Special Reports

Special Report – Commodities end 2017 on strong note; set for a comeback in 2018

Posted on January 4, 2018 at 10:38 am GMT

Commodity prices had a mixed start to 2017, with the S&P Goldman Sachs Commodity Index (S&P GSCI) falling by 15% at its low point in June, driven down mainly by the decline in oil prices. However, as the OPEC-led output restrictions started to bite, crude oil prices turned higher, with a strong performance in the fourth quarter. Industrial metals also had an impressive run in 2017, particularly copper and aluminium. Going into 2018, most investors are bullish about commodities, especially [..]

Special Report – New Zealand dollar : All eyes on the RBNZ

Posted on January 2, 2018 at 3:24 pm GMT

The kiwi dollar retreated in 2017 amid falling dairy prices, political uncertainties, and a less-than-hawkish stance by the RBNZ. Are better times ahead for the NZD? That may depend primarily on whether and when the Reserve Bank will begin to raise interest rates. Market pricing is leaning towards a rate hike in 2018, but the RBNZ’s own forecasts suggest that will only happen in mid-2019. The market and the Bank are currently at odds, and something has to give. The [..]

Special Report – Australian dollar : Monetary policy, iron ore, and Chinese risks

Posted on December 29, 2017 at 11:39 am GMT

The aussie enjoyed a decent run in 2017, but it is an open question if this will remain the case in 2018. Expectations for declines in iron ore prices and the prospect of a notable slowdown in the Chinese economy suggest that the risks surrounding the AUD over the coming year may be tilted to the downside. That said, many variables could change that and spell good news for the currency, including a potential hawkish shift in the RBA’s language. [..]

Special Report – Canadian dollar: As good as it gets?

Posted on December 29, 2017 at 10:02 am GMT

The Canadian currency outperformed most of its major peers in 2017. Whether that will continue or reverse in 2018 is likely to depend on monetary policy, the evolution of oil prices, and developments in the NAFTA negotiations. With the market having already priced in a significant degree of monetary tightening, and with oil prices likely to struggle to advance much further from current levels, the loonie may require a fresh positive catalyst to draw support from in order to continue [..]

Special Report – JPY to continue dancing to the BoJ’s beat in 2018

Posted on December 22, 2017 at 9:03 am GMT

The yen underperformed most of its major peers in 2017 despite the improving economic backdrop in Japan, as the Bank of Japan’s ultra-loose policy framework continued to undermine the currency. Will the yen enjoy better times ahead? That is likely to depend on whether the Bank will scale back some of its stimulus, which in turn, will depend on the evolution of inflationary pressures in Japan. If the BoJ keeps its framework untouched while the Fed continues to raise rates, [..]

Special Report – Brexit to remain the dominant theme for sterling in 2018

Posted on December 20, 2017 at 10:19 am GMT

Sterling staged a modest recovery in 2017, on the back of a rate hike by the Bank of England and some noteworthy, albeit slow, progress in the Brexit talks. Even though monetary policy has been supporting the currency in recent months, it is an open question whether this will remain the case moving forward. Moreover, the Brexit negotiations have only just entered their second and perhaps most crucial phase, where the two sides will discuss the all-important trading relationship. Numerous [..]

Special Report – Euro outlook 2018: Short-term pain, long-term gain?

Posted on December 18, 2017 at 3:52 pm GMT

Whether or not the euro will continue its bull run into 2018 is likely to depend on a variety of political and economic factors. How will the upcoming election in Italy play out, and will markets begin to price in concerns regarding the stability of the euro area ahead of the event? Moreover, will the ECB be optimistic enough to signal an end to its QE program, thereby increasing the appeal of the common currency? A reasonable scenario for the euro’s [..]

Special Report – Will the greenback stage a comeback in 2018?

Posted on December 18, 2017 at 3:25 pm GMT

The US dollar plummeted in 2017, but that may not necessarily continue in 2018. The Fed seems set to undergo a hawkish shift in voting rights, while the Republicans are on the verge of implementing the highly-anticipated tax package. Although these factors could provide some support for the greenback overall, the currency’s fortunes may also depend to a large degree on the performance of its major counterparts, such as the euro and the yen. It is not hyperbole to say [..]

Special Report – Hammond plans for post-Brexit Britain; Pound lifted above $1.33

Posted on November 23, 2017 at 12:18 pm GMT

The UK Chancellor of the Exchequer, Philip Hammond, unveiled his 2017 budget in parliament on Wednesday, which put the focus on investing for the future as Britain readies to leave the European Union. With the Conservative government still trying to bring under control a financial crisis era debt hangover, Hammond had little room for big giveaways. Instead, Hammond used his first budget after the disastrous June elections to plan for the future, with the housing market and business investment taking [..]

Special Report – Chinese debt potentially raising dark clouds on the horizon – analogies to Japan; who stands to lose the most?

Posted on November 17, 2017 at 12:12 pm GMT

International organizations including the International Monetary Fund and the World Bank have been warning of dangerous debt levels in China. A debt crisis in the world’s second largest economy might seem like a frightening prospect for the rest of the world, however a closer look reveals that under the current state of affairs, one such crisis would mostly be of serious detriment to nations whose exports are heavily directed towards China, one such nation being major commodity exporter Australia. Not [..]

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