Harvinder Kalirai
Harvinder Kalirai
business coming cycle japanese lower moving positive signs starting trade
We're starting to see positive signs that the Japanese business cycle may be moving around. The dollar-yen should trade lower in coming months.
adopted basis bias continued cycle early fed further hike hikes hiking looking neutral points rates suggest total type until
If you look back to 1994 when the Fed was hiking rates continuously, after every rate hike the Fed adopted a neutral bias. However, the tightening cycle continued until early '95, for a total of 300 basis points (3 percent). We are not looking for that type of tightening cycle this time, but nevertheless it does suggest that the neutral bias does not preclude further rate hikes down the road.
backdrop commodity external favorable high interest leading prices rates record support terms trade
High commodity prices are boosting Brazil's terms of trade and leading to record trade surpluses. A favorable external backdrop and still high real interest rates should support the Brazilian real.
context data extremely number point strong weak
This is one weak number in the context of an extremely strong economy. One data point doesn't make a trend,
clear conclusive early economy fed halt headline hot inflation moving next percent perhaps policy running signs towards
There are very early signs of (a manufacturing slowdown), but I don't think they're conclusive enough to halt the Fed from tightening policy further, ... But I think, ultimately, with the economy running hot and inflation on a clear upswing, we see headline inflation moving towards and perhaps even surpassing 3 percent as we head into next year.
domestic expect numbers reflects sharp solid trade
We did expect a sharp deterioration of the trade balance. The real story on the trade numbers is that the import surge reflects very solid domestic demand.
benign bigger gets gives japanese lower neglect reason seeing seems support terms weakness worried
We're seeing a benign neglect in terms of the weakness of the Japanese yen. There's little reason for the Japanese to be worried because it seems the lower the yen gets the bigger the support it gives to exporters.