Special Report

Dear Client, This week, we are publishing a Special Report co-produced with Mark McClellan, who writes The Bank Credit Analyst. This report discusses the long-term outlook for the dollar and argues that the greenback is in a structural…

Dear Client, Yesterday, my colleagues Marko Papic, Matt Gertken, and I had a webcast to discuss the rising threats of trade wars between the U.S. and China. If you have not listened to it yet, I encourage you to listen to it here. Best…

Special Report

In this Special Report, we review the theory behind exchange rate determination and examine the cyclical and structural forces that will drive the dollar. The long-term structural downtrend in the dollar is intact. This trend reflects…

Special Report

Feature China's foreign reserves have been subject to heavy scrutiny over the past few years. The country's multi-trillion-dollar official reserve assets, long viewed by both Chinese officials and the global investment community…

Highlights The combined U.S. current account and fiscal deficits are set to rise as Trump's profligacy and higher interest rates kick in. In and of itself, this does not spell doom for the dollar. The Fed's response to the twin…

Highlights The call on EM local bonds boils down to the outlook for EM exchange rates. Forthcoming EM currency depreciation will halt the rally in local bonds. EM currencies positively correlate with commodities prices but not with…

Highlights The global economic recovery has been driven by demand in China, the U.S. and Europe, while domestic demand in EM ex-China has not recovered much. Going forward, the key to EM financial markets performance will be Chinese…

Highlights China's tightened control on capital account transactions has played a key role in slowing down capital outflows, particularly outward FDIs. Meanwhile, investors' panic over the RMB has also abated substantially,…

Highlights The bottom in the dollar will have to wait for clearer signs that U.S. inflation has hit a trough. DXY is unlikely to punch below its May 2016 low. We examine balance of payments dynamics across the G10. This analysis…