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Economic Times
5 days ago
- Business
- Economic Times
Steve Englander on Trump's 50-day window to Putin; crypto & other classes and more
Synopsis Standard Chartered's Steve Englander notes crypto's positive week, driven by bipartisan stablecoin agreement and risk optimism. Rising bond yields stem from fiscal concerns, while equities benefit from technology's potential. Forex struggles as US yields increase for negative reasons, and tariff impacts on the dollar remain inconsistent. The market awaits developments on Trump's tariff threats against Russia. Steve Englander, Global Head of G10 FX Research and of North America Strategy, Standard Chartered Bank, says the crypto market is performing well this week. Stable coins are seeing bipartisan agreement. This is boosting prices. Bond yields are rising due to fiscal concerns. The market is optimistic about technology's potential. Fixed income faces upward pressure. Forex is struggling. US yields are increasing for negative reasons. Tariffs' impact on the dollar is inconsistent. ADVERTISEMENT What do you make of the fresh tariff announcements by President Trump on Russia? He has given that 50-day window to Putin where he wants him to listen to him and he is willing to supply arms to Ukraine as well. How do you see the situation intensifying and what can it mean for the markets? Steve Englander: I do not think it will mean much till day 49 and markets have started timing the risk on Trump statements and obviously August 1st is the date they have focused on for most trading partners and 50 days for Russia. In some ways, it is reassuring to Western Europe that the US is moving back into a more traditional foreign policy line. But right now, it is wait and see. When it comes to tariffs, the market sees a way out. It is not clear what the way out is for the Russia-Ukraine war. So, they will be watching developments to see if any progress is made in terms of coming to a ceasefire, but for now, 50 days is a long way off. Aditya Khemka on US tariff threat over pharma and what to bet on there Fifty days seems like a long way away, like you just said, but do you believe that the outcome that Trump wants is even a possibility right now because it is not unheard of that Putin is going to be giving into these demands. It is not largely expected if you could put it that way. What do you believe could happen in the next 50 days in terms of the tariff front and also Putin's stance on this entire war? Steve Englander: I am not going to pretend to be an expert on Russian politics. I mean, he has got his priorities. He has to decide how credible the US threat is and whether he wants to respond in a positive way and whether he can walk away from the war in a way that works for him politically. So, we will have to wait and see. The other tariffs are probably going to be more market moving if we do not make progress. But so far, the market seems to think that there is a lot of room for negotiation here and US equities are either at record highs or very close to record highs and keep going up. It is a sign that the market expects some resolution on the standard tariffs as opposed to war related tariffs. What are you making of various asset classes? While equity markets are holding out quite okay of late – in range but near about their record peaks pretty much at least in the US and many other emerging markets as well, I am intrigued about the way Bitcoin has been behaving and there is a whole crypto week wherein it seems that the US house of representatives are going to be looking at some legislations when it comes to cryptos. Steve Englander: Yes, crypto is having a good week and dealing with stable coins is one of the few topics on which there seems to be a bipartisan consensus here. The administration seems to be so friendly towards that, which is part of the reason we are seeing prices go up. It is also a sign that the market is relatively optimistic on risk. In this background, we keep seeing bond yields drift up and that is related to the fiscal bill and a lot of the ways by which it closes budget holes are questionable. So, we will probably see the deficit and debt increase beyond what they are projecting with the bill. So, in some ways, the market is saying what do we have the most conviction on? If it is equities, it is because of technology. Things are exogenous to policy not because of policy but because they see technology as opening up a lot of doors. They look at the fixed income market because there is a story there from the fiscal bill which is that maybe upward pressure on yields. FX is losing out on this. You ask if US yields go up, do we buy the dollar? But they are going up for a bad reason. Is that a reason to sell the dollar, what about the tariffs? In December, tariffs were positive for the dollar. In April, they were negative. 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Economic Times
