QCAM Monthly May || Don’t fight risk aversion
The USD outperformed across the board in April on rising global growth concerns and risk aversion. The Fed’s lead in the hiking cycle further supported the USD. We think...
QCAM Monthly April >> Surprise me
The Ukraine war remains a source of uncertainty but has not derailed financial markets. Europe is still most at risk and commodity currencies remain a good hedge but the focus is on...
QCAM Monthly March 2022 >> Not a systemic crisis
QCAM Monthly March 2022 QCAM Insight Russia’s attack on the Ukraine and the firm response by Western allies are both sea changes with far reaching consequences. The near-term outlook is very uncertain but the crisis is not systemic in our view. We think the war will slow but not derail the global recovery. Central banks will take that into account but... Economy and Interest Rates While Omicron and inflation were weighing on consumer sentiment, business sentiment was holding up well through February and even improving in some parts despite ongoing supply difficulties. While rising social and economic mobility [...]
QCAM Monthly February >> At the crossroads
FX markets have been on a roller coaster since the start of the year driven by two themes: rising global growth optimism and a more hawkish Fed. We think both themes will shape FX dynamics...
QCAM Monthly January >> Emerging Markets FX divergence
QCAM Monthly January 2022 QCAM Insight The performance of EM currencies in 2021 has diverged significantly. The primary driver was central banks’ resolve to fight inflation. Improving global growth conditions should be good for EM FX, but large differences are likely to prevail because of diverging economic fundamentals, political conditions and central bank reactions... Economy and Interest Rates Global economic activity has reaccelerated in the fourth quarter of last year. The Omicron variant is expected to temporarily disrupt but not to derail the recovery path. The decoupling of social and economic mobility from Corona cases [...]
QCAM Monthly December 2021 >> 2022 Sneak Preview and One Year of FX BIAS
QCAM Monthly December 2021 QCAM Special - One Year of FX BIAS A year-ago QCAM launched the FX BIAS certificate. The performance so far is promising and validates the features of the prior back-tests: solid return, moderate volatility, and no significant cross-correlations. Our goal is to strengthen these features further by adding more currencies and business surveys to the FX BIAS model. QCAM Insight The USD outstripped expectations in 2021. The US economy outperformed amid a bumpy global recovery and the Fed turned hawkish earlier. The two main themes for 2022 will be a smoother [...]
QCAM Monthly Novemer 2021 >> A chance for volatility
QCAM Monthly November 2021 QCAM Insight Currency performances diverged in October. The USD was broadly stable, but the JPY fell while most other major currencies rallied. The different currency moves reflect the market’s repricing of changing monetary policy positions. The divergence may also lead to more FX volatility... Economy and Interest Rates Global growth concerns (Delta-variant, supply-side bottlenecks, China) are showing up in softer data releases as well as downward growth revisions. In our view, these factors are temporary and unlikely to derail the global recovery. FX Markets The USD was range bound in October, [...]
QCAM Monthly October 2021 >> Stagflation Angst
The USD rallied across the board in September on persistent growth concerns and perceptions of a less patient Fed. Stagflation angst is spreading and supporting the bullish USD narrative. In our view, the USD has more...
QCAM Monthly September 2021 >> Current account imbalances
FX markets were relatively stable over the last month despite increased uncertainties. In our view, the struggle for direction in FX is likely to continue near-term. However, longer-term FX fundamentals are taking shape.
QCAM Monthly August 2021 >> Inflation implications
While currency markets struggle to find direction in the near-term, longer-term FX factors are starting to take shape. One is the development of relative inflation performance and the impact on purchasing power parity.