Italy Rating Downgrade Inevitable Although Government Might Water Down Stimulus
(Update: The Italian government has announced that it would now set the budget deficit targets to 2.4% of GDP for 2019, 2.1% for 2020 and 1.8% for 2021. Given short-lived and fractious nature of Italian government, we view these targets with suspicion. Suggest to continue monitoring the debt problems of...
Euro Recovers on Italy Budget Rumor, Risk Aversion Persists in Asia
Euro recovers broadly today on new that the final version of Italy's budget could be less worse than originally reported. More details could be published today and we'll see how the common currency, as well as German and Italian yield react. Meanwhile, Sterling also recovers as markets prefer for...
Risk Aversion Dominates as Australian Dollar, Sterling and Euro Slide
Euro suffered heavy selling today as Italy and EU stepped up rhetorics on budget clashes. But even heavier selling is seen in Australian, New Zealand Dollar and Sterling. Steep decline in Hong Kong stocks hints that China markets will likely come back from holiday next week facing much troubles....
Trump’s USMCA – NAFTA 2.0 or Old Wine in New Bottles? And, Prepared for China Too?
Canada and the US eventually reached a preliminary trade deal, named USMCA, just a few hours before the US-imposed negotiation deadline. Obviously, the market was thrilled by the “breakthrough”, evidenced by the rally of Canadian dollar and, to a lesser extent, Mexican peso against the greenback. While there are...
Euro Weakens as Italy on Track to Clash with EU on Budget, Aussie steady after RBA
Canadian Dollar remains firm on the USMCA trade deal but it's waiting for fresh stimulus to extend rally against Dollar and Yen. Australian Dollar is also steady after RBA stands pat and published a neutral statement as widely expected. Meanwhile, Euro is suffering some fresh selling on persistent worries...
CFTC Commitments of Traders – USD Bets Trimmed as Fed’s Policy Rolls Out as Planned
USD bulls lost ground as the greenback corrected from its peak. As suggested in the CFTC Commitments of Traders report in the week ended September 25, NET LENGTH of USD index dropped -447 contracts to 37 009 contracts. Both speculative long and short positions decreased. During the week, the...
CFTC Commitments of Traders – Traders Bullish on Energy as Prices Hit Highs
According to the CFTC Commitments of Traders report for the week ended September 25, traders turned more bullish on the energy market. NET LENGTH for crude oil, heating oil and gasoline futures rose, while NET SHORT for natural gas futures dropped. Speculative long positions of crude oil futures jumped...
Canadian Dollar Stays Firm on Trade Deal, Sterling Lifted by Brexit Rumor
Canadian Dollar remains the strongest one today as boosted by the new trilateral USMCA trade deal with US and Mexico. Meanwhile, Sterling is shot up by news that UK Prime Minister Theresa May is ready to make a new offer on Irish border on Brexit negotiation. However, no details...
Canadian Dollar Soars as USMCA Trilateral Trade Deal Agreed Finally
Canadian Dollar surges broadly today as the an agreement, the USMCA is finally reached with the US to replace NAFTA. Riding on the last week's post GDP rally, the Loonie is enjoying strong bullish momentum. The USMCA news further seal the case for an October BoC rate hike. At...
Dollar Higher on Hawkish Fed, Euro Dragged Down by Italy
Dollar rose broadly last week as markets received Fed's hawkish rate hike rather week, despite initial hesitation. However, the greenback was just the second strongest, overshadowed by Canadian Dollar. Stronger than expected GDP data from Canada solidify the case of October hike by BoC. Furthermore comments by BoC Governor...
Euro Selloff Intensifies as Markets Response to Italy Budget Deficit Overwhelmingly Negative
A long list of economic data are released today. But the main focus is on Italy. The coalition government's decision to target budget deficit at 2.4% of GDP for the next three years drew heavy criticism from EU. Also, financial market reactions are overwhelmingly negative. European stocks decoupled from...
Dollar Rally Continues as Focus Turns to PCE Inflation
The case for bullishness in Dollar continued to build up with yesterday's rally. The greenback is now the strongest one for the week followed by Sterling. In particular, USD/JPY's firm break of 113.17 resistance confirmed larger up trend resumption. Now, GBP/USD is the only one who's yet to break...
Dollar Extends Post FOMC Broad Based Rally, Euro Lower on Italy Budget Jitter
Dollar strengthens further and broadly, in early US session as post FOMC rally extends. As we aruged in prior report, there were hawkish elements in Fed's projections and overall announcement should be Dollar positive. Today's rally showed that this view is shared by other participants. In particular, EUR/USD's break...
Dollar Rebounded from Knee-Jerk Selloff as Fed is More Hawkish than Initial Perceived
Dollar suffered a brief knee-jerk selloff after Fed raised interest rate as widely expected but stopped calling monetary policy as accommodative. But the greenback recovered as the overall announcement wasn't dovish at all. There were indeed more hawkish elements in the details of the new economic projections. For now,...
FOMC Hiked Rate and Removed “Accommodative” Policy Reference
FOMC raised the Fed funds rate, by +25 bps, to 2-2.25% in September. While the accompanying statement was largely dubbed from the previous meeting, the market has viewed the removal of the “accommodative” policy language has slightly dovish. This is evidenced in the instant drop of Treasury yields and...
Dollar Rises as FOMC Awaited, But No Technical Level Broken Yet
Dollar firms up broadly in early US session as markets are awaiting FOMC rate decision. A 25bps hike is widely expected and there is no change for Fed to disappoint. The tricky part is the new economic projections which could make or break Dollar' rebound. At the time of...
Australian Dollar Boosted by Chinese Stocks, Dollar Still Lacks Buying ahead of FOMC
Australian Dollar rises broadly today as boosted by strong rally in Chinese stocks. The Shanghai SSE composite is pushed through 2800 psychological level on news that MSCI is considering increasing A shares weighting significantly. Nonetheless, Aussie is out-performed by New Zealand Dollar for now, on strong rebound in business...
Swiss Franc Selloff Extends on Surging German Yield
Swiss Franc weakness is the main theme in rather directionless markets today. In particular, EUR/CHF is leading the way higher on expectation of policy divergence between ECB and SNB. Also, the need for safe haven diminished much after situations in Turkey and Italy stabilized for a while. Funds are...
Dollar Regains Bullish Momentum after Brief Set Back, Swiss Franc Pressured
Dollar suffered brief set back overnight as Euro attempted for a rally. But the greenback quickly found its footing and it's trading as the strongest one in Asian session today. In particular USD/CHF took out 0.9651 resistance, which is taken as a signal of near term reversal. It remains...
Sterling Recovers Broadly But Risks Stay on the Downside, Dollar Losing Some Steam
Sterling pares back some of last week's loss and is trading as the strongest one for today so far. There were lot of comments on Brexit from both sides. In particular, UK Brexit Minister Dominic Raab tried to talk down the disagreement from EU. But the messages from the...