02-07-2025
- Business
- Economic Times
Dollar sentiment deeply negative, but yield moves may stir volatility: Steve Englander
"I think that the bond part is reasonably clear. Equities seemed to like it more or less. And the dollar really was not sure. Markets are concerned about the deficit in the US, but they also like higher yield. And what we have seen is that the usual correlation between rates differentials and the dollar has largely been restored over the last months or two months. So, it is very ambiguous right now," says Steve Englander, Standard Chartered Bank. ADVERTISEMENT First question is with respect to Trump tax bill which has been passed by the senate and now requires upper houses approval. If at all that were to be passed, how do you read this development and what does this mean for global equity markets? Steve Englander: Well, the market is still trying to read it and some of the volatility we saw in the New York session is because the market is trying out various reactions. My guess is that it would push up bond yields a little bit because it does seem that where they need to compromise, they compromise on papering over issues, either kind of spending cuts do not get made or tax increases are delayed and likely never to come. So, I think that the bond part is reasonably clear. Equities seemed to like it more or less. And the dollar really was not sure. Markets are concerned about the deficit in the US, but they also like higher yield. And what we have seen is that the usual correlation between rates differentials and the dollar has largely been restored over the last months or two months. So, it is very ambiguous right now. I want to understand from you, now apart from the tax bill that we just spoke about, the tariff deadline of July 9th that is also looming and since the tariffs were announced in April, we have recovered from those lows. In fact, in the US market S&P 500 and Nasdaq they hit their records in the first half of 2025, but then a very interesting trend that we saw yesterday, tech stocks have taken a hit starting the second half of calendar year. So, where do you see the next leg of move coming in for the US markets and also if you could comment on what kind of global risk sentiment do you see shaping up because of the tariff deadline looming? Steve Englander: Well, part of the reason US equity market performance has been so good and part of the reason the dollar has been so weak is that the market has become more optimistic, that the July 8th or 9th deadline is not going to be resolved in an aggressive way the way the April 2nd was, but it will end up being relatively benign. ADVERTISEMENT And the market would love to see the status quo. I know it sounds crazy because everybody is tariffed up, but there is a sentiment that the world can live with the 10% baseline tariffs and they are hoping that the US does do a couple of deals, delays any sanctions, let negotiations continue, and that is pretty much what is priced in. When you are looking at the second half of the year, the market is at certain point going to have to look past both the tariff debate and the fiscal bill and say what is the outlook for growth, what is the outlook for profits and again I would say that it is more ambiguous. ADVERTISEMENT It is not clear that there is that much supply side incentive that is priced into this bill. So, we will have to see how markets react. But it is also possible that exogenous factors that we just see AI implemented and contributing to profits and productivity that, that gives a better tone completely independent of policy. ADVERTISEMENT But also wanted your thoughts on the US dollar and especially dollar index which continues to trade at the lowest level that we have seen since 2022. How do you see the US dollar moving and what kind of impact will that have on other currencies as well? Steve Englander: Well, the market is very negative dollars. Sentiment is very negative dollars. Positioning is negative dollars. And I do not think that global asset managers and investors have sold all the dollars or hedged all the dollar positions that they want. And again, I would say that there are different forces in play. Longer term, it may well be that the dollar continues to fall. But if we end up having yields backing up, the market will have to decide whether to chase yields, which they have done so often, or treat that yield back up as a risk premium which would be negative dollars. So, overall, I would say the longer-term picture is probably not great, but there is balance of forces in the near term that could keep the dollar volatile.
