Delivering Global Macro Investment Insights

DeSaque Macro Research

DeSaque Macro Research Limited was formed by Said DeSaque in April 2012 with the view to delivering global macro investment insights aimed at providing new ideas to clients.

Said DeSaque has over 26 years of experience working as a professional economist in financial services. Prior to establishing DeSaque Macro Research, Said held positions as Senior Economist at Robert W Baird and William Blair. He began his career as a graduate at PaineWebber in 1986, where he eventually became Head of the London Economics Department.

Said takes a very keen interest in international relations, along with their implications for economic development. His research interests include the economic transformation of China and its implications for global capital markets, particularly in the United States. He is a member of Chatham House in London.

The US economy and capital markets have historically been Said’s main focus of attention. He frequently presents his views to institutional investors in diverse geographic locations. In recent years, Said has also been carefully monitoring economic developments in Asia, particularly China and Japan.

Shanghai Accord 2.0? World Central Banks Turn On The Money Taps … A New Easing Cycle Has Started

The US Fed Steps-Up the Pace – Updating The Shanghai Accord 2.0

Global Economist, DeSaque Macro Research

Said Desaque

Global Economist

FX & Rates

Concerns about the slowing global economy will raise the importance of currency movements in 2019 H2 as a means to mitigate headwinds to growth. In particular, the Trump Administration seems keen to preside over a weaker dollar, particularly versus the euro and the yuan.
Markets are discounting policy easing by the Fed and the European Central Bank (ECB) that could push the yen higher in the event of no response by the Bank of Japan (BoJ). The sales tax increase in October raises downside economic risks in Japan that could ultimately force more policy easing by the BoJ.
The yuan briefly appreciated in the wake of news about the US and China resuming trade negotiations, but a final agreement is unlikely any time soon. Further monetary stimulus is likely to arrive via lower reserve requirements for banks, while deliberate weakening of the currency by the People's Bank of China will only be contemplated if US-Sino trade talks collapse.
The current environment differs from the post-Plaza Accord environment due the persistence of low inflation and strong US growth relative to the rest of the world that has attracted strong capital inflows. A weaker dollar will require a degradation in the post-tax returns on US assets via significantly slower growth or degraded corporate operating performance.
Historically, the Fed has never targeted the US exchange rate as a policy objective, although it monitors the currency's impact on inflationary expectations and financial conditions. Continued repetition of June's strong Employment Situation report will make justifying three reductions in the federal funds rate in H2 impossible, thereby reducing the prospects for a weaker dollar.

Concerns about the slowing global economy will raise the importance of currency movements in 2019 H2 as a means to mitigate headwinds to growth. In particular, the Trump Administration seems keen to preside over a weaker dollar, particularly versus the euro and the yuan.
Markets are discounting policy easing by the Fed and the European Central Bank (ECB) that could push the yen higher in the event of no response by the Bank of Japan (BoJ). The sales tax increase in October raises downside economic risks in Japan that could ultimately force more policy easing by the BoJ.
The yuan briefly appreciated in the wake of news about the US and China resuming trade negotiations, but a final agreement is unlikely any time soon. Further monetary stimulus is likely to arrive via lower reserve requirements for banks, while deliberate weakening of the currency by the People's Bank of China will only be contemplated if US-Sino trade talks collapse.
The current environment differs from the post-Plaza Accord environment due the persistence of low inflation and strong US growth relative to the rest of the world that has attracted strong capital inflows. A weaker dollar will require a degradation in the post-tax returns on US assets via significantly slower growth or degraded corporate operating performance.
Historically, the Fed has never targeted the US exchange rate as a policy objective, although it monitors the currency's impact on inflationary expectations and financial conditions. Continued repetition of June's strong Employment Situation report will make justifying three reductions in the federal funds rate in H2 impossible, thereby reducing the prospects for a weaker dollar.

Great Currency War: Slowing Global Economy Will Test Truce

USD

Great Currency War: Slowing Global Economy Will Test Truce