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Episode 12:
In this episode of the Macro Matters podcast by Millennium Global, we share our Q3 2023 Global Currency & Macroeconomic Outlook. Our Lead Economist, Piya Sachdeva, Economist & Strategist, Sandra Rhouma and Junior Portfolio Manager, Eve Danbury discuss the macro themes that will matter most in the coming quarter and how these are expected to impact global currencies.
Discussion points:
01:59: Regional banking stress.
04:01: Broad outlook on the US economy.
06:40: Fast thoughts on the Fed and the trajectory for US inflation.
09:44: Global growth and the China narrative.
12:16: US dollar views into the next quarter.
16:13: Thoughts on the ECB and the Euro.
19:25: Japanese Yen views for the second half of 2023.
21:17: BoE moving forward and the British Pound in a global context.
24:28: Views on the SNB and Swiss Franc from here.
26:56: Australia - RBA and the Australian dollar.
28:40: Global growth in relation to the Bank of Canada and the Canadian dollar.
30:57: China - the most pivotal story for markets into the next quarter.
34:07: Excitement of emerging markets.
IMPORTANT DISCLAIMERS: This piece of content contains the views and opinions of our Global Economic Research and Strategy Team as of 13th July 2023 and does not necessarily represent the views and opinions of Millennium Global or any of its Portfolio Managers. This information is intended for Professional Clients only, not retail clients. This information does not constitute an offer to buy or a solicitation of an offer to sell and does not constitute an offer or solicitation in any jurisdiction in which such a solicitation is unlawful or to any person to whom it is unlawful. Past performance is not a guarantee or reliable indicator of future results. Forecasts are not a guarantee or reliable indicator of future performance. For further information please see Important Disclaimers on https://investments.millenniumglobal.com/regulatory-disclaimers
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Discussion points:
02:00: US/China relations - Is there scope for a détente?
10:55: China/Taiwan - Arguably, the hottest topic in geo-politics.
26:20: North Korea - Is their nuclear programme a genuine threat?
29:40: Russia/Ukraine - Are we heading towards a resolution? What could unfold from here?
34:09: EU cohesion - Franco/German relationship hits new lows; a rapprochement between Sunak and Von De Leyen.
42:15: Middle East - An impending escalation in conflict with Israel?
49:07: Washington/Riyadh - Riyadh pivot to Bejing?
50:52: Washington/Europe - Is the special relationship with London dead? How might the relationship with Brussels change in the future?
56:02: UN - Is it a relic, can it be reformed, will it survive in its current form?
IMPORTANT DISCLAIMERS: The views and opinions expressed in this content are those of the presenters, Abigail Cushing, Mark Astley and Nigel Inkster, correct as at 5 May 2023. The value of any investments may fall as well as rise. This information is intended for Professional Clients only. Millennium Global does not target retail clients. This information does not constitute an offer to buy or a solicitation of an offer to sell and does not constitute an offer or solicitation in any jurisdiction in which such a solicitation is unlawful or to any person to whom it is unlawful. For further information please see Important Disclaimers on: https://investments.millenniumglobal.com/millennium-global-marketing-disclaimers
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Is the twenty year decline in the proportion of US dollars held in global reserves the beginning of a paradigm shift or part of business as usual?
Discussion points:
01:07: Why has the topic of de-dollarization become so prevalent lately and what are the key arguments supporting the notion of the dollar’s demise?
03:36: What is the crux of the argument around the weaponization of the USD fueling global de-dollarization? How much of a potential problem is this really?
07:31: Perhaps a helpful way to frame the argument for or against the dollar’s reserve status is to put it into historical context. Can you break that history down for us? And what are the key factors that typically support a currency’s reserve status?
12:50: One of the biggest arguments in favour of continued dominance of the USD as the global reserve is the lack of a viable alternative. Can you elaborate on that?
18:30: Are there any risks to being too complacent about dollar dominance? Is there a risk of the USD’s share of global reserves dipping further? What would that mean for the US and for global markets?
22:21: What actions by the US could put the dollar’s status as the reserve currency at real risk?
