Yves Sanquer

Rates: a well-oiled narrative (with no room for hiccups)

In light of the latest macroeconomic statistics, investors continue to favor a central scenario based on four pillars: the end of the monetary tightening cycle, followed by a rate cut as early as 2024, a soft landing for the US economy and inflation under control. It's a fine narrative, but beware of potential setbacks.

September 04, 2023 at 03:28 pm IST

Currencies: And despite everything, the US dollar proves resilient

At first glance, the headline may seem surprising, given that the dollar's recent rise is rooted in soaring interest rates on US debt. However, the recent meeting of the BRICS (Brazil, Russia, India, China and South Africa) is playing out an entirely different tune, the underlying force of which should not be overlooked.

August 28, 2023 at 07:26 pm IST

Rates: A very narrow path

Not too hot, not too cold. Like the children's tale, Goldilocks, investors love a happy medium. In this game, the path to a soft landing for the US economy is as tortuous as it is narrow. Here's how.

August 28, 2023 at 07:14 pm IST

Rates : When China wakes up

China is struggling to come out of the woodwork. Its many targeted stimulus policies are not having the desired effect, far from it. And the new rate cut initiated by the People's Bank of China will do nothing to change this, so timid does it seem.

August 21, 2023 at 08:40 pm IST

Currencies: Talk about a strategy!

Following on from my weekly commentary on interest rates, I wanted once again to make the link between monetary policy and the foreign exchange market. Due to diametrically opposed policies, the interest-rate differential between the USA and China has never been so wide since 2007, and this is weakening the yuan just as it continues to weaken the Japanese yen for the same reasons. Thinking they can prop up their currencies through massive intervention is as ineffective as it is costly.

August 21, 2023 at 08:34 pm IST

Rates: Goodbye inflation

The latest statistics from the United States have set the world alight. While the interest-rate market was logically the first to be impacted, all asset classes were equally affected, including gold, the dollar and equities.

July 17, 2023 at 07:27 pm IST

Currencies: The dollar is knocked out

The publication of a below-expectation level of inflation in the United States has claimed its first victim: the dollar is suffering a severe blow, to the point of relaunching the downward momentum initiated in the fourth quarter of 2022. On a broader scale, the US dollar fell against virtually all other G10 currencies.

July 17, 2023 at 07:24 pm IST

Currencies: The kiwi gets its mojo back

The loonie and the kiwi put on a show last week. The former lost ground against its main rivals, while the latter took a breath of fresh air. So much so that the kiwi-cad recovered almost 3% over the week. Is this just a blip or a new trend in the making? Let's take a closer look.

July 10, 2023 at 07:52 pm IST

Rates: Caution advised

We had to wait until the sixth day of July to see a clear bearish session on the equity markets. The reason? Poor economic statistics from the four corners of the globe and more hawkish than expected Fed minutes. However, the job market helped to limit the damage - at least for the time being.

July 10, 2023 at 07:26 pm IST

Interest rates: In Sintra, hawks no longer scare doves

For months, we've been told that recession would soon hit the developed economies, and that we should expect the worst on the stock market. Except that, for the time being, and with all due respect to the interest-rate market, the stock market is doing just fine.

July 03, 2023 at 06:53 pm IST

Currencies: What's happening to the Peso?

The Mexican Peso continues to sail under clear skies. Up over 12% against the dollar since the start of the year, it still has upside potential, much to the delight of carry trade enthusiasts. The rest of us will take advantage of any intermediate pullbacks to join the party.

July 03, 2023 at 06:48 pm IST

Rate: God Save the Queen (from inflation)

Or should I say "God Save the King", which is now the official name of the English national anthem since the death of the Queen. She must be turning over in her grave at the sight of inflation which is rising at the speed of a galloping horse. So much so that the Bank of England has taken the financial community by surprise.

June 26, 2023 at 08:56 pm IST

Forex: "Do or don't, there is no try"

Clearly, the newly-appointed governor of the Turkish central bank, Hafize Gaye Erkan, has not learned the lessons of Master Yoda. So, yes, raising the key rate is a 180° turnaround from previous policy. But the market was expecting more, much more, to break the national currency's deflationary spiral.

June 26, 2023 at 08:48 pm IST

Rates: Go! One last one

How about another round of tightening? Because in essence, that's the message delivered by both the US Federal Reserve and the European Central Bank in their post-announcement speeches. Let there be no mistake: rates have not (yet) peaked.

June 19, 2023 at 07:59 pm IST

Currencies: Make EURO great again!

For several weeks, the European currency has been on a slippery slope against the US dollar. But that was before...

June 19, 2023 at 07:49 pm IST

Currencies: The pound dreams of greatness

There was a time, not so long ago, when British territory extended far beyond its natural borders. While the colonies disappeared at the beginning of the last century, the Commonwealth kingdoms endured, and today include Australia, Canada and New Zealand. Not that the British pound is impressed, as it remains one step ahead.

June 05, 2023 at 08:37 pm IST

Rates: Step out of your comfort zone

For some of you, stepping out of your comfort zone may mean going to the gym, taking a dip in the pool, speaking in public or asking your boss for a raise, which in these inflationary times is certainly not a bad thing. As an investor, it could mean shifting your paradigm and looking at things from a new, possibly uncomfortable angle. To paraphrase Sherlock Holmes, "when you've eliminated the impossible, what remains, however improbable, must be the truth...".

June 05, 2023 at 07:57 pm IST

And you thought inflation was under control?

For several weeks now, we've been witnessing the traditional sweep of experts explaining that the work of central banks has borne fruit, that inflation is (on the way to being) brought under control and that further rate hikes should no longer be necessary. However, the latest US figures paint a more mixed picture.

May 30, 2023 at 02:49 pm IST

Ready, steady, go.... Or maybe wait a little

Over the past few weeks, the dollar has embarked on a "remontada" that would make some of the big soccer teams green with envy. So much so, that it is now just a stone's throw away from critical levels for the future. Let's take a look at some of the most interesting cross-dollars to watch.

May 30, 2023 at 02:12 pm IST

Rates: At a crossroads

Hopes of an agreement between the Republicans and the Democrats is pushing indices and interest rates to their respective resistances at 4200 points and 3.63%. Against all odds, a breakout should be favorable to both, while since last October, the correlation is reversed.

May 22, 2023 at 08:23 pm IST

Currencies: Dollar rebound benefits U.S. equities

The recovery of the U.S. dollar above its February lows has several consequences for other asset classes: first, it directly benefits U.S. equities and then weighs on gold.

May 22, 2023 at 08:09 pm IST