Special Reports

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Special Report – Emerging market and risk sensitive currencies take a hit from rising trade tensions

Posted on June 21, 2018 at 12:18 pm GMT

The United States and China came one step closer to an all-out trade war this week after the Trump administration announced counter tariffs to China’s retaliation to the US’s 25% tariffs on $50 billion of Chinese goods, when they matched it with similar levies. Until now, the growing rift in trade policy between the world’s two largest economies had been met by only modest responses in financial markets. However, following the latest exchange of heated rhetoric, market participants may have [..]

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Special Report – Only “Trump risk” left to lift the yen

Posted on June 20, 2018 at 2:33 pm GMT

The yen appreciated by 3.9% versus the US currency in 2017, which marked the worst year for the greenback since 2003. During the first few months of the current year, the Japanese currency managed to build on last year’s positive momentum, in part due to rising market expectations for a Bank of Japan that is getting closer to normalizing policy. Indicatively, the dollar/yen pair touched its lowest since late 2016 of 104.55 on March 26. However, as we’re approaching the [..]

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Special Report – Trade tensions set to escalate, will markets take notice?

Posted on June 15, 2018 at 11:21 am GMT

The trade narrative has been somewhat overshadowed by geopolitics and central bank meetings lately, but that may change as soon as today. The US is set to announce a revised list of Chinese products it will impose tariffs on, which could provoke a proportional response from China and reignite fears of a trade war. While the situation may escalate in the near-term, potentially unleashing another bout of risk aversion, the end result still appears more likely to be a trade [..]

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Special Report – Euro outlook clouded by politics, easing economic momentum; recent rally a “convenient” time to sell?

Posted on June 7, 2018 at 1:59 pm GMT

Eurozone’s common currency finished 2017 on a strong note versus the US dollar, advancing by 14.1% to render itself the best performing major currency. Largely euro-friendly election outcomes and economic data pointing to an ever-improving growth outlook were instrumental for the euro’s strong performance. The current year, though, is presenting a shift in direction, with the euro possibly coming under pressure in the coming months. IHS Markit’s manufacturing PMI for the eurozone hit the highest on record in December last [..]

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Special Report – Emerging markets rattled by strong dollar; Will the Fed take note?

Posted on May 23, 2018 at 3:05 pm GMT

A stronger US currency may have brought a smile to the face of policymakers in Japan and the Eurozone, as their export-reliant economies stand to benefit from a weaker exchange rate, but the dollar rally of the past month has generated unwelcome volatility for emerging market (EM) currencies, raising concerns of a new EM crisis. Emerging market currencies have been making the headlines in recent weeks, particularly the Argentine peso and the Turkish lira, which have been repeatedly hitting record [..]

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Special Report – Is there an end in sight to the Turkish lira’s freefall?

Posted on May 18, 2018 at 12:38 pm GMT

The Turkish lira has continued to plummet so far in 2018, sinking to fresh all-time lows as a worrisome cocktail of economic developments diminished demand for Turkish assets. While a potential rate hike by the central bank may help to ease the selling pressure or even trigger a short-term rebound – for the lira’s decade-long downtrend to truly reverse, it may require much more comprehensive reforms outside the scope of monetary policy. To say that the Turkish lira is in [..]

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Special Report – As 10-year US yields break above 3%, is the dollar turning a corner?

Posted on April 24, 2018 at 3:10 pm GMT

The US dollar broke above the 109-yen level for the first time since early February this week, taking the dollar bears, who have been betting on more losses for the beleaguered greenback, by surprise. The sudden shift to a more bullish sentiment, in the short term at least, comes amid a surge in US Treasury yields, which has led to a widening in the spread of US sovereign bond yields with its peers. But as the dollar climbs to three-month [..]

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Special Report – The most important chapter in the trade saga is the upcoming one

Posted on April 5, 2018 at 11:37 am GMT

Following the latest round of retaliatory tariffs by China, uncertainty is high, and the next move by either side will determine whether all these actions were just “posturing” ahead of serious negotiations, or whether the situation is set to develop into something bigger, like an actual trade war.  On Wednesday, China unveiled its second round of tariffs on US goods, marking the most significant development in the Sino-American trade dispute so far. The Asian nation announced a list of countermeasures [..]

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Special Report – How have EM currencies fared amid trade risks?

Posted on March 23, 2018 at 3:24 pm GMT

The past few weeks have seen very interesting developments in emerging markets (EM). Some EM currencies have plunged, as rising concerns over a tit-for-tat global trade war amplified the already-troubled outlook for those economies. Others, however, have managed to hold their own quite well so far, defying the conventional wisdom that EM economies are the most exposed to the threat of increased protectionism. The possibility of a retaliatory trade war appears increasingly more realistic with every passing day. The latest [..]

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Special Report – Metal prices come under fire from Trump tariffs; Aussie also feels the pressure

Posted on March 22, 2018 at 1:34 pm GMT

After an impressive two-year rally, industrial metal prices have been having a stormier time in 2018, being first swept over by the market turbulence caused by the sell-off in global equities and bonds, then by the announcement by US President Donald Trump that he is imposing tariffs on US imports of steel and aluminium. Commodity-linked currencies such as the Australian dollar have also been pulled lower by the market volatility and subsequent rise in risk aversion. However, despite an international [..]

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