Special Reports

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Special Report – Euro climbs higher, but ECB could provide a “reality check”

Posted on January 19, 2018 at 3:46 pm GMT

The euro started the year with a bang, buoyed by expectations that the European Central Bank (ECB) is likely to begin scaling back its massive stimulus program later this year. Can the single currency continue to gain, or have markets discounted too much too early, setting the stage for a near-term correction? While the financial community widely anticipates the euro to continue its winning streak in 2018, few expected the currency to gain so rapidly in the first few days [..]

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Special Report – BoJ tightening or markets running ahead of themselves?

Posted on January 18, 2018 at 4:02 pm GMT

The Japanese currency posted gains versus the US dollar, reaching four-month highs – equivalently the dollar/yen pair fell to four-month lows – with the yen appreciating on the back of what market participants interpreted as a form of tapering by the Bank of Japan. Such an evaluation though may not be justified, with the market potentially running ahead of itself in terms of placing long yen positions and at the same time offering opportunities for traders who can manage to [..]

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Special Report – Oil makes a comeback, but will it last?

Posted on January 12, 2018 at 3:35 pm GMT

Oil prices rallied in 2017, with WTI finishing the year more than 12% higher as major OPEC and non-OPEC producers continued their efforts to rebalance the oil market by curbing their supply. Can this pattern persist in 2018, or will US shale producers ramp up their production in the face of higher prices, and take the wind out of the precious liquid’s sails? The oil market came closer to rebalancing itself in 2017, as a strengthening global economy fueled demand, [..]

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Special Report – PBOC loosening grip on yuan a sign of confidence but China’s economy remains a key risk in 2018

Posted on January 11, 2018 at 4:15 pm GMT

China’s central bank, the People’s Bank of China (PBOC), attracted some attention this week after it was revealed that it has suspended using the counter-cyclical factor in calculating the daily fixing for the yuan. Having been introduced in May 2017 to counter speculative bets in forex markets, the surprise move is seen as a reflection by the PBOC that downside risks to the yuan have subsided substantially. However, although capital outflows no longer pose a major threat to the economy, [..]

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Special Report – Will gold shine even brighter in 2018?

Posted on January 5, 2018 at 3:12 pm GMT

Gold was one of the main winners of 2017. Intensifying geopolitical tensions, particularly on the Korean peninsula and in the Middle East, combined with the dollar’s sharp plunge helped gold prices to finish the year more than 13% higher. Heading into 2018, the outlook for the precious metal continues to appear positive, as geopolitical risks are unlikely to go away anytime soon, and the US dollar does not seem ready to make a strong comeback yet. Trying to forecast geopolitical [..]

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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 [..]

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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 [..]

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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. [..]

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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 [..]

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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, [..]

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