PBOC to Ease Less Aggressively as Debt Problems Intensify after Months of Liquidity Injection
The phenomenon of rising interest rates since early May appears contradictory to Chinese government’s commitment to maintain “liquidity at a reasonably ample level”. PBOC's leaving of the loan prime rate (LPR), China’s policy rate, unchanged in May and June has fueled speculation about a shift in monetary policy stance....
Risk Reversal Building Up on Coronavirus and US-China Tensions
The conditions for risk reversal continued to build up last week and somewhat intensified. On the one hand, daily new coronavirus cases surged to new high for the world world, as well as for the US. Daily global new deaths were steady and the US death tolls trended down....
CFTC Commitments of Traders – Net Length on Gold Soared to Two-Month High as Rally Resumed
According to the CFTC Commitments of Traders report for the week ended June 23, NET LENGTH for crude oil futures jumped +14 611 contracts to 560 883 for the week. Speculative long positions gained +4 774 contracts while shorts plunged -9 837 contracts. For refined oil products, NET LENGTH...
CFTC Commitments of Traders fx – Bets on USD Still Limited as Traders Weighed Recovery against Second Coronavirus Wave
As suggested in the CFTC Commitments of Traders report in the week ended June 23, NET SHORT for USD Index futures slipped -30 to 5 314 contracts. Speculative long positions increased +857 contracts and short positions added +827 contracts. Bets on both sides climbed slightly and were largely balanced,...
Sterling Dips, Swiss Franc Rises as Weekly Close Approaches
Sterling appears to be under some selling pressure today, without any special driver. A possible reason is some repositioning ahead of next week's Brexit talks. Meanwhile, Yen appears to be regaining some growth, together with Swiss Franc. There is some upside potential on risk-off traders ahead of the weekly...
Markets Range Bound as Consolidations Continues, Coronavirus Ignored
The markets continue trade in consolidative mode today. US stocks reversed earlier loss to closed higher overnight, ignoring the surge in coronavirus cases. Asian markets are mixed, with mild weakness in Hong Kong HSI. it's weighed down by US Senate's unanimous passage of a bill that could lead to...
Dollar Stays in Familiar Range Despite Rebound Attempt, Markets Turned Mixed Elsewhere
The financial markets turned into mixed mode today. While European indices open broadly lower, they quickly reversed early losses and turned positive. US markets open lower again but loss in DOW is relatively limited. Dollar is trying to extend yesterday's rebound against European majors and Yen. Yet, it struggles...
Another Week Of US Stock-build Dampened Crude Oil Price
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks rose +7.09 mmb to 1446.72 mmb in the week ended June 19. Crude oil inventory added +1.44 mmb (consensus: +0.3 mmb) to 540.72 mmb. Stockpile rose in 3 out...
Dollar Rebounds in Risk-off Markets, Underlying Strength Still in Question
Dollar rebounds broadly as markets turned into risk-off mode overnight. It remains firm in quiet trading in Asia, with China and Hong Kong on holiday. The movements in the forex markets are not decisive enough yet. Major pairs and crosses are back inside last week's range. Job and durable...
Mild Risk-Off on Coronavirus Resurgence and Transatlantic Trade War Concerns
Dollar is attempting to rebound today together with Yen and Swiss Franc, while Kiwi and Aussie weaken. European stocks and US futures are down mildly on resurging number of global coronavirus crisis cases. Also, the US Trade Representative said wants to impose new tariffs on USD 3.1B of exports...
Kiwi Down on Dovish RBNZ, Dollar Stays Soft
Risk appetite was firm overnight as NASDAQ made another record high. Yet, Asian markets are rather quietly treading water. New Zealand Dollar tumbles broadly today as dovish RBNZ hints on further easing. There are talks that the central bank would expand asset purchases in August meeting. On the other...
RBNZ Pledged to Expand QE and other Stimulus if Needed, as Risk to Outlook Skewed to Downside
As widely anticipated, RBNZ left the OCR unchanged at 0.25%. The size of QE also stays unchanged at NZD60B. Policymakers acknowledged that the spread ofcoronavirus is under control in the country for now. They also saw reasons for being more confident about the economic outlook. Yet, the central bank...
Selloff in Yen and Dollar Intensifies as PMIs Paint Recovery Optimism
Selloff in Yen and Dollar intensifies mildly today while Australian Dollar and Euro are picking up some rally. Investors sentiments are generally lifted by better than expected PMIs. In particular, France and Australia appear to be back in expansion. European indices are trading higher while US futures point to...
Yen Weakens on PMIs, Risk Appetite Firm Despite Trade Jitters
Yen and, to a slightly lesser extent, Dollar soften further as markets are in mild risk-on mode this week. There were some jitters from White House adviser Peter Navarro's comments on US-China trade deal. But dusts quickly settled after his clarifications. Yen is additionally pressured by the poor PMI...
Gold’s Rally Set to Resume, Supported by Low Yield, Geopolitics and Second Virus Wave
Gold price has gained +2.6% since our last update. Less than $1/oz shy of the all-time high, it is likely that yellow metal's rally will resume very soon. Indeed, expansionary monetary policy, renewed geopolitical tensions in Asia (between North and South Korea, and between India and China, and concerns...
Dollar Softens Further in Mixed Markets, Risk Mildly on the Downside
The global risk markets are generally mixed today. While major European indices are trading slightly in red, US futures point to a higher open. Yen and Dollar remain the weakest ones for today so far, followed by Swiss Franc. New Zealand and Australian Dollar are the strongest ones. But...
Dollar Softer in Quiet Trading as Traders Await Global PMIs
The forex markets open the week in quiet mode, which Asian stocks are mixed. Australian and New Zealand Dollars are mildly higher. Dollar, Yen and Canadian are softer. But major pairs and crosses are generally stuck inside Friday's range. The economic calendar is rather light today. Traders could probably...
RBNZ Preview: Cautiously Optimistic about Recovery while Pledges to Do More if Needed
RBNZ is likely to leave the OCR unchanged record low of 0.25% in June. Meanwhile, the size of the LSAP program (QE) will also stay at NZD 60B. Control of the coronavirus pandemic in the country has been more effective than previously anticipated. Policymakers will be more optimistic about...
Coronavirus Cases Skyrocketed Again, But Risk Seekers Not Giving Up Yet
Just like many governments and central bankers, the markets were torn between the optimism over re-opening of the economic, and the imminent risk of coronavirus second wave. This is reflected in the general strength in Yen, Dollar and Swiss Franc last week. Yet, commodity currencies were relatively resilient, as...
CFTC Commitments of Traders – Traders Trimmed Bets on Crude Oil as Price Climbed to 3-Month High
According to the CFTC Commitments of Traders report for the week ended June 16, NET LENGTH for crude oil futures plunged -21 637 contracts to 546 272 for the week. Speculative long positions declined -26 451 contracts while shorts dropped -4 814 contracts. For refined oil products, NET LENGTH for...