Informes BofAMl Global Research

Redacción - Viernes, 26 de Enero

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Global Economic Weekly: How will central banks react to the currency curveball? •  For non-US DM central banks, the plunge in the dollar has complicated exit plans from monetary accommodation. •  The Fed will see the weak dollar as a sign of easy financial conditions and a green light to keep tightening monetary policy. •   In EM, the dollar dip raises the risk of overtightening in China and could delay rate hikes in some Latin American economies.

Europe Economic Weekly: The deeper we look, the less inflation we find

•   The ECB delivered what we expected. But for verbal FX intervention to work, the threat must be credible, and the ECB's isn't.
•   We stick to our call for a 2Q19 depo rate hike. Sequencing, FX considerations and inflation make a move this year unlikely.
•   We find further evidence that Euro area core inflation weakness is structural, not cyclical, in contrast to the US.

 

The Flow Show: Non-Stop Euphoric Cabaret

•   Tactical pullback in S&P 500 now very likely in Q1
•   B&B surges to 7.9, highest since sell signal of March 2013; EM trading rule close to sell
•   Record inflows to equity funds, active equity funds, tech funds & TIPS this week

 

Global FX weekly: The minutiae of Mnuchin

•   We do not think there has been a material shift to a "weak" USD policy; the ECB is monitoring non-fundamental drivers of EUR.
•   We refresh our FX valuation framework, focusing on BEER; FX vol selling outperforms but we watch for a turning point.
•   Technicals and quant align bearish EURGBP; breakdown targets 0.83.

 

GEMs Macro Monthly: Synchronicity

•   Synchronized global recovery continues to be the main driver of inflows into EM. We see room for EM to continue to rally
•   Positive growth dynamics and stable US real rates validate the price action.
•   Pay rates in Korea and Russia and receive in India and Brazil. We stay long USD vs CNY and MXN. We like long EUR vs KRW.

 

Liquid Insight: How will central banks react to the currency curveball?

•   For non-US DM central banks, the plunge in the dollar has complicated exit plans from monetary accommodation.
•   The Fed will see the weak dollar as a sign of easy financial conditions and a green light to keep tightening monetary policy.
•   In EM, the dollar dip raises the risk of overtightening in China and could delay rate hikes in some Latin American economies

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