FX Commentary - March 26, 2018
The Federal Reserve raised its borrowing rates by 25bps last week, but came just short of being hawkish, as revisions to the path of rates and growth forecasts came in line with expectations. During the following press conference, Chair of the Federal Reserve, Jerome Powell seemed to downplay recent inflationary expectations commenting, “There is no sense in the data that we are on the cusp of an acceleration of inflation.” Furthermore, the Fed’s policy statement introduced the phrase “moderation” in place of “solid” when describing economic activity. In summary, the market continues to look for two further 25bps rate hikes this year and three in 2019.
The Fed aside, markets have quickly shifted attention back to global trade concerns. An executive order signed by President Trump last week to impose tariffs on imports from China incited a global correction in equities. The Dow posted its worst loss (700 points) since February 8th and tumbled an additional 300 points on Friday. However, fears of an all-out trade war have eased this week as reports indicate the U.S. may negotiate with China. Treasury Secretary, Steven Mnuchin, stated he was “cautiously hopeful” on a deal being reached. Whatever the outcome, renewed trade protectionism and its various indirect effects will remain a crucial narrative for markets in the near term. Beyond political drivers, the dollar sees data released on personal consumption expenditure, the Fed’s preferred measure on consumer inflation, and a third estimate of fourth quarter growth later this week.
The focus of trade restrictions on China has in part helped the Canadian dollar, as scrutiny on trade eases up on the U.S. ally. Reports of progress on NAFTA negotiations and a strong consumer inflation print helped the Canadian dollar see a weekly gain against its U.S. counterpart following nearly a month of underperformance. This week is light on data releases for Canada, the only material release being monthly GDP which is expected to stay flat at 0.4% in Q1. The lack of news in Canada could help the Canadian dollar as the U.S. dollar continues to face uncertainties on its own domestic front.
A host of surveys in the EU and Germany last week revealed mixed economic sentiment while purchasing managers’ indices indicated a slowdown in activity in March. Despite the mixed data, the euro managed to remain range-bound last week as dollar selling following the FOMC led to some euro strength. In the near term, the euro does not have any obvious drivers and seems to have exhausted most of its positive central bank sentiment given the recently communicated policy shift. As a result, the euro could find itself threatened by rising yields in the U.S. should its own economic fundamentals remain placid. March Inflation figures for the eurozone’s four biggest economies, led by Germany, highlight the data calendar this week.
Solid labor and consumption figures overcame weaker than expected inflation data last week to help lift the pound near 2-month highs. Last Wednesday’s labour market report showed unemployment reaching its lowest levels since 1975 and wage growth increasing by 0.3%, solidifying market expectations for a May rate hike. A final reading of the UK’s fourth quarter GDP released Thursday is expected to confirm 0.4% quarterly growth. While Brexit remains an ever present narrative for the pound, a recent agreement for a 21-month transition period with the EU should keep the pound clear of any Brexit risks this week.
The yen could see further strengthening pressure given increasing safe-haven demand due to trade war concerns and political risks—both domestically and in the U.S. With many of these same drivers driving risk sentiment for equities, expect USDJPY to closely track equity action this week.
Sources: Bloomberg, Wall Street Journal, Reuters, Barclays, Bank of America, Econoday, 4cast
Recent NewsBridge Bank Closes on $25,000,000 Credit Facility for Targeted Lease CapitalBridge Bank Extends $15,000,000 Growth Capital Term Loan to ExamityBridge Bank's Business Escrow Services Group Launches New Paying Agent PlatformBridge Bank Extends $12,000,000 Credit Facility to EllevationAlex Tsarnas Joins Bridge Bank Team to Lead Its Newly Established Banking Group, Business Escrow Services
Recent InsightsExperts Point to “Exiting the Tunnel” in Western Alliance Bank’s National Economic Intelligence ReportPNW's VC Ecosystem Posts a Record $5.4B in Value for 2020C-PACE: Non-Traditional Funding Options Helps Owners, Developers Go GreenerNational Economic Intelligence Report Provides Glimpse into Post-Pandemic EconomyAnalyzing life sciences VC activity's main hot spots