IMPORTANT DISCLAIMERS: The views and opinions expressed in this content are correct as at April 2023. The value of any investments may fall as well as rise. This information is intended for Professional Clients only. Millennium Global does not target retail clients. This information does not constitute an offer to buy or a solicitation of an offer to sell and does not constitute an offer or solicitation in any jurisdiction in which such a solicitation is unlawful or to any person to whom it is unlawful. For further information please see Important Disclaimers on: https://investments.millenniumglobal.com/millennium-global-marketing-disclaimers
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EPISODE 9:
In this episode of the Macro Matters podcast by Millennium Global, we share our Q2 2023 Global Currency & Macroeconomic Outlook. Our Lead Economist, Piya Sachdeva, Economist & Strategist, Sandra Rhouma and Junior Portfolio Manager, Eve Danbury discuss the macro themes that will matter most in the coming quarter and how these are expected to impact global currencies.
Discussion points:
01:54: How do you think the next quarter plays out for the US and what do you think about the Fed's reaction function in terms of going forward, given the likely credit tightening that is now taking place post this initial banking liquidity crisis?
06:22: Do you foresee any further spillovers into the European banking sector from what's happened in the US? And then from that, what's what's your base case for the ECB from here, given core inflation at the moment is still proving to remain sticky in the near term?
10:47: But from a macro standpoint, Piya, what's your view on the dollar and to the second quarter of this year?
13:14: How are you thinking about the euro here over the next quarter?
15:38: So how are you thinking about the yen from here?
17:41: How are you thinking about the UK and starting from here?
19:47: What are your thoughts on the Swiss franc from here?
21:53: Sandra, what are your thoughts on Australia and the RBA and consequently the Aussie dollar from here?
23:31: How are you thinking about commodities and oil prices broadly and how does that feed into your more neutral view on the Canadian dollar?
25:01: Is there anything else we should be thinking about with specific focus on Brazil?
27:39: Do you think there's limited upside for the currency (CNH) from the reopening given the current account dynamics and also, the lack of spillover that we've seen in regional exports? What are your thoughts here?
IMPORTANT DISCLAIMERS: This piece of content contains the views and opinions of our Global Economic Research and Strategy Team as of 6th April 2023 and does not necessarily represent the views and opinions of Millennium Global or any of its Portfolio Managers. This information is intended for Professional Clients only, not retail clients. This information does not constitute an offer to buy or a solicitation of an offer to sell and does not constitute an offer or solicitation in any jurisdiction in which such a solicitation is unlawful or to any person to whom it is unlawful. Past performance is not a guarantee or reliable indicator of future results. Forecasts are not a guarantee or reliable indicator of future performance. For further information please see Important Disclaimers on https://investments.millenniumglobal.com/regulatory-disclaimers
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In this episode of the Macro Matters podcast by Millennium Global, Abigail Cushing and Mark Astley discuss the latest Bank of International Settlements (BIS) Triennial Central Banks Survey and how the key takeaways translate to the year ahead in currency markets.
Discussion points:01:41 - So, Mark, for the benefit of our listeners who may not have had the pleasure of going through it in its entirety, what in your mind are the key takeaways from this year's report?
06:09 - Those are some interesting developments and I think shed some light on key trends we might expect to continue in the coming months and years. Let's focus on last year; 2022 was an extraordinary year for financial markets, to say the least, and no less so for foreign exchange. Why was last year such a standout year for currency markets?
09:27 - That's a very different landscape than what we've seen in some time. It sounds like from what you're saying, what we experienced last year was not merely a phenomenon and now we'll return to the smoother environment we've generally seen in the years since the financial crisis, but, that we should expect this wild ride in currency markets to continue. Can you expand on that?
12:33 - So what have we learned, as investors lick their wounds from what was for many a painful year and start planning for 2023 and beyond, what lessons should be applied? Are the rules of the game different now? And if so, how do institutional investors account for that in their portfolios?
17:36 - Those are some helpful points on how investors might think about navigating the year ahead. Still looking ahead, what are the biggest risks in your view, to the now seemingly priced in Goldilocks scenario where the Fed can engineer a soft landing, inflation goes back to 2% without a hugely disruptive hit to growth and global equity and bond markets begin a sustained recovery. Are we going to be that lucky?
