UBS Projects Mixed Market Outlook for 2025 Amid Trump Policy Uncertainty 
Global Markets React to Strong U.S. Jobs Data and Rising Yields 
China Holds Loan Prime Rates Steady in January as Market Expectations Align 
China’s Growth Faces Structural Challenges Amid Doubts Over Data 
US Futures Rise as Investors Eye Earnings, Inflation Data, and Wildfire Impacts 
Philippine Central Bank Signals Steady Interest Rates as Inflation Rises and Growth Slows 
U.S. Urges Japan on Monetary Policy as Yen Volatility Raises Market Concerns 
China's Refining Industry Faces Major Shakeup Amid Challenges 
Trump’s "Shock and Awe" Agenda: Executive Orders from Day One 
U.S. Stocks vs. Bonds: Are Diverging Valuations Signaling a Shift? 
Energy Sector Outlook 2025: AI's Role and Market Dynamics 
Fed Confirms Rate Meeting Schedule Despite Severe Winter Storm in Washington D.C. 
Bank of Japan Signals Cautious Path Toward Further Rate Hikes Amid Yen Weakness 
Brazil Holds Selic Rate at 15% as Inflation Expectations Stay Elevated 
Goldman Predicts 50% Odds of 10% U.S. Tariff on Copper by Q1 Close 
Moody's Upgrades Argentina's Credit Rating Amid Economic Reforms 
The above performance picture, we get from the monthly reporting hedge funds is quite disappointing than the picture from the daily reporting funds as even currency hedge funds performed poorly in November.
As you could observe the rolling 21-day beta of the Barclay Hedge FX index with the JPM USD tradable index vs. the net spec position in the USD as reported by the CFTC. Spec is the non-commercial category from the CFTC. Net spec position below is with one week’s lag.
Fed package: The FOMC proved more hawkish than markets anticipated, with the dots shifting to reflect a total of three hikes during 2017. This hawkishness helped to mitigate some of the underperformance of treasury yields such as ZAR 10-year payer trades, as rates were paid up across emerging markets while EM currencies deteriorated.
Over the near term, some positive political dynamics and technical forces may continue to bolster ZAR resilience. Domestic and external factors point in divergent directions, underscoring the importance of trade entry levels.
ECB’s shift: An ECB tapering scenario by 2018, our house view, creates a big demand cliff for global bond markets in 2018, unless supply collapses at the same pace as demand, which seems rather unlikely, or demand outside G4 central banks picks up quickly, something that is more likely to happen only after a big increase in bond yields. An alternative scenario where the ECB tries to preserve ammunition would prolong QE to beyond 2018.
A smoother QE reduction profile is also important because this week’s ECB decision involved not only a reduction in the pace of purchases but also a shift in purchases towards shorter maturities which implies less duration withdrawal.
The USD surged higher, aligned with US yields on the back of the Fed not only raising rates by the expected 25bps, but increasing their expectations for three more hikes next year, from two. They expect jobs growth to strengthen further and inflation to pick up towards their 2% target.
As a result, Long-term the move down through the 1.0450 region is arguably the last in the cycle from the 1.6020 highs set back in 2008. If this is the case the market should not breakdown through the 1.01-0.99 region. Such a move would expose a deeper rift in the EUR and risk a move towards 0.90.
