerging Market currencies (EMs) have been putting in all-time lows versus the US Dollar since the spread of the coronavirus in late February, one currency that has yet to do so is the Turkish Lira. However, it's not because the Turkish Lira is doing so much better than...

Week Ahead – Fed and BOJ to Add More to the Punchbowl, Virus Disruption, and a Fourth Week of Heightened Volatility

A fourth week of heightened volatility will see financial markets continue to focus on the coronavirus spread across Europe and the US.  The economic impact of the virus is deepening, and expectations are high for the week ahead to see another wave of massive monetary easing and for governments...

The Dollar Is Searching For Its Price Ceiling

The dollar index has been growing almost daily in February, adding 2.5% from the beginning of the month to its peaks from May 2017. The dollar index tracks the USD against the six most popular world currencies, where the yen and the euro can be considered the main catalysts...

Risk Appetite Grows ahead of Powell, Oil Bottom in Place, Gold Rally Pauses, EM in Focus

Global equities are higher across the board as investor optimism grows that Beijing is confident enough to allow its largest businesses to resume industrial production and on hopes that Fed Chair Powell’s testimony to Congress will signal that the coronavirus impact to the global economy could warrant further stimulus...

The Week Ahead – Virus Risk Uncertainty, Powell Testifies to Congress, RBNZ to Signal Patience, and Germany’s Recession Fears

Wall Street’s resilience will be tested again as some clarity emerges on whether the Chinese containment efforts were successful in limiting the spread of the virus globally.  The death toll and number of infections continue to rise in China, but optimism is growing the lockdown efforts in Hubei have...

Phase-One Signed. Equities Advance. Turkey To Cut

The signature of the phase one deal between the US and China sent the S&P500 and the Dow to fresh intraday record highs, although the last minute announcement that the tariff cuts on Chinese exports would not happen before the US presidential election left investors wondering if China could...

Week Ahead – Middle East Tensions, Global Deflationary Pressures, US Jobs Report in Focus

The start of the New Year has seen a drastic switch in focus from trade wars to possibly a US-Iran war. The focus for the week ahead was supposed to be the leaking of the details of the phase-one trade deal, but that will not be the case. Financial...

US Open – Earnings, Draghi, CBRT, Oil, Gold, Bitcoin

US stocks are bracing for the busiest day of this earnings season. Industrial giants, 3M and Raytheon delivered contrasting results in the pre-market. 3M posted mixed earnings results, but slashed their full year EPS forecast. Raytheon delivered a beat on both the top and bottom and raised guidance in-line...

CAD Holding Its Gains, More Easing Form CBRT To Come

CAD flat following election results, yet high appreciation potential Election results have left CAD traders unimpressed, although reelected PM Justin Trudeau should face a minority government that should force a coalition with New Democratic Party leftists. As risks of new general elections triggered by a vote of no confidence appears...

Brexit Optimism Rises Despite Parliament Obstacle

The British pound is near 5-month highs ahead of Saturday's showdown as the UK parliament is being asked to ratify the deal that PM Johnson and his EU counterparts reached to avoid a hard Brexit on October 31. The odds of Boris Johnson rallying lawmakers to support his deal...

China GDP Falls to 6%, Turkey’s Win, Brexit Vote Looms, Oil Rises, Gold Stuck in Range

US stocks and the dollar little changed in early Friday trade despite a worse than expected third-quarter GDP reading from China and heightened uncertainty regarding how Brexit will unfold over the weekend and a temporary cease-fire between Turkey and Syria. Asian markets sold off after China’s third quarter GDP figures...

Asia Morning: AUD Performance Sticky

Risk sentiment subject to Brexit headlines... Optimism was buoyed early in the European session on hopes that we might finally see a Brexit deal on October 19th, at the earliest. Headlines emerged that the EU and UK had found a "fair and balanced agreement" with Jean-Claude Juncker President of the...

Week Ahead – Focus Shifts to Brexit, IMF’s WEO, Earnings Season, and Chinese Data

Following a week that was filled with critical updates with the US-China trade war, markets will now focus on the beginning of earnings season, Brexit negotiations, a wrath of Chinese data that will look to see if GDP growth will test below 6% for the first time, and annual...

Political Pressure, Trade Policy and Potential Market Effect

Executive Summary One of the more important characteristics a central bank needs to maintain is its credibility. An erosion of central bank credibility—and in turn independence—has typically been associated with a sharp currency depreciation, as evidenced in Turkey and India. In our view, political pressure on the Fed has...

CBRT’s « Bazooka », Japanese Data Worry

CBRT's « bazooka » The easing cycle is alive and well in EM counties with Turkey moving forward with a significant reduction. In an unexpected move, the Central banks of Turkey chopped its benchmark one-week repo rate by 325bp. The policy rate now stands at 16.5% from 19.75% bringing the...

Waiting For The ECB Bazooka

ECB bazooka triggers currency war? A malaise has fallen over financial markets. The lack of meaningful news has left prices to drift. Tactically, we watching media for any news on US-China trade, ECB, Brexit, general data to support a Fed direction, for insights to short term price action. In Asian...

Sunset Market Commentary

Markets With US financial markets closed in observance of Labour Day and a rather poor economic calendar, today was destined to be a dull start of the week/month. The US imposing new tariffs and China retaliating caught most headlines. However, Trump did say that talks between the country’s negotiators scheduled...

Week Ahead – New Tariffs Begin on China as RBA, BOC, Riksbank and CBR Have Rate Decisions

Labor Day will not be quiet at all, as the US-China trade war remains tense, as certain tariffs kick in and will start to weigh on the US economy.  Politics will remain a focal point as some UK officials will try to stop Boris Johnson’s plan to suspend Parliament. ...

ECB Interest Rate Decision

The ECB is to release its interest rate decision today and is expected to remain on hold at 0.0%.EUR OIS imply a probability of 52.15% for the bank to remain on hold at the current stage. However there is also another 47.85% probability to cut rates by 10 basis...

Short-Term Outlook: All About Earnings, Trade, And Easing

Risk appetite is waning as earnings season picks up and as political posturing between the Chinese and Americans see no substantial progress on the trade front. US stocks have been unable to extend the record rally despite a relatively good start to earnings season that has seen a majority...

Chinese Economy At Slowest Pace Since Early 1990s

Market movers today It is a quiet day on the data release front. A speech by Fed's William (voter, neutral) ahead of the crucial Fed meeting at the end of July will be in focus. The market is looking for hints on how forceful the Fed's rate cut will be...

Turkish Lira Slides As Erdogan Replaces CBRT Head

The Turkish lira is sliding once again amid renewed concerns that President Recep Tayyip Erdogan is ruining the nation’s economy, just as inflation was starting to ease back. His decision to replace the Turkish Central Bank’s Governor over the weekend has backfired with the lira taking a tumble. Undoubtedly,...