20:15 - If you could leave investors with one piece of advice, Mark, what would it be?
IMPORTANT DISCLAIMERS:
The views and opinions expressed in this content are correct as at January 2023. The value of any investments may fall as well as rise. This information is intended for Professional Clients only. Millennium Global does not target retail clients. This information does not constitute an offer to buy or a solicitation of an offer to sell and does not constitute an offer or solicitation in any jurisdiction in which such a solicitation is unlawful or to any person to whom it is unlawful. For further information please see Important Disclaimers on: https://investments.millenniumglobal.com/millennium-global-marketing-disclaimers
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In this episode of the Macro Matters podcast by Millennium Global, we share our Q1 2023 Global Currency & Macroeconomic Outlook. Our Lead Economist, Piya Sachdeva and Analyst, Eve Danbury discuss the macro themes that will matter most in the coming quarter and how these are expected to impact global currencies.
Discussion points:01:11 - First, really, I just wanted to ask you, how are you thinking about inflation and the shift in component contribution to inflation, particularly focusing in the US, which remains the center point of focus for markets at the moment?
03:44 - So, you speak a bit about the concern that the Fed have in terms of possibly over tightening, but ultimately there is that sticky component of inflation, which they do need to tackle. In terms of the tightening already done by the Fed and central banks globally, which is a considerable amount. How much feed through has that been to growth and consumers?
05:03 - And then from that specifically on the Fed, what are your thoughts on how they might be looking at their rate path from here and how do you think they're thinking about the lags to the tightening that they've already done?
09:00 - Just before we turn to currency specifics, I think it's worth just adding a comment on markets more broadly.
10:21 - From a macro eco standpoint, what's your view on the dollar into Q1 next year and how are you thinking about those correlations?
14:43 - How does that translate into your ECB view and is there more to go for them on rate hikes? And then with that, what's your euro view as a consequence for Q1?
17:39 - So sticking with undervalued currencies and arguably flipping to the place that is perhaps the most behind out of everyone in terms of monetary policy, Japan and looking to the yen, it continues to stand out on a valuation basis. But what else leads you to have a more positive view on the currency into next year?
20:08 - What are your thoughts on the pound in an environment where inflation is coming lower?
23:03 - What are your views on the SNB going into Q1 and consequently the Swiss franc from here?
26:53 - Shifting a bit away from correlations to bond prices and rates markets and looking more to the commodity currencies. Both of the G10 commodity currencies, AUD and CAD are acutely sensitive to commodity prices globally, of the Canada obviously specifically oil led. So, the Australian dollar, what are your thoughts around the currency given its overall relationship to risk asset markets?
And then for CAD, for the Canadian dollar, if commodities are set to remain at current levels or possibly lower, as you mentioned, specifically looking at European gas prices, do you see this having a negative effect on the Canadian dollar?
30:17 - You mentioned the commodity price outlook with regards to China, I mean, that's been another huge theme that has gathered pace over the last quarter and certainly looks set to stay at the forefront of investors’ minds going into next year with reopening underway and we're moving away now from from zero COVID policies. How are you thinking about the renminbi as we enter this reopening phase and what do you think this reopening could mean for China's capital inflows?
34:24 - To summarize all our thoughts on the macro environment.
This piece of content contains the views and opinions of our Global Economic Research and Strategy Team as of December 2022 and does not necessarily represent the views and opinions of Millennium Global or any of its Portfolio Managers. This information is intended for Professional Clients only, not retail clients. This information does not constitute an offer to buy or a solicitation of an offer to sell
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In this episode of the Macro Matters podcast by Millennium Global, we share our Q4 2022 Global Currency & Macroeconomic Outlook. Our Lead Economist, Piya Sachdeva and Analyst, Eve Danbury discuss the macro themes that will matter most in the coming quarter and how these are expected to impact global currencies.
Discussion points:
00:38 - Where do we stand at the moment? Going into the final quarter of this year, inflation, growth and monetary policy, within those themes, what are the main economic considerations that you are thinking about as potential currency drivers?
