Cromwell FX Market View

Relief Rally Falters; US Dollar Returns

Last week saw the relief rally end as sell the rise came back into play. The US Dollar once again re asserted itself on the market pushing against important resistance levels. The Fed still remains much further ahead in its policy and this policy divergence once again brought strength to the US Dollar. Despite its…

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Cromwell FX Market View

Relief Rally After Central Banks Move

Last week the relief rally people had been expecting finally came. As markets looked to digest the moves of the central banks and upcoming 2022 first half ending we saw the US Dollar give back a little. This was accompanied by yields falling and risk assets rising as the fall in commodity and energy prices…

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Cromwell FX Market View

Central Banks Make Their Move

Last week saw the central banks look to tighten further as inflationary pressures continue to loom. The Fed was particularly hawkish raising by 75bps but the week also had the SNB delivering a surprise 50bps while the BoE’s 25bps had an underlying hawkish note with 3 members looking to raise by more. The Euro had…

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Cromwell FX Market View

Return of The Dollar

Last week major markets were rangebound till later in the week. Stagflation fears rose as the usually cautious ECB pre committed to rate rises in July and September and US CPI hit a 40-year high which triggered a sell off across all risk assets, pushing yields higher and the US Dollar stronger. The Euro struggled…

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Cromwell FX Market View

US Dollar To Continue Correction

Last week we saw the US Dollar fall once again as short covering fuelled a bounce in risk assets. The Fed is beginning to give a clearer indication as to where it think the Fed funds will be with the risk being that market expectations are disappointed.   The Pound which although gained ground vs…

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Macro Research

The Great Rotation

When market themes change, they can be very subtle from one sector to the other. For example, tech to oil short term bonds to long term or from one region to another. A few of these types of changes happened over the last couple of months I think are worth exploring.   The last decade…

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Cromwell FX Market View

Bear Market… Yes or No?

Last week risk off flows continued a pace as global inflation numbers remained high. The US Dollar finally lost some ground to other currencies as the world waits to see if we are turning into a bear market.   The US Dollar had its first losing week in sometime. US data is still showing some…

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Macro Research

Tech Wreck 2.0

It’s quite clear certain parts of the market such as crypto, saas and other duration linked assets in Tech has recently had a fall from grace reminiscent of the .com bust. How deep this goes will depend purely on central bank policy, of which I’ve tried to argue a fall in risk assets is actually…

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Cromwell FX Market View

The Fed Continues to Rule

The week that was so anticipated finally arrived. The Fed raised interest rates by 50bps ruling out the possibility of 75bps. However by the end of the week, fed fund futures are still pricing in 82.9% chance of a 75bps hike in at the June 15 FOMC meeting, to 1.50-75% Most pairs found some level…

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Cromwell FX Market View

Big Gains for the US Dollar

The US Dollar was the overall winner last week making impressive gains across the board. A further firming of yields and speculation of further Fed tightening propelled the USD.  The market is now expecting a 50bps rate hike in May and could end the year between 2.5% and 3.5% depending on incoming data and developments…

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Cromwell FX Market View

US Dollar Grinds Higher

Last weeks rising yields continued. This led to a week of further downward pressure in bonds and interest rate rises. The Box and RBNZ both moved 50bps higher which caused risk assets to move lower.   The shortened week for the 4 day easter holiday saw the US Dollar grind higher. The flight from risk…

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Cromwell FX Market View

Sleepy Start, Explosive End

The week started as the following had ended. Markets were relatively quiet. The war in Ukraine had continued to ebb away from headlines and the markets were able to begin to focus on other factors.   The US Dollar ended the week the strongest despite the mixed start. The markets waited until the Fed minutes…

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Macro Research

After Inversion Comes?

In my first note, I asked the question, will the yield curve invert? With 5s30s and more importantly the 2s10s inverting on 31/03/22, the guessing game is over! The inversion although an important part to start a countdown on a risk off set up. It’s a steepening of the yield curve that comes after an…

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Cromwell FX Market View

Quieter Week – But Eye of The Storm?

The week was quieter on many fronts. The continued war in Ukraine has now seems to have completely stalled for the Russians. The announcement of a more focused approach on the Donbas region seemed to indicate that a move for total control over the control had failed. Continued talks did not prove to garner any…

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Cromwell FX Market View

Rising Yields a Cause for Concern

The war in Ukraine seemed to move from the spotlight as any developments continued to stall the main themes for the week was the continuing rising yields.   The Yen was the biggest loser as global yields surged except the JGB. The BoJ has clearly put a cap on 10-year yields and the resulting widening…

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Macro Research

The First Warning Signs

The bond market and in particular certain yield curves are starting to flash warning signs: 5s-30s inverted this week for the first time since 2006. This information is useful and not so useful depending on your time horizon. Let’s answer why it’s useful first, it’s telling you in simple terms that growth will slow, and…

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