Markets Mixed as Brexit and Trade War Remain Unresolved
Direction isn't very clear in the financial markets today as they're generally in consolidative mode. Sterling was lifted briefly overnight by UK Prime Minister Theresa May's new Brexit plan. But it was quickly back to square one after the plan was overwhelmingly rejected by MPs. For now, Canadian Dollar...
Yen Lower as Investors Relieved by Suspension of Huawei Ban, Sterling Higher on Short Covering
Risk aversion eased mildly today as markets respond positive to US decision to delay the sanctions of Huawei for 90 days. After some initial hesitation, Yen sell-off is picking up momentum in early US session, because of rally in stocks and treasury yields. On the other hand, Sterling is...
Australian Dollar Tumbles as RBA Hints on Rate Cut; Huawei Sanctions Temporarily Eased
Australian Dollar continues to be the spotlight of the week. It's knocked down by RBA Governor's comment that they's going to consider cutting interest rates in June meeting. It's actually slightly earlier than market expectations of an August cut. The selloff is more than enough to reverse post election...
RBA Removes Rhetoric of “No Strong Case” for Near-Term Rate Cut
RBA turned more dovish, than what was suggested in the meeting statement, in May. As the minutes revealed, policymakers expected to cut the policy rate if inflation remains weak while the unemployment rate climb higher. The latest economic forecasts, published two weeks ago, were based on the assumptions that...
US-China Trade War Intensifies with Huawei Isolation, Currency Markets Shrug Risk Aversion
US-China trade war remains a dominant theme in the global financial markets today. Words from both sides continued to indicate hard line stances. It doesn't quite matter how much close to facts are their rhetorics. What matters most is that neither the US or China is going to back...
Australian Dollar Cheers Election Results, Euro and Franc Turn Softer
Australian Dollar open generally higher this week as traders cheer election results over the weekend. Canadian Dollar is also firm after USMCA members reached an agreement to remove steel tariffs and retaliations. Risks sentiments are steady in mixed Asian markets. Nikkei closed mildly higher following much stronger than expected...
OPEC+ Maintains Output Cut. Market Balance Suggests No Practical Need to Raise Output
OPEC+ stayed put, maintaining the output cut agreed in December last year while pledging to monitor market developments with an option to raise production later. In our opinion, there is no practical need for OPEC+ to officially raise output. Despite US sanctions against Venezuela and Iran, as well as...
CFTC Commitments of Traders – USD Bets Trimmed Further as Trader War Uncertainty Persists
As suggested in the CFTC Commitments of Traders report in the week ended May 14, traders trimmed their bets, on both long and short sides, on futures of US dollar index, euro, Swiss franc, and Canadian dollar. On the other hand, bets on both sides were increased in the...
CFTC Commitments of Traders – Oil Traders Awaited OPEC+ Meeting; Bets for Higher Gold Price Surged Amidst Safe Haven Demand
According to the CFTC Commitments of Traders report for the week ended May 14, NET LENGTH for crude oil futures fell -6 528 contracts to 487 808 for the week. Speculative long positions declined -8 810 contracts while shorts slipped -2 282. Overall bets for crude oil diminished as...
CHF, USD & JPY Surged on Deals, Sterling Plummeted
Deal, deal, deals. They're the main themes in the markets last week. The cross-party Brexit talks in UK collapsed and a high profile Brexiteer is tipped to lead the Brexit process after current Prime Minister steps down. Tensions between US and China escalated further. A trade deal is now...
Sterling Pressured as Cross-Party Brexit Talks Collapsed, Sentiments also Weighed Down by Trade Worries
Sterling suffers heavy selling today as after Brexit negotiations between the UK government and opposition Labour formally collapsed. More uncertainties lie ahead as Prime Minister Theresa May will lay our the time line for stepping down, whether her Brexit deal would be approved by the Commons in June or...
Yen Mildly Higher as China Said to be Unkeen to Resume Trade Talks with US
Asian markets once again decouple from the US. While US stocks staged a strong rebound overnight, Asian indices are generally mixed. Weakness is indeed seen in China's Shanghai SSE while Yuan resumes recent free fall. There is some negative reaction to report that China is not eager to resume...
Sterling Extends Decline, Markets Shrug Trumps Huawei Threats
Market sentiments are generally steady today. Better than expected job and housing data lift Dollar mildly higher in early US session. Yen and Swiss Franc are trading of the softer side, paring some of this week's gains. While US moves to contain Huawei catch a lot of headlines, there...
Yen Firm as Risk Aversion Remains, Australian Dollar Lower on Unemployment Rate
US stocks recovered overnight on talks that Trump is going to delay auto tariffs decision, due May 18, by up to 6-months. All major stock indices staged mild recovery. German DAX also reversed earlier losses to close higher. However, such optimism wasn't carried through to Asian session today. In...
US Crude Oil Inventory Jumped to Highest Level since 2017
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks surged +14.64 mmb to 1270.26 mmb in the week ended May 10. Crude oil inventory rose 5.43 mmb to 472.04 mmb (consensus: -0.8 mmb). While this marks the highest...
Yen and Franc Surge as German Yield in Free Fall on Italy Budget
Worries over Italy's budget takes center stage today. Italy 10-year yield hit as high as 2.812. On the other hand, German 10-year yield dived to as low as -0.131. US 10-year yield is also dragged down to as low as 2.364 so far. These are clearly signs of risk...
China’s Slowdown Resumes as Seasonal Effects Faded
Economic data in April prove that China’s economy is not yet out of the wood. Growth in industrial production , retail sales and fixed asset investment all surprised to downside, suggesting that the rebound in March was only due to one-off, temporary factors. Re-escalation of US-China trade war is...
Australian Dollar Tumbles on Wage Growth Miss, China Data Point to More Slowdown
After some initial hesitation, Asian markets picked up some momentum and strengthen broadly, recovering some of this week's losses. Though, strength is so far limited with lots of uncertainty ahead. It's a fact that US-China trade war is dragging on for longer despite Trump's "positive" words. At the same...
Market Sentiments Stabilized, UK Job Data and German Confidence Ignored
Markets sentiments generally stabilized today as it seems that US and China are still will to continue trade negotiations. Nevertheless, otherwise some pleasing words, there is nothing concrete, not even a scheduled meeting. Further decline in German 10-year yield, deeper into negative territory, is a sign of nervousness among...
Yen and Franc Retreat as Sentiments Stablized Somewhat, But More Tariffs Still on the Way
Market sentiments somewhat stabilized in Asian session today. Major indices opened lower, following the selloff in US. But losses are so far rather limited. Indeed, in the currency markets, Yen and Swiss Franc are paring some of yesterday's strong gains while Gold also retreats back to below 1300. USD/CNH...