Passionate financial Markets follower and psychologist - is what best describes Aurelija Augulyte. She is a dedicated macro strategist, engaged in tying the economic reality with the market trends, tracking sentiment, drivers and ultimately forming Nordea's short term views. Aurelija’s focus is FX markets, but her strength is ability to find signals across the asset classes, which a broad product knowledge helps to utilize. A native of Lithuania, Aurelija speaks Russian, Polish, English, Danish, some German, and understands the different cultures, which gives her an edge in the cross-region analysis.
Aurelija is a Chartered Financial Analyst (CFA) and a certified dealer (ACI). She holds a bachelor degree in economics from Vilnius University and a master's degree in Applied Economics and Finance from Copenhagen Business School. Aurelija has been with Nordea since 2007.
Next week´s key events USA Next week’s most important US data release is the Nov retail sales report. Nov retail sales (Thu) are expected to increase 0.5%, mainly driven by auto sales. The consensus is looking for a 0.2% rise …
Will the ECB cut the deposit rate? Would a negative deposit rate change the growth outlook? Will a deposit rate cut weaken the EUR? Will EONIA turn negative? What is the lower bound for the deposit rate? Does a negative deposit rate at the ECB force banks to lend?
The worst that could happen to EUR is ECB cutting deposit rates...the USD weakness to resume unless payrolls post 200k+.
The single key risk for the EURUSD remains US Treasury yields; this year correlation has flipped, so now the USD gains in line with higher US Treasury yields. It is sufficient to look at US Treasury yields because the spread to Bund yields has been directional – that is, they move mostly together, but US Treasury yields go up more when they do.
• Norway: We expect Norges Bank to cut rates by two times 25bp next summer. There will however not be any such signals at the upcoming MPC meeting in December. Still, we believe the recent weakening of the NOK is …
After a week of consolidation, the USD is ready to take another go. Which way?
Weaker NOK alongside rate cuts, SEK: It's all about weakness and the USD correction won’t last – flows support EUR. More on these stories in this edition of Global FX Strategy.
USD is raging after strong payrolls data...will Fed speakers cap the USD rally?
The ECB expectation adjustment has beaten the EUR down from overshooting mode, chance for a break?
In the short term, we expect the USD to gain ground. The market expectations of tapering have been postponed to March – and even later – which can be changed by a few better macro figures from the US. (Our economists still call for a January taper.) The weaker payrolls in September may still be revised as they used to in previous years. Various short-term indicator models suggest that the EURUSD has overshot.
One more squeeze up for EURUSD? More generalized EUR strength is a worry, especially if euro area inflation this week comes below 1.1%...
There is room for more weakness in USD. But it won't give up without fight. Change in risk sentiment could benefit.
As has been seen in US politics often in the past few years, Congress came together to raise the debt ceiling at the last minute. However, the damage has been done, political wrangling will continue, and the Fed is likely to delay its tapering plans. The US curve is set to flatten further, while the USD will likely see renewed pressure before long.
Find our take on the dollar reaction to an expected upcoming debt ceiling deal, alongside updated stories on GBP, SEK, NOK and market quant in this week's edition of Global FX Strategy.
US default (expectations) may benefit USD....but this time is different in many ways.
Here is an overview of our financial forecasts. Read the full report in the attachment or the headlines for a summary.
In spring the recovery was seen as the slowest in 100 years. Now, PMIs are the highest on record. In spring Governor Carney was the dove above doves. Now, he sees no need for more QE and is not afraid to hike rates at some point. The GBP has strengthening significantly as a consequence, but the most recent move higher in GBP/USD seems overdone. We maintain our longer-term GBP views: stronger vs the EUR and weaker vs the USD.
The USD has hit the first line of support - ripe for a bounce? The GBP most vulnerable.
This week, we explain why we think the EUR is overvalued! This alongside updated stories on AUD, NZD, CAD, SEK, NOK, volatility and market quant.
Political uncertainty is rising at a bad time when a few confidence indicators have started to show signs of improvement. New elections seem highly likely. Watch Wednesday's vote of confidence and Friday's vote to immediately strip Berlusconi from his Senatorial seat.
Potential turning points for EURUSD and GBPUSD? It ain't over until it's over. Politics ON.
This will likely be a consolidation week,with lots of central bank talk to introduce volatility. The USD will try to fight, but not run far against majors. Turning cautious on cyclicals/EMs.
