Th US dollar seems set to end the week a bit higher against most major currencies after Fed Chair Powell’s speech at Jackson Hole reinforced the FOMC’s recent pushback against an early “pivot” sent equity markets tumbling and boosted the greenback . The …
26th August 2022
We’ve raised our near-term natural gas and coal price forecasts across the board this week to account for the recent slump in Russian natural gas exports to Europe, the likelihood that those exports will remain low, and the knock-on effect that higher gas …
It was another week of soaring natural gas prices as LNG demand from Asia appears to have picked up and the energy crisis in Europe deepens by the day . Ultra-dry and hot weather across Europe is creating problems with Norway’s hydropower and France’s …
19th August 2022
The US dollar rallied sharply this week, regaining most of the ground lost since its mid-July peak as US interest rate expectations rebounded and risk appetite faded . All G10 currencies fell against the dollar this week (see Chart 1), and we think …
The US dollar continued to struggle this week as equity markets extended their rebound and commodity prices also rallied: the currencies of commodity exporters and other economies most exposed to global growth generally fared well. Wednesday’s …
12th August 2022
This week the prices of most commodities got a boost as investors pared back expectations for rate hikes in the US , following lower than expected inflation data. That said, we still expect a further small rise in the US 10-year Treasury yield by the end …
The huge upside surprise in US payrolls data pushed the greenback higher against most major currencies today in an otherwise quiet week for FX markets. The continued strength of the labour market in the US adds to our conviction that the Fed remains some …
5th August 2022
In a week of relative financial market calm, there was a pause in the large, sentiment-driven swings that have characterised most commodity prices in recent weeks . Instead, prices seemed to take direction from more fundamental drivers. That said, the …
The spreads of sovereign dollar bonds over US Treasuries are in distressed territory in almost a third of EMs covered in the JP Morgan EMBI Index, with the majority of those being frontier markets. In this note, we answer five key questions on default …
3rd August 2022
The dollar looks set to lose further ground this week after the FOMC’s 75bp hike was, somewhat strangely, interpreted as the start of a dovish pivot and US Q2 GDP disappointed . However, the greenback has rebounded a bit today after income and spending …
29th July 2022
The prices of most commodities across energy, metals and agriculturals rose this week. The common driver was investors dialling back their expectations of the aggressiveness of US monetary policy tightening , after data showed GDP contracted for a second …
It was a more positive week for prices, in large part owing to some softness in the US dollar . Otherwise, the news was not particularly positive for prices given the ECB’s surprise decision to hike its policy rate by 50bp (having signalled 25bp), …
22nd July 2022
After a series of strong weeks left it at two-decade highs, the US dollar seems set to end this week lower against most major currencies. Despite weaker-than-expected activity data out of the US, UK, and euro-zone this week, cyclically sensitive (i.e., …
Most commodity prices fell this week as global monetary tightening and fears about economic growth intensified . The high June inflation reading in the US nails on another large rate hike at the FOMC’s meeting in July. And central banks in Canada and …
15th July 2022
Although it has dropped back a little today, the US dollar is on track for another strong week, rising further against all other major currencies and hitting a new 20-year high. At the time of writing, the greenback was at or around our end-2022 forecasts …
The US dollar has continued to surge this week, with the key EUR/USD rate breaching a two-decade low and approaching the symbolic parity level as fears around Europe’s energy supply worsened. Solid US data, in particular today’s stronger-than-expected …
8th July 2022
There was no clear direction in commodity prices this week, even within the same types of commodities. The takeaway is that commodity prices were dancing to their own tunes . Take energy, for example. Natural gas and coal prices rose on fears that Russia …
The US dollar looks set to end the week stronger against most major currencies, nearing its strongest level since 2002 as “risky” assets remained under pressure. A key reason for the dollar’s rally is that weak activity data out of the US , including the …
1st July 2022
Prices struggled to find direction this week as concerns about demand deepened at a time of still constrained supply of many commodities . The price of Brent crude fell sharply on Thursday in response to US real spending data for May, which were weaker …
Most commodity prices fell this week as demand concerns picked up due to ongoing monetary policy tightening by major central banks . Speaking to the US Senate Banking Committee on Wednesday, Federal Reserve Chair Jerome Powell underlined his “strong …
24th June 2022
Amid mounting concerns about the global growth outlook as more central banks raised policy rates, the US dollar looks set to end the week broadly unchanged against most major currencies. Although we suspect the greenback may struggle to make new highs in …
Among the flurry of central bank announcements, the continued plunge in equity markets, and wild gyrations across core government bond markets, currencies have been pulled in several directions this week. While the US dollar is ending the week only a …
17th June 2022
European natural gas prices surged this week on renewed supply concerns, as Russia once again cut gas supplies to Europe and the US Freeport LNG export facility closed for six months . The huge price move emphasises how volatile natural gas prices can be …
The US dollar rose against all major currencies this week, reversing some of its fall over the past month or so. Much of this strength came late in the week as equity markets came under renewed pressure in the aftermath of the ECB’s hawkish message at its …
10th June 2022
The supply risks associated with the war in Ukraine have not gone away, but there has been more market attention in recent weeks on the outlook for commodities demand. In the very near term, the lockdowns in China weighed on both energy and, to a lesser …
