UK Rates and GBP hit by Disappointing Data

In our March monthly we recommended positioning for lower UK short-term rates based on our weakening long-leading indicator, and we later recommended taking advantage of GBPUSD seasonality – which has seen cable higher in each of the past 13 Aprils – to...

Bank of England Mood Changes

This post is taken from our April 24th weekly report. Much like the Federal Reserve, the Bank of England has been itching to normalise monetary policy following nearly a decade of providing emergency assistance to the economy. Buoyed by the run up in prices over the...

Fade Bank of Canada Rate Hikes

This post is taken from our March 13th weekly report. In our February Monthly we suggested selling CAD, and buying Bankers’ Acceptances (BAs), the Canadian analogue of Eurodollar futures. With ~64bps of rate rises priced in from the Bank of Canada over the next year,...

Fig Leaves For Raising Interest Rates

Central banks are increasingly altering the perception of their reaction functions to allow tighter (or less easy) monetary policy. At the ECB, discussion of so-called “supercore” inflation has re-emerged. This consists of the components of the HICP basket that have a...

Turkey: A Recipe for Inflation

On a structural basis, Turkey has consistently been one of the most vulnerable economies to a currency crisis in light of considerable external vulnerabilities, and was flagged again in VP’s September thematic update of our debt and currency crisis framework. However,...

BoJ to Keep Loose As No Immediate Sign of Target CPI

The set-up in Japan continues to favour a weaker yen. Inflation is coming, but the BoJ will want to be sure the train has arrived at the station before stepping off at the monetarytightening platform. The top-left chart shows the lagged effects of a weaker yen should...

EUR: Tactically Overbought; Macro Headwinds

Macro headwinds are building up for long EURUSD positions in addition to signs that EURUSD is becoming very overbought technically. A few weeks ago we noted that EURUSD sentiment was one of the most bullish (contrarian indicator) among the 50 major FX pairs we track....

BoJ Underscores Support for USDJPY

Data and policy continue to line up for a weaker JPY. Kuroda has re-iterated his commitment to stimulus, stating, “it’s premature to discuss in an exact way about exit strategy”. Kuroda continues his battle against the deflation mindset; and, as the top chart shows,...
Page 1 of 41234