Archives of “June 6, 2019” day

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IMF raises 2019 US growth to 2.6% from 2.3%

  
Analysis, Economy

IMF out with annual US economic review

  • raises US economic growth forecast in 2019 to 2.6% from 2.3%
  • deepening of ongoing trade disputes or abrupt reversal of recent everyone’s financial conditions pose material risks to US economy
  • says it is especially important trade tensions between US and China are quickly resolved
  • medium-term risks to financial stability are rising
  • abrupt reversal of financial accommodation could 8 US economy
  • Fed should defer further interest rate hikes until there are greater signs of wager price inflation
  • Fed should consider publishing quarterly report was central economic scenario endorsed by Federal open market committee
  • Inflation remains very subdued
  • Sees 2% growth in 2020

The IMF will have a press briefing on the results of their report shortly. You can watch it HERE.

Nikkei 225 closes at flat levels amid mixed mood in Asian markets

  
Analysis, Global Indices

Tokyo’s main index closes lower by 0.01% at 20,745.84

Nikkei 06-06

Equities are having to weigh up Fed rate cuts and global trade tensions – immediate focus being US-Mexico – and that’s causing for a bit of a mixed tone in Asian trading. Gains have been fleeting over the past hour and we’re seeing stocks reverse early gains as trade sentiment sours hopes of a Fed rate cut later in the year.
It’s hard to really make anything of this so perhaps it’s best to look towards US futures, which are down by 0.1%, as that would be more telling of the way things will play out in the European morning.
USD/JPY continues to hold lower at 108.10 currently as the yen extends gains amid more cautious risk sentiment after US-Mexico talks failed to reach a deal overnight.

Reuters polling – most expect USD strength to continue for 6 months

  
Analysis, Forex

Via Reuters :

  • USD dollar strength to continue for more than six months, say majority of analysts

and then, further out:

  • Euro to gain about 4% vs dollar to $1.17 in a year ($1.18 in the previous, May, poll)
Some of the remarks from analysts:
“For now the Fed may refrain – to the benefit of the dollar – from signaling it is preparing to cut interest rates if U.S. economic data continues to hold up over the summer,” said Mansoor Mohi-uddin, senior macro strategist at NatWest Markets. “Beyond the summer, however, the prospects of the Fed staying on hold to the benefit of the dollar may be receding.” 
“We think some developments are now starting to move against the dollar … with expectations that the Fed may need to deliver rate cuts over the next six to 12 months,” said Lee Hardman, currency economist at MUFG. “Yield spreads are now starting to move against the dollar and we just think that kind of dynamic, if sustained going forward, should start to erode some of the appeal of the dollar”. 
“So far, the change in both Fed rhetoric and – even more strikingly – in market expectations, really hasn’t done that much to undermine the dollar,” noted Kit Juckes, chief global FX strategist at Societe Generale. “If the equity bounce and mood improvement in markets lasts, maybe that can continue, but I think the improvement is short-lived, the currency will come under more and more scrutiny.” 
“I think it is the dollar that is the going to be the asset of choice for many investors now in terms of safe haven,” said Jane Foley, head of FX strategy at Rabobank. “The yen will remain the safe haven when things turn really sour, particularly when there is geopolitical risk, but investors have an issue with the yen, and that is there is no yield … I think that factor throws many people back into the dollar.”
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