HKD Supported by Low US Yield and Seasonal Factors, Despite Huge Political Uncertainty Ahead
Recent strength of HKD has triggered the territory’s de facto central bank, HKMA, to defend the currency system. The key reasons for strong HKD are broad-based USD weakness, HIBOR-LIBOR spread, semiannual settlement and IPO activities in Hong Kong. Policy uncertainty has taken a backseat as the US government is...
Yen and Franc Digest Gains and Risk Markets Recovery Mildly
Risk markets recover mildly today after yesterday's sharp decline. DOW future is currently up over 500 pts ahead of open, but well short of yesterday's -1800pts decline. Yen and Swiss Franc turn softer today, followed by Dollar, while commodity currencies recover. For the week, though, Yen and Swiss Franc...
Risk Aversion Eased Mildly in Asia after Massive Selloff in US
Risk aversion carries on in Asian session today, after the massive selloff in the US overnight. But selling has some what eased ahead of the weekend. In the currency markets, Yen and Swiss Franc remain the strongest ones for the week, even though both are paring some gains. Dollar...
Markets Back in Risk Aversion on Fear of Coronavirus Second Wave
The financial markets are suddenly in deep risk aversion today, particular on fear of a second wave of coronavirus pandemic. A John Hopkins Center senior scholar has already warned that "there is a new wave coming in" parts of the US. In the currency markets, Australian Dollar is trading...
Yen, Swiss and Dollar Rise as Risk Aversion Comes Back after FOMC
Yen, Swiss Franc and Dollar strengthen generally today as risk appetite is having a setback after dovish FOMC announcement overnight. While NASDAQ continued to defy gravity and extended the record run, DOW and S&P 500 closed mildly lower. Asian markets are also trading in red as pull back in...
FOMC Signals to Increase Asset Purchases in Coming Months
As expected, FOMC left its monetary policy measures unchanged and downgraded the macroeconomic outlook. The members also project that the policy rate will stay unchanged through 2020. The accompanying statement showed few changes. Yet, the pledge to increase purchases by at least their current rate signals that the central...
Pick-up in US Oil Inventory and OPEC+’s Compliance Problem have Capped Crude’s Upside
The excitement brought by OPEC+'s agreement to extend the output cut deal for a month to July short-lived. Crude oil price only climbed modestly higher after the news. Gains were quickly evaporated. Concerning OPEC+, the market is mainly concerned about compliance by some participants. A survey by S&P estimated...
More Signs of Dollar Weakness as Fed Awaited
Stock markets are generally mixed today as NASDAQ seems unstoppable. But other indices, in Asia, Europe and even US look sluggish. OECD noted the equal probability of having a second wave of coronavirus spread or not. But that's largely ignored by investors. In the currency markets, Dollar is back...
China’s Inflation Declined to Lowest in Over a Year; Trade Data Showed Weakness in Domestic and Global Demand
Headline CPI slowed further to +2.4% y/y in May, from +3.3% a month ago. The market had anticipated a milder drop to +2.7%. The reading is the lowest since April 2019 and the first time below +3% since August 2019. Food inflation continued to ease significantly. Specifically, growth in...
Dollar Softens ahead of FOMC, Fed to Release New Economic Projections
Dollar is back under pressure against and focus turns to FOMC meeting. NASDAQ managed to break 10k level for the first time, and closed up 0.29% at 9953. But DOW and S&P 500 ended lower. Mixed trading in stocks carry on in Asian session. Yen continues to ride on...
Risk Markets Setting Stage for Pullback, But To Be Confirmed
Yen and Swiss Franc rise broadly today as global stock markets look set for a pull back after recent strong run. Major European indices are trading generally in red while US futures point to a lower open. On the other hand, commodity currencies are trading broadly lower, as led...
Yen Firm after Strong Rebound, Ignore Stocks Rally
Yen surges broadly this week and remains generally firm in Asian session. Pull back in treasury yield is seen as a factor driving the Yen higher. Yet, the lack of selling in Yen despite strong risk appetite, with NASDAQ extending record run, is something to note. it might be...
FOMC Preview – Standing Ready to Add Stimulus Despite Signs of Recovery
While we do not expect any change in monetary policy at the June FOMC meeting, there are a number of things that should be watched for. Chair Jerome Powell will discuss the economic outlook and the monetary policy stance at the press conference. The staff will also release the...
Yen Recovers While Yields Retreat, Dollar Softens
The forex markets are rather consolidative today as traders are waiting for the next direction. European and Asian stock display some mild strength but that is far from being impressive. US futures are also mixed as NASDAQ might has a little retreat before deciding to extend the record run....
Risk Rally Pauses in Asia, Forex Markets Await Next Move
Asian markets are relatively quiet as another week starts. There is no follow through from Friday's strong rally in the US. Trade data from China released over the weekend also provide little inspirations. There is also practically no reaction to the massive global "Black Lives Matter" protests, nor intensifying...
Investors in Euphoria, Betting on a V-Shaped Recovery
The global financial markets were basically in euphoria last week. Lockdown restrictions continued to be eased. ECB provided more stimulus by expanding the crisis purchase program. Surprised growth in US and Canadian employment in May argue that the worst of coronavirus pandemic is already behind us. More importantly, investors...
CFTC Commitments of Traders – Traders Trimmed Long bets on USD, whilst Shorts in NZD and CAD Futures Dropped
As suggested in the CFTC Commitments of Traders report in the week ended June 2, NET LENGTH in USD Index fell -6 541 contracts to 8 258. Speculative long positions decreased -3 162 contracts and short positions were up +3 379 contracts. Concerning European currencies, NET LENGTH in EUR...
CFTC Commitments of Traders – Traders Bet Higher Crude Oil Price, and Lower Gold Price, as Risk Appetite Returned
According to the CFTC Commitments of Traders report for the week ended June 2, NET LENGTH for crude oil futures rose +25 756 contracts to 568 330 for the week. Speculative long positions soared +27 938 contracts while shorts added +2 182 contracts. For refined oil products, NET LENGTH...
Dollar Trying a Rebound as NFP Grew in May, Yen and Franc Weaken
Dollar attempts to rebound after non-farm payroll employment unexpectedly rebounded while unemployment rate fell. But strength is mainly centered against Yen, Swiss Franc, and to a lesser extent Euro. Commodity currencies continue to be the strongest ones, together with Sterling. Canadian Dollar also firms up on job growth but...
Dollar Stays Weak as Risk Takes a Breather, NFP Unlikely to Rescue
Dollar and Yen remain the overwhelmingly weakest ones for the week even though risk appetite seems to be taking a breather again. In particular, the greenback suffered steep selling after Euro bulls cheered ECB's PEPP expansion. The common currency is one of the strongest one this week, just next...