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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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Following on from fresh 20-year highs for the DXY dollar index earlier today, an excerpt from our report on the US dollar (see here): financial and economic conditions are both directly and indirectly impacted by a stronger dollar - a few examples:
- Transmitting to global activity: Higher USD debt servicing costs in local FX; central banks respond to weaker FX by tightening
- Dampening inflation pressures: The implied drop in import prices would also be helpful from the Fed’s perspective. (The Chinese yuan’s renewed weakness vs USD marked the top in inflation breakevens – see chart). We may have seen some evidence of this from slowing goods price categories in April's CPI report.
- Slowing US export growth
- Weakens US corporate profitability: “Growth” stocks get nearly 50% of revenue from overseas; S&P overall about 40%; small-cap value 15-20%. So the stocks that have been driving the bull run for the last few years are already suffering most from tighter conditions.
Source: BBG, MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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