ECB Expands and Extends PEPP, after Sharply Downgrading Inflation
ECB’s increase in stimulus was slightly more than we had anticipated. The move was mainly driven by the sharp downgrade in inflation outlook. The decision has sent a strong message to the market that the central bank is “undeterred” by German constitutional court’s ruling and will continue to adjust...
Euro Welcomes ECB’s PEPP Expansion, Resuming Rally
Euro strengthens again after ECB announced expansion of its crisis asset purchase program PEPP. Euro is also taking Swiss Franc mildly higher too. On the other hand, Sterling is the weakest one as pressured by the selloff against Euro. Canadian Dollar is following as the second weakest for the...
Euro Softens as Markets Await ECB, Dollar in Weak Recovery
Dollar recovers mildly in general as recent selloff is losing some momentum. The recovery is also accompanied by mild retreat in Euro as well as some weakness in Gold. Though, the strength of Dollar's recovery is far from being strong enough to warrant short term bottoming yet. As for...
BOC Turns More Optimistic About Economy, Scales Back Term Financing
Turning more optimistic on the economic outlook, BOC scaled back some term financing facilities, while leaving the policy rate and QE programs unchanged. Policymakers suggested that the impacts of the coronavirus pandemic have peaked, despite ongoing uncertainties.
The members have turned more optimistic about the economic developments. The judged that...
US Oil Inventory Surprisingly Dropped
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks rose 5.04 mmb to 1399.92 mmb in the week ended May 29. Crude oil inventory dropped -2.08 mmb (consensus: +3.04 mmb) to 532.35 mmb. Stockpile fell in 3 out...
Investors Sentiment Resilient, But Forex Markets Turning Mixed
There is not much change in the global investor sentiments today, as stock markets continue to rally on lockdown exit optimism. Much better than expected job data from the US also provide something to cheer. Though, in the currency markets, recent moves appear to have been exhausted. Australian Dollar...
ECB Preview – Lagarde to Expand PEPP and Sharply Downgrade GDP and Inflation Forecasts
We expect ECB to add more stimuli and downgrade it macroeconomic projections at the upcoming meeting. It is likely that the more flexible PEPP will be expanded and extended. Previous meetings suggest that the members are reluctant to lower the deposit rate further. The concerns are mainly the limited...
Risk Appetite Lifted Further by China Data
Risk appetite continues in Asian session, with help from positive data from China. China's economy appears to be on track for recovery even though the road would remain bumpy. In the currency markets, New Zealand Dollar is leading Australian Dollar higher, followed by Euro. Dollar, Yen, Swiss Franc continue...
Focus Turns to Yen and Franc Selling as Risk Rally Continues
Global stock markets continue with impressive rally today, with focuses on back-to-normal optimism. Germany's DAX is even more impressive, with more than 3.7% against at the time of writing, after a three-day break. It's supported by news that Chancellor Angela Merkel's ruling coalition is working on another massive stimulus...
Aussie Firm as RBA Stands Pat, Risk Appetite Continues
Risk appetite continues today with mild strength in Asian markets, following the slightly higher close in US overnight. It seems that investors completing ignoring the unrest in the US, as well as its tension with China. In the currency markets, Sterling is currently the strongest one for today, followed...
New BOC Governor to Carry On Legacy, Keeping Rate and QE Intact
The upcoming BOC meeting (June 3) will be the first one headed by incoming Governor Tiff Macklem. We expect him to leave the policy rate unchanged at 0.25%. The unconventional monetary policy, i.e.: QE, will also remain the same. Given the disappointing GDP and inflation data, the accompanying statement...
Euro Loses Some Upside Momentum While Risk Appetite Continues
Risk appetite remains generally firm in European session but trading has turned a bit subdued with France, Germany and Swiss on bank holiday. Dollar is trying to recovery entering into US session, but remains one of the weakest, along with Yen and Swiss France. Australian Dollar is leading commodity...
Aussie Surges as Markets in Full Risk-On, All Risks Shrugged
Risk-on mode continues in Asian markets today. Investors, in particular in Hong Kong markets, basically shrugged off US President Donald Trump's announcements regarding China. There is also no reaction to the unrest in US. Instead, traders continued to cheer economy reopening, as well as positive data from China. Australian...
Old and New Risks Ignored So Far, Dollar to Decide Reversal or Not Soon
Some old and new global risks, other than coronavirus, have been (re-)emerging in recent weeks. US-China relation is heading another step towards cold war with US President Donald Trump's new set of measures against China announced on Friday. Unrest that started in Minneapolis quickly spread from Los Angeles to Miami...
CFTC Commitments of Traders – Euro Rallied to Highest in 2 Months after European Commission’s Stimulus Plan
As suggested in the CFTC Commitments of Traders report in the week ended May 26, NET LENGTH in USD Index dropped -2 498 contracts to 14 799. Speculative long positions decreased -3 476 contracts and short positions were down -978 contracts. Concerning European currencies, NET LENGTH in EUR futures...
CFTC Commitments of Traders – Traders Took Profit on Gold after Failing to Break New High
According to the CFTC Commitments of Traders report for the week ended May 26, NET LENGTH for crude oil futures dropped -1 029 contracts to 542 574 for the week. Speculative long positions gained +9 217 contracts while shorts jumped +10 246 contracts. For refined oil products, NET LENGTH...
Euro Power Continues, Follow by Yen on Mild Risk-Off
Markets are in mild risk off mode before weekly close, awaiting US President Donald Trump's "interesting" and "powerful" measures on China. Though, this time, Euro is boosted as the strongest one, followed by Yen. Dollar and Swiss Franc are the weakest for today. Overall, Euro is staying as the...
RBA to Send More Upbeat Economic Assessment in June
We expect RBA to leave its monetary policy measures unchanged in June. Governor Philip Lowe appeared cautiously optimistic about domestic economic outlook. We expect the central bank will deliver a more upbeat economic outlook while pledge to leave the policy rate at record low level for years. The forward...
US Crude Inventory and Imports Surprisingly Increased
Crude oil inventory in the US surprisingly increased last week. Meanwhile imports also jumped due to shipment from Saudi Arabia. Supply in the US was partly offset by further decline in domestic production. The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum...
Dollar Weakens, Stocks Turn Cautious, Awaiting Trump’s Announcement on China
Dollar remains generally weak in Asian session, with notable selloff against Yen too. Markets generally turned cautious as US President Donald Trump is set to announce his new China policies on Friday. This is in response to China's passing of national security law to forcibly impose on Hong Kong....