Since the Russian army’s full-scale invasion of Ukraine on 24th February most equity markets, government and corporate bond yields, commodity prices (energy, metals and agriculture), CDS spreads and major currencies have recorded significant intra-day volatility and outsized daily moves. Moreover, for all the “noise”, the current geopolitical crisis has accentuated…

The Fed is widely expected to hike its policy rate 25bp to 0.25–0.50% (its first since December 2018) at its meeting on 16th March, by which point it is due to have ended its asset purchases. Some FOMC members will likely push for a larger 50bp hike. Markets, as of…

The Yen depreciated about 13% versus the US Dollar between 5th January 2021 (a 9-month high) — and 4th January 2022 (a 4-year low) but has since rebounded about 0.7%. The Yen Nominal Effective Exchange Rate (NEER), which provides a more accurate overall picture of Japan’s currency and trade competitiveness…

Consumer demand in the United Kingdom remains modest, which we attribute to a combination of factors. These include still curtailed opportunities to spend on goods (stock constraints) and services (social distancing restrictions), an erosion in real earnings, wealthy households’ low propensity to spend and a paradigm shift in spending habits. …

The number of new daily cases of Covid-19 has remained at or near record-highs in most Eurozone countries, including Germany, France, Italy and Spain, and the number of deaths since 11th December has either risen materially from the previous corresponding period, albeit from low levels (France, Italy, Portugal and Spain)…

The US Bureau of Labor Statistics will release US CPI-inflation data for December today at 13.30 London time. Consensus forecast is for another set of record-breaking data but US CPI-inflation figures have been volatile since Spring 2021 and thus more difficult to accurately predict. Our take is that US companies…

Markets’ focus has in the past three weeks understandably been on the Omicron variant and the reaction function, present and future, of governments and central banks. The multiplication of social distancing restrictions and acceleration in booster jab programs in many major economies since late-November suggest that policy makers’ conviction that…

Our last FIRMS report was entitled FX round-up — Calm before the next storm (18th November 2021) and less than a week later a storm hit with South Africa reporting the Omicron strain of Covid-19 to the World Health Organisation on 24th November. …

The spike in US Treasury yield volatility last week, following the release of gangbuster US CPI-inflation data for October, partly fed through to other asset classes. However, volatility in US asset prices, including Treasuries , the US Dollar and S&P 500, has since subsided while global FX volatility is still…