RBA Affirmed that Adjustments to YCC and QE would be Announced in July
As expected, the RBA left all monetary policy measures unchanged in June. Policymakers maintained a dovish tone, suggesting no rate hike at least until 2024. They also affirmed that some adjustments to the monetary policy would be made in July.
On economic developments, while reiterating the "strong" growth outlook in...
Aussie Steady after RBA, Dollar Softens Mildly
Trading remains relatively subdued in Asian session today. Aussie firmed up slightly, but lost momentum after RBA delivered no surprise to the markets. Sterling is also trying to break through a key near term resistance against Dollar, but there is no follow through buying yet. The greenback, on the...
PBOC Seeks to Curb CNY Appreciation by Withdrawing FX Liquidity
People’s Bank of China (PBOC) announced to increase of FX deposit reserve requirement ratio (RRR) to 7% from the current 5%, effective June 15. The move, together with recent comments from official, suggests that the central bank is getting uncomfortable with recent appreciation in renminbi (RMB, CNY). We believe...
Sterling and Dollar Softer in Subdued Trading, Aussie Firm ahead of RBA
Trading continue to be relatively subdued as US and UK are both on holiday. Sterling is mildly softer, followed by Dollar, and Swiss Franc. On the other hand, Australian Dollar is strengthening mildly, ahead of RBA rate decision in the upcoming Asian session. It's highly unlikely for the central...
Dollar Mildly Lower in Holiday Mood, Busy Week Ahead
Dollar weakens broadly in relatively quiet Asian session today, while Australian Dollar is strengthening. Asia markets are trading mildly lower, but losses are limited. Month-end flow, plus holiday in the UK and the US, could keep activity subdued today. But the week ahead is extremely busy, with lots of...
RBA Preview: RBA to Assess Economic Data and Prepare for Policy Tweak in July
The June RBA meeting will have little surprise, as the central bank has already planned to adjust yield curve control (YCC) and QE measures in July. This week, policymakers will discuss recent economic data and the economic impacts of the lockdown in Melbourne. All monetary policy measures will stay...
Yen Committed to a Direction, While Others Not… Yet
Overall, the markets in the last full trading week of May was rather mixed. New Zealand Dollar surged initially after hawkish RBNZ. But it failed to extend much gain from there, even though it still ended as the strongest. It looked like Dollar was ready to turn around after...
CFTC Commitments of Traders – Net Length for WTI Crude Trimmed as Price Approached Two Months’ High
According to the CFTC Commitments of Traders report for the week ended May 25, NET LENGTH for crude oil futures dropped-457 contracts to 475 490 for the week. Speculative long position rose +13 038 contracts, while shorts soared +13 495 contracts. For refined oil products, NET LENGTH for heating...
CFTC Commitments of Traders – Net Length Increased for GBP as It Consolidated at 3-Year High against USD
As suggested in the CFTC Commitments of Traders report in the week ended May 25, NET LENGTH of USD index futures added +96 contracts to 2 780. Speculative long positions added +350 contracts while shorts increased +254 contracts. Concerning European currencies, NET LENGTH in EUR futures gained +4 142...
Dollar Flies High after Strong Inflation Reading
Dollar surges in early US session as boosted by stronger than expected inflation readings. Indeed, the core PCE inflation hit the highest level since 1991. With the current buying momentum, the greenback is likely to end the week on a high note, with prospect of closing as the strongest....
Positive Correlation between US stocks and bonds Reveal Rising Concerns over Inflation
Correlation between US stocks and bonds has turned positive and continued to rise. The phenomenon, not seen since September 2020, probably reveals increasing risk aversion, driven by rising inflation expectations. The correlation could return to negative, thus facilitating asset diversification, if inflation proves transitory and central banks could maintain...
Yen Selling Takes Off, More Downside for Today
Yen's selling took off overnight, following rebound in treasury yields. Weakness is somewhat solidified in Asian session, together with the strong rebound in Nikkei. With some technical levels broken, Yen's decline could extend before weekly close, and it'd likely end as the worst performing one. As for the week,...
Sterling Surges on BoE Rate Hike Talks, Canadian Dollar Rebound
Sterling jumps broadly today as a BoE officials indicated that rate hike could come next year. UK Prime Minister Boris Johnson also said there is nothing in data that suggests a delay to reopening on June 21, even though some more time is needed to assess the situation. Nevertheless,...
Dollar Recovered in Mixed Markets, Loonie Found Some Footing
Overall markets are mixed for now, except the clear strength in New Zealand Dollar this week. While Aussie is also trading higher against others, it's lagging Kiwi by a mile. Dollar recovered overnight but once again lost momentum quickly. Canadian Dollar has also found some footing after yesterday's pull...
Rise in Petroleum Demand Signals Pickup in US Economic Activities
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks slumped -7.67 mmb to 1275.92 mmb in the week ended May 21. Crude oil inventory fell -1.66 mmb (consensus: -1.05 mmb) to 484.35 mmb. Stockpile decreased in 4 out...
Strong Euro Supported by Firm Data, Rising Inflation Expectations and Tapering Hopes
Following a weak first quarter, the strength in EURUSD has gathered momentum. The pair is the second strongest among majors quarter-to-date. A more upbeat economic outlook, heightened inflation forecasts and expectations of ECB’s tapering are key driving forces of the recent rally.
Indicators Pointing to Stronger 2Q21
Leading indicators have pointed...
Dollar Strikes Back, Kiwi Maintains Gains
While Kiwi and Aussie remain the strongest ones for today, Dollar is striking back as markets enter into US session. On the other hand, Canadian Dollar is now the selling focus. Euro and Swiss Franc also turn weaker. Overall markets are mixed though, with European indexes trading water while...
Kiwi Rallies as RBNZ Suggests that Rate Hike can Come in as Soon as Next Year
The RBNZ delivered a less dovish message in May than a month ago. While leaving all monetary policy measures unchanged, it upgraded the inflation forecast and revised lower the unemployment rate. The central bank also pushed forward the first rate hike to 3Q22. Kiwi rallied to highest since February...
NZD Surges on Hawkish RBNZ, Dollar and Yen Pressured
New Zealand Dollar surges sharply today, on surprisingly hawkish RBNZ which started to signal a rate hike. Strength in the Kiwi is somewhat lifting Australian Dollar, and to a lesser extent Canadian. On the other hand, Dollar and Yen are both turning weaker, followed by Euro and then Swiss...
Euro Surges Broadly on German Business Sentiment, DAX Hits Record
Euro surges broadly today, while German DAX and Stoxx 600 hit new record highs. Strong German business climate reading gave sentiments a strong lift. For now the common currency is only out-performed by New Zealand Dollar, and followed by Swiss Franc. On the other hand, positive market sentiment makes...