Quarterly Outlook
Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?
John J. Hardy
Chief Macro Strategist
You can access both of our platforms from a single Saxo account.
NY Open: Dollar bid in lethargic FX market
Michael O’Neill
FX Trader, Loonieviews.net
FX markets are lethargic. It may be the heat, it could be the humidity, but it is certainly holidays that are responsible for the lethargy. Many European centers were closed for a holiday today, and it looks like New York traders have taken the day off.
A slew of US economic reports underpinned the greenback which is at or near overnight peaks against the major G10 currencies except for the Japanese yen. Retail Sales surprised to the upside, posting at 0.5% gain in July, well above the 0.1% that was forecast. The ex-autos component surged 0.6%, m/m. (forecast 0.3%) US Industrial Production at 0.1 m/m, missed the 0.3% forecast while Capacity Utilization was unchanged at 78.1%. Today’s economic reports support the case for two more Fed rate hikes this year.
The US economic data and lingering Turkey tension fears undermined Wall Street which turned a slightly positive opening into losses in early trading. The DJIA is down 1.13%, the S&P 500 dropped 1.09%, and the Nasdaq is down only 0.18% as of 1410 GMT.
EURUSD a inched higher, rising from 1.1310 to 1.1328 before the data and has retreated to 1.1305. Turkey central bank’s actions to shore up the Turkish lira may have given the currency a reprieve, but President Erdogan may regret his decision to levy sanctions on US imports. If (when) President Trump reacts, fresh concerns about Eurozone ban exposures to Turkey will renew EURUSD selling.
A break of EURUSD support at 1.1305 and 1.1280 would extend losses to 1.1120. A break of 1.1350 would lead to a test of 1.1380 then 1.12405.
USDJPY extended overnight losses. It opened in New York at 111.24 and is testing support in the 110.60-70 zone. Risk aversion demand because of Turkey and soft US Treasury yields trumped the healthy US economic data. A decisive break below 111.60 would target 110.40. The upcoming Japanese trade data may limit losses today.
Latest Market Insights
Quarterly Outlook
-
-
Quarterly Outlook
Equity Outlook: The ride just got rougher
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
China Outlook: The choice between retaliation or de-escalation
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
Commodity Outlook: A bumpy road ahead calls for diversification
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
FX outlook: Tariffs drive USD strength, until...?
John J. Hardy
Chief Macro Strategist
-
Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
-
Quarterly Outlook
Equity Outlook: Will lower rates lift all boats in equities?
Peter Garnry
Chief Investment Strategist
After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto... -
Quarterly Outlook
Commodity Outlook: Gold and silver continue to shine bright
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c... -
Quarterly Outlook
FX Outlook: USD in limbo amid political and policy jitters
Charu Chanana
Chief Investment Strategist
As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ...
Disclaimer