3 d - Josef Brynda
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A major day is approaching on February 2, with expectations that the U.S. will impose reciprocal tariffs on many countries. These tariffs are expected to be permanent, which could bring some stability to the market as it would create a more predictable environment to which the market is highly sensitive.
Regarding currencies, our analytical center anticipates that the risk-off sentiment has not yet had its final say. As a result, the dollar could strengthen on the day of the announcement, with the EUR/USD pair expected to move within the 1.07–1.065 range. Additionally, a key factor influencing the future direction of the dollar this week will be labor market data, PMI indices, and, most notably, the non-farm payrolls report set for release on Friday, which typically has a significant impact on the markets.
Today's reports from the Eurozone indicate that unemployment remains at historically low levels, hovering around 6%, which is still 2% higher than in the United States. Speculation had arisen regarding a potential pause in the Eurozone’s rate-cutting cycle, but today's inflation data—at its lowest level since 2022—suggests that the ECB will have room for further cuts at its next meeting. This is unlikely to provide much support for the euro in the near future. Overall, the ECB is expected to cut rates by 65 basis points this year. A crucial factor to watch will be the sentiment regarding military spending in Europe, as upcoming bond issuances and expected yields could attract investors and, in turn, provide some support to the euro.
The British pound has recently reached strong levels against the U.S. dollar, though it remains unclear how the newly announced tariffs will affect the UK. However, British Prime Minister Rishi Sunak stated that he had a "very good talk" with President Trump, which could favor the pound over the euro in the short term. Meanwhile, today's manufacturing data showed that the UK is still grappling with contraction in this sector—similar to the European Union. A key indicator moving forward will be how tariffs impact individual countries and how they manage increasing defense expenditures. The UK is also projected to cut rates by 55 basis points this year, and this interest rate divergence between the EU and Britain could further work in the UK's favor.
AUD, NZD, and CAD have remained weak against the U.S. dollar over the long term. Canada faces ongoing uncertainty regarding upcoming elections, economic data, and U.S. tariffs, which are unprecedented and, in many cases, quite severe. This could continue to put pressure on the Canadian dollar. However, rising oil prices could provide some support, as the Canadian currency is often correlated with oil prices. Given the economic uncertainty and planned tariffs, it is expected that the Bank of Canada will maintain an accommodative monetary policy, further increasing the interest rate divergence between Canada and the U.S.
AUD and NZD will be heavily dependent on China’s response to tariff announcements. Economic uncertainty is not providing much support for these currencies, although they have recently seen a short-term rebound against the dollar. The key factor will be the development of commodity prices, as these currencies are closely tied to them. We anticipate the U.S. dollar's continued dominance over these currencies, with tomorrow’s statement from Donald Trump on reciprocal tariffs being a crucial event that the market is eagerly awaiting.
9 d - Josef Brynda
As we mentioned earlier, fears of a recession in the U.S. appear to be somewhat overblown. Today's data showed that durable goods orders are near record highs this year, indicating strong consumer and business demand. At the same time, the labor market remains stable and resilient.
A key factor in confirming this positive trend will be tomorrow’s GDP data, which could provide a clearer picture of the overall health of the U.S. economy. Another supportive signal comes from Donald Trump's statement regarding reciprocal tariffs, which are set to be more specifically targeted at selected segments on April 2. This move could help ease concerns about escalating trade disputes and, in turn, reduce fears of a recession.
Overall, despite some uncertainties, economic data continues to point to solid fundamentals that should prevent a significant slowdown in economic growth.
11 d - Josef Brynda
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The US economy showed mixed signals today. On one hand, higher-than-expected PMI in services provided significant support for the dollar, as did expansion in the private sector. However, the manufacturing sector is just below the 50 mark (49.8), indicating contraction. Given the previous manufacturing PMI results, this level could potentially be a trend. Combined with other data, such as labor market figures and CPI, it appears the dollar may show strength in the coming days. Attention will also turn to Thursday's GDP release and labor market data. Additionally, President Trump's shift toward more specific and targeted reciprocal tariffs seems to provide further support to the dollar, as tariffs, essentially taxes, tend to slow economic growth.
In the Eurozone, Germany's Manufacturing PMI rose to 48.3, and the overall Eurozone Manufacturing PMI climbed to 48.7, the highest level in 26 months, though still in contraction. On the other hand, the Services PMI fell to 50.4, but remained in expansion. The ECB signaled the possibility of an interest rate cut due to slowing inflation. ECB President Lagarde warned of weaker economic growth but reassured that the EU's response to US tariffs would not pose inflationary risks. Economic growth in the Eurozone is expected to be slow, and the ECB is likely to continue supporting the economy with interest rate cuts. Positive sentiment towards the euro, driven by fiscal expansion, is gradually fading, especially after the originally planned 500 billion euros was partly redirected to 100 billion euros for decarbonization as a concession to the "greens." Many analysts argue that these two goals are incompatible, as decarbonization will likely slow European development in the long run. As a result, sentiment towards the euro is expected to weaken.
The UK economy today showed expansion in the private sector and services, but the manufacturing sector fell well below the 50 mark, indicating contraction. The Office for Budget Responsibility (OBR) expects to lower its growth forecast for this year, which could lead to cuts in planned spending. The Bank of England may reduce interest rates in May. It is expected that the UK economy will face pressures from rising borrowing costs, which could negatively affect growth in the second half of 2025.
