12 ordspråk av Royal Bank

Royal Bank

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 All the inflation numbers are saying there is not much inflation in the pipeline.

 Commodity prices are a risk to U.S. inflation and I don't think the market is pricing enough scope for that. If the Fed rate gets to 5.25 percent, then cash yields have to be at 5 percent plus.

 European Capital immediately understood the investment thesis and acted quickly to complete the transaction. We are impressed with their flexibility and hard work.

 Having said this, the rise in U.S. rates overnight does suggest there is scope for another test below $1.20 in the euro today, but we would look to square shorts at $1.1950.

 I would be concerned that we might be getting ahead of ourselves in thinking this M&A activity is going to persist. If the economic conditions are not right, then it won't.

 That argues for sustained yuan appreciation in the coming months, irrespective of dollar moves.

 The market is expecting a fairly upbeat assessment by Greenspan. This is one reason why the euro is not trading significantly higher against the dollar but is in a range.

 The question is whether the new forecast sticks to the previous projection of robust growth and at/above-target inflation or whether some of the downside risks get incorporated into the central projection.

 The story there is more positive, not just from the current-account surplus, but also from the interest-rate side and growth. These will help the baht.

 There should be good support around 120.10. That would be on intraday, a good area to buy at looking for a 20 to 30 tick rally this afternoon to get us back up nearer to unchanged levels.

 We periodically review our fees. The $19 fee that did not change is the lowest in the industry, and the other fees are certainly competitive.

 With euro/dollar rising above $1.20, many are now taking the view that we have seen the low of the year and that the euro is about to move sharply higher. This is possible but for this to be the case we feel some strong evidence that the U.S. rate cycle will end in May or earlier is required. The market is more sanguine about the Fed than the data currently justifies.



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