General
ECB QE and external flows
A research note from BNP Paribas about ECB QE reduction and its FX impact. Bottom line: whichever way you look at it, it is difficult to avoid the conclusion that reduced ECB QE will – all other things being equal – be a force for a stronger euro. Other things are not equal, however…
HSBC Currency Outlook – GBP: Weakness to remain
The Conservatives have hung onto power, albeit only just. Uncertainty abounds: this could complicate Brexit negotiations and the domestic policy agenda will be constrained. We retain our GBP-USD forecast of 1.20 for year-end. The election may be over but the politics has just begun.
Morgan Stanley Forex Forecast Update
We expect the global economy to pick up and for risk to remain supported over the coming year. Combined with a still high degree of monetary accommodation from DM central banks, we expect USD to weaken moderately and EM FX to stay supported.
ING Research: Can anything get in the way of a stronger Euro?
ING Economic and Financial Analysis – Our answers to this month’s big questions.
Nomura FX Insights: AUD: Seasonality or coincidence?
Nomura: in our view, the prevailing macroeconomic backdrop at the time is the main consideration, not supposed seasonality, which has been behind the run of falls in AUD in May. We look for AUD/USD to consolidate, but for AUD to underperform other key crosses, such as EUR/AUD.
2017 Global Market Outlook – Focus on Europe
Core scenario: Global reflation to get a boost from a recovery in consumption and investment as political risks ease in Europe. Trump’s tax cut plan is likely positive for ‘reflation’. Asia and Emerging Markets are benefitting from a rebound in global trade.
JPMorgan View – The global and the local view
The world has pulled out of recession and deflation zone, and is now likely growing at a steady pace, just below 3 %,but only 0.2 % above potential, with balanced risk. Global macro vol has fallen to a new record low.
Forex Quantitative Analysis – BNP Paribas CLEER
BNP Paribas CLEER Forecasting Model. Definition of fair value: the exchange rate that corresponds with the current economic fundamentals. Duration of deviation: 6-18 months. Uses model based projections for exchange rates, scenario analysis based on economic variables.
Emerging Markets FX Roadmap from HSBC
The start of 2017 has turned out better than perhaps many initially feared for EM FX, with many recovering the losses sustained from late last year. There has been a growing sense of impatience within the FX market to identify fresh factors that can re-ignite USD strength. The softening stance on protectionist trade policies by the new US administration has also brought some relief to the currencies of the US’s major trade partners.
UniCredit Research: Trump’s corporate tax cut may prompt Europe to follow
Economics Thinking No. 32 by UniCredit Research. The bottom line of this report: “While Mr. Trump might have a valid point in reducing tax pressure on American corporations, it would be much wiser to pursue some form of international policy coordination at the OECD level, to shelter tax revenues, avoid a “race to the bottom” and better regulate tax havens. However, this multilateral approach is miles away from Mr. Trump’s unilateral way of seeing the world.”