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.

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.

In 2023’s first FX quarterly, strategists examine the Fed’s pivot and China’s reopening. Here is a synopsis of what is included in this quarter’s outlook.

The two-day FOMC meeting starts today and wraps up tomorrow afternoon. We expect a 25 bp hike and a very hawkish tone from the Fed. We also conduct a survey of past Fed policy cycles and conclude that an H2 easing cycle is very unlikely. With risks to U.S. rates weighted to the upside, the dollar is likely to benefit from any bond market repricing of Fed policy.

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.

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.

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.

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.

The U.S. economy remains on firm footing; U.S. yields continue to rise; strange things are happening to the U.S. curve; August ISM services PMI came in strong; the Fed releases its Beige Book report; BOC is expected to hike rates 75 bp to 3.25%; Chile delivered a hawkish surprise with a 100 bp hike to 10.75% vs. 75 bp expected; reports suggest the U.K. is stepping back from a Brexit confrontation with the EU; BOE officials testify to Parliament’s Treasury Committee; Germany reported July IP; Poland is expected to hike rates 25 bp to 6.75%; Japan officials are getting more concerned about the weak yen but there’s really not much that can be done as long as the BOJ maintains its ultra-dovish stance; Australia reported firm Q2 GDP data; China reported soft August trade data

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.

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.

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

Markets are still digesting yesterday’s CPI data; July PPI will be reported today; Fed tightening expectations continue to adjust; Fed speakers continue spreading a very hawkish message; the heavy slate of Treasury issuance this week concludes; Mexico is expected to hike rates 75 bp to 8.50%; Peru is expected to hike rates 50 bp to 6.50%; German Chancellor Scholz promised more relief for its citizens; PBOC has pivoted and further easing now seems unlikely

Fed speakers will continue spreading the hawkish message; July CPI will be the highlight; the heavy slate of Treasury issuance this week continues; U.K. energy outlook continues to deteriorate; despite the gloomy macro outlook, the BOE is set to continue tightening as inflation spirals ever higher; Norway reported July CPI; Japan reported July PPI; China reported July CPI and PPI; Thailand hiked rates 25 bp to 0.75%, as expected

The lack of follow-through for the dollar is disappointing; the next big Fed event will be its Jackson Hole Economic Symposium; Fed tightening expectations still need to adjust; Mexico reports July CPI; Brazil central bank minutes will be released; BOE Deputy Governor Ramsden said interest rates will have to rise further to help limit inflation; Hungary reported July CPI; Japan reported July machine tool orders

Markets are still digesting last week’s blockbuster jobs report; Fed tightening expectations continue to adjust; higher U.S. yields continue to support the dollar; U.K. households are facing even greater energy bills; despite the gloomy outlook, the BOE is set to continue tightening as inflation spirals ever higher; Czech central bank Governor Michl signaled the end of the tightening cycle, at least for now; Japan reported June current account data; China reported July trade and foreign reserves data

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.

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

Fed officials continue to push back against the perceived pivot; U.S. yields have surged as a result; ISM reported firm services PMI readings for July; Brazil hiked rates 50 bp to 13.75%, as expected; Germany reported weak June factory orders; ECB tightening expectations remain depressed; BOE is expected to hike rates 50 bp to 1.75%; Czech Republic is expected to hike rates 25 bp to 7.25%; Australia reported firm June trade data

As we expected, Fed officials are pushing back hard against the pivot theme; ISM July services PMI reading is the main event; Brazil is expected to hike rates 50 bp to 13.75%; data suggest the ECB has already activated its first line of defense against fragmentation; final eurozone and U.K. services and composite PMIs were reported; Turkey reported July CPI; Japan reported weak final July services and composite PMIs; New Zealand reported mixed Q2 jobs data; Caixin reported final China July services and composite PMI

Fed speakers will be closely scrutinized this week; inflation expectations have risen after the perceived Fed pivot; July ISM manufacturing PMI was solid; German electricity prices are setting new record highs; ECB tightening expectations remain depressed; regional tensions remain high as U.S. House Speaker Pelosi visits Taiwan; reports suggest Japan will propose a record hike in the minimum wage; RBA hiked rates 50 bp to 1.85%, as expected; tightening expectations are adjusting accordingly after the pivot

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

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.

We got our first look at Q2 GDP and it wasn’t pretty; the GDP data means absolutely nothing with regards to Fed policy; June core PCE data will be important; July Chicago PMI will also be closely watched; July eurozone CPI readings came in very hot; Q2 eurozone GDP data came in stronger than expected; July Tokyo CPI was reported; BOJ board members remain worried about downside risks; given the long-standing monetary policy divergence, we can only explain the recent yen strength as a positioning washout; China reports official July PMI readings Saturday local time

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

The Fed is widely expected to hike rates 75 bp to 2.50%; the press conference will be key; we think markets are setting themselves up for disappointment; the U.S. rates market continues to price in doom and gloom ahead of the FOMC decision; reports suggest Russia is likely to continue limiting natural gas shipments to Europe; markets are still repricing ECB tightening; German GfK consumer confidence was reported for August; the U.K. race for Tory leadership is sharpening up; Australia reported mixed Q2 CPI data

The two-day FOMC starts today and the Fed is widely expected to hike rates 75 bp to 2.50%; June Chicago Fed NAI is concerning; Brazil reports mid-July IPCA inflation; Russia announced plans to cut gas flow through the Nord Stream pipeline; the eurozone was already weakening and now the threat of gas shortages has risen dramatically; Hungary is expected to hike the base rate 100 bp to 10.75%; Japan’s Cabinet Office raised its monthly economic assessment in for the first time in three months; the RBNZ is reviewing its monetary policy response to the pandemic

U.S. rates are inching higher but continue to price in doom and gloom ahead of the FOMC meeting that begins tomorrow; June Chicago Fed NAI will be watched closely for further signs of recession; regional Fed manufacturing surveys for July will continue rolling out; ECB officials continue to send mixed messages; Germany remains the weak link in the eurozone; U.K. CBI released the results of its July industrial trends survey; new BOJ board member Takata said the economy still needs policy support; Singapore reported June CPI

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 U.S. rates market continues to price in doom and gloom; regional Fed manufacturing surveys for July have been mixed; Mexico reports mid-July CPI; the ECB delivered a hawkish surprise; it also announced the creation of the so-called Transmission Protection Instrument (TPI); market sentiment waned as Madame Lagarde conducted her press conference; Italian political uncertainty has risen; preliminary eurozone July PMI readings came in weak; U.K. data came in slightly firmer than expected; Russia delivered a dovish surprise; South Africa delivered a hawkish surprise; Japan reported June national CPI data; Japan and Australia reported weak preliminary July PMI readings

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

The slope of the U.S. yield curve is getting more concerning; Canada highlight will be June CPI data; reports suggest the ECB may consider a 50 bp hike tomorrow; other reports suggest the ECB is struggling to reach a compromise on its new anti-crisis tool; we see four possible outcomes tomorrow; Italian politics remain in flux ahead of a planned confidence vote today; the U.K. political outlook continues to solidify; the two-day BOJ meeting began today

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.

U.S. yields remain depressed on recession fears; the U.S. yield curve is flattening but nowhere near inverting; ISM manufacturing PMI will be today’s data highlight; June eurozone CPI came in hot; yet ECB tightening expectations have softened; Japan reported June Tokyo CPI; Q2 Tankan survey was mixed; the Antipodean currencies remain under pressure; Caixin reported its June manufacturing PMI

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

Fed officials remains hawkish; regional Fed manufacturing surveys for June were uniformly weak; reports suggest the internal debate about the ECB crisis tool continues; June eurozone CPI readings take center stage; Hungary delivered a hawkish surprise; Japan reported May retail sales and June consumer confidence; Australia reported strong May retail sales

Fed tightening expectations have steadied but remain off the recent highs; regional Fed manufacturing surveys for June will wrap up; ECB President Lagarde affirmed plans to hike rates July 20; Brexit tensions are picking up; Hungary is expected to hike the base rate 50 bp to 6.40%; China cut the required quarantine times for international arrivals; PBOC Governor Yi pledged to maintain stimulus

Fed tightening expectations have steadied but remain off the recent highs; most ECB speakers this week are centered around the ECB forum that begins tonight in Sintra; while the ECB has a single mandate of price stability, it has an unofficial second mandate of fighting so-called fragmentation; Brexit remains in the headlines; the summary of discussions from the June 16-17 BOJ meeting suggests there is no rush to remove accommodation

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.

