Highlights The neutral real rate of interest, R*, is low in most economies, and will only rise gradually over the coming years. Currency movements tend to dampen differences in neutral rates across countries. The fact that R* is higher…
Highlights Shorting the RMB against the dollar is no longer a one-way bet. Investors should look to reduce bearish positions on the RMB going forward. The RMB is no longer overvalued. Therefore, any further decline will push the RMB…
Highlights The U.S. Treasury is unlikely to label China as a currency manipulator in the upcoming semi-annual assessment in April. A bigger threat is the possibility that President Trump unilaterally imposes punitive tariffs…
Highlights The supply of U.S. dollar outside America has been curtailed, yet there is large pent-up demand for dollars. This warrants another upleg in the greenback. The Trump administration's desire to shrink America's…
Highlights The USD bull case is now well known by the market, but this is not strong enough a hurdle to end the dollar's run. The behavior of positioning, the U.S. basic balance of payments, interest rate expectations, and relative…
Highlights President Trump is as protectionist as Candidate Trump; USD shortage to tighten global financial conditions; Go Long MXN/RMB as a tactical play on U.S.-China trade war; Brexit risks are now overstated; EU will not twist…
Highlights Mexico and China are not the only countries that could suffer from U.S. trade protectionism. Malaysia, Korea, Taiwan and Thailand are also at risk. The global inflationary versus deflationary impact of U.S. trade…
Highlights The Chinese authorities have progressively tightened capital account control regulations to staunch capital outflows, which will likely slow the drawdown of the country's official reserves in the near term. Rising…