Market Overview
Dollar Recovers on US-Mexico Deal, Aussie Weighed Down by China Imports
Dollar recovers broadly today while stocks markets rebound. Threat of US-Mexico trade war vanished after Trump announced to suspend indefinitely the plan to impose tariffs on all Mexican imports. An agreement was made between the US and Mexico on migration issue. At this point, there is no confirmation of...
Dollar in Steep Decline… Before Trump Drops Mexico Tariffs
Dollar weakness was the main theme over the whole week. It started with worries over Trump's tariff threats to Mexico. Then Fed officials came out acknowledging the risks from Trump's tariff policies and signaled their openness to rate cuts should trade tensions worsen. Selling reached its peak after poor...
Dollar and Yield Tumble as Poor NFP Affirms Fed’s Rate Cut
Dollar tumbles sharply in early as poor non-farm payroll report affirms the case for Fed rate cut this year. The headline number of 75k is a big miss. Equally importantly, weaker than expected wage growth argues that inflation pressure could remain subdued ahead. The question now is on whether...
Dollar Recovers ahead of Job Data, But More Downside Still in Favor
Dollar recovers mildly today, continuing to stabilize from this week's selloff. The greenback is staying in range established earlier except versus Canadian. There is some optimism on the outcome of US-Mexico negotiations. Or at least, tariffs won't go up to the worst case of 25% down the road. Together...
Euro in Range after Rough Ride on ECB’s Not Dovish Enough Meeting
It's a roller coaster ride for Euro. It initially dipped after ECB said there will be no rate hike at least through mid 2020. Then it recovered and breaks yesterday's higher against Dollar as the press conference and new economic projections turn out to be not that dovish. Though,...
Dollar Recovered From Overly Bearish Sentiments as Focus Turns to ECB
Dollar tried to stage a reversal overnight after initial selloff, but upside is so far limited and there is no confirmation of bottoming yet. There are a couple of factors behind the move. Post ADP employment decline was largely undone by better than expected ISM services. In particular, the...
Dollar Selloff Extends on Poor ADP Job, Yields Dive Again
Dollar suffers another round off selloff after terribly poor ADP job data, which showed only 27k growth in May. 10-year yield also takes a steep dive breaching Monday's low at 2.081. Gold breaks 1344 and is on track to take on 1346.71 resistance. The poor data adds to speculation...
Dollar in Deep Selloff as Markets Price in 90% Chance of Fed Cut by September
Talks of Fed rate cut intensified overnight after comments from Fed Chair Jerome Powell. Markets are now even pricing in 90% of a cut by September FOMC meeting. US stocks rebounded strongly with DOW closed up 512.40 pts or 2.06%. Positive sentiments carried through to Asia will broad based...
Dollar Turns Mixed as Risk Aversion Recedes Mildly, Overall Markets Mixed
While Dollar has been pressured for most of the day, receding risk aversion seems to be giving in a hand in early US session. The greenback is riding on recovery in both US yield and stocks and trades mildly higher. Adding to that, Chicago Fed President Charles Evans maintains...
Dollar Decline Accelerates on Falling Yield and Stocks, Trade Wars and Fed Cut Talks
Dollar suffered another round of selloff this week and remains broadly weak today. Free fall in treasury yields continued overnight with 10-year yield closing at 2.081, down -0.061. 2% handle is now looking vulnerable with current downside acceleration. Tech stocks were hit hard with NASDAQ lost -1.61%, on news...
Dollar Softens ahead of Important Economic Data, EUR/CHF Hits 2-Yr Low
Dollar weakens broadly today as markets are turning their focuses to manufacturing from the US. Final reading of Markit PMI shouldn't deviate much from the first print 50.6. Meanwhile, ISM manufacturing could probably how confidence turned after last round of trade war escalation with China. Even if the greenback...
Dollar Mixed as China’s White Paper Signals No Quick End to Trade War
Dollar opened the week mildly lower but appears to have found some footing in early European session. Trump is fighting trade wars on two fronts, at least. On the one hand, China has cleared stated its position for not backing down on some core issues, with a white paper...
Sentiment Sank on Trump’s Political Weaponization of Tariffs
Free fall in major government yields extended, and accelerated last week. Meanwhile, it seemed that stocks investors finally woke up with sharply deteriorating sentiments. Major indices staged steep decline as risk aversion heightened. The first factor being the "ever-present" US-China trade tensions. Hard-line rhetorics from official media blossomed after...
DOW Opens Down 1% as Bears Cheer Trump’s Mexican Tariffs, Yen Maintains Strong Momentum
Global financial markets are rocked by Trump's decision to use tariffs as a way to force Mexico to solve border security crisis of the US. 5% tariffs will be imposed in all Mexico imports to US starting June 10, then "gradually" as Trump claimed, go up to 25% on...
Yen Jumps as Trump Uses His Only Trick of Tariffs on Mexico
Risk aversion intensifies again today as Trump uses his one old tricky in tariffs again, but turned to Mexico. 5% tariffs will be imposed on all Mexican imports on June 10, and "gradually" move up to 25% in less than 4 months time if Mexico doesn't help on border...
USD/JPY Extends Recovery on Solid US Data, Trade Spats Shrugged
Dollar trades generally higher today as risk markets stabilized, partly helped by recovery in treasury yields too. Economic data from US generally matched expectations. Markets also shrugged off repeated comments from US and China regarding trade war. Though, at the time of writing, Canadian Dollar is the strongest one,...
Sentiments Stabilized Despite More Hard-Line Trade Rhetorics, Stock Markets Not Ready for Crash Yet
Risk sentiments stabilized somewhat in Asian session today. While major Asian indices are down, losses are so far limited. Late buying in the US overnight argues that the markets are not in a crash yet despite all the talks on trade war escalation. DOW has indeed reached as low...
Risk Aversion Stays With Persisting Trade Worries, Franc and Yen Strong Again
Risk aversion stays in the global financial markets today but it's not in the most intense state yet. A trigger for selloff in stocks and decline in yield is China's threat to squeeze supply of rare earths to the US as part of a countermeasures in trade war. However,...
EUR/JPY Downside Breakout on Falling Yields and Risk Aversion
Yen and Swiss Franc are finally showing some strength today. There was no special escalation in US-China relationship as the former refrained from naming the latter as currency manipulator. But recovery attempts in stocks were rather short lived. Selloff in stocks is in tandem with free fall in treasury...
Yen Attempts to Rally on Falling German Yields, But No Follow Through Buying Yet
The forex markets are rather mixed today. Italy's budget clash with EU is clearly a concern of investors. Markets are anticipating the tension between Rome and Brussels to intensify with a penalty on breach of EU fiscal rules. Italian 10-year yield jumps sharply higher today while German 10-year yield...