29 Apr 2016
USD weakness helping the commodities and emerging markets - BBH
Research Team at BBH, suggests that the US dollar weakness is rippling through the capital markets.
Key Quotes
“The combination of what appears to be a stagnating US economy (0.5% annualized pace in Q1) and a market that does not believe the Federal Reserve will hike rates in June, and is in fact, judging from the Fed Fund futures strip, skeptical of a single hike this year.
The effect of this US dollar weakness help the commodities and emerging markets extend their recoveries that began 2-3 months ago. Economic fundamentals and the reaction function of the Federal Reserve has also contributed to keeping US yields low, which has global knock-on effects as well.”
Key Quotes
“The combination of what appears to be a stagnating US economy (0.5% annualized pace in Q1) and a market that does not believe the Federal Reserve will hike rates in June, and is in fact, judging from the Fed Fund futures strip, skeptical of a single hike this year.
The effect of this US dollar weakness help the commodities and emerging markets extend their recoveries that began 2-3 months ago. Economic fundamentals and the reaction function of the Federal Reserve has also contributed to keeping US yields low, which has global knock-on effects as well.”