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Senior Market Strategist, IGM
Australia
20+ years of experience
Jonathan, previously based in Singapore as Executive Director-Head of EM Asia FX Strategy for JPMorgan Chase & Co., specializes in interpreting FX market moves for clients, advising on their role in the Asia-Pacific region over short-, intermediate- and long-term horizons.
He shares thematic perspectives—whether on U.S. Federal Reserve rate cuts, safe haven assets, European tensions or geopolitical events—with banks, asset managers, wealth managers and others looking to mitigate risk or maximize returns. He has been a regular commentator for CNBC, Bloomberg and other media outlets.
Prior to JPMorgan, Jonathan served as currency strategist at the Australian bank Westpac and as economist at the Reserve Bank of Australia.
Outside the office, Jonathan spends much of his time with his three children—including a set of twins—coaching rugby and helping them pursue other athletic interests.
“The FX markets make large, rapid moves that sometimes have global reverberations. I’ve learned that if you misjudge or underestimate a currency’s influence, it can come back to bite you. My job is to keep a finger on the pulse of FX markets and deliver real-time insights to clients on what’s actually driving them.”
IGM FX and Rates
By Jonathan Cavenagh 28 Jun 2021
Short term momentum looks positive for the USD, but structural headwinds could still undermine the dollar in H2. Several factors, either in isolation or combined, might be needed before the market re-embraces short USD positions – a meaningful position adjustment, more assertive pushback from Fed officials around tightening/taper expectations and the rest of the world, particularly the EU, looking better. US growth upgrades have outpaced the other major developed economies by a comfortable margin in 2021 to date.
Topic Industry News
IGM FX and Rates
By Jonathan Cavenagh 09 Jun 2021
IGM Insights | Wednesday, 9th June 2021 - Viewpoint - Extend and Pretend - Emerging FX - Seasonality in June - China Insight - Liquidity stays ample despite PBOC FX intervention - FX Majors - EUR/GBP 0.8500-0.9000 range to continue holding - Long term FX Majors & Rates forecasts
Topic Industry News
IGM FX and Rates
By Jonathan Cavenagh 26 May 2021
IGM Insights | Wednesday, 26th May 2021 - FX Majors - USD momentum remains weak - US Rates - Politics intrudes on the Biden agenda - Emerging Asia - Better prepared for taper talk than in 2013 - CEEMEA - South African Rand's prospects into year end - Technical Analysis - NZD/USD weekly
Topic Industry News
IGM FX and Rates
By Jonathan Cavenagh 13 May 2021
IGM Insights | Wednesday, 12th May 2021 - Viewpoint: Some Inflation thoughts - Emerging Asia – Central banks likely to push back against tightening pressures - CEEMEA/LATAM FX - Base metals and central banks supportive - China – CGBs may benefit from equity-bond performance trade off in May - Long term FX Majors & Rates forecasts
Topic Industry News
IGM FX and Rates
By Jonathan Cavenagh 28 Apr 2021
IGM Insights | Wednesday, 28th April 2021 - G10 – Commodity bloc still likely to be favored over low yielders - Emerging – Mexican Peso set to reap rewards of US recovery - China – PBOC may turn proactive to inject liquidity in May - Technical Analysis – Copper/Gold ratio at three-year lows
Topic Industry News
IGM FX and Rates
By Jonathan Cavenagh 25 Mar 2021
IGM Insights | Wednesday, 24th March 2021 - Dollar - USD momentum continues to build - Europe - ECB's long Q2 supports Bund-UST widening - Emerging Markets - Russian Rouble in the face of new sanctions - China - Let's capitalize on government deleveraging
Topic Industry News
IGM FX and Rates
By Jonathan Cavenagh 11 Mar 2021
IGM Insights | Wednesday, 10th March 2021 - Dollar – Too soon to fade the USD rebound - China – Biased against further monetary easing - Emerging Markets – Brazilian Real woes to worsen - Long term FX Majors & Rates forecasts
Topic Industry News
IGM FX and Rates
By Jonathan Cavenagh 22 Dec 2020
The positive risk bias at the start of 2020 for EM Asia assets didn’t last long. The synchronised global economic upswing quickly unravelled as the COVID pandemic swept through EM Asia economies. The epicentre of the pandemic was in China to begin with and as China went into lockdown Q1 was a write off for economic growth in the region. From a peak in mid-January to late March, the ADXY currency index lost 5%. There were significant divergences within the region though, with the IDR losing close to 15% against the USD, the baht 8.6% and INR 5.5%. IDR and INR are typically current account deficit currencies and sensitive to broader risk appetite, whilst the collapse in tourism inflows weighed heavily on the baht. In contrast, the PHP was basically flat against the USD in Q1, while the TWD only lost 0.67%. The Philippines has fairly limited offshore investor positioning, which served it well, while Taiwan managed the pandemic very well and this was reflected in relative currency outperformance…
