Gold will Regain Momentum after Correction, Supported by Low Yield and US-China Tensions
We expect gold's rally to resume after correction. Although there are signs that the coronavirus pandemic is stabilizing, the recovery path of global economy remains thorn and gradual. Central banks around the world will have to maintain expansionary monetary policy, pressing interest rates to zero, if not negative. Meanwhile,...
Euro Flies High on EU New Generation Recovery Plan
Euro surges broadly today as traders more than welcome the new EU pandemic recovery plan. Canadian Dollar is currently the second strongest while the greenback is the third. Strength in Euro appears to have prompted some selloff in Sterling as well as Australian Dollars. The Pound is somewhat weighed...
Dollar Recovers as Markets Turned Mixed, Awaiting Trump’s Very Powerful Response to China
The forex markets turned mixed today, together with major Asian indices. Dollar and Yen are trying to recover but there isn't any conviction in buying. Both remain the worst performing ones for the week so far. News regarding lockdown exits and coronavirus vaccines were generally welcomed. But investors are...
Coronavirus Vaccine News Boost Risk Appetite Again, Dollar in Free Fall
Risk appetite is back driving the global financial markets, after biotech company Novavax said it has started phase 1 human trials of coronavirus vaccine candidate. DOW future points to a breakout from recent rally for rally resumption. Dollar, Yen and Swiss Franc are decisively sold off across the board....
HKD Weakened Despite Widening HIBOR-LIBOR Spread; Hong Kong’s Autonomy at Risk as China Seeks to Impose New Law
Volatility in USDHKD has increased since last week. HKD fell from the strong-side convertibility undertakings against USD after the Chinese Communist Party (CCP) announced the plan to impose national security law in the city. The 12-month HKD FX swap points jumped from 240 to 700 in two days' time....
Sentiments Firm Up as Markets Left Hong Kong Tensions Behind, Comforted by PBoC Pledge
Asian markets strengthen generally as investors put Hong Kong tensions behind for the moment. Sentiments are also somewhat lifted as PBoC pledged to continue with targeted easing measures. Commodity currencies are generally higher as led by New Zealand Dollar for now. Yen and Dollar are the weakest ones, followed...
Sterling Mildly Higher in Holiday Markets, Gains Limited
The markets remain generally steady today, with UK and US markets on holiday. Sterling is mildly higher, followed by commodity currencies. On the other hand, Yen, Dollar and Euro are the relatively weaker ones. But after all, major pairs and crosses are stuck inside Friday's range. Investors would probably...
Euro Softer in Quiet Trading, Activity Might Stay Subdued Today
Asian markets are relatively mixed in quiet trading as another week starts. Hong Kong stocks dip mildly following Sunday's protests against the national security laws. But some optimism is seen in Japan with Nikkei's rise. Movements in the stock indices are limited anyway. Sterling is trading mildly higher, followed...
China’s Diplomatic Tensions Overshadow Global Coronavirus Pandemic Exit Optimism
While Dollar and Yen staged notable rebound towards the end of week, they still ended as the worst performing ones. On the other hand, commodity currencies were the best performers despite paring some of the gains. Markets were lifted by optimism that the world is moving closer to lockdown...
CFTC Commitments of Traders – NET SHORT of GBP Futures Jumped as Concerns about Brexit Talks Reemerged
As suggested in the CFTC Commitments of Traders report in the week ended May 19, NET LENGTH in USD Index added +847 contracts to 17 297. Speculative long positions gained +559 contracts and short positions were down -288 contracts. Concerning European currencies, NET LENGTH in EUR futures declined -5...
CFTC Commitments of Traders – Traders Bet Precious Metals to Go Higher
According to the CFTC Commitments of Traders report for the week ended May 19, NET LENGTH for crude oil futures added +2 584 contracts to 543 603 for the week. Speculative long positions declined -17 540 contracts while shorts slumped -20 124 contracts. For refined oil products, NET LENGTH...
Dollar and Yen Firm But No Extra Risk Aversion Outside Hong Kong
Yen and Dollar remains the strongest ones for today while commodity currencies are weakest, led by Aussie. There was no follow through buying in Dollar and Yen beyond Asian session. The panic selloff in Hong Kong stocks didn't spillover to other markets and even US futures are pointing to...
Markets in Risk Aversion Over Hong Kong’s Future, Yen and Dollar Rebound
Yen and Dollar surge in Asian session today as markets are clouded by new uncertainty over Hong Kong's future. The situation carries significance firstly on the direction of US-China trade tension. Secondly, Hong Kong's international financial hub status could be in question, which would limit China's ability to raise...
Dollar Recovery Attempt Falters Quickly, Swiss Franc Dives Again
The financial markets are, generally speaking, a bit mixed today. European stocks are slightly in red while US futures are down. But losses are very limited. Bulls are still in overwhelming control. In the currency markets, Swiss Franc drops sharply as recent volatile trading continues. Dollar attempted for a...
Sterling Soft as Risk Rally Pauses, Focus Turns to PMIs
Dollar recovers mildly in Asian session, together with Yen, as stock rally takes a breather again. But both remains the worst performing over the week. Similarly, Australian and New Zealand Dollars also retreats mildly but remain the strongest one for the week. Investors are generally optimistic on return to...
Crude Oil Price Supported by Decline in US Inventory. Cushing Stock Recorded Sharpest Fall on History
Crude oil prices continued to climbed higher. The front-month WTI contract has strengthened for six consecutive days. The latest catalyst is another week of surprising decline in US inventory. The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks...
FOMC Minutes Sent Dovish Message about Recovery, Preparing to Adjust QE and Forward Guidance
The FOMC minutes for the April meeting revealed that the members were very much concerned about the job market and inflation outlook as a result of the coronavirus pandemic. While leaving the Fed funds rate unchanged at 0-0.25%, the members also maintained QE. The minutes revealed that “several” members...
Sterling Softens after UK Sold Bonds With Negative Yield
Sterling weakens mildly today after UK sold government bond with a negative yield for the first time ever. According to the Debt Management office, It auctioned GBP 3.75B of 3-year bonds at an average rate of -0.003%. Demand was weak too with bid-to-cover ratio at 2.15, lowest since March....
PBOC Pauses in Rate Cutting. Outlook Remains Expansionary amidst Global Demand Uncertainty and Renewed Trade Tensions
PBOC this morning announced to leave the loan prime rate (LPR) unchanged at 3.85%. While this had been widely anticipated, it should not be interpreted as a signal of unwinding monetary stimulus. We believe the pause allows the central bank some time to assess the impact of previous easing...
Dollar and Yen Soft, Awaiting Next Move in Risk Markets
While risk market retreats mildly, the developments in currency markets are unchanged. New Zealand and Australian Dollar remain the strongest one for now. In particular, Kiwi is lifted a bit further by RBNZ governor's comment that it doesn't want to go to negative rates for now. Aussie somewhat shrugs...