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  1. Et Tu, SNB?

    John Floyd, Richard Jones

    The upcoming Swiss National Bank (SNB) monetary policy meeting provides an ideal vantage point to consider future Swiss monetary policy as driven by both domestic and global influences and provides significant trading opportunities.

  2. Two Reasons Why the Dollar May Struggle for Direction

    Vasileios Gkionakis

    As of 8 September, the dollar had risen by 4.8% since mid-July, its largest gain over a 41-day period since mid-October 2022. 

  3. Look for Idiosyncratic, Relative-Value and Carry Trades in FX

    Vasileios Gkionakis

    Idiosyncratic and relative-value (RV) trades are currently appealing. Look for monetary policy divergences (Bank of England repricing lower, rates re-pricing in CEE), sensitivity to ongoing muted Chinese growth, and energy prices.

  1. Markets to Watch This Week – Get Ready for the BoE’s Final Hike

    Bilal Hafeez, Viresh Kanabar

    ECB pulled off a dovish hike, but we see more to come. The ECB hiked by 25bps as Henry had expected for some time. They also increased their interest rate forecasts for this year and next, driven by higher energy prices.

  2. Charts of the Week: Returning US Inflation, Bullish USD, UK Unemployment Uptick

    Matthew Tibble

    Small businesses may be about to start reversing disinflation. UK unemployment is rising much faster than the BoE expected.

  3. ECB Preview: More Hikes Needed – Now Makes Sense

    Henry Occleston

    The ECB’s decision to hike is based on three factors: Whether core inflation (and importantly wage-intensive services inflation) is trending towards target.

Markets to Watch This Week: A Cautious Hike for the ECB?

Bilal Hafeez, Viresh Kanabar

The quarterly Beige Book was released last week, continuing to point to strong growth, falling inflation and a loosening labour market. Here are our highlights on each point:

Charts of the Week: US Trade Flows, Stalling Earnings, Rising Unemployment

Matthew Tibble

The US is moving away from China imports. SPX and NDX earnings growth stalls – a warning for equities. US unemployment rises on increased participation, especially from young workers.

  1. Markets to Watch This Week: Euro Area GDP Growth Risks Skewed Lower

    Bilal Hafeez, Viresh Kanabar

    US jobs data took centre stage. Last week, US jobs data dominated the market narrative, with JOLTS (Tuesday) and NFP (Friday) data pointing towards a slower labour market.

  2. Charts of the Week: EU Inflation and US Growth Cause Central Bank Headaches

    Matthew Tibble

    Core inflation and wage growth remain an issue for the ECB ahead of the September meeting. Rapid growth acceleration in the US could explain why Powell feels less confident the Fed’s policy stance is restrictive.

  3. Markets to Watch This Week: Is New Zealand in a Recession?

    Bilal Hafeez, Viresh Kanabar

    Powell stood his ground at Jackson Hole. Despite speculation and academic calls suggesting otherwise, Chair Powell reiterated his commitment to the 2% inflation target. He also stated that continued strong growth in the US could require additional policy tightening given inflation remains above target.

G10 FX Weekly: Antipodean and Scandi Trends to Accelerate Next Month

Richard Jones

As with the rest of the G10 FX and rates space, Antipodean and Scandi markets have been rangebound in July-August as investors await a decisive September and Q4 for developed market central banks. We expect the rangebound price action to hold in Aussie, Kiwi, Norwegian and Swedish markets in the next week or two.

Charts of the Week: China’s Economic Weakness and How to Play it

Matthew Tibble

The credit intensity of China’s economy is surging, helping to explain why Chinese policymakers have struggled to boost growth this year.

  1. Markets to Watch This Week: Will Jackson Hole Provide Any Hints on the Fed?

    Bilal Hafeez, Viresh Kanabar

    Last week, US retail sales beat expectations across the board. Advance retail sales rose +0.7% MoM versus +0.4% MoM expected, while the control group rose +1.0% MoM versus +0.5% MoM expected.

  2. G10 FX Weekly: Preparing for UK Short End to Outperform

    Richard Jones

    G10 FX and rates markets are chopping around within ranges as investors await a busy September for developed market central banks. We expect the rangebound performances of July and August to hold in coming weeks.

  3. Charts of the Week: EZ and UK Core Inflation Worries, Oil Instability, and Reduced DXY Bullishness

    Matthew Tibble

    UK core inflation came in stronger than expected thanks to rental prices. Likewise, EZ core inflation remains significantly above typical levels. Oil markets have entered an unstable equilibrium following recent inventory drops.

Markets to Watch This Week: Kneejerk Reaction to UK CPI?

Bilal Hafeez, Viresh Kanabar

US CPI met expectations. July MoM headline and core CPI came in at 0.2%, in line with expectations and unchanged from June. Core goods deflation deepened, while OER was roughly unchanged from July.

G10 FX Weekly: BoE Outlook Exposes UK Yields and GBP to More Downside

Richard Jones

Last week, the Bank of England (BoE) hiked rates for a 14th straight time, raising its key policy rate (Bank Rate) from 5% to 5.25%.

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