China’s CPI Soared to Highest Level in Almost 8 Years; Exports Improved on Tariff Exemption
Headline CPI in China accelerated further to +3.8% y/y in October. This had exceeded consensus of +3.4% and breached the 3% target for the first time since 2013. Food price, in particular pork price, was again the key driver for the strong inflation. Food inflation soared +15.5% y/y, compared...
Trade Optimism Boosted Stocks, Yields, & Dollar
Trade optimism was the main theme driving the financial markets last week. Investors seemed to be convinced that US and China are close to signing trade agreement phase one, even though it's unsure when and where yet after the APEC summit in Chile was cancelled. Additionally, there were increasing...
CFTC Commitments of Traders – Bets on US Dollar Trimmed on both Sides
As suggested in the CFTC Commitments of Traders report in the week ended November 5. NET LENGTH in USD Index slid -1 130 contracts to 28 379. Speculative long positions fell -2 200 contracts and short positions dropped -1 070 contracts. Concerning European currencies, NET SHORT for EUR futures...
CFTC Commitments of Traders – Traders Remained Bullish in Crude Oil Although Price is at 6-Week High
According to the CFTC Commitments of Traders report for the week ended November 5, NET LENGTH for crude oil futures soared +22 793 contracts to 406 140 for the week. Speculative long positions rose +12 784 contracts while shorts slumped -10 009 contracts. For refined oil products, NET LENGTH...
Dollar Boosted by Yields, Canadian Weighed Down by Job Data
Dollar rises broadly today and it's set to end as the strongest one. Strong rally in treasury yield, with 10-year yield now at 1.95, is giving the green back solid support. Stock futures point to mixed open, but could easily extend recent record run if there is more positive...
Dollar Strong on Trade and Rebound in Treasury Yields
The forex markets are pretty steady in Asian session today, staying inside yesterday's range. Over the week, Euro is currently the weakest one on poor economic outlook, with downgrades by European Commission. New Zealand dollar is second weakest after rise in unemployment rate. Sterling is the third weakest as...
BOE Left Policy Rate at 0.75%. Two Members Voted for Easing
Although the Bank rate stayed unchanged at 0.75% as expected, it is surprising to see two members voted for a rate cut. At the minutes, BOE has left the door open for a rate cut for the first time. British pound slumped as the message came in more dovish...
Sterling Dives as Two BoE Members Voted for Rate Cut, Yen Pressured by Trade Optimism
Sterling drops broadly today after two BoE policy makers surprisingly voted for a rate cut, even though the central eventually stood pat. Following the Pound, Yen is the second weakest as risk appetite returns. Market sentiments were lifted after China said they agreed on phased rollback of tariffs with...
Sterling Range-Bound as BoE Projections Eyed, Yen Rebounds
Yen jumps broadly today as risk appetite continues to recede in Asian session. Investors turned a bit cautious as it's still uncertain when and where US and China would sign the phase one trade agreement. Currently, Swiss Franc is the second strongest, followed by Dollar. On the other hand,...
US Crude Oil Inventory Extended Gains
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks dropped -1.59 mmb to 1286.81 mmb in the week ended November 1. Crude oil inventory jumped +7.93 mmb to 446.78 mmb (consensus: +1.52 mmb). Inventory gained in 4 out...
Dollar Pares Gain ahead of Resistance in Indecisive Markets
The markets are relatively indecisive today. It seems that rally in stock markets have passed a near term climax, awaiting fresh developments in US-China trade negotations. Treasury yields also turn mildly lower after yesterday's rally. In the forex markets, Dollar struggles to ge through near term resistance against both...
Risk Appetite Takes a Breather, NZD Down on Unemployment Rate
Yen strengthens broadly today as markets stabilized from recent strong risk appetite. US stocks closed mixed after extending recent record runs. Euro, Dollar and Sterling follow as the next strongest while markets continue to eye trade developments. Commodity currencies are generally lower. In particular, New Zealand Dollar is weighed...
Trade Optimism Lifts Market Sentiments, Treasury Yields Higher
Trade optimism is the main diver in the financial markets today. There are talks that US officials are considering to remove the 15% tariffs on USD 112B worth of Chinese goods, put to effect back on September 1. In return, US would demand stronger intellectual property protections. If realized...
PBOC Cut 1-Year Lending Rate for the First Time since 2016
For the first time in over 3 years, People’s Bank of China (PBOC) lowers the rate of the 1-year medium lending facility (MLF) by -5 bps to 3.25%. This surprising move underlines the rapid deterioration of domestic growth and paves the way for a cut in the loan prime...
RBA Left Cash Rate Unchanged at 0.75%, Maintained Dovish Bias as Members Struggle to Bring Jobless Rate Lower
As expected, RBA left the cash rate unchanged at 0.75%. Dovish bias remains as policymakers struggled to bring down the unemployment rate and boost inflation. Economic developments showed “little changed“. The members affirmed that “a gentle turning point appears to have been reached“. A quarterly Statement on Monetary Policy...
Aussie Firmer after RBA, Risk Appetite Continues as US Stocks Hit Records
Risk appetite continues in Asian session, following record closes in US. Yen and Swiss Franc continue to be broadly pressured. Meanwhile, Australian dollar survived the balanced RBA rate statement and leads other commodity currencies higher. Dollar, Euro and Sterling are mixed, with Dollar having a slight upper hand for...
BOE Preview – Maintaining Dovish Stance although No-Deal Brexit Less Likely
The chance of no-deal Brexit appears to have diminished after Article 50 is further extended to January 2020 and the parliament will hold snap elections in December. However, domestic growth has shown signs of moderating and unemployment rate is bottoming. We expect BOE to maintain the slightly dovish tone...
Risk Appetite Continues as Yen Stays Weak, Dollar Defending Support
Yen and Swiss Franc remain the weakest ones for today, following strong rally in global stocks. US indices would likely extend the record run, as futures suggest. German and US benchmark yields also climb a bit higher. back in the forex markets, though, Dollar recover mildly as there is...
Risk Appetite Returns on Trade Optimism, Yen and Swiss Franc Softer
Strong risk appetite dominates Asian session today, partly as follow through buying from US, and partly on trade optimism. Commodity currencies are trading generally higher, as led by New Zealand Dollar rand then Australian. On the other hand, Swiss Franc and Yen are the weakest ones for now. Dollar...
CFTC Commitments of Traders – Significant Decline in GBP Net Short Suggests Market Hopeful of Election Outcome
As suggested in the CFTC Commitments of Traders report in the week ended October 29 NET LENGTH in USD Index slid -1 701 contracts to 39 509. Speculative long positions fell -3 650 contracts and short positions dropped -1 949 contracts. Concerning European currencies, NET SHORT for EUR futures...