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Financial markets in the United States are especially deep: nearly half the average daily turnover in global FX markets involves USD, and the US accounts for a third of the world’s stock market capitalisation.


  • Forecasts

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    Limited spare resources and tariffs will lift inflation. As inflation rises clearly above target, monetary tightening will resume. Yields will increase in time but less than elsewhere; USD stands to fall. download »
  • FX Notes

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    The US dollar is not clearly overvalued but diminishing interest rate differentials and a less attractive economic environment may put downward pressure on the dollar. We are using the USD as a funding currency. download »
  • Focus Notes

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    Through QE, central banks have expanded their government debt holdings. Were purchases maintained in Japan and in the euro area, debt sustainability would improve sharply in less than a decade. download »
  • Economics

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    • Growth has slipped to slightly below its mean, with investment growth weakening. Unemployment is extremely low, but core inflation not high. Fiscal and current account deficits persist. download »
  • Markets

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    • USD is above its real mean. 50bp of rate cuts are priced in by March 2021. The curve is slightly inverted and yields are only are a bit above lows; spreads have slipped but remain high. Equity returns have been top-tier. download »
  • Investing

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    • If inflation rises, the Fed will eventually re-tighten policy. Bond yields stand to rise again but probably lag global yields. Higher relative inflation and external deficits may weigh on USD. download »