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Tag: FX ✕
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C8 Currency Compass – USD Correction II – February 2025

Newsletter 13 February 2025 · Jon Webb

Our FX systems started the year with ashort USD bias (against the general consensus for a stronger USD). For the first three weeks this bias worked well as fears of blanket US tariffs did not materialize, however, in the final week of January, tariffs were announced on Mexico, Canada and China leading to some renewed USD strength. Nevertheless, so far, the measures that have been taken (with some already suspended for now) have not been as bad as feared. Looking forward to this month, we note the signals are more mixed for the USD though our hedge ratios remain negative USD for the largest currencies: EUR, GBP and JPY.

#C8 #FX #Global #Viking Harbour

Thoughts from the Divide: Which Way Is Up?

Insight 24 January 2025 · Jon Webb

Trying to understand the Global Economic Impacts of Trump’s Second Term. So far, he has signed more executive orders on his first day than the last ten presidents combined. As of this writing in the middle of the Friday trading day, US markets initially seem impressed, with the S&P reaching an all-time high earlier this week and the Nasdaq 100 and Solactive 200 both higher. There is a bit of pullback today, but we are higher for the week overall. And US markets aren’t alone, Japanese and European equities have had their best performance this year. Maybe Japan and Europe aren’t going to be affected by the Trump tariffs? Last time we looked, they made a whole lot of automobiles, but what do we know?

#Bonds #Commodities #Equities #FX #Global #MI2 Partners

C8 Currency Compass – USD Correction – January 2025

Newsletter 17 January 2025 · Jon Webb

Our FX models for USD against EUR, GBP, AUD, NZD and NOK, which were largely USD positive last year, reversed in January. In particular, our reversion models are suggesting some strength in these currencies against USD in the near term. Nevertheless, the continued outperformance of the US economy, alongside sluggish growth in Europe, suggests that any USD reversal will not be sustained.

#C8 #FX #Global #Macro #Risk Premia #Trend Following

C8 Hedge – Currency Compass – Election Special – November 2024

Newsletter 4 November 2024 · Jon Webb

The strong USD bias worked well for our FX models last month, with our dynamic hedge adding over 1% outperformance for EURUSD and GBPUSD, and over 3% for USDJPY. We note, however, that our models have now moved to neutral for the USD against the EUR and GBP, though still look for higher USDJPY. Reducing FX risk may well be sensible given the closeness of the US Presidential election, and doubts about the accuracy of polls. Though, as we note overleaf, late momentum now marginally favours Harris.

#C8 #FX #Global #Macro

C8 Currency Compass – October 2024

Newsletter 15 October 2024 · Jon Webb · 1 file(s)

A strong start from Currency Compass last month, where we called for a 50bp Fed rate cut camp but noting our currency models point to EURUSD and GBPUSD weakness, so any bounce is a good opportunity to add EUR and GBP hedges. Indeed it was, with EURUSD hitting 1.12 and GBPUSD 1.34 before falling back. Stronger US data, in particular the employment report, helped cement this view, the chart below illustrates how recent US data has pushed up the Atlanta Fed Q3 GDPNow forecast from 2% to above 3%.

#C8 #FX #Global #Macro #Trend Following

C8 Currency Compass – September 2024

Newsletter 18 September 2024 · Jon Webb

We are firmly in the 50bp rate cut camp – if the Fed is worried about employment, they need to get ahead of the curve. This is likely to put further pressure on the USD in the near term. USDJPY has hit its downside target (see below) so the benefit is more likely to accrue to the EUR and GBP. We also see the BoJ on hold this week, which adds weight to this view. However, we note our systematic models still point to EURUSD and GBPUSD weakness over time, so any bounce may prove a good opportunity to add EUR and GBP hedges.

#Asia #C8 #FX #US

Thoughts From The Divide: Julian Brigden’s Latest Interview

Insight 25 April 2024 · Jon Webb

In lieu of this week’s Thoughts From The Divide, we wanted to share Julian's latest interview with Ted Oakley, Managing Partner at Oxbow Advisors. In this engaging discussion, Julian addresses economic, stock market, and extreme political instability. In this engaging discussion, Julian addresses economic, stock market, and extreme political instability.

