Special Reports

Special Report – Italian elections: Europe’s and the common currency’s next big test?

Posted on February 15, 2018 at 2:10 pm GMT

Italy will be heading to the polls to elect a new national government on March 4. This is widely viewed as the common currency’s – more widely the eurozone’s and Europe’s – next major risk event. The result of the elections is far from known, with a number of possible outcomes being at play and populist-perceived forces enjoying popularity. The euro is expected to come under intense selling pressure should for example the Five Start Movement find itself ruling the [..]

Special Report – As BoE takes hawkish turn, Brexit risks come back to haunt sterling

Posted on February 13, 2018 at 4:33 pm GMT

After starting 2017 around $1.22 – levels last seen in the 1980s – few would have believed that the British pound would end the year at $1.35. The currency’s gains didn’t stop there as cable went on to top the 1.43 level in January for the first time since the day after the Brexit referendum on June 23, 2016. However, renewed Brexit concerns have since pulled the pound back to around $1.38 even as the Bank of England flags an [..]

Special Report – Why has gold remained indifferent to stock market volatility?

Posted on February 9, 2018 at 3:24 pm GMT

The classic narrative that safe havens rally when stocks plunge is on shaky legs right now. While major US equity indices have dropped roughly 10% in a matter of days, gold has actually moved lower over the same period, leaving most investors puzzled. Why has gold’s response been so muted, and what do the cards hold for the precious metal moving forward? A variety of factors can be blamed for gold’s indifference to the market turbulence. First and foremost is [..]

Special Report – Aussie rally falters, but was it doomed to begin with?

Posted on February 7, 2018 at 4:04 pm GMT

The Australian dollar posted an incredible rally of 8.5% against its US counterpart during early December and late January, fully reversing the September-December downtrend and setting a 2½-year high of $0.8135. However, that rally is now looking in trouble, with the pair declining 3.5% from its January 26 peak and technical indicators turning negative. But even before the uptrend came to a halt, the aussie/dollar’s performance had raised eyebrows among some market participants about the sustainability of such strong gains [..]

Special Report – US yields are rising, why is the dollar plunging?

Posted on January 26, 2018 at 1:34 pm GMT

A nation’s bond yields and its currency typically move in the same direction. A rise in US Treasury yields, for instance, has traditionally been followed by dollar strength, as higher interest rates make the currency more attractive for international investors. Vice versa, a plunge in bond yields usually spells bad news for a currency, as it becomes less appealing compared to other higher-yielding currencies. Logically, it follows that when you compare the difference (i.e. the spread) between the yields of [..]

Special Report – Euro climbs higher, but ECB could provide a “reality check”

Posted on January 19, 2018 at 3:46 pm GMT

The euro started the year with a bang, buoyed by expectations that the European Central Bank (ECB) is likely to begin scaling back its massive stimulus program later this year. Can the single currency continue to gain, or have markets discounted too much too early, setting the stage for a near-term correction? While the financial community widely anticipates the euro to continue its winning streak in 2018, few expected the currency to gain so rapidly in the first few days [..]

Special Report – BoJ tightening or markets running ahead of themselves?

Posted on January 18, 2018 at 4:02 pm GMT

The Japanese currency posted gains versus the US dollar, reaching four-month highs – equivalently the dollar/yen pair fell to four-month lows – with the yen appreciating on the back of what market participants interpreted as a form of tapering by the Bank of Japan. Such an evaluation though may not be justified, with the market potentially running ahead of itself in terms of placing long yen positions and at the same time offering opportunities for traders who can manage to [..]

Special Report – Oil makes a comeback, but will it last?

Posted on January 12, 2018 at 3:35 pm GMT

Oil prices rallied in 2017, with WTI finishing the year more than 12% higher as major OPEC and non-OPEC producers continued their efforts to rebalance the oil market by curbing their supply. Can this pattern persist in 2018, or will US shale producers ramp up their production in the face of higher prices, and take the wind out of the precious liquid’s sails? The oil market came closer to rebalancing itself in 2017, as a strengthening global economy fueled demand, [..]

Special Report – PBOC loosening grip on yuan a sign of confidence but China’s economy remains a key risk in 2018

Posted on January 11, 2018 at 4:15 pm GMT

China’s central bank, the People’s Bank of China (PBOC), attracted some attention this week after it was revealed that it has suspended using the counter-cyclical factor in calculating the daily fixing for the yuan. Having been introduced in May 2017 to counter speculative bets in forex markets, the surprise move is seen as a reflection by the PBOC that downside risks to the yuan have subsided substantially. However, although capital outflows no longer pose a major threat to the economy, [..]

Special Report – Will gold shine even brighter in 2018?

Posted on January 5, 2018 at 3:12 pm GMT

Gold was one of the main winners of 2017. Intensifying geopolitical tensions, particularly on the Korean peninsula and in the Middle East, combined with the dollar’s sharp plunge helped gold prices to finish the year more than 13% higher. Heading into 2018, the outlook for the precious metal continues to appear positive, as geopolitical risks are unlikely to go away anytime soon, and the US dollar does not seem ready to make a strong comeback yet. Trying to forecast geopolitical [..]

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