* The US Dollar model signal and positioning stay close to max bearish levels * CTAs pare long positions in JPY FX for fifth consecutive week. Model signal too has come down from max bullish levels * Specs are net neutral AUD FX despite max bullish model signal * CTAs have broadly been buying GBP FX futures since Nov’20, net long positioning (as % of OI) is close to a year high, but has been […] Read More
And Europe is down but not out View in browser Tuesday February 16 2021 Subscriber Exclusive By Ambrose Evans-Pritchard and Jeremy Warner Surprise, surprise: Brexit Britain may beat Europe back to pre-pandemic GDP By Ambrose Evans-Pritchard, World Economy Editor The UK economy did not suffer a bigger contraction than the eurozone last year after all. The narrative of a particularly British fiasco – believed by the London media, and the world – is […] Read More
The coronavirus variant first found in the British region of Kent is likely to sweep around the world and the battle with the virus is going to go on for at least a decade, the head of the UK’s genetic surveillance programme said. The Kent variant has “swept the country” and “it’s going to sweep the world, in all probability,” Sharon Peacock, director of the Covid-19 Genomics UK consortium, told the BBC. “Once we get […] Read More
AFR: The RBA could increase its QE program at any time… […] Read More
AFR: Aussie QE will not fuel asset price bubbles What makes the bubble-trouble talk ridiculous is that long-term Australian interest rates, and our dollar, have been increasing, not decreasing, in lock-step with moves around the world. The RBA’s mission with QE is simply to ensure Aussies are no worse off than our contemporaries overseas. In the counter-factual of no QE, the Aussie dollar would be trading with an 8-handle, smashing exporters and import-competing businesses, and […] Read More
GS-USTs: Refunding, thought on short term rates. Upward IOER adjustment? Treasury’s February refunding announcement was broadly consistent with our expectations in that it left nominal auction sizes unchanged, continued with previously announced gradual TIPS auction increases, and suggested that a new SOFR FRN remains under consideration but is not imminent. As noted previously, we remain of the view that current auction sizes are sufficient to fund a range of fiscal packages. The main area of […] Read More
Since the RBA’s announcement that QE would be extended the AU 10-year bond yield is up 8-9bps – but the spread to the US is barely changed. While QE may cap a rise in yields the current pace of purchases will not stop the rise if the macro backdrop/risk sentiment continues to improve. Our bias is that the RBA does not shift its focus to the November 2024 bond but continues to target the April […] Read More
The Times – How Bank of England dropped clues that tightening may be next big idea Philip Aldrick, Economics EditorFriday February 05 2021, 12.01am, The Times https://www.thetimes.co.uk/article/how-bank-of-england-dropped-clues-that-tightening-may-be-next-big-idea-rhqndq9zt At first glance, nothing happened at this month’s Bank of England rate-setting meeting. On closer inspection, though, it may have been one of the most important monetary policy committee events in years. The big issue was not the base rate, which remained at 0.1 per cent or […] Read More
GS piece just out.. EUR Long end yields to rise further Despite near term setbacks to Europe vaccine rolloout, GS continue to f/c a strong cyclical recovery this yr. As a result , they expect a continues rise in l/end yields. GS Estimates 30y core rates have around 30bp of upside to be consistent with the growth pricing in other european macro assets. Contingent on stronger euro growth , they think the ECB will tolerate […] Read More
In Brief: • Almost all analysts expect rates to be left unch but with outlier calls (MS, SG) for a 10bp cut • Most expect a unanimous vote although see risk of 1 or 2 dissenters voting for a cut • Market is pricing approx. zero chance of a cut this month and ~11bp by Feb 2022 • On QE, all analysts expect no change in the size of the programme • Most […] Read More
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