Dollar Regaining Momentum While Risk Appetite Stays Strong, NASDAQ Hit Record High
The markets are rather calm today as supported by relatively positive investor sentiments. NASDAQ surged to new record high at 7825.67 before having a strong close at 7823.92, up 1.39%. DOW ended up 0.91% at 24924.89 while S&P 500 rose 0.87% to 2798.29. In Asia, Nikkei is having a...
Risk Appetite Unmoved by ECB Accounts, US CPI, Brexit White Paper, Nor NATO Showdown
Return of risk appetite is probably the main theme in the markets without a main theme today. There are quite a number of "high-level" events today, ECB meeting accounts, US CPI release, UK's Brexit white paper, and the NATO showdown. Plus, the continuous development of US-China trade war in...
Dollar Strong as Markets Look into US CPI
Yen was sold off sharply overnight after stronger than expected US producer price inflation data. Selling continues in Asian session as risk aversion receded. The impact of US-China trade war escalation on the markets was brief and limited. Most importantly, the China Shanghai Composite rebounded strongly and is trading...
US Crude Oil Inventory Sank to Lowest Level in 2 Years
Crude oil prices fell as US inventory slumped last week. The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products stocks dropped -7.17 mmb to 1199.73 mmb in the week ended July 6. Crude oil inventory plunged -12.63 mmb (consensus: -4.49 mmb)...
BOC Review – Raised Growth Outlook but Upbeat Business Investment Might Diminish in Coming Years
BOC delivered its fourth post-crisis rate hike in July. While the increase of +25 bps had been widely anticipated, the accompanying statement and the updated growth forecasts appear more hawkish. While raising GDP growth outlook for 2019 and 2020, BOC’s wage growth forecast remained benign. Meanwhile, it heightened its...
Dollar Marches On With NATO Showdown and US-China Trade War
Global stocks tumble as US escalated the trade war with China again today, moving on to the process to impose tariffs on additional USD 200B of Chinese goods. On the other hand, Trump is fighting allies of the US in NATO summit in Brussels. At the time of writing,...
Yen and Dollar Surge as US Moves on with Tariffs on $200B in Chinese Imports
Yen and Dollar are both strong as the US announced to move on with 10% tariffs on another USD 200B in Chinese imports. That could come into effect as soon as in September. Asian Markets are broadly in red. At the time of writing, China Shanghai SSE is down...
Theresa May Walks Brexit Tightrope after Two Senior Officials Quitted, Key Dates ahead
While the optimists suggest that the latest political turmoil in the UK has increased the chance of a “soft" Brexit which is positive for UK’s economic outlook and the British pound, we see ongoing uncertainty in the negotiations with the EU. Pro-Brexit Dominic Raab has replaced the David Davis...
Dollar Rallies as Euro Pressured by German ZEW Miss, Yen Lower on Risk Appetite
Dollar strengthens broadly today, partly with help from Euro's post data weakness. Much weaker than expected German ZEW economic sentiment is giving some pressure to the common currency. On the other hand, USD/JPY surges through 111.13 temporary top and is now taking on 111.39 key near term resistance. Yen's...
Bets for Falling GBP Likely Increase Further as Political Turmoil Heightens Brexit Uncertainty
As suggested in the CFTC Commitments of Traders report in the week ended July 3, bets for US dollar increased modestly on both sides. Speculative long positions for USD Index (DXY) futures added +2 399 contracts while shorts added +1 953 contracts, resulting in a Net LENGTH of 18 672...
Sterling Stabilized after Wild Ride, Strong Risk Appetite Continues to Pressure Yen
Strong risk appetite is keeping the Japanese Yen broadly weak this week. DOW jumped as impressive 302.11 pts or 1.31% to close at 24776.59, turned positive for 2018. S&P 500 followed by rising 24.35 pts or 0.88% to 2784.17. NASDAQ gained 67.81 pts or 0.88% to 7756.20 and is...
Traders Increased Bets on Higher Crude Oil and Gasoline Prices
According to the CFTC Commitments of Traders report for the week ended July 3, net LENGTH for crude oil futures soared +31 629 contracts to 656 720. Net LENGTH for heating oil futures rose +2 297 contracts to 49 443 while that for gasoline added +1 145 contracts to 96...
Sterling’s Fortune Reversed after Boris Johnson Resignation
While the reaction to former Brexit Minister David Davis was largely muted, the situation seemed to change drastically after adding former Foreign Minister Boris Johnson. Prime Minister Theresa May wanted to provide certainty to UK businesses with her locked up meeting in the Chequers with cabinet last Friday on...
Sterling Strengthens Broadly as Davis Resignation is Seen as Good For Soft Brexit
Quick update: Sterling drops notably after Foreign Minister Boris Johnson finally resigns. judging from the current price action, Boris's resignation seems to be taken more seriously by the markets than Davis's.
The global stock markets are in positive mood today. Major European indices open higher, following the strengthen in Asian...
Sterling Volatile on Brexit Jitters, Yen Lower as Chinese Stocks Lead Asian Rebound
Yen trades broadly lower today, followed by Dollar, as Asian markets recovered broadly. China's Shanghai SSE composite leads the way by gaining 1.9% and breaches 2800 handle. It looks like some solid support was obtained between 2016 low at 2638 and 2700 psychological. Current momentum warrants a near term...
BOC Preview – Rate Hike Fully Priced In, Data and Trade with US Continue to Guide Future Path
Since the BOC meeting in May, at which the policymakers removed the “cautious” rhetoric, the market has been raising its bet on a July rate hike. As of today, the market has priced in over 90% chance of a +25 bps rate hike at this week’s meeting. GDP growth...
US, European and Asian Markets Reacted Differently to Start of US-China Trade War
The global markets reacted rather differently as the US-China trade war formally started while there were only signs of further escalations. Over the week, NASDAQ was a star performer and rose 2.37% to 7510.30. S&P 500 rose in tandem by 1.52% to 2759.82. DOW lagged behind but also managed...
Dollar Pullback Resumes as NFP Risks Cleared
Dollar trades notably lower in early US session despite stronger than expected headline NFP number. The rise in unemployment rate and slower than expected wage growth could be the factors. But it's more likely just continuing this week's pull back after NFP risk is cleared. Yen is following as...
US Crude Oil Inventory Unexpectedly Increased
Crude oil prices fell as US inventory surprisingly increased last week. The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products stocks gained +3.3 mmb to 1206.9 mmb in the week ended June 29. Crude oil inventory added +1.25 mmb (consensus: -3.54...
FOMC Minutes: Members Urged Attentions on Yield Curve, Change in Forward Guidance
The FOMC minutes for the June meeting revealed that the members were confident over the growth and inflation outlook, although they acknowledged intensifying trade conflicts. There were discussions over the term structure of interest rates. While many of them were concerned over the flattening of US treasury yield curve,...