05:10 - What's then your view on growth as a product of that?
06:22 - Focusing on what has still been a strong labour market in the US, how are you thinking about the Fed and what they are going to do over the next quarter?
09:05 - Ultimately, the Fed remains the dominant driver of markets but how are you thinking about other central banks, especially in G10?
11:05 - How are you thinking about the dollar specifically, and is it really all upside from here still?
14:42 - What's your view on the Yen going into the next quarter?
16:51 - How are you thinking about the Euro going into Q4?
19:53 - How are you thinking about the UK here and now? Given that we've just had the most turnaround from the new chancellor on the mini budget and then taking a step back, how are you thinking about UK growth in the more medium term?
22:00 - What's your take on the Swiss Franc and the SNB going forward from here?
24:33 - From your perspective, what's going to be the main drag on China's growth outlook going into the next quarter of this year?
This piece of content contains the views and opinions of our Global Economic Research and Strategy Team as of October 2022 and does not necessarily represent the views and opinions of Millennium Global or any of its Portfolio Managers. This information is intended for Professional Clients only, not retail clients. This information does not constitute an offer to buy or a solicitation of an offer to sell and does not constitute an offer or solicitation in any jurisdiction in which such a solicitation is unlawful or to any person to whom it is unlawful. Past performance is not a guarantee or reliable indicator of future results. Forecasts are not a guarantee or reliable indicator of future performance. For further information please see Important Disclaimers on https://investments.millenniumglobal.com/marketing-disclaimers
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In this episode of the Macro Matters podcast by Millennium Global, we are joined by Stephen Jen, CEO and Co-CIO of Eurizon SLJ Capital and former economist for the IMF and Morgan Stanley. He chats with Mark Astley, Co-CEO of Millennium Global Investments, about the remarkable strength of the US Dollar, the drivers and historical parallels of these record moves, where the dollar goes from here, and the risks to the global economy and to investors’ portfolios that need to be addressed.
Discussion points:
01:28 - The US dollar has been on an absolute tear, having rallied for 20 months from its Jan 21 lows. It is now at a new 20-year high and is considered to be broadly 20% overvalued. How did we get here? Can we draw any lessons from history as to how we arrived at these levels?
08:08 - What is the outlook for the USD today? Are we close to a turning point, or do we have further to run? What is the impact of petrodollars? How does Europe’s energy crisis factor? And what on earth is going on with the UK?
16:50 – What are the consequences of a strong dollar? What are some of the big risks that investors should be thinking about in this environment? Is FX intervention perhaps back on the table? What can investors do to be better protected and prepared?
Assets under management as of 30 June 2022 are a combination of USD 26 238 million in notional AUM for unfunded managed accounts and USD 122 million AUM in funded vehicles. The views and opinions expressed in this webinar have been prepared for discussion and information purposes only by the presenters, Mark Astley and Stephen Jen, and do not necessarily represent the opinions of Millennium Global’s Portfolio Managers or Research Professionals. The value of any investments may fall as well as rise. This information is intended for Professional Clients only. Millennium Global does not target retail clients. This information does not constitute an offer to buy or a solicitation of an offer to sell and does not constitute an offer or solicitation in any jurisdiction in which such a solicitation is unlawful or to any person to whom it is unlawful. For further information please see Important Disclaimers on https://investments.millenniumglobal.com/marketing-disclaimers
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In this episode of the Macro Matters podcast by Millennium Global, Mark Astley, Co-CEO of Millennium Global Investments, argues the case for FX Carry, explains how to avoid common pitfalls, and provides insight into the ways of improving risk/return characteristics of FX Carry strategies.
Discussion points:
00:50 - Carry was previously one of the most popular trades in foreign exchange, although, it's popularity took a big hit in the aftermath of the Global Financial Crisis when most global central banks drove interest rates to essentially zero. Here we are, 14 years post crisis, in a very different environment with inflation at multi decade highs and some central banks once again raising interest rates aggressively. Does this perhaps suggest that the carry trade, as we knew it, is back from the dead?
