An Important Week for EUR/USD as Fed and ECB Easing Expectations Built
Euro ended last week as the weakest one as comments from a top ECB official suggested a forceful easing package to be announced in September. Additionally recession fear in Germany sent 10-year bund yield to new record low. New Zealand Dollar followed as the second weakest on dovish RBNZ...
CFTC Commitments of Traders – Long Bets Trimmed on Gold and Silver Futures
Energy prices remained under pressure as US- China trade re-escalates. According to the CFTC Commitments of Traders report for the week ended August 13, NET LENGTH for crude oil futures increased +6 503 contracts to 382 144 for the week. Speculative long positions gained +6 116 contracts and shorts...
CFTC Commitments of Traders – NET LENGTH for JPY Rose as Sentiment in Rick- Off Mode
As suggested in the CFTC Commitments of Traders report in the week ended August 13, NET LENGTH in USD Index declined -1 487 contracts to 29 842. Speculative long positions dropped -1 457 contracts while short positions added +30 contracts during the week. Concerning European currencies, NET SHORT for...
Euro Selloff Continues as German 10-Year Yield Hits Another Record Low Below -0.7%
Selloff in Euro picks up momentum again today as Germany yields dive on ECB easing expectations. Swiss Franc is also pressured as SNB could sometime be forced to intervene. Yen is the third weakest, following rebound in stocks rather than falling yields. On the other hand, Sterling recovers broadly,...
Dollar Mildly Higher as Sentiments Stablized, Yields Remain Pressured
Asian markets turned mixed after US stocks stabilized overnight. Treasury yields remain pressured though, as 10-year JGB yield hit the lowest level since 2016. In the currency markets, Dollar strengthens mildly today after a Fed dove dismissed an emergency rate cut. Though, Australian Dollar is the strongest one. On...
Euro Dives on German Yield, Dollar and Pound Supported by Retail Sales
The global financial markets turned a bit mixed today even though risk aversion remains the underlying theme. European stocks are generally lower while US stocks recovers, turning into consolidations. Comments from China suggests that retaliation is still underway despite delay of part of the new US tariffs. Germany 10-year...
Risk Aversion Continues as Markets Await UK and US Retail Sales
Risk aversion stays in Asia after the -3% crash in Dow overnight. More importantly, treasury yields took another dive on recession fears. US 30-year yield even drops through 2% handle in Asia and hit as low as 1.964. In the currency markets, though, Australian Dollar rises generally after better...
US Crude Inventory Gained While Refined Product Stockpile Declined
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks added +2.41 mmb to 1311.22 mmb in the week ended August 9. Crude oil inventory gained +1.58 mmb to 440.51 mmb (consensus: -2.78 mmb). Inventories increased in 4 out...
Loonie Could Weaken Further as Crude Oil Price Remains Volatile and Disappointing Data Raised Rate Cut Hopes
Risk to Canadian dollar is skewed to the downside in the near term. Disappointing economic data since the July BOC meeting have raised speculations of a rate cut, although the consensus remains no change in the monetary policy for the rest of the year. Crude oil price, a key...
Risk Aversion Back on Recession Fear, Yen Regains Control
Risk aversion quickly comes back to the market as German data suggests that the economy is on the edge of recession. Major European indices are trading in deep red and German 10-year yield also hit new record low at -0.649. Sentiments are further weighed down by US Commerce Secretary...
Chinese Data Surprised to Downside in July. Tariff Delay Won’t Help Arrest Slowdown
China’s economic data surprised to the downside in July. Delay in US tariff should have limited boost on China’s growth outlook. Industrial production gained +4.8% y/y in July, missing consensus of +5.8% and June’s 6.3%. The slowdown is the most severe since February 2009 and caught the market in...
Sentiments Lifted by Delay of Some US Tariffs on China, But Markets Stay Cautious
Market sentiments staged a strong rebound overnight after US Trade Representative announced to delay tariffs on some Chinese imports. However, there seems to be no committed follow through buying/selling yet. DOW hit as high as 26426.97 but closed at 26279.91, up just 1.44%. It's also technically limited below 55...
Dollar Shrugs Pick-up in CPI Inflation, Swiss Franc Rises on Risk Aversion
Swiss Franc rises broadly today as risk aversion stays in the markets, even though Yen is firm but relatively unmoved. Sterling also recovers with help from stronger than expected wage growth. On the other hand, New Zealand and Canadian Dollars are the weakest while Australian is not too far...
Forex Steady Despite Risk Aversion, UK Job Data Watched
The forex markets are rather calm so far despite deep risk aversion elsewhere. Most notably, US 30-year yield plunged sharply by -0.118 to 2.130, closing in to 2.102 historical low. Major Asia indices are all in red, following selloff in US overnight. Nevertheless, all major forex pairs and crosses...
Markets Remain in Risk Aversion as Yen and Swiss Franc Maintain Momentum
Risk aversion is the main theme even though trading is generally subdued today. Yen is currently the strongest one, followed by Sterling and then Swiss Franc. The Pound is trying to recover upside is so far capped by no-deal Brexit risks. Commodity currencies are generally lower, led by Australian...
Political Turmoil In Italy Signals Further Widening Yield Spread
Matteo Salvini, the Deputy Prime Minister of Italy, announced last Friday that he would submit a no-confidence motion against Prime Minister Giuseppe Conte. This marks the collapse of the M5S- League coalition government. Two possibilities arise after Salvini’s move: snap election or a technocrat government. What makes the situation...
Yen and Franc Firm in Quiet Trading, More Upside Ahead
The financial markets are relatively quiet today with Japan and Singapore on holiday. Yen and Swiss franc generally firmer but there is no clear follow through buying to extend last week's rally yet. On the other hand, Dollar is soft, but focus should be more on weakness in Sterling...
CFTC Commitments of Traders – JPY Drifted to NET LENGTH for First Time in Over a Year as Market in Risk- Off Mode
As suggested in the CFTC Commitments of Traders report in the week ended August 6, NET LENGTH in USD Index added +1 046 contracts to 31 329. Speculative long positions added +26 contracts while short positions dropped -1 020 contracts during the week. Concerning European currencies, NET SHORT for...
CFTC Commitments of Traders – Net Length on Energy Futures Trimmed Further as Risk Appetite Diminished
Energy prices remained under pressure as US- China trade re-escalates. According to the CFTC Commitments of Traders report for the week ended August 6, NET LENGTH for crude oil futures declined -11 650 contracts to 375 641 for the week. Speculative long positions added +686 contracts and shorts jumped...
Global Risks Materializing, Stocks and Yields Tumbled, Yen and Franc Surged
US-China trade/currency war, no-deal Brexit, global slowdown and central bank easing were the main themes last week. The perceived risks to global economy were moving closer to materializing. Free fall in Chinese Yuan at the start of the week triggered US in designating China as currency manipulator. New 10%...