Join us and PitchBook, along with our special guests to discover key top-level trends that have defined #VC deal-making in #Chicago. RSVP now and receive a free download of our report Markets to Watch: Chicago with data provided by PitchBook. info.bridgebank.com/markets-to-wat… - yesterday pic.twitter.com/l0HaqoXNoGThe VC ecosystem in #Chicago generated record funding and exit activity during the pandemic. Join our panel of experts on Tuesday, June 22 when they discuss and analyze the #venturecapital trends responsible for this activity. info.bridgebank.com/markets-to-wat… - 3 days pic.twitter.com/x4kQdT1O5dJoin us for Markets to Watch: #Chicago and discover how funding for the regions SaaS #startups rode venture investor enthusiasm posting $674 million in aggregate deal value. RSVP today and receive a free copy of our report with data provided by PitchBook. info.bridgebank.com/markets-to-wat… - 4 days pic.twitter.com/5jfmJzpgMxLearn what’s behind the momentum in #Chicago #venturecapital activity as our panel of experts unpack the top trends in the region. RSVP today and receive a free download of our report Markets to Watch: Chicago with data provided by PitchBook. info.bridgebank.com/markets-to-wat… - 6 days pic.twitter.com/ATuhmDVuQLOur Technology Banking Group is proud to partner with Fluxx, the cloud platform used by world-class foundations and nonprofits to intelligently automate workflows, ensure compliance, improve operations and drive impact. pic.twitter.com/6wUsqMJnwyIn observance of Memorial Day, all Bridge Bank offices will be closed on Monday, May 31. pic.twitter.com/OPRe4C8wH6Join us and PitchBook, along with special guest Voyager Capital, tomorrow morning to discover key top-level trends that have defined VC deal-making in the Pacific Northwest. RSVP now to attend this virtual event. bit.ly/3odHXY4 - 4 weeks 1 day ago #pnw #venturecapital #virtualevent pic.twitter.com/aJsyVW4XFiKey top-level trends that have defined VC deal-making in the Pacific Northwest over the past several years can be found in our recently released report, Markets to Watch: Pacific Northwest. Download it now to learn more. bit.ly/2R6cYkB - 4 weeks 1 day ago #pnw #venturecapital pic.twitter.com/39v4LukI5zJoin us virtually for Markets to Watch: Pacific Northwest to discover how the PNW’s reputation for innovation has helped fresh capital flow into the VC ecosystem with commitments to new investment funds. RSVP today to attend and learn more. bit.ly/3odHXY4 - about 1 month 2 days ago pic.twitter.com/hoFdrqjYBcFunding for leading database software and cloudtech & DevOps segments bounced back in 2020, in the PNW, posting gains on deal count and aggregate deal value. Download our report, Markets to Watch: Pacific Northwest to learn more and read the analysis. bit.ly/2R6cYkB - about 1 month 3 days ago pic.twitter.com/OcWPQUF5QEOn May 19, our panel of experts will provide analysis and key insights into the VC ecosystem of the Pacific Northwest, which posted a record $5.4 billion in value for 2020. RSVP now to attend this informative, virtual event. bit.ly/3odHXY4 - about 1 month 4 days ago #pnw #venturecapitalThe Pacific Northwest’s VC ecosystem posted a record $5.4 billion in value for 2020. Download our report, Markets to Watch: Pacific Northwest to learn more and read the analysis. info.bridgebank.com/markets-to-wat… - about 1 month 5 days ago pic.twitter.com/HTrfF4UWCoWe would like to extend our congratulations to our client, Securly, for their recent acquisition by Golden Gate Capital. Comprised of parents, educators and technologists, Securly is the first and only provider of enterprise security for K-12 schools since 2013. pic.twitter.com/OoRHNh5coQOur Boston-based Technology Banking Group recently provided a growth capital term loan to Examity, a technology company concentrating in the online proctoring market. Read our press release to learn more. bit.ly/3eWeu0g - about 1 month 1 week agoLearn how liquidity surges are fueling reinvestment into life sciences ecosystems by downloading a complimentary copy of our report Life Sciences Markets to Watch. The report also contains analysis of trends in valuations and financing sizes and their implications. pic.twitter.com/mWrsT22dBZFind out how CytoSorbents delivered technology to calm the storm during the COVID-19 pandemic. Read more here: bit.ly/3e6F1su - about 1 month 2 weeks ago #lifesciences #bridgebank #cytosorbentsJoin us for Life Sciences Markets to Watch and discover how likely venture investment in life sciences will continue at a rapid pace with strong liquidity and rates of funding. bit.ly/3dwyk2C - about 1 month 2 weeks ago pic.twitter.com/0BFseH6AZrThe three major life sciences hubs in the U.S. set a record in venture capital invested in 2020. Download our complimentary report, Life Sciences Markets to Watch, to learn more and read the analysis. bit.ly/3gnq7Q9 - about 1 month 2 weeks ago pic.twitter.com/jtO8XiJOa7CytoSorbents is celebrating five years as a Bridge Bank client. Read more at bit.ly/3n26LBA - about 1 month 3 weeks ago #lifesciences #bridgebank #cytosorbentsOn May 5, our panel of experts will provide analysis and key insights into the three major life sciences ecosystems in the U.S., which set a record in venture capital invested in 2020. RSVP now to attend this virtual event. bit.ly/3dwyk2C - about 1 month 3 weeks ago pic.twitter.com/L2LpL5ooZuWith strong liquidity and rates of funding, it is likely that venture investment in the space will continue at a rapid pace. Download our complimentary report, Life Sciences Markets to Watch, to learn more and read the analysis. bit.ly/3gnq7Q9 - about 1 month 3 weeks ago pic.twitter.com/iH1LMoypkaOur #LifeSciences Group recently provided a term loan to Adarza Biosystems, developer of the ZIVA platform, a next-generation biomarker discovery and therapeutic research tool. pic.twitter.com/CR160SrQKbAustin’s VC ecosystem topped $2 billion in value for the third year running in 2020. Download our report, Markets to Watch: Austin, TX, to learn more and read the analysis. bit.ly/3sGCwly - about 2 months 4 days ago #Austin #venturecapital pic.twitter.com/75Kk4auvZdJoin us for Markets to Watch: Austin, TX to discover how the Austin VC ecosystem still secured a record $2.3 billion in aggregate value thanks in no small part to the its resilient enterprise tech sector. RSVP by clicking the link: bit.ly/3rzsUaZ - about 2 months 4 days ago pic.twitter.com/Ml7OkIKMS2Key top-level trends that defined VC deal-making in Austin last year can be found in our report, Markets to Watch: Austin, TX. The report also contains analysis of Austin’s banner year for exit value creation. Download it now: bit.ly/3sGCwly - about 2 months 7 days ago pic.twitter.com/ZQzJ6GiCtwJoin us and PitchBook, along with special guest Silverton Partners to discover key top-level trends that have defined VC deal-making in Austin. RSVP by clicking this link bit.ly/3rzsUaZ - about 2 months 1 week ago pic.twitter.com/M3ithiqhjjOn April 14, our panel of experts will provide analysis and key insights into Austin’s VC ecosystem, which topped $2 billion in value for the third year running. RSVP now to attend this informative event. bit.ly/3rzsUaZ - about 2 months 1 week ago #Austin #venturecapital #technology #innovation pic.twitter.com/gzRc4qJELoAustin’s VC ecosystem topped $2 billion in value for the third year running in 2020. Download our report, Markets to Watch: Austin, TX, to learn more and read the analysis. bit.ly/3sGCwly - about 2 months 2 weeks ago #Austin #venturecapital pic.twitter.com/ltpq7r20P8Join us for Markets to Watch: Austin, TX to discover how the Austin VC ecosystem still secured a record $2.3 billion in aggregate value thanks in no small part to the its resilient enterprise tech sector. RSVP by clicking the link: bit.ly/3rzsUaZ - about 2 months 2 weeks ago pic.twitter.com/ztR0lKmyzEOur Technology Banking Group recently provided a venture debt facility and working capital line of credit to Step. To learn more, read their recent press release. step.com/press/step-sur… - about 3 months 1 week ago #bridgebank #step #fintech pic.twitter.com/MzAtQGOTu9We are pleased to announce that we have launched Bridge Bank Gateway, a new digital paying agent platform that simplifies and accelerates complex M&A transactions. Read our recent press release to learn more. westernalliancebancorporation.com/bridge-bank-ho… - about 3 months 2 weeks agoWe would like to welcome Alex Tsarnas to the Bridge Bank team. Alex will be leading our newly established banking group, Business Escrow Services. Read our press release to learn more. westernalliancebancorporation.com/bridge-bank-ho… - about 3 months 3 weeks ago #mergersacquistions #privateequity #bridgebankIn observance of Presidents' Day, all Bridge Bank offices will be closed on Monday, February 15. #PresidentsDay pic.twitter.com/6eMQQeNJipOur team of asset-based lending professionals is growing! Read more about it here: westernalliancebancorporation.com/bridge-bank-ho… - about 4 months 5 days ago #assetbasedlending #bridgebankOur Life Sciences Group recently provided a Term Loan to Bolder Surgical, a medical device company focused on commercializing mini-laparoscopic surgical devices aimed at improving and enabling laparoscopic procedures for pediatric patients. #lifesciences #medicaldevices pic.twitter.com/hKgRzmVhaZ“Not everybody can be famous but everybody can be great because greatness is determined by service… You only need a heart full of grace and a soul generated by love.” ~ Dr. Martin Luther King Jr. In observance of MLK Day, all Bridge Bank offices will be closed on Mon. 1/18. #MLK pic.twitter.com/rBAo4INJXBOur Technology Banking group recently provided a growth capital term loan to Funraise, a software company that provides a state-of-the-art fundraising platform, saving nonprofit organizations time and resources spent on data management. pic.twitter.com/StETyssfLe