Harvinder Kalirai
Harvinder Kalirai
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.
begins certainly cycle expect imminent interest market rate remove support
If the market begins to expect a more imminent end to the Fed's tightening cycle that would certainly remove the interest rate support for the dollar,
australian commodity dollar positive prices relative remains
The commodity story remains very positive for Australia. Relative to commodities prices the Australian dollar isn't overvalued.
australian currency next rise
The Australian currency may rise to US80c over the next month.
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.
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,
recovering
Manufacturing is recovering -- and the recovery, in fact, is accelerating.
australian bull dollar heading start
I consistently say the Australian dollar is heading higher. Commodities are at the start of a 15- to 20-year bull run.
bet brazilians ethanol higher increasing less means near oil prices record refined sugar
With oil prices back near record levels, one can bet that the Brazilians are increasing ethanol production. This means less refined sugar and higher prices.
beneath confidence cracks durable few figures goods last rise signs starting surface weak
There are a few signs of cracks beneath the surface in the U.S. economy, starting with the weak durable goods and confidence figures last week, and now with the rise in oil.
spark
We got the spark from the PPI today,
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.