Time of India
02-07-2025
- Business
- Time of India
Dollar sentiment deeply negative, but yield moves may stir volatility: Steve Englander
"I think that the bond part is reasonably clear. Equities seemed to like it more or less. And the dollar really was not sure. Markets are concerned about the deficit in the US, but they also like higher yield. And what we have seen is that the usual correlation between rates differentials and the dollar has largely been restored over the last months or two months. So, it is very ambiguous right now," says Steve Englander , Standard Chartered Bank . First question is with respect to Trump tax bill which has been passed by the senate and now requires upper houses approval. If at all that were to be passed, how do you read this development and what does this mean for global equity markets? Steve Englander: Well, the market is still trying to read it and some of the volatility we saw in the New York session is because the market is trying out various reactions. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Access all TV channels anywhere, anytime Techno Mag Learn More Undo My guess is that it would push up bond yields a little bit because it does seem that where they need to compromise, they compromise on papering over issues, either kind of spending cuts do not get made or tax increases are delayed and likely never to come. So, I think that the bond part is reasonably clear. Equities seemed to like it more or less. And the dollar really was not sure. Markets are concerned about the deficit in the US, but they also like higher yield. And what we have seen is that the usual correlation between rates differentials and the dollar has largely been restored over the last months or two months. So, it is very ambiguous right now. Live Events I want to understand from you, now apart from the tax bill that we just spoke about, the tariff deadline of July 9th that is also looming and since the tariffs were announced in April, we have recovered from those lows. In fact, in the US market S&P 500 and Nasdaq they hit their records in the first half of 2025, but then a very interesting trend that we saw yesterday, tech stocks have taken a hit starting the second half of calendar year. So, where do you see the next leg of move coming in for the US markets and also if you could comment on what kind of global risk sentiment do you see shaping up because of the tariff deadline looming? Steve Englander: Well, part of the reason US equity market performance has been so good and part of the reason the dollar has been so weak is that the market has become more optimistic, that the July 8th or 9th deadline is not going to be resolved in an aggressive way the way the April 2nd was, but it will end up being relatively benign. And the market would love to see the status quo. I know it sounds crazy because everybody is tariffed up, but there is a sentiment that the world can live with the 10% baseline tariffs and they are hoping that the US does do a couple of deals, delays any sanctions, let negotiations continue, and that is pretty much what is priced in. When you are looking at the second half of the year, the market is at certain point going to have to look past both the tariff debate and the fiscal bill and say what is the outlook for growth, what is the outlook for profits and again I would say that it is more ambiguous. It is not clear that there is that much supply side incentive that is priced into this bill. So, we will have to see how markets react. But it is also possible that exogenous factors that we just see AI implemented and contributing to profits and productivity that, that gives a better tone completely independent of policy. But also wanted your thoughts on the US dollar and especially dollar index which continues to trade at the lowest level that we have seen since 2022. How do you see the US dollar moving and what kind of impact will that have on other currencies as well? Steve Englander: Well, the market is very negative dollars. Sentiment is very negative dollars. Positioning is negative dollars. And I do not think that global asset managers and investors have sold all the dollars or hedged all the dollar positions that they want. And again, I would say that there are different forces in play. Longer term, it may well be that the dollar continues to fall. But if we end up having yields backing up, the market will have to decide whether to chase yields, which they have done so often, or treat that yield back up as a risk premium which would be negative dollars. So, overall, I would say the longer-term picture is probably not great, but there is balance of forces in the near term that could keep the dollar volatile.
Asharq Al-Awsat
09-05-2025
- Business
- Asharq Al-Awsat
Dollar Eyes Weekly Rise into US-China Trade Talks