#Bonds #Equities #FX #MI2 Partners #US

C8 Hedge – Hedge with an Edge

Insight 16 April 2024 · Jon Webb

We are delighted to announce that C8 Technologies is launching a systematic FX hedging platform which helps businesses easily and effectively manage their currency exposures. C8 Hedge offers corporate treasurers and investment professionals precise guidance for actively and optimally managing their foreign exchange exposures across multiple currencies, using intuitive and simple to use online tools.

#C8 #FX

Whither US Treasuries?

Insight 5 April 2024 · Jon Webb

US growth dynamics remain stronger than many expected. The Federal Reserve seem hell bent on cutting rates but are getting cold comfort from recent data releases, however they attempt to spin it. Recent “off-message” comments from Fed officials underline that risk. If we continue in this vein, expect US rates to ratchet higher and bonds to remain vulnerable.

#Bonds #FX #MI2 Partners #US

Thoughts From The Divide: The Moon

Insight 4 April 2024 · Jon Webb

If the Fed can “only know” the neutral rate (and hence whether policy is restrictive) “by its works”… there may be reason to think that the music is still playing. Whether it’s the price surges of misspelled celebrity memecoins ICOs such as “Joram Poowel” (a coin based on Elizabeth Warren was the “Top gainer” at the time of writing), the return of the Manufacturing PMI to positive territory “for the first time in 17 months”, or the simple good old fashioned break out of gold to all-time highs (sympathy to all mining stock bros, miners have failed to attract the same level of enthusiasm), the “restrictive” territory being bandied about seems less of a place of economic pain, and more one of milk and honey.

#Bonds #Equities #FX #MI2 Partners #US

MI2 for C8 – The FX Year Ahead – Turning Japanese – Feb 2024

Insight 12 February 2024 · Jon Webb · 1 file(s)

Japan is likely to come into increasing focus this year. With bond yields now being allowed to rise as the BoJ’s Yield Curve Control experiment comes to an end, the BoJ’s roadmap to ending NIRP (if things go to plan), the multi-decade underperformance of Japanese equities still fresh in asset allocators’ minds (despite some promising upside momentum) and a chronically weak currency, (especially on a real effective, inflation-adjusted trade-weighted basis), there is plenty of potential for disruption.

#FX #Macro #MI2 Partners

Thoughts From the Divide – Lessons Learned

Insight 15 December 2023 · Jon Webb

If the saying is that we’re always fighting the last war, Chair Powell and his Fed comrades appear to be shellshocked. Not so long ago, when asked about where the FOMC’s collective thinking was, Mr Powell went with the rather cumbersome formulation “not thinking about thinking about” rate hikes. This time around, when asked about the various ins and outs of potential rate cuts, Powell said point blank that “the next question… is when it will become appropriate to begin dialing back the amount of policy restraint that’s in place… that’s really the next question, and that’s what people are thinking about and talking about”.

#Bonds #Equities #FX #MI2 Partners #US

USD Pivot Lower in 2024 – MI2 for C8

Insight 8 December 2023 · Jon Webb · 1 file(s)

MI2 currently has a bias for cyclical USD weakness as we progress into 2024, but this weakness could easily morph into an environment of secular USD decline. The early signs of USD weakness are falling into place, and with the current complacent consensus of stable FX relationships within the G4, the risk is building for a decisive break from the prevailing regime. Below, we segment our analysis to line up our skittles for a consensus-busting weak USD impulse.

#Europe #FX #MI2 Partners #US

C8 Product Update – Aug 2022

Insight 12 August 2022 · Jon Webb

Please find below monthly updates for the following C8-driven products: C8 Corporate Bond Monthly Update, C8 Active World ESG Index, C8 Multi Asset Global Opportunities Certificate, C8 China Futures Access TRS, C8/ Greenblue Good Governance US Equity L/S Certificate

#Bonds #C8 #C8-GreenBlue #Equities #Futures #FX