Global Markets Tapering and FX – Scenarios with trading ideas JPY: Stronger near term EURSEK: Have EURSEK and rates really disconnected? CHF: SNB preview – Waiting for a weaker CHF Scandi Focus SEK: GDP revisions do not alter our view. …
A mini taper is consensus, softer forward guidance to bring USD lower. Still long GBP, EUR, JPY, AUD...against USD.
We have updated out financial forecasts. There are both changes to rates and FX.
Tapering still on the table, but NFPs question the scale and timing - doubts against the USD. Data from China could lift AUD. USDJPY retesting triangle break-out, EURGBP aims at 0.8400 support.
The panicky sell-off in Emerging Markets in August was triggered by the speculation about Fed tapering in September and disappointing growth performance in the EM economies. We think it was an overreaction and expect a correction within a few months.
Global Markets EURUSD: In light of a looming fiscal agenda USDSEK: Gamma on the rise Emerging markets FX: Time for a pause AUD and NZD: Weakness in Aussie and Kiwi is slightly overdone Scandi Focus SEK: Forget about rate …
The USD index broke up, but needs a 180k+ payrolls to accelerate. USDJPY ready to jump out of the triangle. A downward revision on inflation from ECB would beat EUR.
Another calm week ahead before the September kicks in, maybe range for this week, but ultimately lower USD, a chance for EMs.
Global Markets EURUSD: Jackson Hole Meeting GBP: Powder still left in the near term The race of the unemployment rates -Will US or UK win the unemployment race? And the long-term implications for the Cable. BRL: 4-year low Scandi Focus …
The European currencies have something to say: "we are simply the best".
Here is our new financial forecasts. We have revised our 3-months yield forecast in the US and the Euro-zone higher.
Here is an overview of our financial forecasts. Read the full report in the attachment or the bullets for a summary.
The 10Y US Treasury vs German government yield spread is at highest level since 2006, and yet the EURUSD stable...how come?
The USD has roared to new highs last week - well deserved, on unexpected ECB and BOE policy turns. But Fed's Bernanke this week also has a similar task...
Global Markets EUR/USD: Depression fairy Volatility: Scandi vols on the rise CNY & INR: Adjusting forecasts Scandi Focus SEK: The summer and the SEK NOK: Norges Bank Vs. NOK 2-0 Quant of the Week Fair Value Framework: The …
Some recovery in the risk sentiment over the past week… but seems feeble so far and on lower volumes. Stock markets are hovering at important resistance levels, gold prices and AUD hit new lows vs USD…in many ways seems overdone. Signs …
Here is a overview of our financial forecasts. We have made minor changes to the US rates and the commodities forecasts, and we summarize last week's FX forecast changes.
All the good things come to an end. Fed’s Bernanke left us with the impression that “this time is different”. And if there is anything the spike in US Treasury yields and USD last week prove, is that it got …
EURUSD has of late also been supported by higher peripheral bond yields, which attracts investors to EUR assets, hence supporting long EURUSD, – but is this correlation sustainable? History strongly suggests NO. This begs the question what will drive a …
While Fed is just considering tapering, private investors are exiting.
Fed and G8 officials will likely talk to stabilize the markets this week. Will we trust them? Baseline - a bit more USD weakness on retreating yields. USDJPY nears the psychological 92.50 where QQE was launched.
Emerging Markets currencies have weakened substantially in the past month, when the markets took on the risk-off mode. This is just what the EM central banks desire and have tried to push for. We expect this to remain the pattern for the near future.
USD may attempt to recover vs majors after last week's sell-off, but only temporarily. Asian and Chinese data is still a worry for Emerging Markets/commodity FX, even with central bank support now...
“Tapering” has become The Word recently around the Fed and the quantitative easing (QE). I suppose not everyone knows/remembers that there was QE before the Fed, and it was Japan to launch it first just after the dot-com bubble burst. More importantly, not only did Bank of …
The Emerging Market and commodity currencies (“carry” currencies) have depreciated against USD and EUR in May, in particular AUD and ZAR have been hit. We expect stabilisation in China’s data soon, and the Fed is not to end QE in …
It's all about USD (real) yields now, and a week full of events ahead. The balance of risks are for the USD downside. Even EMs can find some ground.
“Fragmentation” has been a key word when talking about the euro zone and ECB over the past few years. There are many ways to measure fragmentation, but it seems that too much emphasis in the media and commentary has been …
After the rather shaky week, we will probably consolidate this week ahead of the next week's key events - notably, US payrolls. WIth "risk off" concerns back, USDJPY further ownside as key short term risk.
