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As we anticipated yesterday (see here and here), the risk-on rally in the wake of this weekend’s “trade war truce” between the US and China has sputtered out relatively quickly. With US officials sending mixed messages about the content of the agreement and Chinese leaders maintaining radio silence, investors are increasingly concerned that a broad,...

With the ECB’s policy normalising plans still unchanged while the Fed is apparently no longer as hawkish as it once was then the EUR/USD ‘should’ in theory go up from here

As you’ve no doubt heard by now, US President Trump and Chinese President Xi were able to reach a ceasefire agreement at the G20 summit in Argentina over the weekend.

There is a real risk that we may not see any real follow-through in gains for stocks because US indices had already gone up for several days prior to the G20 summit last week.

The G20 summit in Argentina will conclude at the weekend which potentially means fireworks at the Asian open on Sunday night as risk-sensitive assets could gap sharply in one or the other direction, depending on the outcome of trade talks between Presidents of China and the US.

Of all the major currencies, the Australian dollar is perhaps the most sensitive to trends in global trade. The country’s commodity-centric economy and close ties with China mean that any slowdown in international business may be seen Down Under first.

“I think it’s essential to remember that just about everything is cyclical. There’s little I’m certain of, but these things are true: Cycles always prevail eventually. Nothing goes in one direction forever. Trees don’t grow to the sky. Few things go to zero. And there’s little that’s as dangerous for investor health as insistence on extrapolating to...

Gold rallied as the dollar and yields both sold off yesterday on the back of the surprisingly less hawkish comments from the Federal Reserve Chairman. The metal has started today’s session slowly, as there hasn’t yet been a significant follow-through in the dollar’s selling.

The Fed turning less hawkish is definitely good news for emerging market currencies, some of which have had a year to forget. If EM currencies now stabilise then this should be good news also for equities, particularly if the US and China manage to end their trade dispute at the G20 summit which begins on Friday.

"We may go past neutral, but we're a long way from neutral at this point, probably." - Fed Chair Powell, 3 October “[Interest rates] remain just below the broad range of estimates of… neutral” -Fed Chair Powell, 28 November Oh, what a difference a month makes!

Equities have stabilised this week and this has allowed the EUR/JPY to climb higher. If sentiment improves further, then we could see a break of the 129 handle soon.

The pound was already higher before the government’s analysis of Brexit scenarios report was released this morning, climbing from a low of $1.2735 to a high of about $1.2790.

Over the weekend, we officially crossed the threshold into the final 10% of the year…but it sure feels like much more than 10% of the year’s high impact economic events are still ahead of us! Within the next week and a half alone, we have a highly-anticipated speech from Fed Chair Powell ahead of the central bank’s December meeting, the much-ballyho...