The approach for modelling the U.S. dollar was twofold. First, we estimated the fair value of each of the DXY constituents, and reconstructed an index based on DXY weights – a bottom-up fair-value DXY, if you will. Second,…
Only in a scenario of a complete collapse in global growth will the Fed cut rates more than what is currently priced in the market. Yet, this scenario would be dollar bullish. In this case, the dollar’s strong inverse…
Japanese foreign machinery tool orders and German industrial orders are contracting deeply, and have not improved, not even on a rate-of-change basis. Meanwhile, China’s imports of capital goods are contracting at a double-…
Highlights Analysis on Indonesia starts below. The U.S. dollar is a counter-cyclical currency – it exhibits a negative correlation with the global business cycle. Ongoing weakness in the global economy – which is…
This will put upward pressure on forward curves, nudging oil near our Commodity & Energy Strategy service’s target of $75 per barrel. Should demand pick up later this year, it will supercharge the uptrend. More…
Highlights The breakout in financial asset prices stands at odds with a deteriorating profit outlook. This suggests a high probability of a coiled-spring reversal in one of the two variables as we enter the thin summer trading months.…
Highlights The EM equity and currency rebounds should be faded. When corporate profits are contracting, lower interest rates typically do not preclude equity prices from dropping. This is the case in EM and China. Our leading…