This document contains the views and opinions of our Global Economic Research and Strategy Team (Claire Dissaux, Mattia Taboga and Meena Bassily) as of 19 April 2018 and does not necessarily represent the views and opinions of Millennium Global or any of its Portfolio Managers.
Millennium Global is pleased to share the Q2 2018 Macro and Currency Outlook Highlights document, which examines several themes including:
- A bearish bias on the broad USD index on the back of still synchronised global growth , widening twin deficits and steady tightening from the Fed, feeding the flattening yield curve.
- Upside risks to the Euro area’s growth outlook have now been removed and we see gains in EUR/USD being capped.
- Rising domestic and political risks for GBP are unlikely to be offset by rate differentials and a rate hike from the BoE in May.
- JPY is cheap in valuation terms and could potentially benefit from a negative twist in global risk appetite.
- NOK has the potential to benefit from higher oil prices and the likelihood of a first rate hike in Sep 18.
- Improving prospects for NAFTA negotiations should lead to a lower risk premium for MXN, while TRY stands out as vulnerable against a backdrop of too low real rates compared to wide external deficits.
- The risk of a trade war between the US and China could create spillovers for the other EM Asian economics such as Korea, Taiwan and Singapore.