02:43 - Is there anything different this time around? In comparing the macro environment to the period before the global financial crisis when carry worked very well, what are the key differences to consider now? In this, arguably, quite different regime. Also, how should we think about timing? We've all been through enough to know that the only constant in markets is change, how long do we think the environment for carry will be favourable?
05:17 - So empirical evidence proves that when FX carry works, it works well. Though there are definitely associated concerns, leverage and crowding are two that come to mind making carry strategies potentially vulnerable to exogenous shocks in the market. I've heard the phraseology before, taking the stairs up and the elevator down. What are the principal risks in adopting an FX carry strategy that investors should consider?
06:53 - So there's nothing particularly novel about a naïve carry strategy, buying the top 3 yielders and selling the bottom 3. Can the strategy be effectively enhanced, to improve it's risk reward characteristics and if so, how?
09:07 - Let's talk about emerging markets for a minute, some would argue that in emerging markets, carry perhaps never went away. Although, investing in carry in emerging markets is a different beast with central banks hiking rates for different reasons than those of G10 economies and with liquidity being less readily available. What are the considerations when approaching carry in emerging markets and how far down the liquidity credit spectrum should an investor consider going?
11:55 - If we are entering a world in which carry is in fact back, and it can be offered in a manor that's superior and less risky than a naïve approach, the strategy is arguably quite attractive, given it's low correlation to traditional assets in a world where that type of differentiation is ever harder to find. How then should an investor think about implementing this strategy in a multi-asset, multi-strategy portfolio?
IMPORTANT DISCLAIMERS:
The views and opinions expressed in this content are correct as at September 2022. Assets under management as of 30 June 2022 are a combination of USD 26 238 million in notional AUM for unfunded managed accounts and USD 122 million AUM in funded vehicles. The value of any investments may fall as well as rise. This information is intended for Professional Clients only. Millennium Global does not target retail clients. This information does not constitute an offer to buy or a solicitation of an offer to sell and does not constitute an offer or solicitation in any jurisdiction in which such a solicitation is unlawful or to any person to whom it is unlawful.
For further information please see Important Disclaimers on: https://investments.millenniumglobal.com/millennium-global-marketing-disclaimers
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03:37: Where do you see China geo-strategically, and is that relationship with Russia sustainable? And how do you think China affects geopolitics over the next five or ten years?
07:48: It's often been said that China is a very canny operator in diplomatic circles. But it seems to have achieved the unenvious position of being caught between enemies not just in the West but in the Pacific Rim as well. And to that extent, it's somewhat weakened strategically. How do you think about that in the big picture?
11:00: You’ve written extensively and in particular with your 2018 book, Red Flags, about China’s economic vulnerabilities. Perhaps you can share some thoughts today about where you think the economy stands and where you think it might be going.
18:17: Given the war in Russia and repercussions on supply chains in Europe and beyond, notably with Germany’s energy dependency on Russia. How do you think globalization is going to evolve over the next five or ten years?
21:25: What are your thoughts on demographics as it applies to all the topics we're touching upon?
28:03: What are your thoughts about that as a thesis for the next generation or so?
37:20: I wonder what you think about how that affects the renminbi, in the context of coming back to where we started, our thoughts on China.
The views and opinions expressed in this content are those of Mark Astley and George Magnus, as of March 2022 and do not necessarily represent the opinions of Millennium Global or any of the funds/accounts it manages or any of its Portfolio Managers.
This information is intended for Professional Clients only. Millennium Global does not target retail clients. This information does not constitute an offer to buy or a solicitation of an offer to sell and does not constitute an offer or solicitation in any jurisdiction in which such a solicitation is unlawful or to any person to whom it is unlawful. For further information please see Important Disclaimers on: https://investments.millenniumglobal.com/millennium-global-marketing-disclaimers
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In this episode of the Macro Matters podcast by Millennium Global, we share our Q3 2022 Global Currency & Macroeconomic Outlook. Our Lead Economist, Piya Sachdeva and Analyst, Eve Danbury discuss the macro themes that will matter most in the coming quarter and how these are expected to impact global currencies.
01:55: Going into Q3, inflation growth and monetary policy, within those themes, what are the main economic considerations you are thinking about as potential currency drivers ?
