Macro vol is alive and well – TDS

FXStreet (Barcelona) - “Idiosyncratic risks are much more pervasive than one strong, global trend, even though pre-Fed tightening and post-ECB bond buying are driving a significant global reallocation”, quotes Richard Kelly, Head of Global Strategy at TD Securities, explaining that the macro volatility is alive and well.

Key Quotes

“We think Hungary is likely to resume easing next week.”

“The National People’s Congress in China continues into the weekend, which always provides risks of policy action on the back of such official meetings, where we still see the high risk of further interest rate and RRR cuts and relaxing of the currency peg as being in the pipeline in the coming months.”

“While that may be insufficient to change global trends and push back against the strong and pervasive USD, it may be enough to support value in metals, for those looking for respite in the commodity space from the risks within oil markets.”

“The Norges Bank meeting on March 19th should see them deliver a 25bps cut, but the market is priced for 40bps over the next year so the real question is how much further they push the market to price there.”

“The strong, coordinated, correlated global environment is not here. We are instead awash in significant flows which always precede Fed tightening, and are only exacerbated by the ECB’s newfound love of asset purchases.”

“It is hard to construct a scenario where this macro volatility will go away any time soon.”