Special Reports

Investment themes: Risk rally following US payrolls disappointment, dovish Fed minutes

Posted on October 12, 2015 at 4:13 pm GMT

Since the end of the third quarter, the US stock market has reversed some of its recent losses and today the US benchmark index, the S&P 500, traded at a 1 ½ month high. This has spurred gains in various other assets such as commodities, emerging market stocks and currencies and precious metals. However, the dollar has taken a hit, as the main reason for the rally was that the Fed looked to be on hold for the remainder of [..]

Investment themes: US jobs picture deteriorates, hurting the Dollar

Posted on October 2, 2015 at 4:12 pm GMT

Just as the US dollar started to get over its post Federal Reserve meeting blues from September 17, the latest employment report by the Bureau of Labor Statistics has reduced the likelihood of a Fed rate hike by the end of 2015. As the report showed a deep slowdown in the labor market – also apparent because of negative revisions to the previous month’s numbers – this could provide additional ammo to Fed board members that do not want to [..]

Investment themes: Equity sell-off gathers momentum and has effect on currencies

Posted on September 29, 2015 at 4:12 pm GMT

As the US stock market benchmark, the S&P 500, made fresh 1-month lows yesterday, falling once again below 1900 on global growth concerns, it is interesting to check the impact on foreign exchange markets. The S&P 500 is now almost 12% off from its peak. As expected, the main beneficiary was the Japanese yen, which pushed the US dollar under the 120 mark. The pair has broadly remained in the 119-121 range, which it has kept for most of September. [..]

Will they – won’t they speculation keeps Euro, Dollar in ranges

Posted on September 25, 2015 at 4:10 pm GMT

Two important themes this week emerged following speeches of arguably the world’s two most powerful central bankers; Mario Draghi and Janet Yellen. The speeches involved hints as to the timing of the next monetary policy moves in the United States and the Eurozone. Speaking before the European parliament, the ECB chief signaled that although the possibility of extending or enlarging the present Quantitative Easing program was open, such a move in the short-term would be premature. Other ECB officials have [..]

Investment themes: Are Currency Wars back?

Posted on September 22, 2015 at 4:20 pm GMT

Since the Fed decided to leave interest rates unchanged the previous Thursday, one theme has become apparent: other major central banks are also considering either leaving policy loose for a longer period or adding to their stimulus – partly so as to avoid their currencies appreciating too much. The strong dollar was specifically cited as a reason for the Fed not to raise rates; which shows that US policymakers may not be so willing to let other currencies continue to [..]

Investment themes: Risk on/off drives correlations higher and becomes leading factor in FX moves

Posted on September 2, 2015 at 4:08 pm GMT

One interesting theme that investors and traders should be aware of is the rise in correlations in times of market stress. As today’s market moves suggest, the recent turbulence in financial markets has not been overcome and as a result, there could be days with some sharp “risk on” or “risk off” trades. That is to say, risk assets such as stocks could rise or drop sharply whereas defensive instruments plot the exact opposite course. Broad risk appetite could dominate [..]

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