04:45: The picture that you painted of slowing growth but still high inflation is certainly a challenging one for central banks - where does this leave your view on the Fed?
06:28: How are you thinking about other central banks in G10?
08:15: Delving into a bit more detail now, the US inflation is high but likely peaking and with that the Fed is likely to continue to tightening from here, whilst those inflationary risks remain, what does this mean for the broader USD, are we likely to see both sides of the USD dollar smile at play here?
11:12: Sticking with G3 still, the Euro. As we know, EUR has struggled to trade stronger even with the move higher in European rate differentials and now that the rate path for the next quarter has effectively been pre announced by the ECB, is there only downside risks from here? And how are you thinking about the upcoming possibility of an anti-fragmentation tool?
13:20: Taking a bit of a turn now to the one economy that is yet to see any monetary tightening, Japan. Expectations ahead of the most the recent BoJ meeting were mounting, will they or wont they change yield curve control, are they concerned about the recent currency weakness at all. Take us through your view on the JPY, and how we are thinking about yen in the midst of recessionary fears.
15:50: Staying in G10, in terms of Sterling and the limited effect that that's had on the currency so far. Moving over to the monetary policy side of things, The Bank of England has been the posterchild of Central banks for hiking into slower growth. Are there larger hikes to come or is a pause more likely at this stage?
17:32: We can't talk through a macro outlook without covering swiss and the most recent surprise SNB rate hike, the first hike in 15 years, that saw EURCHF trading to parity and CHF the strongest G10 currency last month. How are you thinking about CHF in what is now possibly a new regime for the currency?
18:42: Looking more to commodity currencies now, AUD and CAD. Both economies have faced aggressive levels of inflation, both have also been witness to monetary tightening from CB's already and both economies have also benefitted from highs commodity prices and strong terms of trade - how are thinking about AUD and CAD now as risk currencies?
20:08: Finally touching on EM and Asia specifically, CNH. Gone from being a low vol to high vol currency in the space of 3 months, with China having faced another new wave of covid cases and aggressive social restrictions, what are your thoughts for the yuan going forward from here?
This piece of content contains the views and opinions of our
Global Economic Research and Strategy Team as of 7th July 2022 and
does not necessarily represent the views and opinions of Millennium Global or
any of its Portfolio Managers. This information is intended for Professional
Clients only, not retail clients. This information does not constitute an offer
to buy or a solicitation of an offer to sell and does not constitute an offer
or solicitation in any jurisdiction in which such a solicitation is unlawful or
to any person to whom it is unlawful. Past performance is not a guarantee or
reliable indicator of future results. Forecasts...
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A discussion on the recent significant strength of the US dollar, potential problems it creates for US investors, how to think about addressing those problems, and the outlook for the US dollar from here, featuring Millennium Global Investments' Co-CEO, Mark Astley
Discussion Points:
02:16 - Let's look at the U.S. dollar’s remarkably strong performance in 2022. What are the driving forces behind this phenomenon?
03:58 - How has this historic USD strength impacted US-domiciled capital owners, including pension funds, endowments and foundations, many of whom have meaningful exposure to overseas assets in Europe, Japan, China and other emerging markets?
06:28 - How should we think about the problem then of managing FX risk as distinct from the other risks in a globally invested portfolio?
08:08 - When managing this currency risk, when is the right time to hedge and when is the wrong time?
11:10 - What should we expect from here? The US dollar has already experienced a serious rise. Is there nowhere to go from here but down, or can this strength be sustained?
15:20 - How can institutional investors address the problem?
IMPORTANT DISCLAIMERS: The views and opinions expressed in this content are those of Mark Astley and Abigail Cushing and do not necessarily represent the opinions of Millennium Global or any of the funds/accounts it manages or any of its Portfolio Managers. This information is intended for Professional Clients only. Millennium Global does not target retail clients. This information does not constitute an offer to buy or a solicitation of an offer to sell and does not constitute an offer or solicitation in any jurisdiction in which such a solicitation is unlawful or to any person to whom it is unlawful.
For further information please see Important Disclaimers on:
https://investments.millenniumglobal.com/millennium-global-marketing-disclaimers