The US dollar seems set to end the week lower against most major currencies, a third successive weekly decline, and a drop of ~3% in the DXY index from its multi-year high earlier this month. In part, this week’s fall probably reflects the rebound in …
27th May 2022
A persistent theme in energy markets is uncertainty about the outlook for the EU’s imports of energy from Russia . It does appear that some sort of embargo of oil imports will be announced, maybe as early as next week. However, this is not new news and is …
After another volatile few days across financial markets, the US dollar looks set to end the week lower against most major currencies. (See Chart 1.) Given the renewed falls in “risky” assets, that is arguably somewhat surprising: the dollar generally …
20th May 2022
The prices of many industrial metals (IM) picked up this week on news of an easing of COVID-19 restrictions in China . However, we think weak demand and improved supply in China will send IM prices lower in the coming months, even if high energy prices …
Despite a reversal today, the US dollar looks set to appreciate for the sixth week running as “risky” assets remain under pressure. The DXY index has had its largest six-week gain since mid-2016 (while the S&P 500 has had its worst such period since the …
13th May 2022
Most commodity prices fell this week amid a general sell-off in risky assets and a stronger US dollar . That said, we think the days of higher energy prices leading to an all-encompassing rally in commodity prices could be over. Natural gas prices rose on …
There has been plenty of doom and gloom surrounding the outlook for frontier economies over recent months, particularly Sri Lanka and Tunisia. But there are some places where we hold more upbeat views. Frontier economies in the Gulf will benefit from high …
12th May 2022
The US dollar looks set to eke out small gains against most currencies this week as US bond yields rose further and equities whipsawed. While the net effect of the FOMC’s policy announcement and today’s US payrolls report on currency markets was …
6th May 2022
Energy prices continue to be pummelled by upward pressure related to fears of supply shortages and downward pressure from signs of slower economic growth, tighter monetary policy and a stronger US dollar . This week was no exception, although supply fears …
The US dollar rose for a third week in a row, reaching its strongest level since early 2017 as the growing policy divergence between the major Asian central banks and the rest of the world as well as concerns about Europe’s energy supply added fuel to …
29th April 2022
Russia’s monopoly exporter of natural gas, Gazprom, suspended gas deliveries to Poland and Bulgaria this week because they refused to pay for Russian gas in rubles . There is some confusion about whether the process by which Russia demands rubles to be …
Another week of broad-based appreciation has seen the US dollar edge higher even as US bond yields have stalled. Instead, it is the sell-off in equity markets over the past couple of days which has driven the greenback to a new high. In some sense, the …
22nd April 2022
It has been an unusually quiet week for commodities, with less volatility than we have come to expect . The war in Ukraine continues to provide possible stresses for supply but, for now at least, it seems the market focus is shifting to demand as well, …
The US dollar continued to edge higher against most major currencies, with the DXY index (and 10-year US Treasury yields) reaching a new high for the year. The renewed rise in Treasury yields today reversed the dollar’s weakness following a …
14th April 2022
The war in Ukraine continued to dominate headlines, and commodity price movements, this week as peace talks fell apart and sent energy prices up sharply . However, at the same time, there are further worrying signs of a downturn in China’s commodities …
The US dollar has risen across the board this week as the Fed’s hawkish message on “quantitative tightening”, renewed sanction risks in Europe, and the polling shift in favour of far-right candidate Marine Le Pen ahead of France’s presidential election …
8th April 2022
Last week, we suggested that the downside risks to prices were building, and these came to the fore in the past week with particularly hawkish US Fed minutes published on Wednesday and ongoing COVID-19 related lockdowns in China. The announcement of a …
Another solid gain in US payrolls did little to boost the dollar today, which seems set to end the week little changed against most major currencies. During the course of this week, central banks in Chile, Czechia, and Colombia continued to tighten …
1st April 2022
Signs of weaker demand in China in the latest PMI data and the announcement that the US will sell off a large chunk of its strategic oil reserve suggest that the downside risks to commodity prices are building . Admittedly, while oil prices fell sharply …
Amid the broad-based “risk-on” tone in markets this week, the US dollar has edged down against most major currencies. As was the case last week, an increasingly hawkish tone by the Fed and a rise in 10-year US Treasury yields had little impact on the …
25th March 2022
Taking the lead from energy, most commodity prices rose this week as hopes of an imminent ceasefire in Ukraine faded and Western leaders met to consider further sanctions on Russia . Meanwhile, Putin’s announcement that natural gas purchases could only be …
Even after its broad-based appreciation today, the US dollar seems set to end the week a bit lower against most major currencies. This is somewhat surprising given the FOMC’s hawkish tone on Wednesday and Fed Governor Waller’s comment today that a 50bp …
18th March 2022
Commodity prices remained extremely volatile this week . After all the supply fears associated with the war on Ukraine, a rising number of COVID-19 cases in China raised concern about both demand and supply given widespread lockdowns in key industrial …
The war in Ukraine continues to dominate both the news headlines and financial markets. While market conditions have remained very volatile, this week has seen a degree of stabilisation of risk sentiment in the absence of major new escalations. As a …
11th March 2022
The seemingly unstoppable rise in commodity prices gave way to sharp corrections this week, though the big picture is that prices remain extremely elevated . We suspect commodity prices will continue to whipsaw around in the weeks ahead, as markets move …