Summary of 22 institutional views: Where does the Fed’s minutes fail to drive the dollar’s ​​rebound?

The Fed’s March forecast may be more hawkish or drive the dollar’s ​​rebound. Many well-known investment institutions have commented on this. This article collects the latest opinion comments from various agencies for your reference.

US federal government budget deficit

Western Pacific 601099, the stock bank: trillion dollar deficit, the US financial outlook is disturbing.

The US Congressional Budget Office CBO issued a report at the beginning of the week, saying that the US federal government's budget deficit is expected to rise from 665 billion US dollars last year, and will rise to 981 billion US dollars by 2019. Starting in 2020, the annual deficit will reach 1 trillion US dollars, and will rise to 1.5 trillion US dollars by 2028. Since the deficit is expected to grow faster than the US economy, the proportion of US public debt to GDP will be 77% from the end of 2017. Rose to 96%.

Western Pacific Bank economist Elliot Clarke said that this is a disturbing financial outlook. Many of the economic assumptions made by CBO are relatively optimistic, which puts GDP growth at a downside risk, so the deficit has the risk of further growth.

Federal Reserve

ANZ Bank: The Fed’s March issue is expected to be more hawkish, or to drive the dollar to rebound. At 2:00 Beijing time on Thursday (April 12), the Fed will announce the minutes of the March monetary policy meeting. ANZ expects that the position of the minutes is likely to be more hawkish, or further support the dollar to continue its rebound.

In March, the US Federal Open Market Committee (FOMC) position was very hawkish. Only one member deviated from consensus expectations, that is, the interest rate expectation dot chart showed that interest rates would be raised once every quarter. The minutes are expected to provide more optimistic signals and more hawkish statements, which may eventually support the dollar to launch a new wave of gains.

Danske Bank: The Fed’s March summary will focus on whether to discuss FRA/OIS spreads.

Denmark's Danske Bank believes that the focus of the day will shift to the minutes of the Federal Reserve's March monetary policy meeting to be announced at 2:00 Beijing time on Thursday (April 12). The current risk is biased to the Fed to raise interest rates three times during the year. For the US dollar, attention should be paid to the US dollar. Does the FOMC discuss the broadening of the FRA/OIS spread (used to measure bank borrowing costs in the coming months) as this may be the first sign that the Fed is concerned about the liquidity of the US dollar.

Goldman Sachs: Increased the probability of a Fed rate hike in June to 85%.

Prospects for the Bank of Canada and the Reserve Bank of Australia

Royal Bank of Canada: Bank of Canada and the Reserve Bank of Australia policy outlook.

The Royal Bank of Canada wrote that Canada’s economy was not doing well in the first year, and GDP growth in the first quarter was lower than the Bank of Canada’s expectations for the second consecutive month. As the Canadian economy is in full capacity, wages and inflation continue to rise, and more trending growth should be welcomed. We still expect the Bank of Canada to still have room to raise interest rates in the second quarter, especially if the North American Free Trade Agreement negotiations are making positive progress.

The Australian economy continues to create jobs, but the recent slowdown in corporate recruitment is not enough to absorb the idle job market. Moderate wage growth may curb inflation; while global trade concerns have intensified and financial markets have tightened, the Reserve Bank of Australia will remain on the sidelines this year.

stock market

Morgan Stanley believes that Asian stock markets have lost support from economic data.

Morgan Stanley gave up the forecast of the Asian stock market's rise, thinking that the global economy is not as expected, and corporate profits are under pressure. This situation has led to an increase in the volatility of financial markets, thus inhibiting investors' investment sentiment.

BMO Technical Analyst: The S&P 500 index may rise to a minimum of 2,745.

Russ Visch, technical analyst at BMO Nesbitt Burns, said in the report that the next major trend in the stock market may be rising, not falling, the S&P 500 closed at 2656 on Tuesday; the minimum should bring the S&P 500 back to the downside The trend line is 2745 points; the reversal of the S&P 500's trend line at 2745 may mean resuming an uptrend and clearing the way for a record high of 2,872 points.

trade war

UBS: China and the United States have reached an agreement to avoid trade wars as high as 70%.

