Forex Forecast
G10 Forecast changes
Given the important developments in the global economy over the past month, we have changed a number of our forecasts. These are published on Barclays Capital Live as they were needed for the EM quarterly. We will discuss them in greater detail in our G10 quarterly (published Thursday).
EUR/USD forecast change: The peripheral crisis is likely to deepen
EUR/USD forecast change: The peripheral crisis is likely to deepen The problems in the euro area have deteriorated significantly and are likely to worsen further before stabilising. Heightened risk, coupled with more dovish language coming from the ECB and the SNB floor, has made a lower EUR/USD likely in the short run. We are therefore […]
CEE Quarterly: Risk awareness
Macro outlook: The past quarter has taught us the perils of post crisis consolidation against a backdrop of elevated debt levels. Aftershocks are unavoidable. In line with a reduction in our growth outlook for the US and EMU, we are marking down our growth forecasts for CEE for this year and next.
UBS – Morning Adviser Europe – S&P Downgrades Italy
Italy Downgraded By S&P S&P downgraded Italy by one notch overnight, from A+ to A on its long-term debt, outlook negative. The ratings agency noted it reduced Italy on expectations of weak growth and also cited the country’s fragile politics as a hindrance to its ability to reduce debt. The outlook on debt remains negative.
FX Ringside: USD skew indicates stronger dollar
Norway: Rate cut hopes farfetched Norges Bank will leave rates on hold at 2.25% this week adding a more dovish tone compared with its surprisingly hawkish previous message. We believe the market is simply incorrect to discount a 30% probability of a rate cut.
Key Currency Views: September 2011
Currency themes Theme #1. “Twist and Shout”. The Fed is expected to announce operation twist on Sept 21, likely followed before Thanksgiving by a loud “shout” (communicating their commitment to ultra-low rates beyond 2013). QE3 will be on the table if, as we expect, there is no inflection in the US data by Q1 of […]
Sovereign Ratings Outlook: September 2011
Well Euro held in there well yesterday after a punishing 10 previous days. Plenty of chat and headlines around China and Italy support but as seen before the support for Spain did not amount to anything decent. Italy’s auction will be watched closely. Valentin Marinov (Strategy) notes that proposed EFSF issuance of EUR25bn to year-end […]
Daily Economic Briefing: September 12, 2011
Global data summary Tensions continue to build in the EMU fiscal crisis. Investors are sensing a breaking point may be in the offing and, with little idea of what this will be or how it will play out, are moving quickly to the exit. In the event of a disorderly involuntary default, Greece would likely […]
FX DAILY STRATEGIST: Europe – 12 September 2011
EUR continues to slide – volatility risks slipping over into real economy: Concerns over progress on the Greek bailout and the sudden resignation of Juergen Stark from the ECB Governing Board has seen risk pummelled. The DJIA fell more than 300 points and the flight into safe haven assets kept USD and USTs well bid. […]
European FX Daily – EUR sell off continues
– AUD and KRW lead sell-off vs USD, Asian equities down 1.2%-3.3%. – US data this week likely point to slow growth but no support yet for QE3 – Italian and Spanish bond auction in focus – Credit Suisse conference call today: The Future of the Euro
Fred Neumann short piece “Asia’s buffer” + FX forecasts
Fred continues to argue that the risk for Asia is a mere cyclical dip, not a financial crisis and Fred’s “chart of the week” shows that savings still have a healthy buffer over investment. HSBCs latest GDP, CPI and FX forecasts for the region are on p.4 (Worth a glance).
FX DAILY STRATEGIST: Asia – 08 September 2011
Resumption of Wednesday’s risk rally could provide support for EURUSD despite EUR risks The world looked like a much better place on Wednesday as risk rallied keeping high beta currencies like SEK, AUD, and NZD well in demand. AUD could receive further support this morning from an improvement in the employment numbers especially after the […]