Here's a look at the main drivers in Developed Markets this week.

Here's a look at the main drivers in Emerging Markets this week.

Here's a look at the main drivers in Developed Markets this week.

Here's a look at the main drivers in Emerging Markets this week.

Here's a look at the main drivers in Developed Markets this week.

Here's a look at the main drivers in Emerging Markets this week.

Here's a look at the main drivers in Developed Markets this week.

Here's a look at the main drivers in Emerging Markets this week.

Here's a look at the main drivers in Developed Markets this week.

Here's a look at the main drivers in Emerging Markets this week.

Our Currency Strategy experts offer their predictions for currency performances for both Major and Emerging Markets.

High food and energy prices continue to squeeze households globally. Aggressive monetary policy responses and shrinking real incomes have increased global recession risks. Indeed, more and more signs of recession are piling up.

Our Currency Strategists set out what the geopolitical and macro-economic landscape means for major and emerging markets in the third quarter

For much of the first half of this year, high interest rates and rising commodity prices helped these currencies outperform their emerging market peers. However, broad-based dollar strength has slowly but surely eaten away at those EM FX gains and this is likely to continue as the Fed remains on its aggressive tightening path.

Fed speakers continue spreading the hawkish message; PPI data also came in on the soft side; preliminary August University of Michigan consumer sentiment will be today’s data highlight; monthly U.K. data dump began; eurozone June IP was reported; Sweden reported July CPI; Taiwan revised Q2 GDP growth slightly lower; India reports July CPI and June IP

Fed officials continued their communication push; Fed tightening expectations should move higher; the July jobs report is the main event; Canada also reports July jobs data; several eurozone countries reported June IP; BOE hiked rates 50 bp to 1.75%, as expected; updated forecasts were grim; Czech Republic delivered a dovish surprise and kept rates steady at 7.0%; Japan reported firm June labor cash earnings and household spending; RBA released its Statement on Monetary Policy; India hiked rates 50 bp to 5.40% vs. 35 bp expected

We think Fed officials will push back against the market’s dovish take on its decision; the U.S. rates market continues to price in gloom and doom; ISM reports July manufacturing PMI; eurozone final July manufacturing PMI readings were reported; Germany continues to weaken; Caixin reported soft China July manufacturing PMI; Hong Kong reported weak Q2 GDP data

The two-day FOMC ended with a 75 bp hike to 2.50%; market expectations for Fed tightening are diverging; Powell was suitably hawkish during his press conference; and reiterated the Fed’s laser focus on inflation; we get our first look at Q2 GDP; it looks like some fiscal stimulus is coming in the U.S. after all; eurozone confidence continues to plunge in July; ECB officials are starting to acknowledge recession risks; July eurozone CPI readings will start to roll out; BOJ Deputy Governor Amamiya sees wage gains picking up next year; Australia reported soft June retail sales

It’s all about the ECB today; regional Fed manufacturing surveys for July will continuing rolling out; the ECB is widely expected to hike rates 25 bp; Italian politics have entered a dangerous new phase; the U.K. political outlook has gotten some clarity but the next Tory leader will inherit a terrible situation; South Africa is expected to hike rates 50 bp to 5.25%; Turkey kept rates steady at 14.0%, as expected; the two-day BOJ meeting ended with a dovish hold; Indonesia kept rates steady at 3.5%, as expected

Fed Chair Powell made some rare comments about the dollar; Chicago PMI will be today’s highlight; May core PCE will be closely watched; Colombia is expected to hike rates 150 bp to 7.5%; BOE Governor Bailey did sterling no favors; the Riksbank hiked rates 50 bp to 0.75%, as expected; Japan reported weak May IP and housing starts data; China reported strong official June PMI readings

U.S. yields remain low as recession fears rise; the U.S. yield curve is flattening but nowhere near inverting; Fed Chair Powell broke no new ground in his testimony before the House; Mexico hiked rates 75 bp to 7.75%, as expected; June German IFO business climate came in soft; U.K. reported soft May retail sales; U.K. politics are heating up; Japan reported May national CPI readings

