English EN French FR Italian IT Spanish ES

FED – 17 June 2021

On Wednesday we saw the biggest euro fall since April 2020. Indeed the Euro fell as much as 1.1% to 1.1994 per dollar, right after policymakers reported that the Fed will raise interest rates twice by the end of 2023. This event surprised markets and some even predicted a move next year: the currency broke 1.20, suggesting to some traders that further losses are on the way. Some dollar bears already cut their bets short this week amid speculation that the Fed might surprise with a hawkish view. While, on the other hand, others thought that the central bank’s long-standing view that inflation is transitory meant it would maintain a dovish tone. At the same time US Treasury yields rose along with the greenback, forcing traders to cover shorts.

Summing up its recommendation, Deutsche Bank’s George Saravelos said there’s now “greater scope for a front-end real rate repricing in the U.S. yield curve” and also “room for higher volatility”.
Both factors are bullish for the dollar, he said, adding that “the support the Fed was providing for EUR/USD upside is no longer there”.
The central bank kept the target range for its policy rate unchanged from zero to 0.25%, where it has been since March 2020. It also kept the pace of its monthly bond purchases at $120 billion. The vote of the Federal Open Market Committee was unanimous.
The more aggressively worded signal of the Fed‘s forecast saw the dollar rise, stocks fall and 10-year Treasuries yields jump.
“It’s a hawkish surprise,” said Thomas Costerg, senior US economist at Pictet Wealth Management, speaking of the rate projections. “We’re looking at a Fed that seems positively surprised by the speed of vaccinations and the continued withdrawal of social easing measures.”
Quarterly projections revealed that 13 of 18 officials preferred at least one rate hike by the end of 2023, up from seven in March. Eleven officials saw at least two rises by the end of that year. What’s more, seven of them saw a move as early as 2022, compared with four.
Officials expect price pressures to rise 3.4% in 2021, up from the March projection of 2.4% after The Fed has boosted its inflation forecast to the end of 2023.
Moreover, the 2022 inflation forecast rose to 2.1% from 2%, and the 2023 estimate was raised to 2.2% from 2.1%.
Consumer price pressures have shown to be hotter than expected in the past two months. Labor Department data reported a price jump of 0.8% in April and 0.6% in May, marking the two largest monthly increases since 2009.

GDP Forecasts

The US economic recovery is gaining momentum as trade restrictions and social activity increase across the country. Strong consumer and business demand has exceeded capacity, leading to supply chain bottlenecks, longer lead times and higher prices.
Due to the unprecedented pandemic Fed officials declared such “fits and starts” are to be expected. It also added and expressed optimism about the outlook for the second half of the year as more Americans get vaccinated. The FOMC increased its projections for economic growth. Gross domestic product was seen expanding by 7% this year, from a previous projection of 6.5%. It maintained its 2022 expansion forecast at 3.3% and raised its 2023 estimate to 2.4% from 2.2% in March.

This communication is for informational purposes only. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. All market prices, data and other information are not warranted as to completeness or accuracy and are subject to change without notice. Any comments or statements made herein do not necessarily reflect those of Aleph Finance, or its affiliates.

Flag of Italy, by Adam Stanislav

Authorization from italian Regulator

We have been authorized by CONSOB to operate in Italy. Here you can find our Press Release and the official CONSOB Press Release.

English EN French FR Italian IT Spanish ES
  • Retail Client
  • Professional Client
  • Institutional Client

You are an individual private investor or a small charity, small trust or small organisation.


The basis on which you access this site
The material on the Retail Client section of alephfinance.com website is aimed at residents of the UK only. Products and services mentioned on this site are subject to UK legal and regulatory requirements and are not available in any jurisdictions other than the UK.
The material on the website is for information only and is not an invitation to subscribe for units or shares in any funds described herein nor is it investment advice or investment recommendation. Nothing on this site should be construed as investment advice or investment recommendations. We highly recommend that you obtain appropriate professional investment advice before making any investment decisions.
We draw your attention to the “Legal Documents” page of our web site. This can be found at the top of each page. This section contains important information about the terms under which you use this web site, risk warnings and other important information. Please access and read this Important Information section.
Past performance is not a guide to future returns. The value of investments and any income from them is not guaranteed and may fall as well as rise and the investor may not get back the original amount invested.

Aleph Finance is a trading name of Pairstech Capital Management LLP.
Pairstech Capital Management LLP is a London-based Asset Management firm founded in 2007. The company is authorised and regulated by the Financial Conduct Authority (“FCA”), registered nr. 477155.
Link to FCA firm register: https://www.fsa.gov.uk/register
Pairstech permissions are authorised through the “Passport Mechanism” across many European Countries.
A Spanish branch has been approved in September 2015 by CNMV.

You are an approved or exempt intermediary selling or recommending financial products to clients.


The basis on which you access this site
The material on the Professional Client section of alephfinance.com website is aimed at professional financial advisers of the UK. Products and services mentioned on this site are subject to UK legal and regulatory requirements and are not available in any jurisdictions other than the UK.
Information on the Professional Client section of our website will not be fully compliant with the Financial Conduct Authority (FCA) disclosure requirements relevant to private investors or retail clients.
If you are a private investor you must not access this area of our website. Please select the Retail Client option from our welcome screen.
We draw your attention to the “Legal Documents” pages of our web site. This can be found at the top of each page. This section contains important information about the terms under which you use this web site, risk warnings and other important information. Please access and read this Important Information section.
Past performance is not a guide to future returns. The value of investments and any income from them is not guaranteed and may fall as well as rise and the investor may not get back the original amount invested.

Aleph Finance is a trading name of Pairstech Capital Management LLP.
Pairstech Capital Management LLP is a London-based Asset Management firm founded in 2007. The company is authorised and regulated by the Financial Conduct Authority (“FCA”), registered nr. 477155.
Link to FCA firm register: https://www.fsa.gov.uk/register
Pairstech permissions are authorised through the “Passport Mechanism” across many European Countries.
A Spanish branch has been approved in September 2015 by CNMV.

You are here on behalf of a fund management group, pension fund or other institutional investor.


The basis on which you access this site
The material on the Institutional section of alephfinance.com website is aimed at professional financial advisers of the UK. Products and services mentioned on this site are subject to UK legal and regulatory requirements and are not available in any jurisdictions other than the UK.
Information on the Institutional section of our website will not be fully compliant with the Financial Conduct Authority (FCA) disclosure requirements relevant to private investors or retail clients.
If you are a private investor you must not access this area of our website. Please select the Retail Client option from our welcome screen.
We draw your attention to the “Legal Documents” pages of our web site. This can be found at the top of each page. This section contains important information about the terms under which you use this web site, risk warnings and other important information. Please access and read this Important Information section.
Past performance is not a guide to future returns. The value of investments and any income from them is not guaranteed and may fall as well as rise and the investor may not get back the original amount invested.

Aleph Finance is a trading name of Pairstech Capital Management LLP.
Pairstech Capital Management LLP is a London-based Asset Management firm founded in 2007. The company is authorised and regulated by the Financial Conduct Authority (“FCA”), registered nr. 477155.
Link to FCA firm register: https://www.fsa.gov.uk/register
Pairstech permissions are authorised through the “Passport Mechanism” across many European Countries.
A Spanish branch has been approved in September 2015 by CNMV.

For further information, please read our Legal Documents.