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International financial news

International financial news

[US Boston Fed President Roseng Glenn (2019 FOMC): The US monetary policy is already in a loose state. If you continue to cut interest rates many times, it will probably increase the risk of financial stability. Currently, the United States does not need additional easing. Note: George and Rosengren in September opposed the Fed’s interest rate cut in September]

[Federal 2020 FOMC Voter Kaplan: Do not think that interest rate will be cut again in 2019]. US bond yields are lower, which has been driven by pessimistic expectations of investors' long-term economic growth prospects. The Fed should cut its interest rate by tactical, limited, and constrained, and will focus on the evolution of the US economy. You should not limit your attention to monetary policy, but you need to explore a wider range of policy options.

[Bill Brad explains why the Fed is required to cut interest rates by 50 basis points in September: US manufacturing seems to be "falling into recession"] US St. Louis Fed President Brad (2019 vote committee) said that he would have liked the US Federal Open Market Committee ( FOMC) is able to implement a more substantial rate cut at the monetary policy meeting on September 17-18 (the actual rate cut is 25 basis points). After all, the US manufacturing industry “seems to be in a recession,” and the US economy as a whole is likely to slow down. To "on the horizon".

[Federal release of the latest version of repurchase arrangements: overnight repo operations will continue until October 10] The United States New York Fed announced that from September 23 to October 10, the New York Fed will implement overnight repurchase operations, each time The size of the repurchase is at least $75 billion, and until October 10, three 14-day repurchase operations will be offered, each with a repurchase size of at least $30 billion. After October 10, repurchase operations will be implemented as necessary to help maintain the federal funds rate within the target range.

[US oil service Baker Hughes: US oil rigs dropped for five weeks, with 719 units recorded a new low since May 2017.] The latest weekly report released by American oil service Baker Hughes shows that the US oil drilling week of September 20 The number dropped by 14 to 719, is expected to fall to 729, the number of natural gas drilling dropped by 5 to 148; the total number of wells dropped by 18 to 868.



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Flash Manufacturing PMI

Summary of investment bank views

Mitsubishi UFJ Bank: The situation of a strong dollar reversal has become more difficult, and the recent downside risk of the euro has moderated

The research team of Tokyo Mitsubishi UFJ Bank discussed the outlook of the euro against the US dollar and said that it maintains a strategic neutral view. It is expected that the exchange rate will be traded in the 1.0900-1.1200 area in the near future. The bank said that the recent ECB and Fed policy meetings failed to fluctuate the euro in a big way, although the long-term view of the euro against the dollar should be under downward pressure, but the Fed did not expect a more aggressive rate cut against the market, releasing the current rate cuts. The cycle may be close to the end of the signal; this makes the European Central Bank just gave a series of comprehensive easing policy, the situation of the dollar's strong reversal is getting more difficult.

Loose monetary policy will last longer in the euro zone than expected, but the recent relaxation of Brexit risk and optimism built on trade relations should moderate the downside risk of the euro in the near future; the recent downgrade of the US federal funds rate is also a prospect Creating uncertainty, the Fed’s inspiring speculation to restart asset-liability expansion should deepen the dollar’s upside potential.

Credit Suisse Bank: Investors can consider shorting the EUR/USD in rallies, or buying EUR/CHF on dips

Swiss Credit Suisse (Credit Suisse) released a customer report on Friday suggesting that investors can consider shorting the euro against the dollar, and also buying the euro against the Swiss franc on dips. The euro is still firmly trading against the dollar in the 1.0926/1.1109 range. Considering that the euro continues to be favored by arbitrage financing, and the Fed cut interest rates as scheduled (but the dot matrix chart is biased towards the hawks), we recommend shorting the currency pair on rallies, and the stop loss can be set at 1.1120.

USD/CHF is limited to the 1.0000 integer mark. At present, the market is entering a consolidation market. Investors need to be patient. I believe that they will remain in the range of 0.9850-1.0000 for the time being. For the EUR/CHF, we recommend buying on dips and holding it for a long time. The key area is 1.0890/1.1020. I believe the pair will stabilize at 1.0930-50 or re-attack.

CIBC: The Bank of Canada is ready to join the interest rate cuts. The dollar is expected to rise to 1.33 at the end of the year.

The Canadian Imperial Bank of Commerce (CIBC) wrote on Friday that the Bank of Canada is ready to join the interest rate cuts and expects the dollar to rise to the 1.33 mark at the end of the year. We insist that the Bank of Canada will cut interest rates by 25 basis points and expect to cut interest rates in December. Before the market generally expected the Bank of Canada to cut interest rates in October, but the probability of interest rate cuts continued to decline, and even began to believe that the Bank of Canada will not implement interest rate cuts during the year.

The statement after the last policy meeting of the Bank of Canada and the president’s speech did not imply that action will be taken soon, but the global economic slowdown has been taken into account. However, supported by the Bank of Canada’s position and strong employment reports, Canadian dollar buying has returned again, and investors are betting that the probability of a rate cut in October has fallen. However, whether the implementation of interest rate cuts or a strong hint of interest rate cuts at the December policy meeting will help the dollar return to the top of 1.33 at the end of this year or at the latest in the first half of next year.

Canada’s current account deficit fell more than expected in the second quarter, mainly due to the increase in investment income. But in the medium term, we still see a lot of disappointing places, so it may drag down the performance of the Canadian dollar. The Canadian dollar is expected to depreciate between 2020 and 2021, and the US dollar against the Canadian dollar is expected to rise to a high of 1.38 in the fourth quarter of 2020.

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