External broker reports(aggregated public sources), Nordea

Nordea

External broker reports(aggregated public sources)

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FX & Rates

<ul><li>Just as consensus had started to gather around bear steepening driven by rising term premia, war in the Middle East adds to inflation and credit risks.</li><li>So far, the rise in oil prices has been modest.</li><li>However, a spike in energy prices is generally more likely to prompt rate hikes when following a period of too high inflation and less anchored inflation expectations</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Just as consensus had started to gather around bear steepening driven by rising term premia, war in the Middle East adds to inflation and credit risks.So far, the rise in oil prices has been modest.However, a spike in energy prices is generally more likely to prompt rate hikes when following a period of too high inflation and less anchored inflation expectationsContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Head of Research and Global Chief Strategist, Steno Research

Andreas Steno

Head of Research and Global Chief Strategist

Macro and Geopolitical Research House

Steno Research

Steno Research is a new macro and geopolitical research house. We are based out of Copenhagen, Denmark, but have an international team and a strong network of sources and partners around the world. The team is lead by Andreas Steno, previous global head of strategy at Nordea Bank, and Mikkel Rosenvold, former chief consultant in the Danish Ministry of Finance.

<ul>
<li>“I’ve said on many occasions that I think a market-determined value for the dollar is in America’s interest. And I continue to feel that way.” - Janet Yellen, October 2022</li>
<li>Janet Yellen basically wrote off the possibility of a Plaza Accord 2.0 (coordinated action against a strong USD) in Q4-2022 when the energy crisis was at its peak with a strong USD against almost all peers.</li>
<li>The current situation looks mostly reminiscent of last year, why we struggle to see why the US authorities should alter their view.</li>
</ul>


“I’ve said on many occasions that I think a market-determined value for the dollar is in America’s interest. And I continue to feel that way.” - Janet Yellen, October 2022
Janet Yellen basically wrote off the possibility of a Plaza Accord 2.0 (coordinated action against a strong USD) in Q4-2022 when the energy crisis was at its peak with a strong USD against almost all peers.
The current situation looks mostly reminiscent of last year, why we struggle to see why the US authorities should alter their view.


FX Watch: The World Needs a Riyadh Accord More than a Plaza Accord 2.0

Managing Partner, VRS (Valuation & Research Specialists)

VRS (Valuation & Research Specialists)

Managing Partner

Valuation & Research Specialists (VRS) is a boutique financial advisor with more than 17 years of experience in Corporate Valuation and Finance, and a diversified client base including some of the largest Companies in Greece.

Since 2002, VRS has completed more than 200 engagements in the areas of business valuation and financial analysis for more than 100 clients in a wide range of industries.

VRS has been honored to work with small and large private and publicly traded companies in Europe and overseas.

Boutique Financial Advisor

<div><div><div><div><ul><li>During the period under consideration, i.e. July 3rd – August 4th, 2023, the EUR/USD exchange rate was moving upwards until July 17th, 2023, but thereafter it followed a downward trend.</li><li>However at the start of August, the Euro notched an uplift and was still trading higher than the levels in beginning of July.</li><li>According to Graph 1, during the first twelve trading days of the period under consideration, the pair was fluctuating along the range 1.085-1.125. </li></ul></div></div></div></div>

During the period under consideration, i.e. July 3rd – August 4th, 2023, the EUR/USD exchange rate was moving upwards until July 17th, 2023, but thereafter it followed a downward trend.However at the start of August, the Euro notched an uplift and was still trading higher than the levels in beginning of July.According to Graph 1, during the first twelve trading days of the period under consideration, the pair was fluctuating along the range 1.085-1.125. 

Comment on Exchange Rate EUR/USD - August 4, 2023

<ul>
<li>The ECB is likely going to hike tomorrow and even after the repricing this morning, we still see risk/reward favoring a bet on a hike.</li>
<li>With the inflation forecast likely being hawked up (as per sources in Reuters), we see a very high probability that the ECB will react to the hawkish adjustment of staff projections with a hike and continued hawkish messaging.</li>
<li>If the ECB raises the inflation profile to &gt;3% territory in Q4-2023 and Q4-2024, that would constitute a &gt;0.3%-points increase in the profile, which will most certainly have to be followed up by policy action.</li>
</ul>


The ECB is likely going to hike tomorrow and even after the repricing this morning, we still see risk/reward favoring a bet on a hike.
With the inflation forecast likely being hawked up (as per sources in Reuters), we see a very high probability that the ECB will react to the hawkish adjustment of staff projections with a hike and continued hawkish messaging.
If the ECB raises the inflation profile to &gt;3% territory in Q4-2023 and Q4-2024, that would constitute a &gt;0.3%-points increase in the profile, which will most certainly have to be followed up by policy action.


EUR Watch – The ECB Will Soon Reveal Their True Inflation Vs Growth Preferences

Head of Research, Steno Research

Emil Moller

Head of Research

Macroeconomics

<ul>
<li>Just as the markets were speculating about which spring month would see the first Fed rate cut of the cycle, a surprisingly high CPI report from the BLS swiftly dispelled any lingering dovish sentiment that had survived the recent NFP announcement.</li>
<li>We’ve analyzed both the CPI data (see here) and the current labor market in detail (see here), and although there are signs of cooling, it’s difficult to counter the recent adjustments in the OIS curve.</li>
<li>This suggests that USD assets remain the focal point, and for the foreseeable future, EM macro strategies should lean towards spread/receiving rather than expecting an NVDA-like bull run in equities</li>
</ul>


Just as the markets were speculating about which spring month would see the first Fed rate cut of the cycle, a surprisingly high CPI report from the BLS swiftly dispelled any lingering dovish sentiment that had survived the recent NFP announcement.
We’ve analyzed both the CPI data (see here) and the current labor market in detail (see here), and although there are signs of cooling, it’s difficult to counter the recent adjustments in the OIS curve.
This suggests that USD assets remain the focal point, and for the foreseeable future, EM macro strategies should lean towards spread/receiving rather than expecting an NVDA-like bull run in equities


United States

The US dollar is the official currency of the United States of America.

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USD (USD CURNCY)

EUR rates: From the frying pan...

Just as consensus had started to gather around bear steepening driven by rising term premia, war in the Middle East adds to inflation and credit risks

Nordea

FX Watch: The World Needs a Riyadh Accord More than a Plaza Accord 2.0

“I’ve said on many occasions that I think a market-determined value for the dollar is in America’s interest. And I continue to feel that way.”...

Steno Research

Comment on Exchange Rate EUR/USD - August 4, 2023

During the period under consideration, i.e. July 3rd – August 4th, 2023, the EUR/USD exchange rate was moving upwards until July 17th, 2023,...

VRS (Valuation & Research Specialists)

EUR Watch – The ECB Will Soon Reveal Their True Inflation Vs Growth Preferences

The ECB is likely going to hike tomorrow and even after the repricing this morning, we still see risk/reward favoring a bet on a hike. With the...

Steno Research

EM by EM #43: Rand’s Reckoning?

Just as the markets were speculating about which spring month would see the first Fed rate cut of the cycle, a surprisingly high CPI report from...

Steno Research

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