BOE Voted 9-0 to Keep Policy Unchanged. Signaled to Discuss with Regulator about Negative Rate Implementation
BOE voted unanimously to leave the Bank rate unchanged at 0.1%. The asset purchase program also stayed at 745B pound in September. At the meeting, policymakers acknowledged stronger-than-expected recovery in the UK. Yet, they reiterated that the outlook remained highly uncertain as mainly brought about by the coronavirus pandemic....
Fed Shifted to Outcome-Based Forward Guidance, Upgraded Economic Projections
The Fed left the policy rate unchanged at 0-0.25% and the asset purchases program unchanged in September. There are substantial changes in the policy statement, reflecting the formal adoption of average inflation targeting. Updated economic projections revealed a more optimistic outlook for this year through to 2022. The Fed...
Dollar Surges as FOMC Risks Cleared, on Asian Risk Aversion
Dollar surges broadly today partly because FOMC announcement and projections overnight removed the risk of extra dovishness. Also, Hong Kong led decline in Asian stocks is providing extra support to the greenback. Yen is following closely as the second strongest for now. On the other hand, New Zealand Dollar...
Crude Oil Price Rebounded as Production Halted by Hurricane while Inventory Fell
Crude oil price rebounded as hurricane Sally damaged production facilities while US inventory resumed decline last week. The front-month WTI crude oil contract extended gain for second day, rising to a 1.5- week high og US$40.34/bbl before settling at 40.16. The Brent contract also climbed higher. US Bureau of...
Yen Surges as Traders Look Forward to FOMC Projections
Yen rises broadly today as markets are awaiting Fed policy decision. The strength in Yen since last week seems to be related to inflation expectations. It first followed comments from an ECB official that the pandemic impact impact would eventually be demand dominate, and thus deflationary. Such view could...
Dollar Softens Mildly as Focus Turns to FOMC Statement and Projections
Dollar trades generally soft in Asian session but losses are so far limited. The greenback is actually still staying above last week's low against all but Yen and Kiwi. Major focus will turn to FOMC today and traders could finally commit to a direction, after getting Fed's new economic...
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...