Founder

Olivier Desbarres

Exacting. Excellent. Exceeding. Exemplary.

4X Global Research

4X Global Research was founded in 2017 to provide institutional and corporate clients with the substantive research, high-quality analysis and thoughtful insight on Emerging and G20 economies and financial markets they need to make informed and timely decisions and gain an edge in their investments.

FX & Rates

The Federal Reserve has in the past six weeks diligently stuck to its “patience until substantial further progress is seen” monetary policy mantra. Its “reward” has been range-bound US Treasury yields, a slowly depreciating Dollar and a metronomic rise in US equity indices, with all three financial markets exhibiting only modest volatility.Since 19th April the Dollar NEER has depreciated a further 0.6% to within striking distance of a 14-week low, in line with “our core scenario that the Dollar will indeed lose further ground”. We remain bearish the US Dollar, a theme we will explore in greater detail in forthcoming FIRMS reports.Fed Chairperson Powell would argue that keeping US Treasury yields in check has been a worthy achievement given the backdrop of President Biden’s ambitious fiscal stimulus plans and accelerating US economic growth and rising domestic and global inflation. A GDP-weighted measure of headline CPI-inflation in 32 major economies rose to 2.1% yoy in March from 1.4% yoy in February, the largest monthly increase since December 2009. But core CPI-inflation in developed economies rose only marginally in Q1 2021, with the rate of inflation in March of 1.2% yoy below its 10-year average of 1.5% yoy.While backward looking these data they may explain in part why developed central banks, with the exception of Bank of Canada, have so far felt justified in keeping their policy rates on hold and the modalities of their asset-purchase programs broadly unchanged. In the past month currencies in Emerging Europe, Africa and Latin America have been main beneficiaries of still reasonably low US yields, weakening Dollar, burgeoning global growth and robust risk appetite. The timing of this EM rebound has coincided with our forecasts.Non-Japan Asian currencies have lagged, which we attribute in part to portfolio outflows and NJA central banks keeping a close eye on a flat-lining Chinese Renminbi.This differentiated EM currency rally will extend near-term, in our view, but high-yielding EM currencies in particular remain vulnerable to any spikes in US and other developed market government bond yields and more generally market volatility.

The Federal Reserve has in the past six weeks diligently stuck to its “patience until substantial further progress is seen” monetary policy mantra. Its “reward” has been range-bound US Treasury yields, a slowly depreciating Dollar and a metronomic rise in US equity indices, with all three financial markets exhibiting only modest volatility.Since 19th April the Dollar NEER has depreciated a further 0.6% to within striking distance of a 14-week low, in line with “our core scenario that the Dollar will indeed lose further ground”. We remain bearish the US Dollar, a theme we will explore in greater detail in forthcoming FIRMS reports.Fed Chairperson Powell would argue that keeping US Treasury yields in check has been a worthy achievement given the backdrop of President Biden’s ambitious fiscal stimulus plans and accelerating US economic growth and rising domestic and global inflation. A GDP-weighted measure of headline CPI-inflation in 32 major economies rose to 2.1% yoy in March from 1.4% yoy in February, the largest monthly increase since December 2009. But core CPI-inflation in developed economies rose only marginally in Q1 2021, with the rate of inflation in March of 1.2% yoy below its 10-year average of 1.5% yoy.While backward looking these data they may explain in part why developed central banks, with the exception of Bank of Canada, have so far felt justified in keeping their policy rates on hold and the modalities of their asset-purchase programs broadly unchanged. In the past month currencies in Emerging Europe, Africa and Latin America have been main beneficiaries of still reasonably low US yields, weakening Dollar, burgeoning global growth and robust risk appetite. The timing of this EM rebound has coincided with our forecasts.Non-Japan Asian currencies have lagged, which we attribute in part to portfolio outflows and NJA central banks keeping a close eye on a flat-lining Chinese Renminbi.This differentiated EM currency rally will extend near-term, in our view, but high-yielding EM currencies in particular remain vulnerable to any spikes in US and other developed market government bond yields and more generally market volatility. 

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

Buy DXY 91 to 90.50 overshoot to a align with the SPX top of the rising wedge near 4,180 for a peak in risk. Late April is the ideal timeline for a USD low base to form as a rally platform for a risk off cycle in May/June.Expect some key lows for the USD in EM to pressure EM equities in coming months. USD in Asia bearish tactically into targeted lows to reverse positioning to long the USD.

Buy DXY 91 to 90.50 overshoot to a align with the SPX top of the rising wedge near 4,180 for a peak in risk. Late April is the ideal timeline for a USD low base to form as a rally platform for a risk off cycle in May/June.Expect some key lows for the USD in EM to pressure EM equities in coming months. USD in Asia bearish tactically into targeted lows to reverse positioning to long the USD.

Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Founder & Chief Market Strategist - SAV Markets

Cross Asset Strategy

The recent bounce in Gold has taken us to a sell zone at a time when yields are stabilising again. A refreshed weekly chart may be able to distinguish the 'wood from the trees' in what has sometimes been a noisy market

The recent bounce in Gold has taken us to a sell zone at a time when yields are stabilising again. A refreshed weekly chart may be able to distinguish the 'wood from the trees' in what has sometimes been a noisy market

The US Dollar Nominal Effective Exchange Rate (NEER) traded in a narrow range of 1.8% between late-2020 and early March, according to our estimates. The Dollar then embarked on a 3-4 week rally, driven by rising US Treasury yields, the stretched valuations of other major currencies and still tepid global economic activity. Since end-March the Dollar NEER has depreciated 1.8% to a 7-week low. Stronger US economic growth – fuelled in part by the government’s $1.9 trn coronavirus relief package – alongside lower US yields across the maturity spectrum and rising US and global equities have weighed on the “safe-haven” Dollar’s relative attractiveness. Global FX volatility has remained subdued and well below its 10-year average. However, the performance of major currencies has, unlike in November-December, been far from even. In particular, Non-Japan Asian currencies have underperformed which we attribute in part to NJA central banks’ more pro-active management of their currencies.This timeline, its drivers and the relative performance of the Dollar and major currencies, including in the emerging market space, have been in line with our expectations (see <a href="https://www.smartkarma.com/insights/forecast-review-usd-cny-em-global-growth" target="_blank" rel="noopener">Forecast review: USD, CNY, EM &amp; global growth</a>, 21st December 2020, Dollar – <a href="https://www.smartkarma.com/insights/dollar-diversification-rotation-and-valuations" target="_blank" rel="noopener">Diversification, rotation and valuations</a>, 18th January 2021, <a href="https://www.smartkarma.com/insights/dollar-s-recent-weakness-blip-not-new-trend" target="_blank" rel="noopener">Dollar’s recent weakness – Blip, not new trend</a>, 12th February 2021 and <a href="https://www.smartkarma.com/insights/us-and-uk-the-comeback-kids" target="_blank" rel="noopener">US and UK: The Comeback Kids</a>, 5th March 2021).Further US Dollar depreciation in weeks ahead, in our view, remains conditional on both:<ol style="list-style-type: lower-roman;">
<li>The ability of a dovish Federal Reserve and FOMC members to further jawbone lower or at the very least cap US Treasury yields; and </li>
<li>Global macro indicators continuing to point to a pick-up in economic growth. </li>
</ol>Our core scenario is that the Dollar will indeed lose further ground but that the performance of other major currencies will be conditioned by powerful, often inter-related domestic factors and thus remain far from uniform.

The US Dollar Nominal Effective Exchange Rate (NEER) traded in a narrow range of 1.8% between late-2020 and early March, according to our estimates. The Dollar then embarked on a 3-4 week rally, driven by rising US Treasury yields, the stretched valuations of other major currencies and still tepid global economic activity. Since end-March the Dollar NEER has depreciated 1.8% to a 7-week low. Stronger US economic growth – fuelled in part by the government’s $1.9 trn coronavirus relief package – alongside lower US yields across the maturity spectrum and rising US and global equities have weighed on the “safe-haven” Dollar’s relative attractiveness. Global FX volatility has remained subdued and well below its 10-year average. However, the performance of major currencies has, unlike in November-December, been far from even. In particular, Non-Japan Asian currencies have underperformed which we attribute in part to NJA central banks’ more pro-active management of their currencies.This timeline, its drivers and the relative performance of the Dollar and major currencies, including in the emerging market space, have been in line with our expectations (see Forecast review: USD, CNY, EM &amp; global growth, 21st December 2020, Dollar – Diversification, rotation and valuations, 18th January 2021, Dollar’s recent weakness – Blip, not new trend, 12th February 2021 and US and UK: The Comeback Kids, 5th March 2021).Further US Dollar depreciation in weeks ahead, in our view, remains conditional on both:
The ability of a dovish Federal Reserve and FOMC members to further jawbone lower or at the very least cap US Treasury yields; and 
Global macro indicators continuing to point to a pick-up in economic growth. 
Our core scenario is that the Dollar will indeed lose further ground but that the performance of other major currencies will be conditioned by powerful, often inter-related domestic factors and thus remain far from uniform.

As we see yields slip this week, especially over the past 24 hours, the question now is whether there is more to this move or is it already over?Technically we have clear levels and points of reference to watch.From a cross market perspective, there are more doubts than answers at this stage…

As we see yields slip this week, especially over the past 24 hours, the question now is whether there is more to this move or is it already over?Technically we have clear levels and points of reference to watch.From a cross market perspective, there are more doubts than answers at this stage…

United States

The euro is the official currency of the European Economic & Monetary Union.  The US dollar is the official currency of the United States of America.

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Something Has Got to Give

Treasury yields have been range-bound despite global backdrop of stronger growth and rising inflation. USD weaker, equities and (most) EM...

Olivier Desbarres

USD Buy Levels to Sync with Peak in Risk

Buy DXY 91 to 90.50 overshoot to a align with the SPX top of the rising wedge near 4,180 for a peak in risk. Late April is the ideal timeline for a...

Thomas Schroeder

The Sell Zone in Gold?

After a decent short term bounce on Gold we now see the sell zone that should be watched. A refreshed weekly chart may reveal how low we could go

Shyam Devani

Dollar and the Three Bears

in past 4 months Dollar has range-traded, rallied then weakened, driven by US yields, domestic and global economic activity and relative...

Olivier Desbarres

Make or Break for Bonds

Is the move down in yields the start of something or is it already over? The levels identified and highlighted in this note will help

Shyam Devani

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