QCAM Monthly March 2023 QCAM Insight The USD staged a solid rebound in February on the back of firmer activity and inflation data and higher Fed terminal rate pricing. In our view, the US data surprises highlight some of the risks for the outlook but don’t reflect a new trend. In particular, we do not see a return to the dynamics of 2022. We believe that... Economy and Interest Rates Economic data at the start of the year was stronger, leading to further positive growth revisions. Business sentiment is starting to improve and consumer confidence continues to recover. [...]

QCAM Monthly February 2023 QCAM Insight The USD continued to decline in January, but less strongly and evenly as in December. Fading global growth uncertainties, falling risk aversion and the Fed likely to pause the tightening first still point to more USD downside. However,... Economy and Interest Rates Growth forecasts for 2023 are being revised up on the back of better economic reports. Business sentiment is stabilizing and consumer confidence is recovering, albeit from a low level. The Euro-area continues to surprise on the upside, while the US... FX Markets The USD continued to slide lower in January [...]

QCAM Monthly January 2023 QCAM Insight The USD is down nearly 10% since the peak in late September. The key drivers of the shift were the expected pivot in Fed policy and a broad decline in global risk aversion. The latest data supports the market’s view of an economic soft landing. Thus, the USD,... Economy and Interest Rates Economic activity at the end of last year was firmer, business sentiment is stabilizing, and consumer confidence is recovering, albeit from a low level. The Euro-area surprised on the upside, while the US... FX Markets The USD continued to slide [...]

QCAM Monthly December 2022 QCAM Insight: "2023 sneak preview" FX markets were driven by unexpected events and developments in 2022, notably the Ukraine war and the rapid adjustment in monetary policy. The big winner was the USD although it lost some of its gains in recent weeks. In our view,... Economy and Interest Rates Economic activity at the start of winter is holding up better than feared, especially in Europe. Still, forecasts point at a significant slowing going into 2023 with a high risk of recession, especially as the impact of monetary tightening continues to spread. Consumer confidence [...]

QCAM Monthly November 2022 QCAM Insight FX markets remained volatile in October driven by changing market perceptions of relative monetary policy adjustments. We believe these conditions will prevail until year-end. The JPY remains a special case. The combination of accommodative fiscal and monetary policies risks further JPY weakness in the near term. However, the current policy mix... Economy and Interest Rates Growth forecasts have been revised further down and are approaching recession levels for several economies in 2023. Consumer confidence is already in recession territory and business sentiment is approaching recession levels. The near-term risk of recession is [...]

QCAM Monthly October 2022 QCAM Insight Financial and currency markets are on a roller coaster driven by the fear of recession and hopes that central banks will have to slow the pace of tightening soon. Policy actions have compounded the volatility and forced central banks to intervene. The pillars of USD support are still in place, but we fear that ... Economy and Interest Rates Recession concerns are rising. The recovery momentum from the Corona pandemic is still strong but the pressure from inflation and rising interest rates is building. Inflation has probably peaked in the US but is [...]

QCAM Monthly September 2022 QCAM Insight: "The party is over" Risk aversion has returned over the last two weeks as central banks reinforced their assurance to bring down inflation. The USD rallied in response. The outlook for FX markets depends much on how growth and inflation dynamics will play out in the second half of the year. The USD is likely to strengthen further if the US outperforms in terms of better growth and inflation news. The main risk for the USD is... Economy and Interest Rates Growth forecasts continue to move lower. The recovery momentum from the [...]

QCAM Monthly August 2022 (Special) with QCAM Special: Expanding «FX BIAS» QCAM Insight The risk of recession in the major economies has increased yet financial markets are not very intimidated, hoping that central banks will prevent the worst. The USD slipped as interest rates and risk aversion declined. In our view Economy and Interest Rates Growth forecasts continue to slide lower. Recession is not imminent given the recovery momentum from the Corona pandemic but the probability of a recession over the next year is approaching 50%. Consumers respond more negatively to high inflation and... FX Markets The USD [...]

QCAM Monthly July 2022 QCAM Insight The USD staged a massive rebound in June and early July boosted by a hawkish Fed and global recession fears. The USD is overvalued and the interest rate advantage is declining but. Economy and Interest Rates Growth forecasts continue to slide lower. Recession is not imminent given the recovery momentum from the Corona pandemic but it is a clear and present danger. Consumers respond more negatively to high inflation and... FX Markets The USD surged in June and early July and the USD DXY is now up 10.5% since the start of [...]

QCAM Monthly June 2022 QCAM Insight The USD has dropped 2.5% versus other major currencies in recent weeks after a phenomenal rally through the middle of May. Is this just a correction or a change in trend? Economy and Interest Rates The Ukraine war, China’s lockdown, high inflation and rising interest rates weigh on sentiment and slow the global economy. Developed markets, especially Europe, are hit harder than emerging markets. Recession still seems to be... FX Markets The USD rose at the start of May, but then fell back sharply. Still, the USD DXY is up a stellar [...]