ECB to Slow Asset Purchases via PEPP. Growth and Inflation Outlook Upgraded
Two important messages delivered at the ECB meetings are: 1) the end of the front-loading of PEPP asset purchases and 2) acknowledgement of a more persistent inflation pressure. The policy rates were all kept unchanged with the main refi rate, the marginal lending rate and the deposit rate staying...
Euro Tumbles in Crosses, No Help from ECB Re-calibration
Euro tumbles notably against European majors and Yen today, and ECB's re-calibration of PEPP purchases provide no support. But Dollar is seen as equally weak. Sterling is currently the star performer for today, followed by Swiss Franc and Yen. Commodity currencies are mixed. Focuses will now turn back to...
Euro Losing Momentum ahead of BoC, Dollar Recovering Further
Commodity currencies are trading generally lower in Asia today, with pull back in Japanese stocks in the background. Canadian Dollar is also soft after BoC's rate decision overnight. Dollar, Yen and Swiss Franc are trading mildly firmer, extending this week's rebound. Euro is following closely, but momentum is starting...
BOC Stood Pat but Delivered Cautiously Optimistic Message
The loonie recovered modestly after the BOC meeting. As widely expected, policymakers left the overnight rate unchanged at 0.25% and QE purchases at CAD 2B/ week. Yet, they remained cautiously optimistic over the medium term economic outlook, despite disappointing GDP data in 2Q21 and July. We expect the central...
Euro and Swiss Franc Soften in Mixed Markets, Canadian Also Weak
Euro and Swiss Franc weaken mildly in mixed markets today. New Zealand Dollar firms up together with Yen and Dollar. Meanwhile, Canadian Dollar is also soft, awaiting BoC policy decision. Major European indices are trading in red, but losses are limited. US futures also point to slightly lower open....
Canadian Dollar Turns Weaker ahead of BoC, Dollar Extending Rebound
Dollar's recovered continued in Asian session today, partly supported by hawkish comments from a Fed official. Mixed sentiments in the stock markets also stabilized the greenback. Instead, commodity currencies continued to reverse some gains. Main focus today will turn to BoC policy decision but that would likely be a...
Sterling Down as Risk Sentiment Turns Weaker, Dollar Trying to Rebound
Risk sentiment turns a bit weaker today in the stock markets. But benchmark European and US yields are staging a strong rally. In the currency markets, Aussie is sold off is in delayed reaction to RBA's dovish tapering, but Canadian is follow closely with selloff in oil price. Sterling...
BOC Preview – QE Tapering to Pause as Economy Contracted in 2Q21
Torn between disappointing economic activities but rising inflation, higher vaccination rate but worsening Delta outbreak, and a federal election just 12 days after this week’s meeting, the BOC will likely stand on the sideline this month. Policymakers will keep its weekly asset purchases unchanged at CAD 2B/ week and...
RBA Adopts Dovish Tapering as Delta Outbreak Expected to Hurt Growth in 3Q
At the September meeting, the RBA decided to reduce QE asset purchases to AUD 4B/week, from ADU 5B/ week previously. It also left the cash rate, as well as the yield target on the April 2024 bond, unchanged at 0.1%. The central bank did include a dovish twist, signaling...
Aussie Shrugs RBA, Dollar Recovery Losing Steam
Trading the the forex markets remain rather subdued in Asian session. Aussie basically shrugs off RBA's decision to taper, but extend QE. Dollar is trading slightly softer, as yesterday's recovery lost momentum. European majors are currently the slightly firmer ones. But overall, traders are staying in wait-and-see mode. Risk...
ECB Preview – Time to Lower Asset Purchases?
The pace of asset purchases in the Pandemic Emergency Purchase Program (PEPP) in 4Q21 is the focus of this week’s ECB meeting. Following hawkish comments from some council members, especially chief economist Philiip Lane, hopes that an announcement related to reduction in purchases would be made at the upcoming...
Dollar Paring Some Losses, Aussie Retreats Ahead of RBA
Trading in the currency market is rather subdued today and markets will stay quiet with US and Canada on holiday. Dollar is paring some of last week's large losses but upside momentum is weak. On the other hand, Australia Dollar is turning slightly weaker as tomorrow's RBA policy decision...
Currencies Shrug Strong Rise in Nikkei, Focus Turn to RBA, BoC and ECB
Dollar recovers mildly in quiet Asian session today, but there is no sign of a sustainable rebound yet. Most major pairs and crosses are staying inside Friday's wide range. Strong rally is seen in Japanese Nikkei today, but there is little reaction in FX. Trading could remain subdued with...
CFTC Commitments of Traders – Risk Currencies to Gain Ground after Weaker-than-Expected Nonfarm Payrolls
In the last week of August, bets on USD index futures fell on both sides as traders pondered Fed Chair Powell's Jackson Hole speech and awaited the August employment report. As speculations of Fed's tapering tamed after both events, it is likely that the euro, as well as commodity...
CFTC Commitments of Traders – Gold Strengthened Further as Tapering Hopes Faltered
According to the CFTC Commitments of Traders report for the week ended August 31, NET LENGTH for crude oil futures sank -17 784 contracts to 356 528 for the week. Speculative long position declined -13 154 contracts, while shorts gained +4 630 contracts. It is possible to see an...
Dollar Weakness to Stay after Substantial Setback in Job Recovery
Dollar was under pressure most of the week and selling accelerated again after the big disappointment in employment data. The non-farm payroll report could show that job market recovery had made a "substantial setback" rather than "substantial further progress". A tapering announcement from Fed in September is basically off...
Dollar Spikes Down after Huge NFP Miss, Gold Upside Breakout
Dollar spikes lower in early US session after huge NFP miss. But the selloff is only firm against commodity currencies at the time of writing. In particular, the greenback is trying to recovery against European majors, as well as Sterling. Traders might need a bit more time to make...
Dollar, Yen and Swiss Franc Continue to Decline as Focus Turns to NFP
Overall developments in the markets are unchanged for the week. US stocks continued with recent up trend overnight. Dollar, Yen and Swiss Franc extended near term decline. New Zealand and Australian Dollars are the strongest one, followed by Euro and then Sterling. Main focus will now turn to US...
OPEC+ Sticks With Original Plan to Add Output Despite Economic Uncertainty. US Inventory Fell Sharply
The OPEC+ will continue to increase oil output by +0.4M bpd in October. The decisions was made swiftly and came in line with the alliance’s plan to gradually bring back the output reduced (9.7M bpd) amidst the outbreak of the pandemic last year. Although the alliance has projected that...
Risk Sentiment Firms Up after Jobless Claims, Dollar Staying Weak
Risk-on sentiment firms up slightly after better than expected jobless claims from the US. Dollar, Yen and Swiss Franc continue to trade as the weakest ones. On the other hand, New Zealand and Australian Dollars are the strongest. But the moves in risk markets are limited so far. Investors...