RBA Preview – Another -25 bps Rate Cut Expected This Week
We expect to RBA to cut the cash rate, by -25 bps, to 1% in July. Although this would be earlier than RBA’s projection in the May SoMP, it is largely in line with market expectations, which has priced in about 70% of a rate cut in July. We...
Focus Turn to US Data after Trump & Xi Delivered at G20
Expectations setting were rather well set for the highly anticipated Trump-Xi meeting at G20. Both sides agreed to stop raising tariffs further. But it's unsure whether they've closed the huge gap that led to collapse in trade negotiations. If the causes remain, the results would be the same no...
CFTC Commitments of Traders -NET LENGTH for USD Fell on Heightened Hopes of Fed Funds Rate Cut
The CFTC Commitments of Traders report in the week ended June 25 shows that NET LENGTH in USD Index declined -6 183 contracts to 22 366. Speculative long positions fell -5 992 contracts while short positions added +191 contracts during the week. DXY index plunged to the lowest level...
CFTC Commitments of Traders – Bets for Higher Precious Metal Prices Soared as Gold and Silver Rallied to Multi-Year Highs
According to the CFTC Commitments of Traders report for the week ended June 25, NET LENGTH for crude oil futures rose +15 716 contracts to 378 803 for the week. Speculative long positions fell -5 808 contracts but shorts declined -21 524 contracts. We expect NET LENGTH to rise...
Dollar Mildly Lower in Quiet Markets, G20 Eyed
Dollar trades broadly lower in relatively quiet markets today. Trading is rather subdued firstly due to quarter end effect. More importantly, traders are awaiting the highly anticipated Trump-Xi meeting. It's cautiously optimistic that some form of agreement would be made to avert further tariff escalations. But this is far...
Markets Turn Cautious With Eyes on G20, US & Eurozone Inflation
Asian markets trade broadly lower today as traders lighten up positions ahead of the highly anticipated Trump-Xi meeting tomorrow. Yen and Swiss Franc are currently the strongest ones as sentiments turn cautious. Nevertheless, both are contained well above recent lows against other majors currencies for now. Directions in other...
Markets Going Nowhere ahead of G20, US & China Exchange Words ahead of Trump-Xi Meeting
The financial markets are generally in consolidative mode, awaiting the start of the two-day G20 summit in Osaka, Japan tomorrow. For traders, main focus will be on face-to-face meeting of Trump and Chinese President Xi Jinping. Hopes are high for some form of agreement to stop further escalations in...
Yen & Swiss Franc Lower Again as Stocks Rise on Trade Optimism
Asian markets trade broadly higher on increasing "optimism" regarding US-China trade war. Some form of agreement is anticipated out of the Trump-Xi summit on Saturday to avoid further tariff escalation. Yen and Swiss France are trading as the weakest one for more, followed by Euro. Australian and New Zealand...
Huge Decline in US Inventory Lifted Crude Oil Price
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks decreased -11.89 mmb to 1304.89 mmb in the week ended June 21. Crude oil inventory slumped -12.79 mmb to 469.58 mmb (consensus: -2.54 mmb). Inventories rose in ALL 5...
Hong Kong as Bargaining Chip in US-China Trade Talk?
Five years since the Umbrella Movement, Hong Kong has once again been in global spotlight. Just a week after a march by over a million protesters, about two million of Hongkongers took to the streets against the proposal of extradition bill amendment. The issue has caught so much international...
Sentiments Lifted by Mnuchin’s Trade Optimism, Capped by Trump’s Tariff Threats
Risk appetite firms up mildly today as lifted by US Treasury Secretary Steven Mnuchin's upbeat comments regarding trade negotiation with China. There are also reports that US would delay new tariffs without deadline, to bring China back to negotiation table. However, the positive lift is capped after Trump reiterates...
RBNZ Review – Stand Pat and Stay Cautions
NZDUSD climbed higher after RBNZ left the OCR unchanged at 1.5%, a well-anticipated move. The members maintained a dovish tone, but not more dovish than in the previous meeting. Although the central bank indicated that interest rates might need to be lower, it does not sound like it would...
Dollar Rebounds as Fed Dismissed Aggressive Cut, NZD Rebounds Despite Dovish RBNZ
New Zealand rises broadly even though RBNZ hints on an August rate cut. The easing bias is actually well priced in and traders responds to the positive reference to the economy instead. Dollar also trying to extend yesterday's rebound as even the most dovish Fed official dismissed an aggressive...
Yen Surges on Renewed Weakness in Treasury Yields
Yen rises broadly today as major treasury yields are resuming recent decline. German 10-year yield hits new record low at -0.33 while US 10-year yield is back below 2.0 handle. Though, New Zealand Dollar is even stronger as record export in May solidifies the case for RBNZ to stand...
Yen & Gold Jumps on Fresh Iran Sanctions, Dollar Awaits Fed Powell
Yen and Gold surge today as global sentiments are weighed down by new US sanctions on Iran. In particular, Gold hits as high as 1439 and is currently up more than 1%. Nevertheless, New Zealand Dollar outshines Yen and is currently the strongest one for today. Kiwi is boosted...
Dollar Ignores Trump’s Fed Attack, Euro Mixed after German IFO
Dollar stays generally soft in quiet markets but selling seems to have slowed in early US session. Trump criticizes Fed as sticking like a "stubborn child" on interest rates. Such comments are ignored by markets, sensibly, in general. The key to Fed's policy is whether Trump is able to...
HKD’s HIBOR Soars, But With Limited Upside
Recent spike in HIBOR has sent HIBOR-LIBOR spread to the positive territory, a situation not seen in a decade for both 1-month and 3-month spreads. In our opinion, the upside for HIBOR is limited although it could stay elevated in the near-term due to seasonal factors.
On June 13, both...
Dollar Stays Soft as Markets Await G20, Aussie Mildly Firmer
The financial markets are relatively steady in a light day today. The imminent risk of war between US and Iran is eased, as Trump opts for more economic sanctions. Meanwhile, it appears that US and China are both preparing for the Trump-Xi summit at G20 in Japan later in...
CFTC Commitments of Traders – Precious Metals Glittered as Rate Cut Hopes Heightened
According to the CFTC Commitments of Traders report for the week ended June 18, NET LENGTH for crude oil futures rose +24 140 contracts to 363 087 for the week. Speculative long positions fell -12 708 contracts but shorts declined by a sharper -24 140 contracts. Escalated tensions between...
CFTC Commitments of Traders – Rising Bets for Higher USD Likely Short-lived
The CFTC Commitments of Traders report in the week ended June 18 shows that NET LENGTH in USD Index gained +4 560 contracts to 28 549. Speculative long positions added +3 434 contracts while short positions decreased -1 126 contracts during the week. We expect NET LENGTH to decline...