Recent Articles

What if there is a crisis?

Currencies trade very differently in a crisis.  We explore what could happen to our FX market outlook if we experience a financial crisis in the next twelve months.   


The probability of a financial market crisis erupting in the next twelve months is significantly north of 0%.  While our base case forecasts are not predicated on a crisis occurring, (implying that we see a less than 50% chance of a crisis occurring in the next year), our view is that there is at least a 20% – 30% of such an event.    


There are a few reasons for our concerns.  For a start, years ending in ‘7’ are known to spell trouble for the markets; 1987 gave us Black Monday, 1997 delivered the Asian Financial Crisis, and finally 2007 brought the Global Financial Crisis.  On a slightly less superstitious note, it is hard to argue we are not ‘due’ a serious market sell-off...

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Will Trump Survive To The End Of His First Term In Office?

As special counsel Robert Mueller impaneled a grand jury in the Justice Department’s investigation into Russian election interference, several Republican senators have started moving away from the President.  This has led to increasing speculation as to whether this is a signal that impeachment proceedings may be next.


As we’ve had a number of questions from clients on this issue, in this week’s Big Picture, we look at the likelihood of impeachment, the impeachment process, and potential impacts on the markets should it come to fruition.



The Impeachment Process


The impeachment of a President is not new in the US.  To be impeached, the Full House of Representatives debates on each Article of Impeachment.  Should any of the Articles of Impeachment be approved by a simple majority vote, the President will be ‘impeached’.  However, being impeached is like being indicted of a crime.  The President will remain in office pending the outcome of the...

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How have expectations of monetary policy change impacted hedging costs?

Following last week’s FOMC meeting, the committee elected to keep the Fed funds target rate unchanged at 1-1.25%. The outcome was widely expected and hence there was no significant change in the markets. The accompanying statement included a number of small changes which have firmed up expectations that we can expect an announcement with regards to balance sheet normalisation at the next meeting in September, but once again, this was broadly expected and hence had little impact on markets.


Taking a step back from intraday market movements, the bigger picture tells a more significant story – namely that central banks are starting to tighten their ultra-loose stance on monetary policy. Most importantly, it’s not just the Fed either, the Bank of Canada raised rates earlier this month (and are expected to do so again before the end of the year) while the Bank of England and even the European Central Bank...

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An Integrated Approach


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Where Next?


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Currency Volatility – Are markets nearing an inflection point?



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