BOC Preview – Policy Rate will Stay Unchanged. But for How Long?
Although the Fed and ECB have resumed monetary easing, BOC is not expected to follow suit. This is also the key reason for the recent strength in Canadian dollar. At the meeting next week, we expect the central bank to leave the policy rate unchanged at 1.75%.
Upside surprise in...
CFTC Commitments of Traders – Net LENGTH for CAD futures has More than Double amidst Narrowing Yield Spread with USD
As suggested in the CFTC Commitments of Traders report in the week ended October 22, NET LENGTH in USD Index declined -6 226 contracts to 31 210. Speculative long positions fell -3 455 contracts and short positions added +2771 contracts. USD fell across the board as market turned trade...
CFTC Commitments of Traders – Bets for Higher Oil Prices Increased as Market Sentiment Improved
According to the CFTC Commitments of Traders report for the week ended October 22, NET LENGTH for crude oil futures soared +9 288 contracts to 366 172 for the week. Speculative long positions jumped +12 545 contracts while shorts added +3 257 contracts. For refined oil products, NET LENGTH...
Dollar and Loonie Strengthened as USD/CAD Presses 1.3 ahead of Fed and BoC
Canadian and US Dollars ended last week as the strongest ones. It now appears that US and China are on track to complete the easier phase 1 trade deal in November. Optimism lifted stocks as well as oil prices, which indirectly helped the Loonie too. Also, recent developments in...
Euro Soft on Weak Business and Consumer Sentiments
Trading in the forex markets remain subdued ahead of weekly close. Euro is generally softer as data showed German business and consumer sentiments remained weak. Also, professional forecasters downgraded Eurozone inflation and growth projections in latest survey. For the week, Canadian Dollar remains the strongest one, followed by Dollar...
Dollar Still Lacks Committed Buying as Markets Stay in Consolidation Mode
Consolidations continue generally in the forex markets today, with the exception of notable strength in Canadian Dollar. The Loonie is so far the strongest one follow the week as helped by rebound in oil price. Dollar is currently following as second strongest but there is no committed follow through...
ECB Review – Outgoing Draghi Defended the Need to Easing Package
President Mario Draghi’s last ECB meeting came in without surprise. He sent a cautiously dovish message about Eurozone’s economy and reiterated the importance of the stimulus package announced last month. The new leadership will likely maintain the existing policy stance unless there are dramatic changes in the domestic and...
Euro Shrugs ECB Meeting, Dollar Ignores Weak Durable Orders
The forex markets remain generally steady in early US session. ECB rate decision triggered little reactions as widely expected. Also, markets was also indifferent to poor PMIs from Eurozone. Meanwhile, weak durable goods orders report from US was shrugged off. And positive news regarding US-China trade deal was ignored....
Euro Softer in Consolidations ahead of Draghi’s Last ECB Meeting
Consolidative trading continues in the forex markets as major pairs are crosses are stuck in tight range. Yen weakened mildly overnight but there was no follow through selling through recent highs. European majors are also mildly softer, without sustainable decline. ECB meeting is a focus today but it will...
US Oil Inventory Stabilized after Weeks of Stockbuilds
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 October 18. Crude oil inventory dropped -1.7 mmb to 433.15 mmb (consensus: +2.23 mmb). Inventory in PADD 3 (Gulf...
Yen Softens as Risk Sentiments Stabilized, in Quiet Trading
The forex markets turns mixed in relatively quiet trading today. Earlier selloff in Asia stocks didn't carry forward to other markets. Yen turned slightly softer, following Australian Dollar as second weakest. Sterling's selloff halted and recovers broadly as consolidations continue. Stabilization in the Pound also takes other European';s mildly...
China Watch – PBOC Paused Rate Reduction in October. RRR Cut Still Likely as Growth Continues to Slow
The market was surprised to see that PBOC left the loan prime rate (LPR), its latest benchmark rate, unchanged in October following two consecutive cuts in the prior two months. Yet, this came in line with our expectations that elevation inflation could retrain PBOC from extending monetary easing.
Recall that...
Markets in Mild Risk Aversion on Political Risks, Sterling Mixed after Brexit Votes
Yen and Swiss Franc rise broadly in Asian session today, followed by Dollar, on mild risk aversion. Traders are seeing some risk of a snap election in UK after the schedule of Brexit deal was voted down. Additionally, political risks in Hong Kong continued on news that China is...
Sterling Softens ahead of Brexit Vote, Canadian Dollar Weighed Down by Retail Sales
Canadian Dollar turned mixed as the brief lift from election results faded. Instead, the Loonie is under mild selling pressure after poor retail sales data. Nevertheless, Sterling is the weakest one for today as traders turn cautious ahead of vote on Brexit and bill time table. Pull back in...
Canadian Dollar Firm after Trudeau’s Minority Win, Sterling Awaits Brexit Vote
Canadian Dollar rises slightly higher after Prime Minister Justin Trudeau cling on to power following election wing. His Liberal Party had won, or were leading in 155 out of 338 seats in the parliament. That was short of the 170 seats needed to take majority and the Liberal might...
ECB Preview – President Draghi’s Last Speech to Remain Dovish as He Leaves a Divided ECB to Lagarde
In his last meeting as the president, Mario Draghi is not expected to announce any new measures. Rather, he would be defending the needs of the stimulus package announced in September and urging for a bigger role in fiscal policy. Economic data released since the last meeting have surprised...
Brexit and Trade Optimism, Sterling Firms Up While Yen Softens
Yen trades broadly lower today, following rally in treasury major global treasury yields. Investors are generally optimistic that, despite all the obstacles, UK Prime Minister Boris Johnson is able to deliver orderly Brexit eventually. Comments from China and US regarding trade negotiations were also affirmative. For now, Euro follows...
Sterling Just Mildly Lower on Brexit Drama, Aussie Firm US-China Trade Progress
Sterling opens the week mildly lower as Brexit uncertainty is dragging on. Nevertheless, selling pressure is weak so far because there is still enough time for the Commons to ratify the Brexit deal to even avoid another extension. At this point, Swiss Franc is following as second weakest, then...
CFTC Commitments of Traders – Traders Trimmed on Higher Precious Metal Price Fell as Risk Appetite Improved
According to the CFTC Commitments of Traders report for the week ended October 15, NET LENGTH for crude oil futures gained +1 799 contracts to 356 884 for the week. Speculative long positions jumped +16 123 contracts while shorts rose 14 324 contracts. For refined oil products, NET LENGTH...
CFTC Commitments of Traders – Traders Trimmed Bets on EUR and GBP as Brexit is in Focus
As suggested in the CFTC Commitments of Traders report in the week ended October 15, NET LENGTH in USD Index dropped -2 423 contracts to 37 436. Speculative long positions fell -4 689 contracts and short positions slipped -2 266 contracts. Concerning European currencies, NET SHORT for EUR futures...