Special Reports

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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 1:32 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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Special Report – The “winners” and the losers of a potential trade war

Posted on March 9, 2018 at 2:06 pm GMT

Talks of a trade war have been dominating headlines in recent days, with investors being spooked that the latest US tariffs could spark retaliation from other major economies. The “good news” is that recent price action has given us a taste of what to expect in financial markets should the situation escalate from here. Blink and you missed it. That is how quickly trade-related headlines have been hitting the wires recently, and how sharply markets have been responding to them. [..]

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Special Report – Do concerns about US twin deficits justify the dollar’s increasingly bearish outlook?

Posted on February 22, 2018 at 1:39 pm GMT

As the US government looks to raise $258 billion in Treasury auctions this week, the risk from a ballooning US deficit is weighing on investors’ minds as concerns grow about the sustainability of the worsening fiscal shortfall in the United States. The prospect of a burgeoning budget deficit comes at a time when the country’s trade balance has also been deteriorating in recent months. More worryingly, it is occurring against the backdrop of an economy that is at a late [..]

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Special Report – Italian elections: Europe’s and the common currency’s next big test?

Posted on February 15, 2018 at 2:10 pm GMT

Italy will be heading to the polls to elect a new national government on March 4. This is widely viewed as the common currency’s – more widely the eurozone’s and Europe’s – next major risk event. The result of the elections is far from known, with a number of possible outcomes being at play and populist-perceived forces enjoying popularity. The euro is expected to come under intense selling pressure should for example the Five Start Movement find itself ruling the [..]

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Special Report – As BoE takes hawkish turn, Brexit risks come back to haunt sterling

Posted on February 13, 2018 at 4:33 pm GMT

After starting 2017 around $1.22 – levels last seen in the 1980s – few would have believed that the British pound would end the year at $1.35. The currency’s gains didn’t stop there as cable went on to top the 1.43 level in January for the first time since the day after the Brexit referendum on June 23, 2016. However, renewed Brexit concerns have since pulled the pound back to around $1.38 even as the Bank of England flags an [..]

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Special Report – Why has gold remained indifferent to stock market volatility?

Posted on February 9, 2018 at 3:23 pm GMT

The classic narrative that safe havens rally when stocks plunge is on shaky legs right now. While major US equity indices have dropped roughly 10% in a matter of days, gold has actually moved lower over the same period, leaving most investors puzzled. Why has gold’s response been so muted, and what do the cards hold for the precious metal moving forward? A variety of factors can be blamed for gold’s indifference to the market turbulence. First and foremost is [..]

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