Weekly Report
War Fear Overwhelmed Rate Hikes; Oil, Gold, Yen and Franc Surged
War or rate hikes, it's very clear that investors are worried about the former. Sentiment took a deep dive on Friday on worries over an imminent Russian invasion of Ukraine. WTI crude oil surged to new 7-year high while Gold also soared before weekly close, while stocks took a...
Euro Flexes Muscle after ECB, Staging Broad-Based Bullish Reversal?
It was a week a surprises. While BoE delivered that a 25bps hike, four of the nine MPC members have indeed voted for a 50bps raise. However, there was no follow through buying as BoE indicated only "modest" tightening would follow. Also, the event was overshadowed by ECB's unexpected...
Dollar Skyrockets on Hawkish Fed, Sterling Trailing Behind
The FOMC meeting turned out to me more hawkish than expected and markets are now pricing in four to five hikes this year, instead of three. Dollar was given a strong boost and surged broadly to end as the strongest one. Nevertheless, reactions in the stock markets, while wild,...
Yen and Franc in Spotlights Again as Earnings Shook Markets
It's not Omicron nor Fed rate hike, but earnings. Bullish investors appeared to have finally gave up after disappointing Netflix report last week. NASDAQ led other major indexes sharply lower, and dragged down cryptocurrencies too. Given that Apple and Tesla will come next, there is risk of even more...
Dollar Ignores Hawkish Fed, Yen and Loonie Surged
Strong US inflation reading and hawkish comments from Fed officials were the main theme in the markets last week. While much volatility was seen in the stock markets, major indexes remained rather resilient. Dollar got practically no support from expectation of three Fed hikes year this, and tumbled broadly....
Dollar Failing to Ride on Hawkish Fed and Surging Yields
It was a roller coaster ride as traders came back for the new year. Markets were in full risk-on mode as worries over Omicron faded. Yet, sentiment turned after more hawkish than expected FOMC minutes. Major stock indexes were than in deep pull back. Major global benchmark treasury yields...
Dollar Stands Tall after A Week of Central Bank Surprises
It was a very volatile week full of central bank surprises. Fed indicated that there would be as many as three rate hikes next year. BoE surprised by raising the Bank Rate. Even ECB turned out to be less dovish as expected. But in the end, if was the...
Markets Back in Risk-on Mode, But Forex Mixed Awaiting Central Bank Meetings
Investors seemed to have already put Omicron risks behind last week, with markets turned back into risk-on mode. But the forex markets were indeed quite mixed. Commodity currencies were the strongest ones, but the rebounds are looking more like corrective. Yen was the worst performer, but the pull-backs were...
Swiss Franc and Yen Surged after Fed Powell Stirred Up Omicron-Nervous Markets
Just as the world is concerned and confused with the newly discovered Omicron, Fed Chair Jerome Powell stirred up the markets further, by talking up faster tapering. The biggest reactions were found in US treasury yields on strong safe-haven flows. Major stocks indexes also turned sharply lower, solidifying the...
Investor Confidence Shattered by Omicron Variant, Yen and Swiss Franc Surged
Investor confidence was shattered by the news of the heavily mutated B.1.1.529 coronavirus variant, now called omicron. WHO warned that this variant has a large number of mutations, some of which are concerning. It added that preliminary evidence suggested an increased risk of reinfection with this variant. It may...
Euro Dived on Dovish ECB and Lockdown Fears, More Downside Risks ahead
Euro tumbled broadly and deeply last week, and ended as the run away worst performer. It's firstly weighed down by dovish comments from ECB officials, who talked down the need for policy action to counter inflation. More importantly worries grew after Austria returned to full lockdown.
Daily new COVID-19 infections...
Dollar Surges as Markets Added to Bets on June Fed Hike
Traders added to the bet of a June rate hike by Fed after stronger consumer inflation reading. Dollar surged across the board with Dollar index taking out an important fibonacci level. Benchmark currency yields staged a strong rebound. But stocks were very resilient despite intensify speculation of an early...
Yen and Franc Followed Bonds Higher, Ignored Record Running Stocks
The developments last week were a bit confounding, as both stocks and bonds rallied notably. Yen and Swiss Franc followed the path of falling yields and rose as the biggest winner of the week.
Dollar was not much helped by Fed's tapering and solid job data. Australia Dollar ignored broad...
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 Ended Lower Despite Increasing Bets on Fed Hike, US Stocks Hit New Records
The markets have turned a bit mixed last week and have likely entered into a near term consolidative mode already. Dollar ended broadly lower even though traders continued to add their bet on a Fed rate hike next year. Indeed, the odds for a hike by June is now...
Yen Selloff Accelerated on Strong Energy and Commodity Rallies
Yen's selloff accelerated rather steeply last week, on the back of surging commodity and energy prices. Dollar was also pressured this time, as treasury yields retreated and on late rally in stocks. Euro was not to far away, as pressured by selloff in crosses. On the other hand, commodity...
Yen Crosses Followed Yields Higher Against, Loonie Rode on Oil
Yen was once again sold off broadly last week, following late rally in treasury yields despite disappointing US job report. Resilience in overall risk appetite also kept the Japanese currency pressured. Meanwhile, Euro followed as as distant second worst on selloff in crosses, as well as Dollar. New Zealand...
Dollar Index Could Be Capped by 94.46 Fibonacci Level as Yields Rally Halts
Dollar had been the strongest for most of the week but lost it first place at the time, as treasury yields retreated. Instead, resilient risk appetite in the US, as well as firm oil price helped Canadian and Australian Dollars stole the first and second place. On the other...
Yen Dropped Broadly as Treasury Yields Jumped on Hawkish Fed
Yen's fortune reversed last week as US treasury yields accelerate up after hawkish FOMC meeting and projections. US stocks also display strong resilience and closed generally higher, reversing prior losses. Sterling, on the other hand, shrugged off hawkish BoE voting and ended as second weakest. Aussie and Kiwi were...
Dollar and Yen the Runaway Leader on Increasing Risk of Correction in Stocks
Dollar and Yen were the runaway leaders in the forex markets last week. While Fed is not quite likely to announce tapering this week, recent solid data argues that November would finally be the date. Stocks in US and Europe have been losing much upside momentum as central banks...