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21 Aug 2015
The week in a snapshot - SG
FXStreet (Guatemala) - Kit Juckes, macro economist at Societe Generale, noted some of the key conditions in the past week's global financial markets arena.
Key Quotes:
"The ramifications of the Chinese FX regime shift continued to be felt despite the apparent stability in the USD/CNY rate. China growth fears escalated, especially after the Caixin manufacturing PMI data surprised to the downside. The continuing slide in crude oil prices to fresh cycle lows added to general market nervousness about the global outlook. The hitherto resilient S&P500 Index appeared to break down as it traded below its 6-month range. Oil-linked EM currencies suffered the largest losses over the week - RUB, MXN, COP and MYR."
"The US dollar only managed to gain primarily against EM currencies. The FOMC minutes released on Wednesday failed to provide any signal of an imminent rate hike in September, and the market promptly marked down rate expectations. The fall in US yields, exacerbated by the global risk-off mood, kept the dollar on the back foot against other G10 currencies save for the AUD."
"The traditional safe haven choices of CHF and JPY outperformed over the course of the week as fear gripped global markets. The euro also did well with data showing that the Euro area trade balance and current account continuing to post solid surpluses, though GDP Q2 growth disappointed expectations slightly at 0.3% Q/Q. Later in the week, the flash Germany composite PMI was better than expected. The euro also benefitted from the dollar pullback after the FOMC minutes."
"UK inflation data surprised to the upside, especially with core CPI posting a 1.2% Y/Y increase, which buoyed sterling earlier in the week, and retail sales largely met expectations. But the broad euro rally drove EUR/GBP back up to 0.72 by the week's end."
Key Quotes:
"The ramifications of the Chinese FX regime shift continued to be felt despite the apparent stability in the USD/CNY rate. China growth fears escalated, especially after the Caixin manufacturing PMI data surprised to the downside. The continuing slide in crude oil prices to fresh cycle lows added to general market nervousness about the global outlook. The hitherto resilient S&P500 Index appeared to break down as it traded below its 6-month range. Oil-linked EM currencies suffered the largest losses over the week - RUB, MXN, COP and MYR."
"The US dollar only managed to gain primarily against EM currencies. The FOMC minutes released on Wednesday failed to provide any signal of an imminent rate hike in September, and the market promptly marked down rate expectations. The fall in US yields, exacerbated by the global risk-off mood, kept the dollar on the back foot against other G10 currencies save for the AUD."
"The traditional safe haven choices of CHF and JPY outperformed over the course of the week as fear gripped global markets. The euro also did well with data showing that the Euro area trade balance and current account continuing to post solid surpluses, though GDP Q2 growth disappointed expectations slightly at 0.3% Q/Q. Later in the week, the flash Germany composite PMI was better than expected. The euro also benefitted from the dollar pullback after the FOMC minutes."
"UK inflation data surprised to the upside, especially with core CPI posting a 1.2% Y/Y increase, which buoyed sterling earlier in the week, and retail sales largely met expectations. But the broad euro rally drove EUR/GBP back up to 0.72 by the week's end."