The British government and European Union (EU) recently agreed on the terms and conditions of the UK’s exit from the EU in March 2019 which the British and European Parliaments are expected to vote on in late-2018. Prime Minister Theresa May’s cabinet has completed a bruising 18 month training program and is now at the starting line of a gruelling
Read moreMy macro & FX analysis is premised on both a detailed qualitative assessment of Emerging and G20 fixed income markets and economies and a rigorous quantitative analysis of data, trends, policy decisions and global events too often taken at face-value. A picture can say a thousand words and a well-constructed and timely chart can shed light on often complex economic
Read moreThe past year has been remarkable with political precedents set in the US, UK and France, still record-low central bank policy rates in most developed economies and financial markets and macro data at all-time or multi-year highs (and lows). The US presidency is fraught with problems but markets are turning a blind eye…for now. The UK is still on course to be
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Read moreAs we head towards the second half of 2017 and the one-year anniversary of the UK referendum on EU membership, many themes which have pre-occupied financial markets in the past 12 months are likely to continue dominating headlines. These include Donald Trump’s US presidency and its longevity, merits and scope for tax reforms and infrastructural spending, Brexit negotiations which officially
Read moreFinancial markets in the past week have had to contend with two UK-borne shocks: The ruling Conservative party’s loss of a majority in last Thursday’s general election and three MPC members voting in favour of a 25bp hike at today’s Bank of England policy meeting. Sterling, which sold off sharply after the election result, has recovered this week and the
Read moreIn the US, political intrigue, seemingly lifted straight out of a John Le Carré novel, has reached a crescendo and there are now multiple investigations running concurrently. If we assume these investigations will run over weeks/months, the question is whether and to what extent this political backdrop is likely to impact financial markets, US government policy-making, the US and global
Read moreChina’s exchange rate policy is one of many significant uncertainties or “known-unknowns” for 2017 (as it arguably was in 2016 and prior years). The market’s focus is still very much on the rise in USD-CNY but Chinese policy-makers are keen to emphasise the importance of the Renminbi’s performance against a basket of currencies – the CNY Nominal Effective Exchange Rate
Read moreThere appears to be a quasi-universal belief that 2017 will be characterised by acute uncertainty, with the list of difficult-to-predict economic and political variables growing exponentially in recent months. These include the paths which Donald Trump will tread in the US and Theresa May in the UK, the Fed’s reaction function, the future of the eurozone and EU with European
Read moreRising US yields, stronger dollar, FX outflows from emerging markets into US equities, President Trump’s still uncertain policies regarding global trade and country-specific concerns continue to weigh on EM currencies. But the pace of depreciation in EM currencies has abated, with a number of central banks hiking their policy rate and likely intervening in the FX market. China is manipulating
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