Market Overview
Dollar Strengthens with Fed Clarity, China Ambiguity Drags Regional Sentiment
Global financial markets last week were influenced by a combination of clarity and uncertainty. In the US, economic data reinforced expectations of a gradual and measured policy easing path by Fed. Investors embraced the prospect that Fed would not repeat the aggressive 50 bps rate cut implemented in September....
Muted Trading as Canadian Dollar Fails to Bounce on Strong Job Data
Trading in the early US session is relatively subdued, with little momentum driving market moves. Canadian Dollar, despite an initial attempt to rally on the back of stronger-than-expected job data, has not been able to attract sustained buying interest. The market continues to price in further easing from BoC,...
Risk Sentiment Steadies as Dollar Softens, GBP/CAD Eyes UK and Canada Data
Risk sentiment appears to have stabilized heading into the weekend, despite stronger-than-expected US inflation data released overnight. The report didn’t cause any significant shifts in market expectations regarding Fed's rate cuts. Stock markets also showed resilience, with major US indexes closing only slightly lower.
Dollar, however, has lost some momentum,...
Dollar Struggles for Direction Amid Mixed Signals: Strong Inflation vs. Weak Jobs Data
Dollar is struggling to find a clear direction after a set of contrasting economic data sent mixed signals to the markets. On one side, inflationary pressures remain elevated, especially with core inflation ticking up, signals that Fed won't be able to accelerate its policy easing. On the other hand,...
Risk Appetite Returns as Focus Shifts to US CPI
Risk-on sentiment is back in the global markets, with DOW and S&P 500 surging to new record highs in the latest session. Notably, this rally isn’t limited to just the big tech giants. ETFs tracking both industrials and financials sectors also closed at record highs, signaling that the strength...
Dollar Edges Higher Ahead of FOMC Minutes; Commodity Currencies Continue to Struggle
Dollar is broadly stronger today, though the momentum behind the move is not particularly robust. Markets are awaiting insights from several Fed officials and the release of September FOMC minutes later in the US session. While Fed's direction on monetary easing is well understood, the pace of future rate...
Kiwi Falls After RBNZ’s 50bps Rate Cut, Risk-Off Sentiment Weighs on AUD
New Zealand Dollar has taken a hit in Asian session after RBNZ delivered a widely expected 50bps rate cut. With excess capacity in the economy, further policy easing is expected, and some economists foresee an additional 50bps rate cut in November. The central bank would continue loosening in the...
Swiss Franc Down in Mixed Markets, Kiwi Awaits RBNZ Cut
Movements in the currency markets today are somewhat mixed today. Commodity currencies are generally underperforming, led by a sharp decline in Australian Dollar. Investor sentiment in Asia was dampened by the lack of detailed stimulus measures from China, following the much-anticipated post-holiday announcement. This disappointment was starkly reflected in...
Aussie Leads Risk-Driven Declines, HSI Sinks as China Stimulus Falls Short
Hong Kong markets experienced another day of intense volatility, with benchmark HSI plunging over -5% during the morning session as traders rushed to lock in profits from the recent rally. The sell-off came as disappointment spread among investors after China's National Development and Reform Commission failed to deliver concrete...
Weaker Risk Appetite Drags Sterling Down; Aussie Eyes RBA Minutes and Sentiment Data
Risk sentiment is a little bit subdued as US futures trade in the red ahead of North American session. Yen is recovering broadly, partly supported by Japan’s renewed verbal intervention efforts, with traders closely monitoring the possibility of action if USD/JPY breaches 150 psychological level. Swiss Franc and Dollar...
Japan Signals “Sense of Urgency” on Yen Depreciation as USD/JPY Hits 149
Japan’s verbal intervention re-entered the spotlight today as USD/JPY briefly surged above the 149 mark amid a quiet Asian session. Yen continues to face pressure from the strong rebound in Dollar, driven by traders abandoning bets on of a 50bps Fed rate cut in November. Additionally, rising US and...
Dollar Rises on Fed Clarity, Oil Jumps on Rising Fears of Wider Middle East War
The financial markets gained much-needed clarity last week as strong US employment data aligned market expectations with Fed’s own monetary policy outlook. The possibility of a 50bps rate cut in November has now vanished, with traders anticipating two more standard 25bps cuts this year, matching Fed's dot plot.
This development...
Dollar Jumps after Strong NFP, Traders Abandon Bets on 50bps Fed Cut
Dollar surged across the board during early US trading after the all-around stronger-than-expected non-farm payroll report. The data showed much higher-than-anticipated job growth, a slight decrease in unemployment rate, and an acceleration in wage growth. This robust set of figures has led traders to largely abandon bets on a...
Dollar Firm Ahead of NFP, Can Jobs Data Fuel Further Gains?
Dollar continues to dominate the currency markets this week, holding its position as the strongest performer as focus shifts to the upcoming non-farm payroll report from the US. Market reactions to this data will be crucial in shaping financial movements leading up to FOMC rate decision in November. If...
Pound Dives as BoE’s Bailey Suggests Aggressive Rate Cuts Possible
Sterling fell sharply today after BoE Governor Andrew Bailey surprised markets by suggesting the possibility of aggressive rate cuts in an interview with The Guardian. Market expectations quickly adjusted, with swaps now fully pricing in a 25bps cut in November. The odds of a second 25bps cut in December...
Dollar Advances with ISM Services Data Looming, Swiss CPI on Watch
Dollar is gaining some traction, emerging as the strongest currency of the week so far. Several factors are underpinning this momentum. First, Fed Chair Jerome Powell has reaffirmed the expectation of two additional rate cuts this year, adhering to the script established in the latest dot plot. This stance...
Yen Weakens as Ishiba Softens Rate Hike Stance, US Yields Rise
Japanese Yen weakened notably in early US session, reacting to rising US Treasury yields, which were boosted by stronger-than-expected US ADP job data. Adding to Yen’s decline, Japan’s new Prime Minister, Shigeru Ishiba, who was initially perceived as a monetary hawk, has softened his stance on interest rate hikes....
Diverging Global Markets as US Caution Rises, HK Surges, and Oil Prices Jump
Global markets are showing mixed performance as sentiment diverges across regions. In the US, stocks closed lower with traders displaying increased caution. ISM manufacturing report indicated continuation of the prolonged recession in the sector, though without any sharp deterioration. Attention is now focused on upcoming key economic data, including...
Euro Falls on Increased Bets of ECB Oct Rate Cut, Dollar Builds Momentum
Euro declined broadly today after ECB Governing Council member Olli Rehn became the first official to openly indicate that risks are now tilted toward another rate cut in October. Additionally, data showed that Eurozone's headline CPI fell below the ECB's 2% target for the first time since 2021, even...
Dollar Firms as Fed Powell Dismisses Rapid Rate Cuts, EUR/GBP Slips Before Eurozone CPI
Dollar stabilized overnight and is attempting to regain ground following recent losses. The greenback found some support after Fed Chair Jerome Powell’s remarks, where he indicated that Fed is in no rush to implement rapid rate cuts. This has reduced market expectations for a 50bps cut at the November...