U.S. yields are lower as risk off sentiment takes hold; April U.S. PPI data now takes center stage; Fed officials remain hawkish; the heavy slate of UST issuance concludes; both Mexico and Peru are expected to hike rates 50 bp; more ECB officials are on board with July liftoff; yet ECB tightening expectations remain subdued; U.K. monthly data dump was weaker than expected

U.S. rates have resumed their move higher; Fed officials remain hawkish; the Fed’s pivot to limiting demand is noteworthy; retail sales data are worth discussing; despite the holiday, some U.S. data will be reported; ECB delivered a dovish surprise

U.S. rates continue to move higher; Fed officials are likely to remain hawkish; France held its presidential election Sunday; U.K. began its monthly data dump on a soft note

Hawkish Fed comments continue to roil the rates markets; Fed tightening expectations remain heightened; U.S. yields continue moving in the dollar’s favor; the 2- to 10-year curve is no longer inverted; FOMC minutes will be released; as we warned yesterday, default risk has risen for Russia

This is a very quiet week for the U.S. in terms of data; U.S. yields have resumed moving in the dollar’s favor; another portion of the U.S. yield curve has inverted; Colombia central bank minutes will be released; ECB tightening expectations remain heightened after last week’s CPI shocker

Fed Chair Powell is the latest Fed official to look through the Ukraine crisis; we believe the Fed hikes 25 bp at the March 15-16 FOMC; ISM services PMI will be the data highlight; the Fed released its Beige Book report for the March 15-16 FOMC meeting; BOC hiked rates 25 bp to 0.50%, as expected; MSCI and FTSE Russell are both cutting Russia from their major equity indexes; Moody’s and Fitch both cut their sovereign rating for Russia two full steps; eurozone reported January PPI

The Fed continues to tilt more hawkish; U.S. rates market continues to adjust to the new Fed messaging; the week starts off quietly ahead of key inflation and retail sales data later this week; Brexit tensions are back

The dollar is slightly weaker on the day, but moves have been modest ahead of the U.S. holiday. The biggest headline came from Germany, with Olaf Scholz is set to become the next German Chancellor. Also, the RBNZ continued its fight against inflation overnight and raised interest rates by 25bps while signaling there is more to come.

October retail sales will be the data highlight; reports suggest President Biden has made his choice for Fed Chair; regional Fed manufacturing surveys for November have started rolling out; BOC Governor Macklem is sounding more hawkish; U.K. reported solid labor market data

The U.S. Treasury will sell $56 bln of 3-year notes today; U.S. rates have fallen since the FOMC decision; Chile reported higher than expected October CPI; the ECB debate about inflation continues to rage; markets are still digesting last week’s shock decision from the Bank of England

The FOMC is expected to announced tapering when its two-day meeting ends this afternoon; ADP private sector jobs will be the data highlight; ISM services PMI for October will also be reported; ECB President Lagarde is pushing back harder against market tightening expectations

Democrats may be nearing a compromise that could unlock trillions in fiscal stimulus; regional Fed manufacturing surveys for October will continue to roll out; Brazil reports mid-October IPCA inflation; U.K. Chancellor Sunak will reportedly unfreeze public sector salaries next April; BOE tightening expectations are getting trimmed;

U.S. rates continue to rise; Treasury has a heavy auction schedule this week; Fed speakers are plentiful; the House is scheduled to vote on the short-term extension of the debt ceiling today

Here's a look at the main drivers in Developed Markets this week.

The hawkish wave continues to sweep more EM central banks, while isolating the remaining dovish few. In this report we elaborate on the recent changes in Poland, Colombia, Brazil, South Africa and South Korea.

The Fed delivered a hawkish hold, as we expected; we think if job growth improves to around 500k this month, the Fed will pull the trigger on tapering; Powell said that gradual tapering is likely to conclude around mid-2022; there was a hawkish shift in the Dot Plots; Fed regional manufacturing surveys will continue to roll out; Brazil hiked rates by 100 bp to 6.25%, as we expected; Mexico reports mid-September CPI

Here's a look at the main drivers in Emerging Markets this week.

Six major central banks meet next week. Their respective policy stances should underpin our strong dollar call as monetary policy divergences should continue.