UBS’s strategists and analysts led by Deng Tishun wrote in the report that the probability of an agreement between China and the United States is 70%, and the collateral damage to the market is small. Negotiations may last for several months, and the chances of these frictions turning into long-term trade wars are 30%. It is expected that China's offshore stocks will achieve double-digit returns in 2018, as earnings growth is strong.

Investors with limited Chinese stock exposure positions can buy on dips, and those with large positions can consider selling short-term cover calls for specific stocks to take advantage of volatility. The three-month US dollar/renminbi forecast was revised down from 6.4 to 6.3 due to the overall weakening of the US dollar and China's macro background support.

Morgan Stanley Asia Pacific Co-CEO: It is expected that the Sino-US trade dispute will be resolved through negotiations. Wei Christian, co-CEO of Morgan Stanley Asia Pacific, said that Chinese President Xi Jinping’s speech on Tuesday was “reassuring”, indicating that the leaders of the two countries intend to resolve trade issues through negotiations.

Christianson said: "In my opinion, this is not a trade war." She said that to a certain extent this is a political statement, a war of words. "But we can't take it lightly." He said that China's focus is on opening up its own market and hoping to convey information that supports globalization. She also said that the "Shanghai Luntong" plan linking the mainland and London stock markets this year is "great".

Asian developing countries' GDP

Asian Development Bank: GDP of developing countries in Asia will increase by 6% in 2018, and 5.9% in 2019.

China's GDP is expected to grow by 6.6% in 2018 and by 6.4% in 2019. India's growth rate is expected to rise to 7.3% in FY18, with a growth rate of 7.6% in FY 2019.

ADB believes that most Asian economies are in a good position to cope with the challenges of trade tensions and capital outflows. However, private debt remains a hidden danger for some Asian economies, as private debt has risen significantly since the global financial crisis, and given its limited impact on output, it is not all of the extra debt being used for productive investment.

Foreign exchange

Dollar

Crédit Agricole: The risk side of the US dollar is mainly down, which is due to the trade situation. Manuel Oliveri, a currency strategist at Crédit Agricole, said Wednesday (April 11) that the US CPI did not affect the foreign exchange market. The dollar may still face downward pressure and there is no real upside risk.

Scotiabank: The dollar will not rebound sharply because of the minutes of the Fed meeting.

Shaun Osborne, chief currency strategist at Scotiabank, said that the minutes of the Fed meeting released on Wednesday did not support the dollar's sharp rebound; the real message is that “consensus still tends to increase interest rates gradually”; the dollar may rise slightly because there is news that Some Fed officials believe the outlook calls for a steeper interest rate path; Shaun Osborne still believes that long-term fundamentals suggest that the dollar will weaken in the medium to long term; the Fed's actions are close to being completely digested by the market, while the dollar is also facing a weak seasonal trend.

Australian dollar against the dollar

Commonwealth Bank of Australia: The Australian dollar is still expected to rise to $0.83 by the end of the year.

Elias Haddad, currency strategist at Commonwealth Bank of Australia, believes that the Australian dollar appreciation path may be "more moderate" than expected, given that the Reserve Bank of Australia does not seem to be eager to raise interest rates. The basic forecast for the Commonwealth Bank of Australia is that the Australian dollar will rise to the end of the year. To $0.83. The reason why the Australian dollar is expected to rise is that economic activity is stable, the US dollar exchange rate is on a downward trend, global economic growth is improving, and Australia's international balance of payments is in good shape.

Risks include: The Reserve Bank of Australia kept interest rates unchanged at 1.5% longer than expected; The Commonwealth Bank of Australia expects the RBA to raise interest rates to 1.75% in November; other risks include US-China trade tensions and accelerated Fed rate hikes .

UOB: The short-term goal of the Australian dollar against the US dollar is 0.7825.

