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September 13, 2024
Preview: Due September 27 - U.S. August Advance Goods Trade Balance - Deficit to correct lower within a widening trend
September 13, 2024 5:42 PM UTC
We expect an advance August goods trade deficit of $100.6bn, below the $102.8bn seen in July which was the widest since March 2022 but still consistent with a deteriorating underlying trend.
As we Expected, CBR Hiked Key Rate to 19% as Inflation Continues to Soar
September 13, 2024 4:20 PM UTC
Bottom Line: As we predicted, Central Bank of Russia (CBR) announced on September 13 that it increased its policy rate by 100 bps to 19% to tame the stubborn price pressures stemming from high military spending, tight labour market and fiscal policy igniting domestic demand. CBR said in a press rele
Preview: Due September 26 - U.S. August Durable Goods Orders - Aircraft to lead dip, modest slippage seen ex transport
September 13, 2024 3:28 PM UTC
We expect August durable orders to fall by 2.0% overall as aircraft return to more normal levels after an extremely weak June was followed by a strong July. Ex transport we expect a second straight 0.2% decline, which would imply some loss of underlying momentum.
FX Weekly Strategy: September 16th-20th
September 13, 2024 3:16 PM UTC
Market focused on FOMC with significant risk of a 50bp cut still seen
USD upside looks quite limited given current yield spreads
GBP risks still mainly on the downside even if BoE leaves rate unchanged
Hard to oppose JPY strength
NOK weakness overdue a correction, but Norges Bank may not help
FOMC: The 25bps versus 50bps Debate
September 13, 2024 2:26 PM UTC
Looking at press reports that the September FOMC call is a close one between 25bps and 50bps does not persuade us to change our call from 25bps. However the message of the reports is that the slightly disappointing August CPI does not exclude a 50bps move, and that whichever option the Fed does choo
U.S. September Michigan CSI - Higher, including long-term inflation expectation
September 13, 2024 2:16 PM UTC
September’s preliminary Michigan CSI at 69.0 from 67.9 is slightly firmer, with both current conditions and expectations contributing. Inflation expectations are mixed, but a rise in the 5-10 year view outweighs a fall in the 1-year view.
Mexico: Controversial Judicial Reform is Approved by the Congress
September 13, 2024 1:39 PM UTC
The Mexican Senate approved a controversial judicial reform proposed by President López Obrador's MORENA party. The reform calls for the election of all 7,000 federal judges, with current judges being dismissed. Supreme Court justices will also be reduced and replaced by elections in 2025. Concerns
This week's five highlights
September 13, 2024 10:00 AM UTC
ECB Under-Estimating Downside Risks
U.S. August Core CPI at a four month high led by shelter and air fares
U.S. August PPI Ex Food, Energy and Trade a little too high for comfort
UK GDP a More Mixed Messages Give BoE Food for Thought
More of the Same or Game changing Policies for China Equities
FX Daily Strategy: N America, September 13th
September 13, 2024 8:47 AM UTC
University of Michigan confidence data a focus in sparse calendar
Some risk that recent deterioration extends triggering risk negative reaction
JPY remains well supported, with valuation very attractive
EUR has some scope for modest gains after moderate ECB statement
BOE Rate Cuts to 3.50% Then Stop?
September 13, 2024 8:30 AM UTC
UK wage inflation and CPI services will likely be less persistent than the BOE hawks worry about, which will likely see less resistance to UK rate cuts. This gives us confidence of quarterly rate cuts at the next five BOE monetary policy reports, plus one additional cut in December 2024 or March 2
FX Daily Strategy: Europe, September 13th
September 13, 2024 5:31 AM UTC
University of Michigan confidence data a focus in sparse calendar
Some risk that recent deterioration extends triggering risk negative reaction
JPY remains well supported, with valuation very attractive
EUR has some scope for modest gains after moderate ECB statement
Asia Open - Overnight Highlights
September 13, 2024 12:21 AM UTC
EMERGING ASIA
EM currencies perform individually against the USD as the USD began its fall after the ECB decision. SGD saw the largest gains of 0.22%, followed by CNH 0.14%, CNY 0.03%; the biggest losers are PHP 0.38%, THB 0.31%, IDR 0.19%, KRW 0.13%, MYR 0.12%, TWD 0.07% and HKD 0.06%.
USD/CNH is tra
September 12, 2024
FX Daily Strategy: Asia, September 13th
September 12, 2024 9:00 PM UTC
University of Michigan confidence data a focus in sparse calendar
Some risk that recent deterioration extends triggering risk negative reaction
JPY remains well supported, with valuation very attractive
EUR has some scope for modest gains after moderate ECB statement
Time Has Come: SARB will Likely Decrease the Key Rate to 8.0% on September 19
September 12, 2024 7:09 PM UTC
Bottom line: South African Reserve Bank (SARB) will likely start cutting the key rate at the upcoming MPC meeting on September 19 and decrease the rate from 8.25% to 8.0% given recent fall in inflation, suspended power cuts (loadshedding) after March, deceleration in inflation expectations and a rel
FX Daily Strategy: APAC, September 13th
September 12, 2024 2:35 PM UTC
University of Michigan confidence data a focus in sparse calendar
Some risk that recent deterioration extends triggering risk negative reaction
JPY remains well supported, with valuation very attractive
EUR has some scope for modest gains after moderate ECB statement
ECB Review: Under-Estimating Downside Risks?
September 12, 2024 2:16 PM UTC
That the ECB cut the discount rate again by another 25 bp (to 3.5%) was no surprise. Neither was an unchanged tone at the press conference, with no clearer acknowledgment of downside risks even given ECB GDP projections (Figure 1) which moved down more toward our long-standing below-consensus thin
U.S. August PPI - Ex Food, Energy and Trade a little too high for comfort
September 12, 2024 1:00 PM UTC
Like the CPI, August PPI was on the firm side of expectations, up by 0.2% overall and 0.3% in both the core rates, ex food and energy and ex food, energy and trade. The data confirms that while inflation has fallen significantly, it is not yet consistent with target. Initial claims provided few surp