Emerging markets have been affected by a combination of factors, most obviously rising US interest rates and the subsequent appreciation of the US Dollar. However, what has not come out as clearly is the effect of rising commodity prices on economic growth. Show More
This week it's the US Dollar Index. Unless you've been living under a rock (or maybe that saying should be updated - unless you've been living out of range of wifi), you will have noticed 2 key things about the US dollar index: 1. The US dollar bull market seemed... Show More
2017 saw a combination of solid economic growth without a significant pick-up in inflation. This let the Fed continue to raise rates, but at a measured pace, and it has flagged it’s likely to raise rates another three times this year. Other major central banks did not follow this path... Show More
As the Fed meets to make its June monetary policy decisions, the consensus (and my view) is that they will hike interest rates again. This will add to the interest rate differential support for the US dollar and driver further policy divergence. This comes at a time where the US... Show More
The New Zealand dollar seems to be defying gravity of late, as the interest rate differential between the RBNZ's OCR and the Fed funds rate continues to move lower. While the interest rate differential sometimes works with a lead and sometimes with a lag in setting direction for the Kiwi... Show More
Implied volatility is a well known indicator for the stock market e.g. the CBOE VIX Index, with spikes and troughs in the index generating useful market timing signals. But what about the foreign exchange markets? Today's chart shows the average US Dollar option volatilities across developed market currencies, and the... Show More
As the headlines in the image below suggest, Gerard Minack has developed a reputation for his bearish views. So to hear that he has turned bullish on the outlook for US growth certainly caught us off guard. Show More
Everyone forecast the death of the Aussie dollar in 2016, however, interest rate differentials and resurgent commodity prices pushed the local currency to a peak of 78 cents early in 2016. Of the 600+ Livewire members that responded to our 2017 Outlook Survey only 5% see the currency ending the... Show More
As a holiday treat we're making the 2016 End of Year Special Edition of the Weekly Macro Themes available for free: http://www.topdowncharts.com/2016-special-edition This edition looks at some of my favorite charts and themes of the year from the weekly report, including the charts that worked (and those that didn't... Show More
It's that time again... Almost a year after the last rate hike the US Federal Reserve is set to hike the fed funds target rate by 0.25% to a new range of 0.50-0.75%. The outcome of the FOMC meeting will be announced (along with the "dot charts" and economic projections)... Show More
The below chart appeared in the latest edition of the Weekly Macro Themes http://www.topdowncharts.com/single-post/2016/11/25/Weekly-Macro-Themes---25-November-2016 and shows the well known US Dollar Index (or DXY) vs the average 10-year government bond yield differential across the G10 currencies. There appears to be a pretty clear relationship between the interest differential indicator and... Show More
The US dollar lost its safe haven play last week when it encountered major resistance from its 200 days moving average level, according to Saxo Capital Markets Sydney-based trader James Kim. In the next few days, the US Dollar Index might be testing re-entering the channel it broke during the... Show More
Following suggestions that the US Federal Reserve is ready to raise interest rates in coming months, all that matters right now in the market is the Fed and USD, says Saxo Capital Market’s Global Macro Strategist Kay Van-Petersen. Fed Chair Janet Yellen said on Friday that the central bank could... Show More
Global macro strategist Kay Van-Petersen of Saxo Capital Markets believes we probably will see two Fed rate hikes this year. He expects that the US dollar will continue to strengthen and he finds it very possible that we will test new highs. He is long DXY futures. Click the following... Show More
The recent path of US industry capacity utilisation summarises a great deal about the state of the US economy and background financial market conditions. Whenever capacity utilisation has been at the level recorded in March over the past 50 years, the US economy has suffered a recession. The current capacity... Show More
Saxo Bank's Global Macro Strategist Kay Van-Petersen says, that his focus is on three things. Mainly the FOMC minutes and whether the USD will continue its weakness. He also previews rate decisions from the Reserve Bank of Australia and the Reserve Bank of India, which he believes may offer opportunities... Show More
Bloomberg: "Federal Reserve Chair Janet Yellen spelled out on Tuesday what she means by data dependence, asserting her leadership of the U.S. central bank with a clear message that interest rates will be raised at a cautious pace. In one of her most detailed policy discussions this year, Yellen gave... Show More
Ole Hansen, Head of Commodity Strategy at Saxo Bank, believes one side effect of negative rates is that investors are being forced to invest in real assets. “Hansen says the most obvious example is in gold, however, he also says the trend is evident in oil, copper and even iron... Show More
Each year Byron Wien, Vice-Chairman of Blackstone, produces his list of the top potential ‘surprises’. He defines a surprise as an event which most people would ascribe a likelihood of less than 1 in 3, but which he believes has a greater likelihood than 1 in 2. Among his picks... Show More
In the lead up to a potential rates hike in the US, gold and silver have remained in relative tight ranges. Saxo's Head of Commodity Strategy Ole Hansen says these precious metals have already priced in the hike. "The fixation on higher rates and its potential positive impact on the... Show More
