FX Breakout Monitor: The breakout picture for FOMC reaction
The USD continues to press stronger across the board ahead of the FOMC meeting, which looks a pivotal risk event for the ability of the greenback to find further momentum here. Elsewhere, we are noting that the coronavirus outbreak is pressuring currencies like the Aussie and select EM currencies that are heavily exposed to Chinese demand for their commodities exports.
FX Update: Dissonance across markets ahead of FOMC
Markets are trying to stabilize and recover from coronavirus fears, with major equity markets in a buoyant mood once again, while commodities markets and some currencies have yet to show much of a sigh of relief. Meanwhile, we have an FOMC meeting dead ahead, with the USD perched on the edge of breaking stronger and the focus on how the Fed will treat its balance sheet growth from here.
Monthly Macro Outlook: A bad movie remake
Contrary to what bears have said here and there, we don't think that the coronavirus will be the trigger of a prolonged slowdown or a major market correction. There are many signs that growth is modestly picking up in early 2020 and we believe that the fiscal and monetary push from China and other central banks to offset the macroeconomic impact of the virus will help stimulating the recovery this year.