Quarterly Outlook
Investor Outlook: Beyond American shores – why diversification is your strongest ally
Jacob Falkencrone
Global Head of Investment Strategy
You can access all of our platforms from a single Saxo account.
NY Open: Fading the 'Blue Wave' dollar retreat
Michael O’Neill
FX Trader, Loonieviews.net
Summary: The Democratic 'Blue Wave' proved a mere ripple in the US midterms, and the dollar is clawing back its post-vote losses. Meanwhile, a jobs report bonanza in New Zealand could potentially see a hawkish tilt from the RBNZ, so the kiwi is in focus.
The “Blue Wave” wasn’t. The heavily hyped predictions that US Democrats would gain at least 40 seats in the House of Representatives and even possibility secure a majority in the Senate proved to be wishful thinking. The wave was just a ripple.
The initial reaction to sell dollars led to USD opening in New York with losses against the G-10 majors. The losses are being slowly clawed back in early trading as the greenback is higher across the board, except against the Canadian dollar which is unchanged. It may just be profit-taking unless the US dollar index can take out support in the 95.25-40 area, which would spark additional US dollar demand.
The EURUSD rally stalled at 1.1498, the September downtrend line which guards significant resistance in the 1.1540-50 zone. The European Central Bank may be contemplating tightening, but an actual rate hike isn’t expected until sometime in the summer of 2019. Meanwhile, the Federal Open Market Committee policy statement is released tomorrow. No one expects a rate increase, but last Friday’s robust nonfarm payrolls report leaves the door open for a hawkish-sounding announcement.
USDNZD is in the spotlight. The far better than expected employment data could lead to a less dovish than usual Reserve Bank of New Zealand policy statement after the New York close. If so, NZDUSD could take out resistance at 0.6795 (the 38.2% Fibonacci retracement level of the May-October range) and target 0.7020 (61.8% Fibonacci retracement level)-
USDCAD traders ignored the better than forecast Ivey PMI data (Actual 61.8 versus a forecasted 50.9). The data series is volatile but occasionally spurs an FX reaction. It may limit USDCAD gains in the short term.
Wall Street opened in positive territory and added to the gains. Conventional wisdom suggested that the Democrat win would be bad for stocks as they could try to roll back tax cuts. For the moment, traders don’t see that as an issue, preferring to believe that a gridlocked Congress is good for equities.
The initial reaction to sell dollars led to USD opening in New York with losses against the G-10 majors. The losses are being slowly clawed back in early trading as the greenback is higher across the board, except against the Canadian dollar which is unchanged. It may just be profit-taking unless the US dollar index can take out support in the 95.25-40 area, which would spark additional US dollar demand.
The EURUSD rally stalled at 1.1498, the September downtrend line which guards significant resistance in the 1.1540-50 zone. The European Central Bank may be contemplating tightening, but an actual rate hike isn’t expected until sometime in the summer of 2019. Meanwhile, the Federal Open Market Committee policy statement is released tomorrow. No one expects a rate increase, but last Friday’s robust nonfarm payrolls report leaves the door open for a hawkish-sounding announcement.
USDNZD is in the spotlight. The far better than expected employment data could lead to a less dovish than usual Reserve Bank of New Zealand policy statement after the New York close. If so, NZDUSD could take out resistance at 0.6795 (the 38.2% Fibonacci retracement level of the May-October range) and target 0.7020 (61.8% Fibonacci retracement level)-
USDCAD traders ignored the better than forecast Ivey PMI data (Actual 61.8 versus a forecasted 50.9). The data series is volatile but occasionally spurs an FX reaction. It may limit USDCAD gains in the short term.
Wall Street opened in positive territory and added to the gains. Conventional wisdom suggested that the Democrat win would be bad for stocks as they could try to roll back tax cuts. For the moment, traders don’t see that as an issue, preferring to believe that a gridlocked Congress is good for equities.
Latest Market Insights
Quarterly Outlook
Q3 Macro Outlook: Less chaos, and hopefully a bit more clarity
Quarterly Outlook
-
-
Quarterly Outlook
Q3 Macro Outlook: Less chaos, and hopefully a bit more clarity
John J. Hardy
Global Head of Macro Strategy
After the chaos of Q2, the quarter ahead should get a bit more clarity on how Trump 2.0 is impacting... -
Quarterly Outlook
Equity outlook: The high cost of global fragmentation for US portfolios
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
Commodity Outlook: Commodities rally despite global uncertainty
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
Upending the global order at blinding speed
John J. Hardy
Global Head of Macro Strategy
We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ... -
Quarterly Outlook
Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever
Jacob Falkencrone
Global Head of Investment Strategy
-
Quarterly Outlook
Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?
John J. Hardy
Global Head of Macro Strategy
-
Quarterly Outlook
Equity Outlook: The ride just got rougher
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
China Outlook: The choice between retaliation or de-escalation
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
Commodity Outlook: A bumpy road ahead calls for diversification
Ole Hansen
Head of Commodity Strategy