Richard Jones
Summary US fixed income has staged an impressive bull run since late April/early May, with yields plummeting across the curve. Yet several signals now warn of a short-term correction higher for US yields. We anticipate the correction will depend on the FOMC’s policy update next week and therefore avoid initiating countertrend tactical positioning as the […]
Richard Jones
Summary Switzerland’s August inflation data came in weaker-than-expected across the board. This would normally lead to CHF weakness, but softer global risk sentiment this week resulted in the currency tracking sideways, with CHF haven demand offsetting weaker Swiss data. As we wrote last month, we think the Swiss National Bank (SNB) will intervene in the […]
Macro Hive
Key Events G10 In the US, the main data points are: NFP – Friday. If the print shows no marked improvement on July and is below consensus for UE falling to 4.2%, the Fed will likely frontload rate cuts, starting with 50bp in September. JOLTS – Wednesday. The U/V ratio is more important than headline. […]
Richard Jones
Summary As we wrote last week, August seasonality has seen reduced market liquidity and rendered trading conditions suboptimal. This is especially true in USD/JPY, having a ~6% high/low range in the three trading days between 1 and 5 August. Expect another week of choppy, illiquid markets, with new direction in USD/JPY emerging only next month. […]
Richard Jones
Summary As is common in August, reduced market liquidity has rendered trading conditions sub-optimal. This month has seen big moves, and sizeable retracements of those moves, across all global macro asset classes. We see these dynamics continuing for the next 1-2 weeks so keep our powder dry into September. Liquidity should improve then, and durable […]
Henry Occleston
Summary A September cut may require a continued undershoot in headline and services inflation (our expectation) and signs of further labour market easing (less certain). The September meeting will also see a decision on QT for the year ahead. Given the maturity profile, the risk is skewed towards slower active sales. This would present more […]
Richard Jones
When evaluating the performance of our momentum models we are considering the average performance across the one-, three-, and 12-month momentum models. Summary Momentum models were down 0.1% over the past week, with equity models down 0.4% WoW, FX models flat WoW, and rates models down 0.2% WoW. Momentum models are down in aggregate over […]
Henry Occleston
Summary The market is fully pricing a 25bp cut in September. However, recent data suggests the ECB will need to revise their forecasts more hawkishly at the September meeting. This, and the amount of incoming data, elevates the risk of the ECB pausing in September. We therefore see good value in fading the 25bp cut […]
Ben Ford, Bilal Hafeez
Summary Momentum models slipped -0.2% over the past week. Rates (+0.4) were the only positive performer with FX (-0.3%) and equities (-0.9%) underperforming. Momentum models underperformed across all three asset classes over a three-month timeframe (equities: -5.3%, FX: -1.7%, and rates: -1.0%). Market Implications Momentum models are heavily bullish Gilts – we are long 10Y […]
Ben Ford
Summary The RBNZ cut the OCR 25bps to 5.25%, against our expectation for no change. Material weakness in high-frequency data and updated research from the central bank drove the dovish update. There were large changes to GDP and tradables inflation forecasts. Ahead, the RBNZ are forecasting 25bp cuts at the next three meetings before slowing. […]
Macro Hive
Key Events G10 In the US, the main data is: CPI – Wednesday. Consensus is 0.2% MoM for core. The Fed will look for continued OER disinflation and, based on CPI and Tuesday’s PPI, an estimate of core PCE near 20bp. Retail sales – Wednesday. Following June’s 0.4%, consensus expects a slowdown to 0.1% ex […]
Richard Jones
Summary Amid the market turmoil this week, on Monday EUR/CHF traded at its lowest level since 2015 (~0.9211). That day, the Swiss National Bank (SNB) abandoned the EUR/CHF ‘floor’ at 1.2000. Since then, although the pair has traded choppily, EUR/CHF has bounced decisively off this week’s low to now trade over 2.5% higher at 0.9460. […]
Richard Jones
When evaluating the performance of our momentum models we are considering the average performance across the one-, three-, and 12-month momentum models. Summary Momentum models were down 0.1% over the past week, with equity models down 0.5% WoW, FX models down 0.4% WoW and rates models up 0.6% WoW. Momentum models are down in aggregate […]
Richard Jones
Summary In July, USD/JPY had its worst month since November last year, falling almost 7%. Before the MoF intervened on 11 July, the pair topped out intraday just below 162. Now, post-Fed and BoJ, USD/JPY lingers near its lowest level since March. Although most of the event risk for this week has passed, the US […]
Henry Occleston
Summary The BoE cut 25bp, in line with economist consensus. We had been low conviction on the decision but have long been dovish on the BoE outlook and positioned accordingly. The vote was tight, 5:4 in favour of cutting. As expected, forecasts and comments were hawkish (decision ‘finely balanced’, ‘upside risks to outlook’). However, the […]
Viresh Kanabar
Summary The BoJ hiked 15bp while highlighting increased upside risks to its inflation forecast. They were willing to look through weak household consumption, prioritising broadening wage gains and the risks of a weaker JPY. Governor Ueda stated monetary policy remains accommodative despite the hike and that further hikes are likely. Market Implications We think the […]
Henry Occleston
Summary Whether the BoE cuts rates this week is highly uncertain. The fundamental picture suggests they should cut immediately. But recent data volatility could lead to another pause. Updated forecasts could be key (even though med.-term ones will get caveated). If they realign near-term CPI downwards, it will strongly justify a cut. Ultimately, our stronger […]
Richard Jones
Summary Since the Japanese Ministry of Finance (MoF) bought JPY on 11 July, USD/JPY has declined ~5.75%, its biggest two-week drop since late last year. USD/JPY is now trading at its lowest level since early May (~152.50). Much event risk exists for USD/JPY in the next week. The Bank of Japan (BoJ) updates monetary policy […]
Macro Hive
Key Events G10 In the US, there is… PCE price index, pers. income, spending – Friday. Consensus seems reasonable. The Fed watches the services component of PCE. We will examine median price PCE for indication of trend and see personal savings remaining around 4%. Q2 GDP – Thursday. Consensus is 1.9% vs the Atlanta Fed’s […]
At Macro Hive, we offer a wide range of FX rates analysis and research into foreign exchange markets. We provide detailed FX analysis on DM and EM on a weekly basis, while our Emerging Markets team produces daily insights into the latest currency exchange rates and FX trends for China, India, Brazil and other EM countries. Our FX rates analysis also covers carry trades.
The trading of currencies on the FX market (or forex market) occurs 24 hours a day, five days a week across major financial centers worldwide. Our research is therefore global in perspective, and we cover the latest FX news alongside analysis of historical exchange rates in response to macro trends. At Macro Hive, we base our FX rates insights on a longer-term outlook, seeking to hold positions for weeks rather than intraday swings.
As with all investments, trading in currencies entails risk, especially during periods of high market volatility or geopolitical tension. We recommend investors interested in FX investments tailor their exposure according to their risk appetite. It is also possible to hedge to mitigate exposure to risk by using correlated currency pairs.
As a corollary to our FX research, Macro Hive also specialises in interest rate insights. We offer previews and reviews of central bank meetings and analysis of central bank communications, and our research extends to the broad macroeconomic implications of easing and tightening cycles. We use this to inform not just our FX analysis, but also our outlook on bonds, equities, and other asset classes.
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