Fed Hike Aftermath Series

Fed did its deed, now watch out inflation

Dec 20, 2015 21:50 pm UTC| Commentary Central Banks

The USD is expected to continue to be supported versus G3, while it could underperform relative to emerging market currencies. With the uncertainty regarding the first hike of the Fed behind us, risk premia should decrease...

EUR/USD to trade side-ways into year-end

Dec 20, 2015 21:25 pm UTC| Commentary

EURUSD is expected to trade side-ways into year-end as the data calendar is light and event risks (eg, Fed, ECB) are behind us. Yet, 2016 will bring about another year of significant EUR depreciation with the Fed/ECB...

Currency War Series

BoJ surprise and focus for the year-end

Dec 20, 2015 21:19 pm UTC| Commentary Central Banks

The Bank of Japan (BoJ) decided on surprise measures to qualitatively supplement its QQE without further quantitative easing last week. Governor Kuroda at the post-meeting press conference described the decision as a...

Banxico likely to deliver a pre-emptive hike on MXN weakness

Dec 20, 2015 07:07 am UTC| Commentary

Mexicos positive inflation outlook, along with risks to growth, indicates that Banxico will lag the US Federal Reserve during its rate-hiking cycle next year. We expect two more hikes of 25bp, at the March and June...

European PMI outperformance can't offset Chinese manufacturing slowdown

Dec 19, 2015 08:48 am UTC| Commentary

Global manufacturing has been softening since early 2014. The descent is driven by a slowdown in emerging markets as China transitions away from a manufacturing to a services-based economy, and Brazil and Russia struggle...

Oil in Global Economy Series

Declining oil prices could push for another rate cut by ECB in 2016

Dec 19, 2015 08:40 am UTC| Commentary Central Banks

Brent prices dropped to $35 per barrel, which constitutes a significant downside risk to the ECBs inflation scenario and is likely to refuel talks of further monetary accommodation through, in particular, another cut in...

U.S. extends tax relief as state spending grows

Dec 19, 2015 08:33 am UTC| Commentary Economy

U.S. Congress this week passed legislation covering fiscal 2016 (FY16) spending appropriations (exceeding the 2011 sequester cap) and a basket of tax credits, deductions and adjustments with a net revenue cost surpassing a...