Dollar Surges as US-China Tensions Back in Spotlight, Sterling Rally Lost Steam
Market sentiments seem to be hurt by news that China is set to seek WTO backing next week to slap sanctions on the US. The sanctions would be for non-compliance with a WTO ruling over US dumping duties, which China won in 2016. The case was then confirmed in...
Sterling Strong on Brexit Optimism, Look into Job Data for Further Strength
Yen and Dollar are trading as the weakest ones in Asian session as risk aversion receded. In particular, Nikkei rebounds over 1% as concerns eased about last week's typhoon and earthquake. Canadian Dollar is the strongest one at the time of writing, followed by Australian Dollar and Sterling. But...
Strong Chinese Inflation Mainly Driven by Food Price
China’s headline CPI rose to a 6-month high of +2.3% y/y in August, up from +2.1% a month ago. However, the increase almost entirely came from food prices which jumped to +1.7%, from +0.5% in the prior month. Taking a close look at food inflation, deflation in pork price...
Swiss Franc Dives on Easing Italian Budget Worries, Franc Crosses Could be Reversing
Swiss Franc tumbles broadly today as easing concerns over Italy's budget narrows Italian-German yield spread notably. Italy Economy Minister Giovanni Tria's comments over the weekend were well received by the markets. Euro also strengthens broadly, except versus Australian Dollar and Sterling. Aussie is merely in consolidation, digesting recent steep,...
Yen Mildly Higher as Asian Markets Weighed Down by Trade Tension, ECB to Highlight the Week ahead
Yen opened the week mildly higher as Asian markets are generally soft on risk aversion, after Trump warned of tariffs on additional USD 267B in Chinese imports on Friday. However, Nikkei is rather immured from trade threats for today, despite Japan being named the next target. But after all,...
ECB to Affirm QE Reduction from October and Downgrade Inflation Forecasts
While it has been widely anticipated that this week’s ECB meeting would be non-eventful, it is closely watched. We expect the central bank to reaffirm that the monthly asset purchases would be halved in size (from 30B euro to 15B euro) from October to December. There is chance that...
Dollar Soared as Data Support Fed Hikes, Trade War to Intensify
Economic data, Fed expectations, trade war, Brexit were among the biggest themes last week. Emerging market risks seemed to have abated. Meanwhile, Italy was less of a threat to Eurozone after the government pledged not to blow up the account. Yen and Swiss Franc ended the week as the...
CFTC Commitments of Traders – Greenback Rose Across the Board
As suggested in the CFTC Commitments of Traders report in the week ended September 4, NET LENGTH of USD index dropped -1 085 contracts to 33 486 contracts for the week. Both speculative long and short positions increased. During the week, the DXY index gained +0.76%. The greenback rose...
CFTC Commitments of Traders – Traders Expect Gasoline Prices to Fall as Driving Season Ends
According to the CFTC Commitments of Traders report for the week ended September 4, NET LENGTH for crude oil and heating oil futures rose, while that for gasoline futures dropped. Speculative long positions of crude oil futures jumped +19 043 contracts, while shorts climbed +3 626 contracts higher, resulting...
Dollar Rises on Solid NFP and Wage Growth, Sterling Even Stronger on EU Barnier
Sterling surged sharply today as once against lifted by Brexit. The direct trigger isn't clear but it's believed to be comments by EU Barnier. Dollar is following as the second strongest with help from another set of solid non-farm payroll data. In particular, wage growth beat an already high...
Yen Jumps as Asian Selloff Extends, Dollar Cautious ahead of NFP Job Data
Australian and New Zealand Dollar suffered heavy selling today as risk aversion weighs. Major Asian indices are all in red on trade war worries and selling is intensifying into mid-Asian session. Dollar doesn't ride on the wave and is trading as the third weakest. But the greenback is seen...
US Crude Oil Inventory Fell More Than Expected, While Fuel Stockpiles Unexpectedly Soared
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products stocks rose +3.55 mmb to 1226.61 mmb in the week ended September 1. Crude oil inventory declined -4.3 mmb (consensus: -1.29 mmb) to 401.49 mmb. Inventories decreased in 4 out of 5...
Dollar Weakens after Mixed Job Data, Awaiting Trade War Developments
Dollar weakens again in early US session after mixed job data, but selling pressure is so far limited. Markets are cautiously awaiting tomorrow's non-farm payroll report for sure. But more importantly, the development in trade relationship with Canada and China is the focal point. Canadian Foreign Affairs Minister Chrystia...
Yen and Swiss Franc Higher after Sharp Sterling Volatility, Dollar Looks to ISM Services
After sharp volatility overnight, the forex markets relatively calm in Asian session. Australian Dollar is trading as the weakest one so far with larger than expected trade surplus providing no support. Dollar follows as the second weakest as it turned soft after the rally attempt failed. Canadian Dollar and...
BOC Affirmed the Case of October Rate Hike, Downplayed Strong Growth and Inflation
BOC left the policy rate unchanged at 1.5% in August. Comments from Governor Stephen Poloz also signaled that a rate hike in October is highly likely. Yet, the market interpreted the message sent in the meeting was more cautious than previously. While acknowledging strong growth in the second quarter,...
Budget Discipline Narrows Italian-German Yield Spread, Yen and Swiss Franc Lower
Risk aversion is the general theme in European and Asian markets today while US futures point to lower open. But that's not quite reflected in the currency markets. New Zealand Dollar is trading as the strongest one so far. Canadian Dollar also recovered some ground as markets await BoC...
Tale of Two Crises – Comparing Argentina and Turkey
Since our last discussion in May, the financial situation in Argentina has not improved. Rather, it has deteriorated rapidly over the past few months. Last week, President Mauricio Macri announced that he had asked the IMF to accelerate disbursement of its 3-year stand-by loan worth of US$ 50B, after...
Asian Stock Rout Limits Aussie Rebound, Dollar Rise Halted by Dovish Fedspeak
Australian Dollar is lifted broadly today after stronger than expected GDP data. But the Aussie quickly pared gains as weighed down by stock market rout in Asia. At the time of writing, Hong Kong HSI leads the decline by falling -1.65%. China Shanghai SSE is down -0.92%, Singapore Strait...
Dollar Surges as Ex-US Markets Back in Risk Aversion, Canadian Dollar Tumbles Sharply
Dollar strengthens broadly today, in particular against commodity currencies, as global ex-US markets are back in risk averse mode. Trade tensions and emerging market problems are staying as the two main themes that weigh on investors' sentiments. The greenback is followed by Yen and Sterling as the next strongest....
RBA Left Cash Rate Unchanged for 25 Months in a Row
RBA left the cash rate unchanged at 1.5% for a 25th consecutive month. Similar to previous meetings, policymakers were upbeat over the growth and the employment outlook, while acknowledging soft wage growth and inflation. In short, the central bank is optimistic over the business conditions and higher levels of...