Positioning ahead of G20

26 February, 2016

Interesting moves from China overnight as G20 Finance Ministers and Central Bank governors meet in Shanghai today and tomorrow. We’ve seen the yuan weaken this week for the first time in a month, with the PBoC describing its current monetary policy stance “prudent with a slight easing bias”. This is an interesting shift and the timing it also pertinent ahead of the G20 meeting. Previously, the tendency was for the yuan to strengthen into such meetings, to ease some of the criticism that the authorities were keeping the currency artificially low. The move could well entice some reaction from others, given the continued low level of global growth and that many developed markets would likely to see lower currencies themselves, to aid exports and also reduce risks of deflation. The bottom line is to keep an eye and ear out for further developments through the day.

We’ve seen some resilience on the part of sterling overnight, which was always a risk given the extent of the weakness seen through the week. But the recovery is marginal, nudging towards the 1.40 level on cable and not yet at yesterday’s lows on EURGBP. There is quite a slew of data released today, with business and consumer confidence in the Eurozone, together with German inflation and GDP data in the US. The latter will be closely watched given that the pace of annualised growth is seen falling from 0.7% to 0.4%. But keep eyes and ears open for more comments from official today and over the weekend.


Source link  
CB Monetary Policy Unchanged

Thursday saw the latest Monetary Policy Committee (MPC) report from the Bank of England. The BoE stated that further modest increases...

No Surprises as Fed Raises Rates

The Federal Reserve, as expected, raised its benchmark interest rate by a quarter of a percentage point, to a range of 1.25% to 1.5%. The latest hike...

CB meetings dominate the week

With no impactful economic data releases on the calendar today, the markets are focusing on a plethora of Central Bank meetings scheduled...


No Surprises from BoC & ADP

In an unsurprising move, the Bank of Canada decided to hold its benchmark lending rate at 1%, after two small hikes earlier in 2017. The BoC stated...

Moderate Gains for USD

On Monday, the US Commerce Department released Factory Orders data for October, indicating that the continued strength in the Manufacturing...

OPEC Extends Output Cuts

On Thursday, OPEC (Organization of Petroleum Exporters) and non-OPEC producers led by Russia agreed to keep output cuts until the end of 2018...


US Economy Expands Faster Than Predicted

Data released on Wednesday showed that the US economy expanded at its quickest pace since 2014 in Q3. The US Commerce Department said that...

Political Turmoil in Germany Hurts EUR

The EUR lost ground against many of its peers on Monday on news that Chancellor Angel Merkel’s efforts to form a coalition government had collapsed...

USD Suffers on Subpoena News

The Trump Administration is back in the spotlight with news of a report that Special counsel Robert Mueller’s investigators have issued a subpoena...

  


Share: