Kit Juckes

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Last quote by Kit Juckes

Whether the Fed's next hike is in March, May or June is less important than whether they go twice or three times this year, and that in turn is less important than what the market prices as a terminal Fed Funds rate.
Mar 02 2017
We can learn a lot about a person if we know what types of things he or she talks about or comments on the most frequently. There are numerous topics with which Kit Juckes is associated, including Davos and Janet Yellen. Most recently, Kit Juckes has been quoted saying: “Whether the Fed's next hike is in March, May or June is less important than whether they go twice or three times this year, and that in turn is less important than what the market prices as a terminal Fed Funds rate.” in the article Dollar hits 2-week high vs yen, muted elsewhere.
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Kit Juckes quotes

A bit of a euro short-covering rally overnight changes nothing. The $1.0580 area where the last two euro falls have found resistance is the next key support. There's a huge dose of political concern to keep the pressure on the euro ahead of the Italian referendum on 4 Dec, and perhaps ahead of French elections next year too.

Now that we've got ourselves pricing in a pretty hard-looking Brexit into market sentiment ... we're going to be sensitive to anything that challenges that view that we're putting control of immigration above protecting access to the Single Market, bank passporting etc.

I'm slightly surprised the pound hasn't bounced from its fall ... but not surprised enough to prevent me being bearish long-term. To be fair, absolutely no-one is going to change their view of the UK economy, sterling or the wider implications of 'Brexit' until there are mountains of evidence about the economic impact.

We still like being short sterling/dollar and long euro/sterling as the pound's bounce runs out of steam.

We've done some travelling (in rate expectations)... so I can see the dollar trundling higher on today's data. It would take quite a lot for the market to suddenly decide that they're going to go... twice by the end of the year.

Ignoring the last of these we can put some of this down to the fact that the euro has been very subdued this year.

Volumes have grown fast for almost all of my career and this represents the end of a golden age of growth in the market as regulation and scandals have tarnished the industry's reputation.

In another era, there would be massive pressure on the FOMC to raise rates but no-one expects anything from today's meeting. Still, some acknowledgement of the improved economic backdrop is likely in the statement and the market will go on slowly raising the odds of a 2016 rate hike.

On the other hand, if for some reason the data are OK, then who knows? It's bound to be fascinating. When all the dust settles, I think we'll see new lows for sterling.

Any further deceleration in the pace of U.S. employment (and hence economic) growth would take the global economy even closer to stalling speed.

The mood has soured again. The announcement that fund manager Standard Life had stopped retail investors from pulling out of one of the largest U.K. property funds is one catalyst for the downturn in sentiment, though not the only one.

The BoE releases its financial stability report this morning, an opportunity to reiterate the Bank's ability and willingness to manage the financial sector after-effects of the referendum. None of that however, will help the pound. Currency weakness will be tolerated if not actively welcomed. Positioning will dictate the pace of the fall.

The negative economic implications for the U.K. economy leaving the EU are clearly understood but there is plenty of willingness to downplay the impact on the rest of Europe let alone the rest of the world.

The message from Mr Carney is probably that the MPC intends to embark on a limited and gradual tightening of policy, but that will keep speculation that the next move is a cut alive.

The FOMC statement did nothing to help the dollar at all. (There is) no reason to look for more than one more rate hike this year.

The recent drift higher in 10-year Treasury yields (to 1.9 percent) and in breakeven rates (to 1.66 percent) just might prompt a marginally less dovish message than in March; a possibility which will probably give markets a slightly risk-off sense today.

Risk is thoroughly on. All the chit-chat was that they (the Fed) were going to be hawkish, and they weren't.

A slowdown in the pace of sterling's decline against the dollar doesn't yet signal a correction.

My impression is that there is virtually no reserve armory big enough to cope with widespread capital outflows, if capital is allowed to flow relatively freely.

The statement is bound to reflect the softer economic data, tighter financial conditions, global environment and the 2 percent gain in the dollar's trade-weighted index since the last meeting. However, the assessment of the inflation and labor market outlook probably hasn't changed and our U.S. economics team haven't thrown in the towel on the idea of a March rate hike, even if the market has.

The market mood soured overnight - again - as the International Energy Agency warned of an oil glut as Iran returns to the market and other major producers keep supply coming. For once, the short-term focus isn't on Chinese markets, where equities are weaker but not dramatically so and the currency is stable. But that just goes to show that bottling up volatility in one market simply displaces it to others.

China may take a back seat for a day or two, but oil prices remain a threat to markets, as oil-producing countries and companies rethink the medium-term outlook. Weak oil prices will be a major factor behind default rates in 2016 and even if the latest rush of forecasts of oil reaching $25/20/10 (a barrel) aren't proven right, the damage has already been done.

At the moment the yuan is weakening against the dollar but is remaining broadly stable relative to the PBOC's basket [of other currencies].

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