Yen Surges Broadly, Dollar and Euro Weak
Dollar trades broadly lower today but there seems to be no clear unified theme in the financial markets. Stocks are in risk-on mode, lifting the Australian Dollar. But Yen is also generally higher despite some mild recovery in treasury yields. Sterling's recovery is understandable as it's digesting some of...
Upbeat August Chinese Data Suggests PBOC to Leave Rates Unchanged for Longer
The latest set of macroecononmic indicators in China suggests that economic activities surprised to the upside in August. Growth in industrial production accelerated while retail sales gained first the first time since February. Better-than-expected data in August signals that it is less likely for PBOC to cut interest rates.
Industrial...
Aussie Rallies as Chinese Data Gives Sentiment Additional Boost
Investors seemed to have put last week's selloff in stocks behind already. Asian markets, except Japan, trade generally higher following the rebound in the US overnight. Additional, upside surprises in data from China boost optimism that it's back on track for stronger rebound for the rest of the year....
AUD Strengthened on Upbeat Chinese Data, RBA Minutes Contained Little News
RBA minutes for the September meeting contained little new information. The members highlighted uncertainty of the economic outlook with lockdowns in Victoria would likely derail Australia’s recovery. Australian dollar is climbing higher at the time of writing this report. However, we believe it is not driven by the minutes...
Sterling Recovers Mildly ahead of an Eventful Week, Dollar Treads Water
Trading in the forex markets remain generally subdued for now. While US stocks are set for a rebound, currency traders are not to bothered with that. Sterling is so far the stronger one for today, as traders take profits on shorts, ahead of of the string of UK data,...
BOE Preview – BOE to Signal More Easing on Weak Recovery and Brexit Uncertainty
Renewed uncertainty of Brexit talks, sharp selloff of sterling last week and increased speculations of further rate hike have made this week's BOE meeting a closely-watched one. While the central bank is expected to leave the policy rate and QE unchanged at the meeting, we anticipate it to deliver...
NZD Mildly Higher on Lockdown Exit, Yen Awaits Breakout
New Zealand Dollar trades generally higher in otherwise quiet markets today. The news of lockdown exit is lift sentiments on Kiwi, even though upside is relatively limited. Other major forex pairs and crosses are bounded inside Friday's range though. Trading could remain subdued due to a light calendar today....
FOMC Preview – Policy Incorporating Average Inflation Targeting. New Economic Forecasts and Dot Plots Awaited
After announcing to adopt a new monetary policy framework at Jackson Hole symposium weeks ago, the focus of the upcoming FOMC meeting is on the more clarification of average inflation targeting, the members’ view on the economic outlook (to be revealed in the policy statement and the staff economic...
CFTC Commitments of Traders – Expect NET LENGTH for GBP Futures to Decline in Coming Week on No-Deal Brexit Concerns
As suggested in the CFTC Commitments of Traders report in the week ended September 8, NET SHORT for USD Index futures dropped - 988 to 5 758 contracts. Speculative long positions slipped -895 contracts and short positions fell -1 883 contracts. Concerning European currencies, NET LENGTH in EUR futures...
CFTC Commitments of Traders – NET LENGTH for Crude Oil has Sharpest Decline since May, on Demand Concerns
According to the CFTC Commitments of Traders report for the week ended September 8, NET LENGTH for crude oil futures slumped -41 549 contracts to 449 366 for the week. Speculative long position declined -28 235 contracts, but shorts rose +13 314 contracts. Crude oil prices sank over -6%...
No-Deal Brexit Could Push Sterling Back into Medium Term Down Trend
Sterling's selloff was the most decisive move last week. UK-EU negotiations seemed heading to a dead-end as UK published the so-called internal market bill, which violates part of the Brexit Withdrawal Agreement. WTO style of trade relationship after Brexit looks more likely than ever. Technical developments in Sterling pairs...
Markets Steady ahead of Weekend, USD Shrugs CPI
The markets are generally rather steady today, awaiting weekly close. Major European indices are mixed in tight range. US futures point to mildly higher open, arguing that yesterday's selloff might not extend for now. Commodity currencies are generally firmer today while Dollar and Yen are the weakest. Stronger than...
Euro Rebound Fades Quickly, Sterling Decline Continues
Sterling weakness remains the unified theme in the markets this week. The Pound remain under pressure in Asian session today while recovery attempt was brief and weak. As for the week, Canadian Dollar is currently the second weakest, in tandem with the sharp decline in oil price. Swiss Franc...
ECB Upbeat about Recovery, Resorted to Verbal Warning of Strong Euro
ECB left all the monetary policy measures unchanged in September. The staff upgraded the near-term growth outlook, as well as core inflation forecasts for 2021 and 2022, suggesting the central bank's optimism over the recovery. Policymakers continued to stress that risks to growth remain skewed to the downside and...
Crude Oil Prices Fell as US Inventory Gained for the First in 7 Weeks, While OPEC+ Output Produced More than Quota
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks gained -3.42 mmb to 1124.86 mmb in the week ended September 4. Crude oil inventory gained +2.03 mmb (consensus: -1.34 mmb) to 500.43 mmb. Stockpile rose in 4 out...
Euro Surges as ECB Gives No Red Light to Appreciation
Euro jumps notably as ECB insist that it doesn't target the exchange rate, despite recent appreciation, suggesting that they're still comfortable with the current level. The common currency also takes Swiss Franc higher with it. On the other hand, Sterling is left behind as European majors. The Pound suffers...
Euro Awaits ECB for Next Move, Sterling Weakness Persists
Sterling remains the weakest one for the week, without a doubt in the otherwise mixed forex markets. Overall risk sentiments stabilized with the overnight rebound in US stocks. Dollar has pared back much of this week's gains together with Yen. Euro is currently the stronger one for today, as...
BOC Left Policy Rate and QE Unchanged, Pledged to Calibrate Measures when Needed
BOC announced to leave the policy rate at the effective lower bound of 0.25% and maintain the pace of asset purchases at CAD 5B/week of Canadian government bonds. While acknowledging that economic activities have rebounded more than expected since the July meeting, the members remained cautious about the outlook,...
Pound Selloff Continues, Risk Sentiments Stabilized
The Pound's selloff continues today as the UK government's so called internal market bill draws wide criticism, from EU to Scotland and Wales. Traders continue to off-load Sterling on no-deal Brexit risks. European markets, though, somewhat stabilized and recovered from yesterday's selloff. US stocks futures also point to recovery...
Subdued Core CPI and Contraction in Imports Suggest It Takes Time to Revive China’s Domestic Demand
Headline CPI moderated to +2.4% y/y in August, from +2.7% a month ago. High base and softened growth in food inflation was the key reason for the slowdown. Food price rose +11.2% y/y, decelerated from +13.2% in July. This was mainly driven by the sharp moderation of pork inflation...