August retail sales data are worth discussing; University of Michigan consumer confidence ties into this question about consumption; regional Fed manufacturing surveys for September are starting off strong; ECB denied hawkish comments attributed to Chief Economist Lane; new forecasts from last week’s ECB meeting are not consistent with the FT story

After the post-jobs report sell-off, the dollar has come roaring back; due to the media embargo ahead of the September 21-22 FOMC meeting, there will be no Fed speakers this week; the only U.S. data today is the August budget statement

Now that the dust is settling after Brazil’s pro-government demonstrations, a clearer picture starts to emerge; it doesn’t look good to our eyes, but we may have reached a local maximum in tensions.

The Fed Beige Book report painted a fairly upbeat picture for the September 21-22 FOMC meeting; speakers this week suggest the Fed is looking through the August jobs miss; July JOLTS job opening are worth discussing; weekly claims data should show continued improvement in the labor market; BOC delivered a dovish hold, as expected; Peru is expected to hike rates 25 bp to 0.75%

July JOLTS job opening will be reported; Fed releases its Beige Book report for the September 21-22 FOMC meeting; Fed speakers this week should reveal how the Fed is viewing the August jobs miss; BOC is expected to keep policy steady; yesterday’s large pro-government protests across Brazil were mostly peaceful

Here's a look at the main drivers in Developed Markets this week.

Here's a look at the main drivers in Emerging Markets this week.

• Ethereum broke violently higher with multiple drivers still looking supportive; Crude prices stabilized this morning after a 2% drop yesterday on news that OPEC plans to boost crude production; Brazil's Q2 growth figures disappointed, but inflation remains the focus for now; Moody's cut Peru's credit rating by one notch; Eurozone PPI surprised on the upside, but the doves are firmly in control

Here's a look at the main drivers in Developed Markets this week.

Here's a look at the main drivers in Developed Markets this week.

Here's a look at the main drivers in Emerging Markets this week.

The same themes and price action direction prevailed overnight: delta-virus triggered selloff continues across assets combined with China’s crackdown against the tech sector. The Australian and New Zeeland dollars are underperforming, hit by increasing concerns about infections and declining commodity prices.

July retail sales data are worth discussing; the U.S. economy should continue to post strong growth in Q3; FOMC minutes will be released; Canada reports July C

Markets are starting the week with a modest risk-off tone; regional Fed manufacturing surveys for August will start rolling out.

Here's a look at the main drivers in Developed Markets this week.

U.S. 10-year real yields fell to a new record low of -1.14%; two-day FOMC meeting begins today and ends with a decision tomorrow; market expectations for Fed policy are worth mentioning; Fed manufacturing surveys for July will continue to roll out

Here's a look at the main drivers in Developed Markets this week.

Here's a look at the main drivers in Emerging Markets this week.

The dollar is ending a good week on a solid note. DXY is trading just below 93 and is up two straight days and six of the past seven. Further gains are expected and it should eventually test the March 31 high near 93.437. The euro remains heavy after the ECB decision (see below) and the clean break below $1.18 sets up a test of the March 31 low near $1.1705. Sterling is having trouble breaking back above $1.38 as economic uncertainty picks up.

The dollar remains firm as the new week begins in risk off mode. DXY is up for the third straight day and is trading at the highest level since April 5 near 93. Further gains are expected as it moves toward a test of the March 31 high near 93.437. The euro remains heavy ahead of the ECB decision Thursday and the break below $1.18 sets up a test of the March 31 low near $1.1705. Sterling is also trading heavy as the government’s pandemic response comes under renewed scrutiny (see below). Cable is about to test the April 12 low near $1.3670 and further losses are likely. USD/JPY remains under pressure as risk off sentiment continues to take hold, though near-term support is seen around the July 8 low just above 109.50.

Here's a look at the main drivers in Developed Markets this week.

Here's a look at the main drivers in Emerging Markets this week.

