United Kingdom: Back to 1999…and to the Future

Conservative FX Markets Testing (Some) Extremes

Risk Aversion, Not Panic, in Face of Uncertainty

United Kingdom: Anatomy of Economy on Lockdown Life-Support

Founder

Olivier Desbarres

Exacting. Excellent. Exceeding. Exemplary.

4X Global Research

4X Global Research was founded in 2017 to provide institutional and corporate clients with the substantive research, high-quality analysis and thoughtful insight on Emerging and G20 economies and financial markets they need to make informed and timely decisions and gain an edge in their investments.

FX & Rates

Price action in major currencies was again subdued last week. With few tier-one macro data releases for markets to trade off the focus was on the reaction function of governments and central banks to covid-19 related developments.Only a handful of currencies appreciated by more than 1% vs the Dollar last week and no major currency depreciated by more than 0.7%. The net result was that the Dollar Nominal Effective Exchange Rate was down only 0.2% and it is broadly unchanged since Friday.The calendar for tier-one macro data releases and policy events is far heavier this week, particularly in the US, China and UK. OPEC+ is also due to meet on 15th July with expectations that it will announce plans to start increasing oil production.Since its rally in mid-June the Dollar has arguably been trading like a “safe-haven” again, with stronger-than-expected US macro data still mostly benefiting US and global equities. In this context this week’s release of June retail sales figures and NY and Philly Fed manufacturing indices for July will be in markets’ eye-sight.The Sterling NEER is near a one-month high as the British government once again opens the spending taps but UK GDP, inflation, labour market and retail sales data out this week may well put a floor under reasonably high currency volatility.In the Eurozone, macro data are likely to continue to play second fiddle to pan-European policy stimulus measures, with the Euro likely to be sensitive to this Thursday’s ECB policy meeting and in particular the <a href="https://www.consilium.europa.eu/en/meetings/european-council/2020/07/17-18/" target="_blank" rel="noopener">special EU Summit</a> on 17-18 July.The Chinese Renminbi has appreciated a slow but steady 1.7% in the past month but has treaded water in the past four sessions. This week’s sequential June data and Q2 GDP figures could prove a litmus test for the PBoC’s appetite for further currency appreciation.The Australian and New Zealand Dollars are struggling for clear direction but that is not the case of the Thai Baht which, in line with our expectations, has been weakening in July.

Price action in major currencies was again subdued last week. With few tier-one macro data releases for markets to trade off the focus was on the reaction function of governments and central banks to covid-19 related developments.Only a handful of currencies appreciated by more than 1% vs the Dollar last week and no major currency depreciated by more than 0.7%. The net result was that the Dollar Nominal Effective Exchange Rate was down only 0.2% and it is broadly unchanged since Friday.The calendar for tier-one macro data releases and policy events is far heavier this week, particularly in the US, China and UK. OPEC+ is also due to meet on 15th July with expectations that it will announce plans to start increasing oil production.Since its rally in mid-June the Dollar has arguably been trading like a “safe-haven” again, with stronger-than-expected US macro data still mostly benefiting US and global equities. In this context this week’s release of June retail sales figures and NY and Philly Fed manufacturing indices for July will be in markets’ eye-sight.The Sterling NEER is near a one-month high as the British government once again opens the spending taps but UK GDP, inflation, labour market and retail sales data out this week may well put a floor under reasonably high currency volatility.In the Eurozone, macro data are likely to continue to play second fiddle to pan-European policy stimulus measures, with the Euro likely to be sensitive to this Thursday’s ECB policy meeting and in particular the special EU Summit on 17-18 July.The Chinese Renminbi has appreciated a slow but steady 1.7% in the past month but has treaded water in the past four sessions. This week’s sequential June data and Q2 GDP figures could prove a litmus test for the PBoC’s appetite for further currency appreciation.The Australian and New Zealand Dollars are struggling for clear direction but that is not the case of the Thai Baht which, in line with our expectations, has been weakening in July.

Major Economies & Currencies – What to Look Out for and Why It Matters

USD

Major Economies & Currencies – What to Look Out for and Why It Matters