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
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