UOB analysts said that the Australian dollar will continue to rise to 0.7825 against the US dollar in the coming weeks; we have held this view since last Thursday (April 5), and the short-term exchange rate has the possibility of testing the top of the 0.7630/0.7770 consolidation range. . After a few days of consolidation, the Australian dollar unexpectedly rose strongly, hitting 0.7768 overnight, and the exchange rate momentum improved significantly, indicating that the exchange rate still has room for further strong resistance to 0.7825.

However, the current volatility is still seen as a correctional rebound, 0.7825 may not be easily broken; 0.7795/00 has formed a strong resistance, and it is expected to curb the exchange rate in the short term. On the downside, only a break below 0.7695 will ease short-term upward pressure.

USD/JPY

Daiwa Securities: USD/JPY is trying to break through key technology positions.

Yukio Ishizuki, senior currency strategist at Daiwa Securities in Tokyo, said that the USDJPY is testing a breakthrough in key technology, as speculators who have been aggressively selling the exchange rate and causing it to fall to 104 are lifting these positions. Speculators have been actively buying yen, even in an environment that naturally weakens the yen exchange rate. For example, Japan and the United States spread the gap and Japan's trade surplus narrowed; so what we are seeing now is the reversal of this measure.

Japanese yen buying is purely driven by speculative motives, as supply and demand may now be conducive to selling the yen, including the demand for overseas assets by Japanese institutional investors. USD/JPY is testing a level of 107.17 below the lower limit of the Yiyun equilibrium map. As the speculators who oversold the USD/JPY are still lifting their short positions, there is still room for the exchange rate to rise; if this level is exceeded, The next target is the February 21 high of 107.90 and 108.

Barclays Research: USD/JPY is unlikely to make a difference in the second quarter. The Barclays study discussed the outlook for the USDJPY and believes that the current global risk sentiment and the overall performance of the US dollar still dominate the exchange rate. This week, due to the relatively light domestic events in Japan, the US dollar continued to believe that the US dollar’s ​​performance is stable and the US economy is accelerating. The second quarter will be trading near the current trading range.

Euro against the dollar

Credit Suisse: Short-term euros are hard to break the current range, and the upside will be limited to 1.2556/1.2615.

The Credit Suisse Technology Strategy Analysis team discussed the outlook for the euro against the US dollar and believes that the short-term is still in the near-term trading range, limited by 1.2556/1.2615, which is the year's high and the 61.8% Fibonacci since the May 2014 high. The retracement of the squad is unlikely to break easily; on the downside, the important support is at the March low of 1.2155. After the break, it may suggest a top-level formation and may continue to fall to the 1.2033 support level thereafter.

ING: The structure is bullish on the euro, and the second quarter is 1.25.

ING discussed the outlook for the euro against the dollar and maintained a structural bullish stance. The second, third and end targets were 1.25, 1.28 and 1.30 respectively; ECB President Draghi spoke in support of the euro, saying that despite the low inflation The global trade dispute has brought new threats, but the economic recovery in the euro zone remains solid.

Commerzbank: The euro is expected to face greater resistance at 1.2450/76.

Technical analysis of the German commercial bank believes that the euro against the dollar will face greater resistance at 1.2450/76. After failing to break below the 2017-2018 uptrend line of 1.2257, the exchange rate continued to rebound in the recent trading range. The current demand fell to the February low of 1.2155, confirming the short-term top construction, short-term upside is difficult to break through 1.2450/76; the intraday wave pattern points upward, but the rebound is difficult to break through the February high of 1.2556. Breaking through the 2008-2018 resistance line of 1.2622 will point to a 50% Fibonacci retracement of 1.3190 since 2008, but the odds are not expected.

UOB Bank: The euro is expected to rise further against the dollar at 1.2280. UOB analysts said that as long as the euro held the 1.2280 support against the dollar, there is still room for further upside in the short-term exchange rate.