The dollar headed for a weekly gain on most major peers on Friday as a US-UK trade deal raised hopes of progress in looming US-China talks, while bets of imminent Fed rate cuts receded after the central bank indicated it was in no hurry. Financial markets are heading into the weekend with the focus squarely on trade negotiations between Washington and Beijing due to begin on Saturday in Switzerland. The euro touched a one-month low of $1.1197 in Asia and was down about 0.6% for the week. The yen has weakened about 0.4% this week and hit a one-month trough of 146.18 per dollar, before steadying around 145.48 on Friday. Sterling, which had rallied on news reports of an impending US-UK trade deal, gave back gains when the agreement turned out to be pretty limited and struck a three-week low of $1.3220 in early trade on Friday. The "general terms" agreement modestly expands agricultural access for both countries and lowers prohibitive US duties on British car exports, but leaves in place the 10% baseline. "The market reaction of buying USD may reflect greater optimism that such tariff deals are doable," said Steve Englander, global head of G10 currency research at Standard Chartered, in a note to clients. "Trump's dangling of the prospect of a trade detente with China may be adding to optimism that the global disruption from trade wars may not be as severe as markets have feared," he said. "For the time being, G10 markets would be relieved if US and China bilateral tariffs were rolled back, even if they remain well above January 19 levels." Bitcoin has surged back above $100,000, reflecting a refreshed appetite for risk-taking in markets' more speculative corners. Announcing the UK deal, Trump said he expects substantive negotiations between the US and China this weekend and that tariffs on Beijing of 145% would likely come down. The administration is weighing a plan to slash the tariff on Chinese imports by more than half, the New York Post reported, citing unidentified sources, though the White House dismissed that as speculation. The Australian dollar headed for its first weekly drop in a month, with a 0.7% fall to $0.6407. The New Zealand dollar was likewise lower, clinging to support at $0.5895, just above its 200-day moving average. On the central bank front this week moves were as expected with the Bank of England cutting, while Sweden, Norway and the United States left rates on hold. However, Federal Reserve Chair Jerome Powell's remarks, emphasising the level of uncertainty, were taken as reducing the likelihood the Fed lowers rates any time soon and market pricing for a cut in June has drifted to about 17% from about 55% a week ago. In contrast with G10 peers, the dollar was lower on several Asian currencies this week after a shock surge in the Taiwan dollar. After a volatile few days it has settled around 30 to the dollar, more than 6% stronger from where it had finished April. The Singapore dollar is not far from decade highs. The Hong Kong dollar has retreated from the strong side of its band after heavy intervention from the Hong Kong Monetary Authority. India's rupee opened under renewed pressure on Friday as conflict between India and Pakistan escalates. It dropped sharply on Thursday and, at 85.55 to the dollar, is eyeing its heaviest weekly fall since 2022.
Free Malaysia Today
09-05-2025
- Business
- Free Malaysia Today
Dollar eyes weekly rise into US-China trade talks
The dollar headed for a weekly gain on most major peers today. (AFP pic) SINGAPORE : The dollar headed for a weekly gain on most major peers today as a US-UK trade deal raised hopes of progress in looming US-China talks, while bets of imminent US rate cuts receded after the Federal Reserve indicated it was in no hurry. Financial markets are heading into the weekend with the focus squarely on trade negotiations from Washington and Beijing due to begin tomorrow in Switzerland. The euro was steady in Asia in the morning and down 0.6% for the week at US$1.1217. The yen has weakened about 0.7% this week and hit a one-month trough of 146.18 per dollar, before steadying around 145.78. Sterling, which had rallied on news reports of an impending US-UK trade deal, gave back gains when the agreement turned out to be pretty limited and struck a three-week low of US$1.3220 in early trade today. The 'general terms' agreement modestly expands agricultural access for both countries and lowers prohibitive US duties on British car exports, but leaves in place the 10% baseline. 'The market reaction of buying USD may reflect greater optimism that such tariff deals are doable,' said Steve Englander, global head of G10 currency research at Standard Chartered, in a note to clients. 'Trump's dangling of the prospect of a trade detente with China may be adding to optimism that the global disruption from trade wars may not be as severe as markets have feared,' he said. 'For the time being, G10 markets would be relieved if US and China bilateral tariffs were rolled back, even if they remain well above Jan 19 levels.' Bitcoin has surged back above US$100,000, reflecting a refreshed appetite for risk-taking in markets' more speculative corners. Announcing the UK deal, Trump said he expects substantive negotiations between the US and China this weekend and that tariffs on Beijing of 145% would likely come down. The administration is weighing a plan to slash the tariff on Chinese imports by more than half, the New York Post reported, citing unidentified sources, though the White House dismissed that as speculation. The Australian dollar headed for its first weekly drop in a month, with a 0.7% fall to US$0.6391. The New Zealand dollar was likewise lower at US$0.5892. On the central bank front this week moves were as expected with the Bank of England cutting, while Sweden, Norway and the US left rates on hold. However Fed Chair Jerome Powell's remarks, emphasising the level of uncertainty, were taken as reducing the likelihood the Fed lowers rates any time soon and market pricing for a cut in June has drifted to about 17% from about 55% a week ago. In contrast with G10 peers the dollar was lower on several Asian currencies this week after a shock surge in the Taiwan dollar. After a volatile few days it has settled around 30 to the dollar, a bit more than 6% stronger than where it had finished April. The Singapore dollar is not far from decade highs. The Hong Kong dollar has retreated from the strong side of its band after heavy intervention from the Hong Kong Monetary Authority.
