Dollar Strikes Back as Yields Jumped after FOMC, Yen Following
Dollar is making a come back as US treasury yield surged after FOMC rate decision and statement. The decision to stand pat was widely expected. One surprise was probably the lack of reference to the stock market crash in October. Fed policymakers appear to be not bothered by it...
Limited News from FOMC, December Rate Hike Hopes Unaltered
As widely anticipated, FOMC left the target range for the federal funds rate unchanged at 2.00-2.25% at its November meeting. The changes in the accompanying statement were limited. This is not unusual as the November meeting is in between important ones in September and December. No press conference and...
Dollar a Bystander ahead of Fed, Euro and Sterling Turn Soft
Dollar's decline slowed today, ahead of FOMC rate decision. But there is so far no momentum for a sustainable rebound. It's like trading mixed as a bystander for now. Instead, major movements are found in Euro and Sterling, which start to weaken mildly. Euro is somewhat weighed down by...
Rising Inventory Perpetuates Crude Oil Selloff in the Fifth Week
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products stocks gained +4.83 mmb to 1253.43 mmb in the week ended November 2. Crude oil inventory increased +5.78 mmb (consensus: +2.43 mmb) to 426 mmb. Inventories increased in 3 out of of...
US Midterm Elections – Split Congress Paves the Way for Slower, but More Sustainable, Growth Outlook
The dust is settled on the result of US midterm elections. As polls have suggested, the Congress is split with Republicans continuing the control of the Senate and Democrats is taking over the House.
In our election preview, we have suggested that the most Democrats can do is delaying the...
No Acceleration in Dollar Selloff, Focus Turns to FOMC
Strong risk appetite carries through from US to Asian markets after Democrat's regain of majority in House after the mid-term election. Nikkei closed up strongly by 401.12 pts or 1.82% at 22486.92. Hong Kong HSI is up 0.76% at the time of writing. Singapore Strait Times is up 0.90%....
RBNZ Affirmed the Next Move Can be Up Or Down, Despite Upbeat Data
RBNZ left the OCR unchanged at 1.75% in November. The move had been widely anticipated. Despite recent strong dataflow, the central bank downplayed the improvements and Governor Adrian Orr affirmed that the next rate change can be up or down. Kiwi, which has jumped to the highest level in...
US Mid-Term Results Cheered by Stocks, But Dollar and Yields Pressured
Dollar's selloff continues as markets enter into US session. It's clear that Democrats have regained control of the House while Republicans retained control of Senate. The reactions in the financial markets are not too straightforward. Stocks are cheering the results as futures point to triple digit gain in DOW...
Dollar Suffers as Democrats Set to Regain House Majority
Dollar trades broadly lower as results of US mid-term election kick in. At the time of writing, Democrats already claimed victory of 163 seats in the House while Republicans got 159 seats. And the Democrats have already achieved a net gain of more than 23 seats up to regain...
Sterling Rally Continues Even Though UK PM May Achieved Nothing on Brexit at the Cabinet Meeting
Sterling remains rather resilient despite more Brexit negative news today. There seems to be no progress on negotiation at all and there is little hope for a November EU summit. Nonetheless, the Pound defies gravity and is trading as the second strongest one today. Australian Dollar is the strongest...
RBA Turns More Upbeat Over GDP Growth, Keeps Rates Unchanged amidst Low Inflation
The RBA meeting this month is a non-event. As widely anticipated, the members left the cash rate unchanged at 1.5%, for the 25th consecutive meeting. The members remained upbeat over the economic outlook, expecting the job market to strengthen further and wage growth to improve. The central bank left...
Australian Dollar Mildly Higher as RBA Raised Growth Forecasts, But Upside Capped
Australian Dollar trades broadly higher today after RBA stood pat but raised growth forecast a little. Though, it's being held below last week's high against both Dollar and Euro. More evidence is needed to prove its strength. Sterling, on the other hand, shows a bit promises by extending recent...
Sterling Firm Despite Weaker Data and Brexit News, Swiss Franc Weakest
Swiss Franc is clearly the weakest one for today so far. In particular selloff intensifies somewhat in European session. Weakness of the Franc also drags down Euro, which is trading as the second weakest. On the other hand, Sterling is taking turn to be the strongest with New Zealand...
FOMC Preview – Affirming a Strong Economic Case for December Rate Hike
The aim of the FOMC meeting later this week is to prepare the market for a December rate hike. While the recent stock market crash and slowdown in inflation have trimmed bet for a December rate hike to 77.5% from 80% a month ago, the macroeconomic environment is still...
Forex Markets in Range, Yawn Unambitious Chinese President Xi
The forex markets open the week rather quietly. Sterling and Dollar are generally firmer but are both kept below Friday's high. The Pound did attempt to rise against Euro at open but quickly retreated back into familiar range. On the other hand, New Zealand Dollar and Australian Dollar are...
CFTC Commitments of Traders – GBP Got Biggest Increase in NET SHORT, Ahead of BOE Comments
The CFTC Commitments of Traders report in the week ended October 30 shows that all major currencies (except USD) were in NET SHORT positions. Speculative longs on USD index added +1 040 contracts while shorts dropped -455, sending the NET LENGTH higher, by +1 495 contracts, to 39 523...
CFTC Commitments of Traders – Longs on Oil Continued to Shrink
According to the CFTC Commitments of Traders report for the week ended October 30, NET LENGTH for crude oil, heating oil and gasoline futures all continued to drop. Oil prices dived during the reporting week, with the front-month WTI crude oil contract dipping -0.38% while the Brent contract was...
Trade War Overshadows Fundmentals in the US, Election to Join the Party
What is a bigger driver of volatility in the markets, politics or monetary policy? Judging only from last week's development, politics got the nod, at least in the US. Investor sentiments initially sank on report that Trump was ready impose more tariffs on China, as soon as in December....
Dollar Trying to Recover as NFP Beat Expectations, Euro Strong as German-Italian Spread Narrows
After being pressured for most of the day, Dollar is trying to recover in early US session after better than expected job data. Though, momentum remains weak so far, and the greenback is trading mixed only. On the other hand, there is little change in Yen's fortune, which remains...
Progress in US-China Trade Talks Boosts Sentiments and Australian Dollar, Non-Farm Payroll Watched
Asian stocks, as well as Australian and New Zealand Dollar, are shot up by optimism that US-China trade negotiation is having some nice progress. At the time of writing, Hong Kong HSI is leading the way up with 2.4% gain. China Shanghai SSE is up 1.21%. Nikkei and Singapore...