Soaring Inflation Makes PBOC’s Easing Measures More Challenging
Headline inflation in China soared to +5.4% y/y, the highest level in almost a decade, in January. This came in higher than consensus of +4.9% and December’s +4.5%. Once again food, especially pork, price was the key driver of the jump. Food price soared +20.6% y/y, accelerating from +17.4%...
Markets Mildly Lower as Coronavirus Death Tolls Break 900
Asian markets trade mildly lower as China's coronavirus continues to spread. But losses in major indices are so far limited. In the currency markets, commodity currencies are trading to recovery some of last week's losses, together with Sterling. Yen and Dollar turn weaker despite mild risk aversion. But major...
RBNZ to Leave OCR Unchanged at 1% and Warn of Risks Associated with Coronavirus
RBNZ is widely expected to leave the OCR unchanged at 1%. Upbeat economic developments since the November meeting should warrant removal of easing bias in February. However, outbreak of coronavirus from China suggests that risks to global growth are greatly skewed to the downside. This should cause the members...
CFTC Commitments of Traders – Traders Took Profit after Recent Gold Price Rally
According to the CFTC Commitments of Traders report for the week ended February 4. NET LENGTH for crude oil futures slumped -64 388 contracts to 397 374 for the week. Speculative long positions fell -11 338 contracts while shorts rose +53 050 contracts. For refined oil products, NET LENGTH...
CFTC Commitments of Traders – Uncertainty of Novel Coronavirus Continued to Support Safe Haven Currencies
Novel coronavirus has shown no signs of abating. The latest statistics indicate that the number of confirmed cases has increased to above 30 000 and casualty to over 800 in China. The epidemic has affected at least 28 countries in the world. Against this backdrop, safe-haven currencies outperformed risky...
Dollar Jumped Broadly on Solid Batch of Economic Data, Coronavirus Fears Receded
Dollar ended last week as the strongest one as markets put China's coronavius behind. Instead, strong risk sentiments lifted major US indices to new record highs. Friday's pull back was likely due to pre-weekend profit taking only. Latest batch of economic data, including ISMs and NFP, suggested that US...
Dollar Firm after Strong NFP Growth, But No Follow Through Buying Yet
Dollar remains firm in early US session after strong headline NFP number. But there is no follow through buying for the moment. Risk appetite also recede mildly as market head towards weekly close. Over the week, Dollar remains the strongest one, followed by Australian Dollar and then Canadian. Sterling...
Dollar to Draw Support from Non-Farm Payrolls for a Strong Close
Dollar is trading with a firm tone as markets await non-farm payrolls report from the US. Bet on a Fed rate cut by June receded this week, currently a 36.6% as indicated by fed fund futures, as stocks extended record runs. A set of solid job data could give...
Stocks to Continue Record Runs, Dollar Firm With Aussie
Markets continue to stay in risk on mode today, with US futures point to more record highs. There is some lift by news that China will halve tariffs on some US imports. Also coronavirus continues to be off investors' mind. In the currency markets, Australian Dollar is the strongest...
More Rate Cuts Expected as Novel Coronavirus Hurt China’s Economy Severely
Earlier this week PBOC announced monetary easing measures to support the economy, in light of the severity of the novel coronavirus. Concerning the latest move, PBOC announced to cut the 7-day and 14-day reverse repo rate, each by -10 bps, to 2.4% and 2.55% respectively. The -10 bps reduction...
Risk On as Coronavirus Fears Subside, Aussie and Dollar Strong
Australian Dollar remains the strongest one for the week while markets are back in risk on mode. Fears over China's coronavirus seem to have subsided, with S&P 500 and NASDAQ new record highs. 10-year yield also staged a strong rebound, taking Dollar broadly higher too. On the other hand,...
US Crude Oil Inventory Jumped Last Week
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks dropped -0.89 mmb to 1294.91 mmb in the week ended January 31. Crude oil inventory gained +3.36 mmb (consensus: +2.83 mmb) to 435.01 mmb. Stockpile in PADD 3 (Gulf...
Dollar Surges on Strong ADP Employment, But Aussie Even Stronger
Dollar rises broadly in early US session after strong ADP employment data. But it's outshone by both Australian Dollar and Sterling. The Aussie is apparently helped by return of risk appetite as well as an RBA's governor that's comfortable with current monetary policy. On the other hand, Swiss Franc...
Focus Turns to US Job and Services Data and Coronavirus Fears Recede
The financial markets seem to have stabilized from coronavirus fears. Following the strong rebound in US stocks overnight, Asian indices are also trading generally higher. Yen and Swiss Franc continue to trade as two of the weakest for the week. But Sterling is the worst performing one on Brexit...
Yen and Franc Turns Softer as Markets Stabilized from Coronavirus Fears
Yen and Swiss Franc turn softer today as global markets rebound. China's coronavirus seems to be suddenly off investors mind, at least temporarily. Meanwhile, Australian Dollar is the strongest one for today, as partly supported by RBA's hold, as well as easing risk aversion. Canadian Dollar follows as the...
RBA Left Cash Rate at 0.75%. Less Dovish on Growth Despite Headwinds
RBA left the cash rate unchanged at 0.75%. To our surprise, policymakers appeared more upbeat on the economic outlook than we had anticipated. While acknowledging uncertainty to growth mainly driven by bushfires and China’s coronavirus, the members adopt a wait-and-see mode to the impacts. They also preferred to gauge...
Aussie Recovers as RBA Gives No Hint of Imminent Rate Cut
Australian Dollar recovers broadly today after RBA stands pat. More importantly, the central bank gives no hint of an imminent rate cut in the accompanying statement. It actually sounds quite comfortable with the current policy. Markets are relatively mixed elsewhere. Sterling turned mixed after yesterday's selloff . Yen also...
Sterling Tumbles on Worries Over Negotiations With EU, Euro Dragged Down
Focuses in the forex markets turned temporarily from China's coronavirus outbreak to Brexit. Both EU and UK expressed strong positions regarding up coming trade negotiations. Their stance reminds traders that risk of cliff-edge Brexit by year end remains. Sterling suffers steep selloff and drags down the Euro. On the...
Risk Aversion Stays as China Back from Holiday, Coronavirus Outbreak Worsens
Risk aversion continues in Asian session as China's coronavirus outbreak continues to worsen. The Shanghai SSE is currently down -8.13%, catching up with others as it's back from holiday. Nikkei is down -1.10%. Singapore Strait Times is down -1.07%. Though, Hong Kong HSI is up 0.09%.
The currency markets, are...
RBA Probably Stays Put in February, Rate Cut Inevitably in Second Quarter
The encouraging employment report might make the case of rate cut less strong this month. Economic developments since the December meeting have been mixed at best. Although job market and inflation showed improvement, GDP growth in the third quarter slowed as contribution from household spending dropped while impacts of...