One of the big themes my colleagues and I have flagged up since late 2007 is the eventual rebalancing of the United States’ external accounts. There are several reasons – both domestic and external – why we believe the US current account deficit will continue to narrow over the coming years. We list these below,… [Read more]

The imminent release of Q2 2011 US GDP figures on the afternoon (13:30 London time) of Friday July 29 and the stalemate over the federal debt ceiling ahead of the August 2 deadline will shape the near-term direction for markets. We see a good chance of a US credit rating downgrade by at least one… [Read more]

I like a number Latin American FX majors against the US dollar, but for very different reasons. In Mexico’s case, strong currency performance will continue to be driven by the carry trade, whereas in Brazil the demand for both yield and capital appreciation will keep upside pressure on the real. This view is best highlighted… [Read more]

The dichotomy in global growth stories became clearer this week. China and Singapore published above-consensus Q1 2011 growth figures (real GDP growth rose by 9.7% y-o-y and 23.5% q-o-q annualised, respectively), while BMI revised down its expectation for the same quarter in the US down from 3.5% to 2.3% with downside risks, and for 2011… [Read more]

Helped by a 25bps hike in eurozone interest rates to 1.25% on Thursday, the euro has broken through US$1.4300/EUR to trade at a 14-month high of US$1.4441/EUR at one stage on April 8, in line with BMI’s bullish view of the currency. In fact, my colleagues and I envisage further short-term gains to our upside… [Read more]

My colleagues and I continue to see further medium-term weakness for the US dollar and, in this respect, favour emerging market (EM) currencies. Our top picks in our key market views are the Chilean peso (CLP) and the Singapore dollar (SGD). Our other EM favourites include the Mexican peso (MXN), Brazilian real (BRL) and South… [Read more]

Commodity markets should remain choppy as we head into an important period that could determine short-term direction for the US dollar. There are several potential fundamental triggers for a dollar comeback in the coming days, including the US midterm congressional elections on November 2 and the announcement on November 3 following the Federal Reserve’s meeting…. [Read more]