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  1. Markets to Watch: Bonds Beware as QRA Emerges

    Bilal Hafeez, Viresh Kanabar

    Summary In the US, the Fed meets on Wednesday. We expect them to hold rates steady while preparing markets for a cut in March. In the UK, the BoE will likely hold rates unchanged on Thursday, taking a more dovish profile in the near term. January CPI is the main release of the week for […]

  2. G10 FX Weekly: EUR/GBP Enters the Buy Zone

    Richard Jones

    Summary Since last May, EUR/GBP has traded in a ~0.8500/~0.8800 range. This week, EUR/GBP printed its lowest levels since September, primarily catalysed by a hawkish pricing tilt in BoE expectations. We think this hawkish BoE pricing has gone too far and that ECB easing will be less aggressive than the market currently prices. Market Implications […]

  3. UK Private Regular Wages Fall

    Henry Occleston

    Summary It was another reduced labour market release (full labour force survey data will be corrected and updated in January hopefully). But what we did get was dovish. Total weekly wage growth dropped 0.8ppt (from an upwardly revised +8.0% YoY) to +7.2%. Meanwhile, regular pay dropped 0.5ppt from an upwardly revised +7.8% in September. Most […]

  1. G10 FX Weekly: December Dollar Downside? Patience the Modus Operandi for Short GBP

    Richard Jones

    We expect USD downside in December, mostly in the last two weeks. However, the outsized November fall may have already accounted for much of the move.

  2. Unpacking the Autumn Statement

    Henry Occleston

    Summary The OBR downgraded real growth across the forecast horizon but upgraded nominal growth forecasts on the back of higher inflation ahead. Ahead of what could well be an election year in 2024, the UK Chancellor’s Autumn Statement provided a 2ppt cut to national insurance contributions. We expect next March’s budget to provide further backing […]

  3. G10 FX Weekly: GBP (Eventually) Lower, USD Rangebound, Be Patient into Year-End

    Richard Jones

    Markets are chopping around in ranges, with the November highs/lows across the G10 FX and rates space to contain price action into year-end.

Prime Trade Ideas: Long JPY? Beware MoF Intervention!

Viresh Kanabar

We consolidate our favourite biases into one, easy-to-read, weekly report! Please find the original pieces linked throughout and a summary table at the end of the document. Reach out to us on Slack or email the author with any questions about the content. Latest Updates FX, Rates, and Commodities: Beware MoF intervention when selling JPY […]

Markets to Watch This Week: Is Credit Still Flowing in China?

Bilal Hafeez, Viresh Kanabar

Last Week’s Highlights 10Y yields collapsed… What drove the move? Last week’s price action was dominated by the collapse in long-end yields, which fell almost 30bps (Charts 1 and 3). Several factors drove this move. On Monday, the US treasury announced it would need to borrow $76bn less than expected at $776bn in privately held […]

  1. G10 FX Weekly: USD/JPY Upside Remains Compelling, But Beware Intervention

    Richard Jones

    Despite a challenging macroeconomic backdrop, with less than stellar survey and hard data in the Eurozone, the euro (EUR) has proven resilient in recent weeks.

  2. BoE Preview: Dovish MPR to Justify Another Pause

    Henry Occleston

    Summary We expect the BoE to hold the Bank Rate at 5.25%, likely with fewer voters backing a hike than at the last meeting (when it was 5:4 in favour of a pause). The MPR forecasts are likely to be far more dovish than in August. Higher unemployment and lower expectations of wage growth will […]

  3. G10 FX Weekly: We Like EUR Higher Against GBP and SEK

    Richard Jones

    Despite a challenging macroeconomic backdrop, with less than stellar survey and hard data in the Eurozone, the euro (EUR) has proven resilient in recent weeks.

Charts of the Week – Seasonals Support Equities, Mispriced BoE Cuts, and Gold Spikes

Matthew Tibble

US equities exhibit strong seasonal patterns. Q4 typically sees stocks rally, especially over October and November.

G10 FX Weekly: GBP Downside to Accelerate in Q4

Richard Jones

With a softening economy and more dovish central bank, we think GBP downside will accelerate into Q4.

  1. Markets to Watch This Week: US Inflation was Hot, Will UK Follow?

    Viresh Kanabar

    US inflation came in hot, hot, hot! While US core CPI aligned with expectations, headline at 3.7% exceeded them.

  2. Momentum Models Remain Bearish on UK Rates

    Bilal Hafeez, Ben Ford

    Momentum models (-0.8% WoW) registered negative returns across FX (-0.4% WoW), rates (-1.4% WoW) and equities (-1.0% WoW). 

  3. Charts of the Week – No Haven USD Boost, Outlier NFP, Robust Gas Demand

    Matthew Tibble

    Summary Investors are in risk aversion mode due to the Israel-Hamas conflict, but the dollar may not benefit. September’s bumper NFP print is likely an outlier. CHF bearishness is building among real money and hedge funds. Despite suggestions otherwise, US and EU gasoline demand remains robust. Is Risk Aversion Good for the Dollar? It’s Complicated… […]

Markets to Watch This Week: Is the UK in a Recession?

Bilal Hafeez, Viresh Kanabar

NFP blew past expectations. Nonfarm payrolls (NFP) were much higher than expected at 336k jobs versus expectations of around 170k, yet wage growth did not pick up. Wages grew by a measly 0.2% MoM...

Momentum Models Bullish USD But Room to Increase Conviction

Bilal Hafeez, Ben Ford

Rates momentum models (+0.4% WoW) outperformed FX and equity momentum models (-0.1% WoW) over the past week. Rates momentum models are the best-performing models over a three-month time frame (+3.4%). FX (+0.6%) followed while equity (-3.0%) struggled. 

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