Analysis

Going into the ECB rate meeting on Thursday has Markets expecting the ECB to remain on hold with rates. The latest Reuters poll shows 39 out of 69 economists expecting the ECB to keep rates unchanged at 3.75%, whereas 30 expect a hike to 25 basis, points hike.  However 36 of those 69 surveyed expected … Read more

Gold price movements are heavily influenced by the path of the US dollar and the movement of US Treasuries. The movement of both the US dollar and Treasuries is dependent on the path of US interest rates. If markets perceive a coming increase in interest rates out of the United States, then yields and the … Read more

It’s hard to think the US is heading into a recession when the jobs market is so strong. That’s been the Federal Reserve’s problem, so that they have constantly stressed the labour market as being a major indicator for the pace and path of their interest rate hiking cycle. If you take a look at … Read more

Over last weekend, at the Jackson Hall symposium, we heard from ECB’s head, Christine Lagarde, who reminded markets that the ECB remains on a meeting by meeting approach. The next significant data for the Eurozone is coming up in the form of the Flash HICP inflation readings for August, which is due out on the … Read more

On Wednesday we see the European PMI prints for August. The usual split is expected between manufacturing and services data with manufacturing data expected to come in worse than services data. This is still due to the lopsided impact of covid restrictions and the late bounce back demand for services post social distancing, However, that … Read more

In a quiet calendar week the US PMI prints are likely to receive more focus than normal ahead of the Jackson Hole symposium at the end of the week. Traders will be looking for these PMI prints to see if the recent rise in yields is justified or whether or not signs of slowing growth … Read more

The key to understanding FX moves is to have a firm grasp of monetary policy as communicated by central banks. The EURGBP is at the time of writing being pressured lower by GBP strength. The GBP Is strengthening on rising inflation pressures revealed in this week’s data, but whether it can continue remains to be … Read more

Heading into the RBNZ meeting markets were not expecting a change in interest rates. In the event the RBNZ kept rates unchanged at 5.5% as expected and noted little changes from the previous meeting. However, the emphasis that the RBNZ did make was the near term risk that inflation measures don’t slow down as much … Read more

Over the month of August there has been a mixed picture for the US economy. Yes, the last NFP showed jobs being added to the US economy at the second slowest rate this year, but the average hourly earnings were still high and the unemployment rate still low. The US jobs market is still ‘tight’ … Read more

That’s what markets want to know. Is the expected 25 bps rate hike on Wednesday the last hike in the current cycle from the Federal Reserve? Ever since the last weaker US CPI print on July 12 market’s have been turning more positive on risk in anticipation of an eventual turning point from the Fed. … Read more