With Fed appearing somewhat more inclined towards QE-tapering than previously signaled, we bring down our 3 month EURUSD forecast to 1.32. We also adjust our Brent Q2 forecast down to USD 105/bbl.
EUR gave up to the rallying USD...but this week's PMIs are a chance. Bernanke will deliver the final verdict for USD. Long GBPUSD, upside risks to AUDUSD and downside to USDJPY.
QE-exit fears lifted the USD yet again. Are we putting the cart ahead of the horse here? Soft US data
A lean data week ahead. With soft FOMC and ECB messages last week, will other central banks follow suit?
A central ban week, full of important data from the US side. The latter showing weakness should keep USD under pressure.
Growth trumps everything. European PMIs this week is a "fingers crossed". More upside for EURUSD, GBPUSD, USDJPY.
We have made a number of adjustments to our financial forecasts including US rates, EUR/USD, GBP, CHF, JPY and base metals. The big story is unchanged!
The weak US data revived the hopes of QE continuation, putting pressue on the USD. IMF gives green light to IMF weakening - chase the carry where it's still left!
Risk appetite in general has been surprisingly resilient to adverse events in the past few months.
Bank of Japan’s new governor, Haruhiko Kuroda, was not afraid of introducing bold monetary policy measures at his first policy meeting.
A new quarter starts with broad USD weakness. EUR is a special case...so far.
Here are the usual financial forecast slides with our new financial forecasts published this this morning in Economic Outlook. We have changed our forecast for the Fed, the BoE, the SNB, Riksbanken, Euro rates, USD rates, EUR/USD, JPY, GBP, SEK, NOK, oil and the base metals.
A EUR 10bn bailout for Cyprus was agreed on Saturday. Today, the Cypriot parliament will have to pass the most controversial part of the bailout. In our view, the bailout does not change the overall picture for the Euro area here and now even if the final bailout terms include a haircut on deposits that was supposed to be insured. However, the current deal clearly increases the longer-term risks for the Euro area.
Cyprus - be cautious, but don't panic. It's not the first "surprise" from the EMU leadership, and probably not the last.
History rhymes, but doesn't repeat. Is USD king again? Not so fast.
For the first time the EM FX Monocle includes all the CEE and Asians economies that Nordea covers. The headlines for March are: CNY: In line with our expectation, the Chinese yuan has been volatile in the past three months. In general, …
The central bank week (11), expect a lot of talk, no changes. The GBP downside may be done for now, if risk sentiment improves. If not, commodity currencies, especially CAD, will come under pressure...
The one thing that seems clear after the Italian election is that nothing is clear at all and uncertainty will linger on. As Bersani put it: Italy is in "a very delicate situation."
Where things almost couldn't get worse, it did for GBP. Only "risk on" striking back and dovish Bernanke can save the day.
Risk sentiment has continued to mostly thrive lately. Improving economic data and continued easy monetary policy should still to provide support, but an increasing amount of event risk and uncertainty in the near future should lead to temporary profit taking and a correction lower in equity prices.
Big chance for EURUSD to rebound above 1.3300 as the European numbers confirm EMU recovery this week...
This is a regular monthly update of our financial forecasts. See the summary below or the full report via the link. Markets have settled a bit since our 29 Jan update (Markets getting too far ahead of economies). Still, we …
Lots of talk this week, less data and Asian holiday with Brazilian Carnival...room for a pause?
ECB's Draghi is on staget this week, and the chances are he is not going to verbally talk the EUR down... just yet.
De finansielle markeder vil være præget af risikovillighed i den nærmeste fremtid. Men som følge af manglen på fundamentale forbedringer venter vi en korrektion i løbet af foråret.
Risk-on is likely to dominate in the very near-term but given the lack of fundamental improvements we expect to see a correction sometime during the spring.
Moderation is virtue. Even when you are in the currency war.
We have only made minor changes to the financial forecasts this time: We have lifted our mid-year target for the EUR/USD to 1.25, made minor changes to the GBP forecast, lowered our 3M EUR/SEK forecast to 8.60 and we have postponed the first hike from Norges Bank to March 2014 and only expect two hikes in 2014.
Fed talk is one of this week's highlights - will they get the USD sink more?...
ECB will not break the zero bound, and US may disappoint near term, with no end to QE - renewing pressure for USD.