Investment Themes

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Investment Theme – What now for the dollar as tax cut hopes fade after health bill collapses?

Posted on July 19, 2017 at 3:55 pm GMT

The slide in the US dollar intensified this week after the Republicans’ attempt to push through their healthcare reform plan in the Senate failed for a second time. The defeat came after two more Republican Senators opposed the legislation on Monday, adding to the two Senators who had already said they would not vote in favour of the latest version of the bill. Given the Republicans’ slim majority of 52-48 in the Senate, the party cannot afford to lose more [..]

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Investment Theme – BoC acts as the Fed’s dancing mate – will others join the party?

Posted on July 14, 2017 at 2:58 pm GMT

At the start of the year, the Federal Reserve was the only major central bank engaging in as well as communicating that it remains on a path of policy normalization. At that point in time, the Fed had already hiked rates twice since last reducing them back in 2008, while it has delivered two additional rate increases so far during the year. The Bank of Canada’s decision to raise rates for the first time in roughly seven years could be [..]

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Investment Theme – Tale of two continents as dollar heads for a chill summer and sun may shine on euro

Posted on June 29, 2017 at 11:55 am GMT

The dollar weakening might further unfold in the coming months amid the latest economic and political concerns. Investors’ are increasingly worried that many of the promises President Trump made during his presidential campaign will not be materialized. The greenback has fallen 4% against the yen since the beginning of the year, while the dollar index is down 6%. The assurances of big tax cuts, massive infrastructure spending and deregulation that President Donald Trump gave during his presidential campaign are being questioned after [..]

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Investment Theme – Sterling weighed by uncertainty of Brexit talks and unlikely rise in interest rates soon

Posted on June 21, 2017 at 3:14 pm GMT

The British pound has been weighed by political uncertainty that has been brought about by Brexit as well as the inconclusive outcome of the snap general election that took place on June 8 that resulted in a hung parliament. Sterling has been unable to recover from its tumble of almost two and a half cents against the dollar on the Monday after the vote, which took it to the $1.26 handle from above $1.29 before the elections. Aside from a [..]

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Investment Theme – Intense tech sell-off an end to incredible rally or mere profit-taking?

Posted on June 12, 2017 at 3:06 pm GMT

The sharp drop in technology stocks on Friday acted as a drag on major Wall Street indices, predominantly on the Nasdaq Composite, an index heavily-weighted towards information technology stocks. The IT sector was, prior to last week’s setback, dominating share price growth in US equity markets during the course of the year. It is also interesting that the sell-off that took place towards the end of last week’s trading was particularly noticeable among the biggest names in IT. Stocks in [..]

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Investment Theme – Dollar pressured by political and economic factors which could derail Fed rate hike path

Posted on June 7, 2017 at 3:19 pm GMT

The US dollar has lost more than 1.5 percent versus the Japanese currency so far this week, weighed down by a sharp drop in US Treasury yields, which were driven lower by a combination of economic and political factors. A batch of weak US data has raised concern that the Federal Reserve may slow down the pace of interest rate hikes. Meanwhile, political risk is also putting the greenback under pressure due to controversies surrounding President Donald Trump that could [..]

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Investment Theme – Pound wobbles on Labour poll boost: election jitters or sign of volatile times ahead?

Posted on May 30, 2017 at 2:27 pm GMT

When the British Prime Minister, Theresa May, unexpectedly called a snap general election on April 18, the pound soared on the news, breaking above the $1.28 level for the first time since October. Sterling has since rallied further, hitting an 8-month high of $1.3047 on May 18. The expectations that an early election would give May a landslide victory on June 8 and thus strengthen her negotiating hand as the UK enters difficult divorce talks with the European Union have [..]

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Investment Theme – Fed rate hike path supports broader trend of dollar strength

Posted on May 25, 2017 at 2:48 pm GMT

The minutes of the Federal Reserve’s May policy meeting that were released on Wednesday indicated that the US central bank remained on track for more rate increases this year. Most FOMC members thought it was appropriate to hike soon. This was interpreted as meaning a move by the Fed could come as early as the June policy meeting. While this should be positive for the dollar, the market reaction was to sell off the greenback and US Treasury yields fell [..]

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Investment Theme – Euro rally overdone or start of new uptrend?

Posted on May 24, 2017 at 3:19 pm GMT

The euro’s relief rally following the receding threat of right- and left-wing populism in Europe after Macron’s election win in France has turned the euro to one of this year’s best performing currencies against the US dollar. The presidential election in France was seen as a key test for European political stability, as well as the fate of the European Union (EU). A victory for the far-right candidate, Marine Le Pen, could have boosted far right movements in other European [..]

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Investment Theme – End of Trump rally boosts safe havens but is it too early to bring out the bears?

Posted on May 18, 2017 at 3:02 pm GMT

The latest controversy in the White House appears to have been the nail in the coffin for the Trump rally that gripped the markets when Donald Trump unexpectedly won the US presidential election on November 8. The Trump campaign’s promises of big tax cuts, massive infrastructure spending and deregulation boosted equities not just in the US but globally too, and led investors to anticipate a faster pace of rate increases by the Fed due to the potential lift to economic [..]

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