Markets are still on board with Fed Powell’s reassuring message on inflation. The BoK kept rates unchanged while also tapering its bond purchases; Chile’s central bank joined Brazil and Mexico in their tightening cycle, while Turkey and Korea left rates unchanged, as expected. Crude continues its downward slide after U.S. supply data and signs that a supply deal on OPEC+ might be at hand

U.S. inflation readings will come into focus; we believe that the continued low rate environment will give the Fed more confidence to taper; U.S. Treasury issuance continues

U.S. yields and the dollar remain subdued; we are agreement with Bullard and Kaplan's comments yesterday and look for tapering by end-2021; core PCE for May will be reported; President Biden announced a tentative infrastructure deal with a group of ten centrist Senators from both parties; Mexico took the plunge into the hawkish camp with a surprise 25 bp rate hike yesterday to 4.25%; Brazil quarterly inflation report reinforced the trajectory of hikes from the statement

Since the Fed’s hawkish hold last week, inflation expectations have fallen dramatically; Fed manufacturing surveys for June will continue to roll out; weekly jobless claims data will be reported; we get another revision to Q1 GDP; Mexico is expected to keep rates steady at 4.0%; Chile central bank minutes were on the hawkish side, confirming a hike is coming in the next few meetings

The two-day FOMC meeting starts tomorrow and wraps up Wednesday afternoon. We expect a hawkish hold stemming from a shift in the Dot Plots, upgraded economic forecasts, and potential tapering talk.

May jobs data will be the highlight; ISM services PMI surprised to the upside; weekly jobless claims data are worth discussing; Chair Powell is the only Fed speaker today; Canada also reports May jobs data; Chilean assets were hit yesterday by a potential bill allowing investors to fully withdraw their pension savings

Markets have to start pricing in a slightly more hawkish Fed going forward; stronger U.S. data ahead should feed into further tapering talk at the June 15-16 FOMC meeting; Mexico reports mid-May CPI; the prospect of left turn in Brazil’s politics is rising

Here's a look at the main drivers in Developed Markets this week.

Here's a look at the main drivers in Emerging Markets this week.

With Fed officials remaining dovish as data paint a mixed picture for the U.S., markets are taking the dollar lower; Kaplan speaks today; Fed manufacturing surveys for May have started to roll out; Chilean assets have come under heavy pressure with the strong performance of far-left parties in the Constitutional Assembly elections

The dollar is giving up some of its recent gains as U.S. rates fall. DXY is down after two straight up days and is trading soft after being unable to break above 91.

U.S. inflation data come into focus; we think that risks to US yields lie to the upside; it’s worth taking a look at how U.S. core and headline inflation have behaved historically to supply shocks; the U.S. labor market remains in flux; more states are rejecting the enhanced unemployment benefits; U.S. Treasury issuance continues with a $41 bln sale of 10-year notes

The markets are still digesting the much weaker than expected jobs report from Friday; the debate between markets and the Fed has tilted more towards the latter; today is a quiet day in the U.S. before the upcoming flood of UST issuance and U.S. data

It’s clear from the strong U.S. recovery and falling virus numbers that the Fed will have to continue unwinding its emergency measures. The Bank of Canada and the Bank of England have already stated adjusting their stance without causing much disruption, but it’s the Fed that really matters.

The outlook for major Latin American markets continues to deteriorate, despite the favourable commodity cycle and relatively higher rates to support local currencies. Local politics and unfavourable pandemic outcomes are still our main reasons for concern, but external factors – strong dollar and higher U.S. yield – also create additional headwinds.

The U.S. economy continues to sizzle; therein lies the crux of our strong dollar outlook; April ISM manufacturing PMI is the data highlight

Here's a look at the main drivers in Emerging Markets this week.

The two-day FOMC meeting ends with a decision this afternoon; we will be putting out a lengthy piece this week about the Fed’s likely roadmap for tapering; U.S. yields are rising ahead of the decision

The latest Bloomberg survey shows growing expectations of Fed tapering in Q4; yields are picking a bit ahead of the two-day FOMC meeting that begins tomorrow and ends with a decision Wednesday afternoon; Fed manufacturing surveys for April will continue to roll out

Here's a look at the main drivers in Developed Markets this week.

Bitcoin saw a roughly 10% flash crash over the weekend; US Treasury yields continue to tumble; the Trudeau government releases its 2021 budget