24-hour outlook: We mentioned yesterday that the potential kinetic improvement of the euro will lead to the exchange rate test of 1.2350, but the probability of further rise to 1.2380 is lower; European Central Bank Management Committee Nowotny's speech pushed the euro to rise rapidly to reach the overnight high of 1.2377, the daily chart A strong close, indicating further upward pressure, but the indicators are overbought, if the exchange rate stabilizes above 1.2400 will be surprised; on the downside, 1.2305 will constitute strong support, small support is located at 1.2330.

In the next 1-3 weeks: the euro easily breaks through the 1.2350 resistance is surprising; the overnight strong gains make short-term pressures upward, but it is not expected to continue to rise above the top of March 1.2475; short-term 1.2425 is a strong resistance; in general, as long as Above 1.2280, the exchange rate is still supported.

New Zealand dollar against the US dollar

National Australia Bank: The New Zealand dollar is limited to the 0.7150/00-0.7400/50 range, and the medium-term outlook is unknown. The National Australia Bank discussed the outlook for the New Zealand dollar against the US dollar, pointing out that the exchange rate outlook is neutral and will be in the 0.7150/00-0.7400/50 range in the coming weeks. The medium-term kinetic energy is bearish, but there is a lack of incentives to confirm that the medium-term continuation will continue to fall; the monthly map Bollinger Band currently coincides with the volatility interval at 0.68/0.75, strengthening the range.

British pound against Australian dollar

Westpac Bank: The momentum of the pound against the Australian dollar is still on the upside. Westpac analyst Sean Callow said that the Brexit negotiations have progressed and the Bank of England is expected to raise interest rates again to boost the pound, while the US tariff policy suppressed the Australian dollar in March.

The Reserve Bank of Australia's interest rate hike is expected to continue to subside. The momentum will push the Australian dollar against the British pound to a short-term low after the Brexit. The British pound is in the 1.86-1.87 area. But speculators hold a lot of pounds long, and if they make a profit, if the Bank of England's resolution is announced, it will at least cause the pair to return to the 1.81-1.82 area in June.

GBP to USD

French agricultural credit: The pound sterling is approaching a multi-month high, but it has not yet reached the overbought level.

French agricultural credit discussed the prospect of the pound from the perspective of position level. Although the UK economic data is even more sluggish, the buying momentum of the pound has increased most of last week, suggesting that speculators still tend to buy on dips; even if the pound is approaching multiple months. High, but still not overbought, so the downward adjustment risk is limited, especially the Bank of England's May rate hike is expected to continue to support the exchange rate.

EUR/GBP

Danske Bank: The euro has a continued risk of falling against the pound. Sverre Holbek, senior analyst at Danske Bank, believes that the euro has a lower risk against the pound.

The euro fell below 0.87 against the pound yesterday, but it is still above this important support level and recorded a cross star; if it falls below 0.87, it will test the low end range of 0.8650. We generally believe that after a series of data released by the UK in the day, the risk of the currency pair may be down, but do not expect this to change the market's expectations for the Bank of England to raise interest rates in May. From a tactical point of view, we still prefer to sell the euro against the pound on rallies.

EUR/CHF

Nomura Securities: It is recommended to increase the short position of the Swiss franc. Nomura Securities proposed to increase the Swiss franc short position, even though the euro against the Swiss franc has risen to the highest level since the Swiss central bank canceled the EUR/CHF 1.20 lower limit. In addition, it is no longer recommended to short the pound against the Canadian dollar, on the contrary that investors should be more than 1.3539 to do more pounds against the Swiss franc.

The Swiss National Bank is very likely to remain inactive for quite some time, waiting for the European Central Bank to gradually normalize monetary policy and the Swiss franc's continued depreciation, after which it is possible to join the normalized monetary policy camp.

Rusal

JPMorgan Chase: Due to US sanctions, RUSAL will be removed from the JP Morgan Emerging Markets Corporate Bond Index from April 30.

(Editor: Wang Zhiqiang HF013)

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