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

Fed Chair Powell finally acknowledged recession risks are building; Fed expectations are pretty much unchanged after Powell; yet U.S. yields are falling again as risk-off impulses build; Mexico is expected to hike rates 75 bp to 7.75%; eurozone reported weak preliminary June PMI readings; ECB tightening expectations have eased; Norway hiked rates 50 bp to 1.25%; Turkey kept rates steady at 14.0%, as expected; former head of FX policy at Japan’s Finance Ministry Takehiko Nakao said markets shouldn’t rule out unilateral intervention

The recovery in U.S. yields has been halted by the return of risk-off impulses; Fed tightening expectations have fallen a bit; Powell delivers his semi-annual testimony before the Senate; Canada reports May CPI data; the ECB seems to be following a policy of strategic ambiguity regarding its planned crisis tool; Italy is back in the headlines due to rising political risks; U.K. reported May CPI data; South Africa reported May CPI; Czech National Bank is expected to hike rates 100 bp to 6.75%; the BOJ minutes are worth discussing;

With recession fears rising, May Chicago Fed NAI takes center stage; housing data will remain in focus as weakness in that sector persists; Canada reports April retail sales; Brazil COPOM minutes will be released; ECB President Lagarde affirmed liftoff next month; Chief Economist Pill said the BOE is prepared to sacrifice growth in order to bring down inflation; RBA released the findings of its review of YCC; Korea reported trade data for the first 20 days of June

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.

U.S. yields are stabilizing; Fed tightening expectations remain elevated; the euro has recovered on reports that the ECB anti-crisis tool is starting to take shape; BOE Chief Economist Pill identified some triggers that would require more forceful action; BOJ kept all policy settings unchanged, as expected; stresses in the JGB market are rising

The Fed hiked rates 75 bp, as expected; Fed tightening expectations have picked up significantly; U.S. yields have recovered; BOE hiked rates 25 bp to 1.25%, as expected; the ECB emergency meeting yielded nothing but disappointment; SNB surprised markets with a 50 bp hike to -0.25% and signaled a shift in its FX intervention policy; BOJ began its two-day meeting today and is expected to keep all policy settings unchanged when it ends tomorrow

The two-day FOMC ends today with a rate hike; new macro forecasts and Dot Plots will be released; we also note that QT announced at the May 3-4 FOMC meeting starts today; May retail sales will be reported ahead of the FOMC decision; Brazil COPOM is expected to hike rates 50 bp to 13.25%; the euro is higher after the ECB announced an emergency meeting today in response to growing concerns about fragmentation; we are shocked that the ECB wasn’t better prepared for the fallout

U.S. yields continue to rise; the rise in short-end U.S. yields reflects significantly higher Fed tightening expectations; portions of the U.S. yield curve have inverted again; monthly U.K. data dump started out very weak; Brexit remains in the headlines; we think the rising risks of fragmentation are a major factor behind subsequent euro weakness; BOJ bought JGBs to defend its Yield Curve Control target; China is reimposing some COVID restrictions as virus numbers rise

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.

U.S. yields continue to rise; the rise in short-end U.S. yields reflects heightened Fed tightening expectations; May CPI data will be the main event; Canada highlight will be May jobs data; ECB kept rates steady but flagged a 25 bp hike in July; ECB tightening expectations have picked up; ECB simply did not seem overly concerned about the risks of rising peripheral yields; Brexit appears to be coming to a head once again; Japan officials have renewed their warnings about the weak yen