Weekly Report
Dollar, Yen, and Swiss Franc Lead Currency Markets, Suggestive of Risk Aversion
In the currency markets last week, Dollar, Yen, and Swiss franc Emerged as the standout performers. Conversely, New Zealand and Australian dollars lagged, painting a picture suggestive of risk aversion within the markets. However, this sentiment has not yet manifested itself in the stock markets, at least not with...
Roller-Coaster Week for Investors Ended with Commodity Currencies on Top
Risk-on, risk-off, and then risk-on. It's a roller-coaster ride for investors last week,with a slew of heavy-weight events. In the end, commodity currencies ended as the best performers, with support from rebound in sentiment. Canadian Dollar held a slight advantage over Australian and New Zealand Dollar. But all have...
Yen and Aussie Down after Volatile Week, Risk-On Sentiment to Continue
The markets experienced surprisingly high volatility in the last week of April, with central bank expectations as the primary driver. Japanese Yen emerged as the worst performer following BoJ's dovish stance, leading bond traders to abandon hopes for any changes to yield curve control. Australian Dollar was the second-worst...
Market Focused on Central Bank Expectations, Commodity Currencies Struggle
Last week, market movements centered around central bank policy expectations, with limited clear alternate influences. Comments from Fed officials and recent economic data suggest that Fed's tightening cycle is not over yet. This pushed US Treasury yields higher, but stock market indexes remained relatively stable. The steady market sentiment...
Dollar’s Fate Uncertain Amid Mixed Week: Risk Sentiment, Stocks, and Bonds in Focus
Dollar fell to its lowest level of the year and breached a critical support, after being under pressure for most of the week. Yet, it staged a recovery towards the end, closing mixed only. Decelerating US inflation data was welcomed by risk market investors, but a lower terminal rate...
Banking Concerns Subside, Inflation Worries Ease, Dollar Lost Ground
Last week, investors appeared to view the banking crisis as well-contained, pushing it into the rearview mirror. Confidence saw a revival, resulting in significant gains for major global stock indexes. In tandem with the lower-than-anticipated inflation figures from the US, market sentiment underwent a notable shift, paving the way...
Market Confusion Reigns While Yen Continued Domination
Last week's financial landscape was far from clear-cut. While it wasn't a definitive risk-on market, investors seemed reluctant to abandon US shares completely. The markets found themselves mired in confusion, struggling to make sense of the relentless barrage of headlines detailing bank crises that began with Silicon Valley Bank,...
Yen Dominates as Market on Brink of International Banking Crisis
Last week, the world appeared to be on the brink of an international banking crisis. The situation might have stabilized with Silicon Valley Bank filing for Chapter 11 bankruptcy, First Republic Bank receiving aid in the form of deposits from major players, and Credit Suisse obtaining a CHF 50B...
Silicon Valley Bank’s Collapse Outweighs Interest Rate Developments
Last week, investors were caught off guard by a series of surprises. However, the largest bank failure in the US since 2008 proved to be the most overwhelming for them. The risks of contagion from Silicon Valley Bank appeared to outweigh concerns about higher interest rates, inflation, and recession....
Dollar Struggled on Resilient Risk Sentiment Despite Expectations of Higher Interest Rates
The likelihood of higher and sustained interest rates in the US and Europe is increasing as time goes on. This expectation has led to some volatility in risk markets, but the late rally in stocks indicates that sentiment remains resilient. Despite a rally in treasury yields, Dollar ended the...
Dollar Jumped on Fed Bets, Next Few Weeks Crucial
Dollar rose broadly last week and ended as the strongest one, as markets added bets on a higher Fed terminal rate after re-acceleration in inflation data. Sterling ended as second after strong services data, which also supported Euro, while Canadian was the third after higher than expected inflation reading....
Dollar Rose on Fed Expectations But Momentum Capped Again By Risk Sentiment
Dollar ended as the best performer last week, after data argued that the slow disinflation process could prompt Fed to tightening further to a higher terminal rate. Yet, buying remained rather uncommitted, as show in Friday's late pull back. Resilient risk sentiment continued to cap the greenback's upside, and...
Dollar Mixed Despite Bet on Fed Peaking at 6%
While the economic calendar was relatively light, the week was full of surprise. The biggest one was the big wagers that put on Fed interest rate peaking at 6%. Rumors and speculations about the next BoJ Governor triggered some volatility. Meanwhile, the blockbuster Canadian job data came in and...
Dollar Won on Strong Economic Data, Might Decouple from Risk Sentiment for a While
With the help from strong economic data, Dollar struck back to end as the strongest one, after a week full of heavy weight events. Traders might start to give up on fighting the Fed on the topic of terminal interest rate and the timing of a cut, given the...
Yen Down, Nikkei Up, Yield Curve Distortion Improved
BoJ and Davos were the major focuses of last week. Much volatility was seen in Nikkei, JGB yields, and Yen. As dusts settled, the Japanese currencies ended as the worst performer, but closed inside prior week's range. Australian Dollar was the next weakest after poor job data. Dollar was...
USD/JPY Dived on Fed and BoJ Expectations, More Downside But 120 Will Be a Bit Stretched
Dollar was sold off broadly last week as a 25bps rate hike by Fed in February is now pretty much a done deal, after CPI data. On the other hand, Yen staged a strong rally on speculations that BoJ is now much closer to exit of ultra-loose monetary policy....
Dollar Selling Re-emerged on Surprisingly Positive Risk Sentiment
Risk sentiment was surprisingly positive in the first week of the year. The stock markets ended on a high note after slowing wage growth in the US and faster cooling in Eurozone inflation. After some flip-flopping, Dollar selling re-emerged in the last session. It might take a week or...
U-turn in Risk Sentiment Following Hawkish Fed and ECB
Risk sentiment took a U-turn last week after more hawkish than expected FOMC projections and, more important, ECB forward guidance. Euro ended as the biggest winner for the week, trained by Swiss Franc, and the Dollar. Australian Dollar was the worst performer, followed by Sterling, and then Kiwi. Canadian...
CAD Down, AUD Resilient, USD Lackluster
Trading in the markets was rather subdued last week. Canadian Dollar was an exception, as it was pressured by falling oil price and a dovish BoC hike. The Loonie just closed marginally higher against Yen, which was also soft. On the other hand, Swiss Franc was the best performer,...
Yen Jumped as Fed Powell Knocked Down Dollar and Yields
The tone of the markets was well set by Fed Chair Jerome Powell's indication of smaller rate hike in the upcoming FOMC meeting. The biggest reactions were found in treasury yields, which decline was surprisingly steep. US stocks ended higher but upside momentum appeared to be diminishing.
Dollar was sold...