ECB Preview – More Warning on Downside Risk, No Big Move Until June
Despite some improvements in the economic data released since the March ECB meeting, the overall picture remains mixed and inflation pressure is still soft. There have been plenty of discussions about ECB’s future monetary policy since the last meeting.
First, the central bank made no elaboration on the details after...
Dollar Higher as NFP Beat Expectations, But Upside Capped by Sluggish Wage Growth
Dollar is lifted mildly in early US session as employment data posted slight upside surprise. But buying in the greenback is not broad based yet. A key factoring limiting Dollar' rise is sluggish wage growth. But after all, the set of numbers look way better than February's. Meanwhile, Canadian...
Focus Turns to Non-Farm Payroll after Vague Progress in US-China Trade Talks
Yen is trading softer in otherwise quiet markets today with Hong Kong and China on Holiday. Yen is indeed also the weakest one for the week following rebound in global treasury yields. For now, Swiss Franc is the second weakest for the day, followed by Dollar. Sterling is again...
Dollar Higher on Jobless Claims, Cautious ahead of Trump-Liu Meeting and NFP
Dollar rises broadly in early US session as partly helped by pleasant surprise in initial jobless claims, which fell to lowest since 1969. But gains are so far limited as markets are awaiting meeting between Trump and Chinese Vice Premier Liu He at 2030 GMT. It's widely reported that...
Markets Mixed as US-China Trade Talks Enter into Final Stage
Chinese stocks extend recent rally on news that US-China trade negotiation are completing its final stage. There could even be an announcement of Trump-Xi summit today and Trump meets Chinese Vice Premier Liu He. However, outside China, the markets are just mixed, without clear directions. Economic data released this...
US Crude Oil Inventory Surprisingly Jumped as Producers Ramped Up Output on Price Increase
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks surged +7.22 mmb to 1229.13 mmb in the week ended March 29. Crude oil inventory surprisingly soared +7.24 mmb to 449.52 mmb (consensus: -0.43 mmb). Inventories rose in 3...
Poor US ADP and UK PMI Services Ignored, Risk Appetite Stays Strong
Risk appetite are generally firm globally today and it's best reflected in Germany 10-year yield, which turns positive for the time in more than a week. It's a rather clear indcation of a positive turn in overall sentiments. There is some optimism on US-China trade negotiations, which resume in...
Trade Talk Optimism and Chinese Service Data Lift Sentiments, Yen Pressured
Yen is back under pressure again today as Asian stock markets extend this week's rally. Stronger than expected Chinese services data is lifting sentiments. Meanwhile, there is somewhat some optimism on US-China trade negotiations, which is restarting in Washington today. International organizations continued to give warnings on global slowdown,...
China: Renminbi Internationalization Remains Sluggish
Renminbi internationalization
The IMF’s latest report reveals that the process of renminbi internationalization remains sluggish as renminbi (Chinese Yuan) is still a tiny portion of global central banks's FX reserve. In 4Q18, 1.89% global FX reserve was allocated to renminbi , compared with 1.07% in 4Q16, when the currency was...
China: March PMIs Show Improvement in Economic Activities
Markit/Caixin’s PMI report shows recovery in China’s economy in March. The composite output index rose to 52.9 in March, from 50.7 in the prior month. This marks the highest level since June 2018. While the manufacturing sector returned to the expansionary territory, services activities also showed stronger growth.
It is...
Dollar Trading Higher Despite Durable Miss, Sterling Soft in Established Range
Dollar trades generally higher today even though upside momentum is capped by weaker than expected durable goods report. Economic data released this week are so far mixed. But at least, they don't point to heightened recession risk. While long treasury yields retreat mildly today, they're held well above last...
Australian Dollar Tumbles as RBA Signals It’s Ready to Move
Australian Dollar trading broadly lower today after RBA kept interest rate unchanged. While there was no clear dovish shift, the statement suggests that RBA is starting to get ready for a move. Weakness in Aussie takes New Zealand Dollar lower too. Sterling is the third weakest so far after...
RBA Review – Holding Rate On Record Low and Turning More Dovish on Economic Outlook
Unsurprisingly, RBA left the cash rate unchanged at 1.5% for a 29th meeting.
While the members acknowledged more downside risks on the economic outlook, they maintained the monetary policy forward guidance unchanged. However, Aussie weakened after the announcement, amidst heightened expectations that the central bank would cut the policy rate...
US Retail Sales Disappointment Raises Doubts on Optimism from Chinese Data
Global markets are generally in risk-on mode today as recession fears eased mildly after improvement in Chinese manufacturing data. While sentiments remain generally positive in early US session, there is a slight bit of cautiousness after disappointment retail sales from he US. Headline sales dropped -0.2% mom in February,...
China Manufacturing PMIs Back in Expansion, Asian Stocks and Australian Dollar Lifted
Stock markets staged a strong rally in Asian session as lifted by better than expected manufacturing data from China. Both official and Caixin PMI manufactured climbed back into expansionary region, suggests that the worst could be over. Australian Dollar jumps broadly following generally positive risk sentiments, followed by New...
CFTC Commitments of Traders – Bets for USD Trimmed on Both Sides
As suggested in the CFTC Commitments of Traders report in the week ended March 26, NET LENGTH in USD Index fell as both speculative long and short positions dropped. NET LENGTH for USD index slipped -650 contracts, to 25 285. All major currencies were in NET SHORT positions.
Concerning European...
CFTC Commitments of Traders – Traders Bet Higher Gold and Silver Prices as Fed Likely To Pause Rate Hike This Year
According to the CFTC Commitments of Traders report for the week ended March 26, NET LENGTH for crude oil futures jumped +33 873 contracts to 448 619 for the week. Speculative long positions rose +25 989 contracts while shorts plunged -7 884. Crude oil prices strengthened during the week....
Risk Aversion to Come Back in Q2 as Stocks and Yields Recouple
Intensifying recession fear was the main theme in the markets in March, alongside never-ending Brexit and trade tensions. With downside risks to growth starting to materialize, major global central banks started their dovish turns. Most notably, Fed now forecasts no rate hike this year. ECB will keep interest rates...
Canadian Dollar Surges on GDP Surprise and Oil Rally, Sterling Recovers ahead of Brexit Vote
Canadian Dollar jumps sharply in early US session after stronger than expected GDP data. At least, the three month-rolling average remained in expansion despite the contraction in December and November. Additionally, WTI crude oil surged through recent resistance to resume larger up trend to as high as 60.72. For...
RBA Preview – Expecting a Dovish Shift on Monetary Policy Stance
The lack of momentum in economic activities would soon dent RBA's hope of higher household consumption (and eventually higher inflation), as a result of further decline in the unemployment rate. We expect the central bank to turn more cautious at next week's meeting. Although the members agreed in March...