Topic Industry News
IGM FX and Rates
By Jonathan Cavenagh 30 Nov 2020
- INR's underperformance in 2020 has been quite stark given the supportive balance of payments backdrop for the currency. The current account balance has shifted into surplus for the first time since 2004 and net FDI inflows have more than offset net portfolio outflows. INR FX is also cheap relative to our short term fair value model and has not caught up with the improved risk back drop reflected in higher equities. - This large divergence mainly reflects the RBI's continued aggressive FX intervention, which has seen FX reserves for the central bank rise sharply and offset the balance of payments surplus. - In this piece we outline the medium term drivers of RBI's FX intervention, which we feel are mainly geared around currency competitiveness. India inflation is generally higher than its trading partners, which means nominal FX appreciation needs to be contained to offset this trend, while India's share of global goods exports has stagnated in recent years. The country also has structural trade deficits with big manufacturing economy's like China. - We conclude that RBI FX intervention will remain a key feature of the INR FX landscape. - Still, there is a scope for the intervention pace to moderate from heady levels into 2021. Historically, stronger wholesale inflation pressures sees the pace of intervention slow as the authorities become more comfortable with some FX strength to offset imported inflation pressures. A continued recovery in global commodity prices suggests the risks for India's wholesale inflation outlook are skewed to the upside. - FX intervention also tends to come down when export and IP growth trends improve, which is also a risk as we move into early 2021. Coupled with the fact that Q1 tends to be the best quarter for INR FX from a seasonal stand point, suggests to us the market will use USD/INR spikes between now and year end as dollar selling opportunities. See the full note below for more details. Read on for more...
Topic Industry News
IGM FX and Rates
By Jonathan Cavenagh 23 Nov 2020
With EM Asia FX already trading at a premium to equity market sentiment, China credit wobbles and central bank rhetoric, we do not rule out further dips. Our short-term fair value models suggest the better value rests with higher yielding currencies…
Topic Industry News
IGM FX and Rates
By Jonathan Cavenagh 11 Nov 2020
Suggested Summary : With the positives for EM Asia FX continuing, as a potential earlier than expected #Covid #vaccine comes quickly after #Biden's US Presidential victory; our latest deep dive analysis looks at whether momentum has started to become overstretched...
Topic Industry News
IGM FX and Rates
By Jonathan Cavenagh 22 Oct 2020
As the US election draws closer, FX markets have started to aggressively price in the prospect of a Blue Wave, Democrat control of the White House, Congress and Senate; providing a good lead on medium term USD direction. Here, we take a closer look at the outlook for Asian currencies on a Biden win or surprise Trump victory, correlations and what has already been priced in…
Topic Industry News
IGM FX and Rates
By Jonathan Cavenagh 19 Oct 2020
Yield momentum has clearly shifted against AUD/USD as the market moves to price in fresh easing in November’s meet. Higher commodities still underpin higher levels of AUD/USD fair value and will act as medium-term support. This is however unlikely to prevent lower A$ levels in the near term. Read more...
Topic Industry News
IGM FX and Rates
By Jonathan Cavenagh 14 Oct 2020
Cyclicals and the macro backdrop suggest the multi-month outlook for the Korean won is positive. However our fair value metrics highlight that the currency’s trend could still be a bumpy one. Read more...
Topic Industry News
IGM FX and Rates
By Jonathan Cavenagh 05 Oct 2020
Asia FX has started Q4 much like how it traded the majority of Q3, rallying against the USD. With several markets closed at the beginning of the month (South Korea, Hong Kong and China), some caution is warranted in terms of the moves seen, as liquidity is probably affected. Nevertheless, it's hard not to come away with the impression that the bulls are very much in charge. Our sense had been we would enter a consolidation phase into October rather than see further sharp USD weakness. In this piece we present a series of charts to assess the bullish versus consolidation case for EM Asia FX. Read more...
Topic Industry News
