Dollar Mixed as Markets Turn Cautious ahead of FOMC Tapering
Overall markets are quite mixed for now. While US indexes surged to new record highs overnight, positive sentiment was not carried forward to Asia. Major pairs and crosses are also stuck in range. It seems that traders and investors have turned into cautious mode, awaiting Fed's tapering decision. For...
Yen Extended Rebound as German Yield Dives, But Lacks Follow Through Buying
Yen extended rebound in European session following the sharp fall in benchmark Germany yield. But struggling to extend gain as markets enter into US session. Overall markets are mixed as investors are probably turning cautious ahead tomorrow's FOMC policy decision. As for today, Aussie remains the worst performing one...
RBA Review – Ending Yield Curve Control and Pushed Forward First Rate Hike to 2023
The RBA tilted modestly to the hawkish side by formally ending the yield curve control and adjusting its forward guidance on the first rate hike. Policymakers remained optimistic over the economic outlook and were not very concerned about inflation. Aussie plunged as Governor Philip Lowe indicated that a lift-off...
Aussie Tumbles after RBA, Yen Staging a Rebound
Australia Dollar tumbles broadly today as markets are dissatisfied with RBA's dovish stance, even though yield curve control is abandoned. Commodity currencies are also trading generally lower. On the other hand, Yen is staging a strong rebound after Japanese Finance Minister Shunichi Suzuki said he's keeping an eye on the...
BOE Preview – Rate Hike Cycle to Begin?
The market has fully priced in a +15 bps increase BOE's bank rate (currently at 0.1%). The mixed economic developments since the September indicate that the Committee will be very divided over whether to hike or to stand on the sideline this month. Th staff will also release the...
FOMC Preview – Tapering to Formally Begin
The November FOMC meeting would see the Fed making a formal announcement on QE tapering. We expect the plan would begin immediately and is expected to end by mid-2022. The Fed funds rate will stay unchanged at 0-0.25%. The market has priced in over 60% of a rate hike...
Swiss Franc Rallies Against Euro and Sterling, Dollar Mixed
Swiss Franc is strengthening notably today, but selling focus has somewhat shifted from Euro to Sterling. Still, the franc is outshone by New Zealand Dollar, which is overwhelming the strongest. On the other hand, Yen is the weaker one following extended risk-on sentiments from Japan to Europe. Sterling is...
Nikkei Surges on LDP’s Election Win, Yen Trades Lower
Japan's Nikkei index surges sharply by over 2% in Asian session, in very positive response to the easy win of the Liberal Democratic Party in Sunday's election. Prime Minister Fumio Kishida's LDP retained comfortable majority in the House of Representatives, ensuring continuity of the economic policies. While other Asian...
CFTC Commitments of Traders – GBP Futures Turned to Net Long as BOE Might Hike Rate Next Week
As suggested in the CFTC Commitments of Traders report in the week ended October 26, NET LENGTH of USD index futures dropped -1 477 contracts to 34 457. Bets decreased on both sides. Concerning European currencies, NET SHORT of EUR futures slipped -851 contracts to 11 256. ECB President...
CFTC Commitments of Traders – Bets Reduced on Crude Oil Futures as Price Soared to Highest since 2014
According to the CFTC Commitments of Traders report for the week ended October 26, NET LENGTH of crude oil futures dropped -5 876 contracts to 423 718. Speculative longs slumped -15 549 contracts while shorts fell -9 673 contracts. Bets were trimmed on both sides as price consolidated as...
Euro Selloff to Continue, At Least in Some Crosses
Euro ended as the worst performing one after the post ECB rally faded quickly. It's clear that ECB would lag behind other major central banks in stopping to add stimulus, not to mention raising interest rate. The selloff in Euro also dragged down Sterling, as both were sold off...
Dollar Rebounding after Strong PCE Inflation Data
Dollar is trying to rebound broadly in early US session, partly on strong inflation data, and partly on month end flow. But overall, the greenback is just mixed for the week. For week Aussie and Swiss Franc are the strongest ones, with the latter lifted by strong buying against...
Dollar and Yen Dropped Again on Risk On Markets
Dollar and Yen dropped sharply overnight on strong risk-on market, as NASDAQ finally caught up and made new record high. The greenback is additionally pressured by the delayed buying in Euro after ECB post-meeting press conference. For now, Canadian Dollar is the third weakest, following the retreat in oil...
ECB Downplayed Urgency of Rate Hike to Tame Inflation
ECB’s meeting came in largely as we had anticipated. Policymakers acknowledged the stronger-than-expected inflation but downplayed the need to push forward rate hike. All monetary policy measures remained intact with the main refi rate, the marginal lending rate and the deposit rate staying at 0%, 0.25% and -0.5% respectively....
Euro Mildly Higher after ECB, Dollar Dips Slightly on GDP Miss
Major pairs and crosses are stuck inside yesterday's range so far, as consolidative trading continues. Euro appears to be lifted slightly by ECB's press conference but there is no follow through buying. Dollar also looks just a touch weaker after worse than expected Q3 GDP data. Overall, commodity currencies...
Markets Staying in Consolidation after BoC and BoJ, ECB Next
Consolidative trading continues in the forex markets in general. Canadian Dollar spiked higher after more hawkish than expected BoC overnight, but there was no follow through buying. BoJ's decision to stand pat triggered little reactions. Expectation of an earlier RBA rate hike intensified after the central bank let target...
Hawkish BOC Ends QE. May Hike Interest Rate in 2Q22 the Earliest
The BOC surprised to the hawkish side at the October meeting. Policymakers announced to end the QE program and begin the reinvestment process, compared with consensus of a reduction to the weekly purchase of CAD1B. While leaving the overnight rate unchanged at the effective lower bound of 0.25%, the...
Yen Recovers as Markets Extend Corrective Pattern
The forex markets are extending near term corrective moves today, with Yen turning slightly stronger, followed by Swiss Franc. Canadian Dollar and Sterling are the weaker ones, followed by Dollar. The Loonie will look into BoC policy decision for guidance. Meanwhile, broader markets will look at development in overall...
AUD Mildly Higher after CPI, CAD Consolidates as BoC Awaited
Australian Dollar rises broadly today with support from strong inflation data. But upside is capped by mildly negative investment sentiment in Asia. While DOW and S&P 500 made new records overnight, there is no follow through in risk-on sentiment. Overall currency markets are mixed, with Yen as second strongest...
Dollar and Yen Down again as DOW Sets to Extend Record Run
Risk-on sentiment is pressuring Yen and Dollar today, while Euro and Swiss Franc are not too far away. On the other hand Sterling is the strongest, while Aussie leads other commodity currencies. US futures are trading higher suggesting that DOW and S&P 500 are on track to extend record...