The development of commodity currencies such as AUD, CAD, and NZD will depend on several key factors. In Canada, snap elections have been called as the Liberal Party seeks to gain a strong mandate and the trust of the Canadian public to continue its policy toward Trump. However, tariffs imposed on Canada are causing significant concern and could slow future development, thus limiting investment activity. For trading the Canadian dollar, it would be ideal to catch short-term strength, as the currency is likely to weaken due to concerns about the future economic outlook. The AUD could gain short-term support after tomorrow's budget announcement, which includes increased government spending on defense (by 1 billion AUD) and relief on the cost of living. NZD could show similar trends to CAD, although New Zealand is likely to avoid recession. However, reciprocal tariffs and expectations of a loose monetary policy from the RBNZ, which anticipates further interest rate cuts, could have a negative impact on this currency.
16 d - Josef Brynda
The dollar strengthened against major global currencies this morning in anticipation that interest rates will remain unchanged, according to CME Group. Its strength was also supported by weaker-than-expected data from the eurozone regarding the consumer price index. On the other hand, the approval of the stimulus package did not provide significant support to the euro, possibly because the Greens are demanding that part of the planned fund be invested in environmental innovations, which investors in Europe often perceive as a negative factor.
At the same time, yesterday's data from the U.S. almost ruled out concerns about a current recession, as industrial production showed a growth of around 0.7%. Additionally, labor market data also indicate stability. Overall, it can be said that U.S. fundamental data remain strong, but investor sentiment has been unsettled due to the unpredictability of government policy. The foreign exchange market is currently experiencing ideal yet often difficult-to-predict movements.
As I mentioned earlier, it will be crucial to follow Jerome Powell’s speech today at 19:00, where he will comment on the current and future economic outlook. Based on observed data, it can be assumed that Powell will not rush into further rate cuts this year, and we rather expect only two reductions, provided that the economy demonstrates resilience. These cuts could then lead to a neutral interest rate.
However, more than ever, it is now essential to monitor investor sentiment. Market sentiment has recently pushed the euro up by approximately 5% against the dollar.
17 d - Josef Brynda
Today, March 18, 2025, an extraordinary session is taking place in the German Bundestag, where lawmakers are debating a comprehensive financial package aimed at strengthening defense and investing in infrastructure. This package includes a reform of the so-called debt brake, a constitutional measure limiting the country's debt, with the goal of enabling higher defense spending. The proposal has been put forward by the parties of the likely new governing coalition, the conservative CDU/CSU alliance and the Social Democratic Party (SPD), and they are also negotiating support with the Green Party.
The proposal includes the creation of a €500 billion investment fund, which would be used for infrastructure modernization, such as roads, railways, and energy networks. This fund would be financed through loans, which requires an amendment to the existing debt brake. A two-thirds majority in parliament is needed to approve these changes, which is why intense negotiations with other parties are taking place.
The future chancellor, Friedrich Merz, has emphasized the necessity of this step in response to current geopolitical threats and the need to strengthen the defense capabilities of Germany and Europe. He also pointed to the weakening alliance with the United States under President Donald Trump, which increases the need for European defense autonomy.
We can say that if German debt leads to economic growth and higher inflation, the ECB may raise interest rates. Higher rates attract investors and strengthen the euro. Additionally, capital inflows into Europe and expectations of increased demand can further push the euro higher.
24 d - Josef Brynda
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We have an unusual situation in which the EUR/USD currency pair is rising despite the fact that the ECB is cutting interest rates while the Fed is not. However, it should be remembered that the recent decision by the Governing Council was already priced in by the market, whereas now the market is anticipating a potential shift in the Fed’s leadership stance in the coming months.
If the fiscal strategy in Europe is fully implemented by 2026, it could significantly change the underlying narrative—from one of U.S. divergence to potentially Europe outperforming U.S. growth. The last time this happened was in 2017. Increased spending is driving higher demand for European assets, which, according to market expectations, could delay the ECB from cutting interest rates.
EUR/USD is at pre-election levels, with the main driver of this pair being expectations of increased spending in Europe. But isn't this too much for a mere "promise"? Unlike in the U.S., individual measures in Europe cannot be canceled or implemented with a "single signature". Chancellor Merz first needs to secure support from the Greens, who have expressed cautious skepticism toward this package but have shown a willingness to negotiate. The outcome may be known by the end of this week.
Currencies such as AUD, CAD, and NZD remain weak against the dollar, AUD and NZD are weakening mainly due to concerns about the economic situation in China, which is once again in a deflationary zone, while the EUR and GBP have strengthened significantly over the past week, mainly due to plans for increased defense spending in Europe. These expenditures make sense during a recession but continue to deepen debt.
On the other hand, the unpredictable situation in the U.S. fails to convince investors to invest in the world’s largest economy. This is mainly due to concerns about future inflation as well as trade tariff policies.
However, our analysis still believes that fears of a recession are somewhat exaggerated. Ultimately, it will depend on how the labor market performs in the near future. Today’s JOLTS Job Openings data came in better than expected, in line with previous months, which is not a significant indicator of an impending recession. The biggest fear is caused by concerns over the introduction of tariffs, as tariffs have the ability to cool down the economy while simultaneously increasing prices, which is the worst aspect of economic functioning. Specifically, during periods of low economic performance and high unemployment, prices tend to rise.
3. 3. 2025 - Josef Brynda
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28. 2. 2025 - admin admin
V roce 2025 bychom chtěli posunout úvahy o transformaci na fond kvalifikovaných investorů. Výhodou pro klienty je větší transparentnost a daň z příjmu 5% místo současných 19%. Probíhají jednání s jednotlivými správci fondů, aktuálně je však pro nás správcovský poplatek velmi drahý.