October 2024 Monthly Report

Read the Ballinger Monthly Report for October below.

The primary theme of September involved the market raising its conviction in the Federal Reserve delivering a frontloaded cutting cycle that will get ahead of a serious downturn in the US economy. Alongside some stimulus in China, that narrative was supportive of risk-sensitive and emerging markets FX, at the dollar’s expense.

At the same time, some strong US consumption data, hawkish pushback from Powell, and idiosyncratic weakness elsewhere also put a dampener on the risk rally. CAD failed to capitalise at all owing to its own dovish central bank, for example, while EUR/USD’s bearish drives seemed to multiply given the eurozone’s weak growth prospects and further disinflation. Sterling had an exceptional month breaking through multiyear highs, but there are questions about the Bank of England now too.

While the mood remains upbeat, there are several key risks heading into Q4. Uncertainty around the dollar’s path is at a peak ahead of the US election, and geopolitical risk has become a central concern, particularly in the Middle East.