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...
RBNZ Preview – Maintaining Cautious Tone to Pave Way for Further Cuts
After lowering the policy rate by -25 bps to 1.50% in May, RBNZ would likely remain on hold this month. Domestic economic developments came in largely consistent with policymakers’ projections. Yet, global economic outlook remains uncertain and major central banks have recently shifted their stance on the dovish side.
As...
Fed & ECB Turned Dovish, But It’s Too Early to Confirm July Policy Actions
Major global central bankers sang a chorus of dovishness last week. Most importantly, both ECB and Fed signaled the possibility of rate cuts ahead. Comparatively, RBA's indication of more rate cut was not much a surprise. In the background, it appeared US and China were back on track to...
Euro Jumps as Eurozone PMIs Show Tentative Signs of Turnaround
Euro rises broadly today as PMI data showed no further deterioration in sentiments in Eurozone. Underlying growth momentum remained weak, but there were more tentative signs of improvement in Germany and France. Swiss Franc remains firm on Middle East Tension. It's reported that Trump has given Iran a warning...
Dollar in Weak Recovery as Focus Turns to Eurozone PMIs
Dollar recovers mildly today but there is apparently no follow through buying for a turn around. The greenback is still feeling heavy on dovish Fed which opened the door for rate cut at this week's FOMC meeting. Weakness in Dollar is also apparent in the strength of Gold, which...
Middle East Tensions Overshadow Dovish Central Banks, Swiss Franc and Canadian Steal the Show
Dollar remains broadly weak, suffering heavy selling pressure after Fed turned dovish yesterday and opened the door for rate cut. Though, Swiss Franc and Canadian Dollar steal the show today on escalating middle tensions. WTI crude oil rises over 4% on news that a US drone was shot down...
Dovish Fed Sent Dollar and Yields Lower, More Downside in Near Term
Dollar drops broadly overnight after Fed indicates that it's ready to "act as appropriate" on interest rates, depending incoming data. It's clearly a sign that Fed is opening door for rate cut, even though it may not come as soon as in July. Selling picks up momentum today together...
FOMC Review – Divided Fed Signals Rate Cut This Year Still Likely
FOMC left the policy rate unchanged at 2.25-2.50% but with one dissent. St Louis Fed President James Bullard voted against the decision as he proposed to cut the rate by -25 bps. The dot plot projections show that more members are in favor of lowering interest rates. The policy...
US Crude Oil Inventory Fell For First Time in Three Weeks
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks decreased -0.41 mmb to 1316.77 mmb in the week ended June 14. Crude oil inventory fell -3.11 mmb to 482.36 mmb (consensus: -1.08 mmb). Inventories rose in 2 out...
Canadian Dollar Jumps on CPI, Dollar Mixed Awaiting FOMC Guidance
Canadian Dollar jumps broadly in early US session, after stronger than expected inflation data remove another reason for BoC rate cut. Though, for now, Loonie is overshadowed by Sterling and Swiss Franc, which are the strongest ones. Meanwhile, risk appetite recedes mildly ahead of FOMC rate decision. Dollar is...
Sentiments Boosted by Trump and Draghi, But Traders Hold Their Bets ahead of FOMC
Market sentiments were given two strong boosts yesterday, first by ECB's indication of monetary stimulus ahead, then by renewed optimism of US-China trade negotiations. Positive sentiments carried forward to Asian session, with strong rally seen in major indices. Though, reactions in currency markets are relatively "refrained" as traders are...
Euro Tumbles, German Yield Hits Record Low as ECB Prepares for More Easing
Surprisingly dovish comments from ECB President Mario Draghi sent Euro sharply lower, and German 10-year yield to new record low today. There are some speculations that ECB could eventually cut interest rates, with a tiered system", alongside released of new economic projections in July. The comments also send German...
Australian Dollar Tumbles on Dovish RBA Minutes, Sterling Weakens Too
Australian Dollar drops broadly today after RBA minutes confirm that more rate cuts are underway. Additional, worse than expected house price data gives the Aussie more selling pressure. Sterling is not far away as second weakest, ahead of the next round of UK Conservative leadership voting today. For now,...
RBA Minutes Indicate More Rate Cuts In Coming Months
RBA, in its June meeting minutes, explicitly noted that the policy rate would be lower. This message came in more dovish than market expectations. The major concern remained in the lackluster improvement in the labor market. RBA cut the bank rate by -25 bps to 1.25% in June. The...
BOE Preview – Record Low Interest Rate Remains Intact Despite Recent Hawkish Comments
We expect BOE to leave the policy rate unchanged at 0.75% this week. It would also keep the size of the asset purchase program at 435B pound. Although there has been some noise pushing for a rate hike, we expect the votes on both measures to be unanimous.
UK’s economy...
Euro Rises on Strong Wage Growth, Dollar Softens on Weak Data
Euro strengthens broadly in mixed forex markets today. Record wage growth in Q1 is a factor under-pinning the common currency. Poor US economic data also helps. But at this point, strength mainly centers in crosses, against Aussie most notably. Meanwhile, New Zealand Dollar is the second strongest one for...
Dollar Firm as Markets Skeptical on Fed Insurance Rate Cut Path
Dollar remains generally firm in quiet Asian markets today. The greenback continues to be supported by expectation that FOMC won't deliver any "insurance" rate cut this week. Instead, Fed policy makers will look at the upcoming developments before making a decision, in particular the result of G20 summit regarding...
FOMC Preview – Preparing for Rate Cut
The Fed could make a number of changes in the upcoming June FOMC meeting, to pave way for a rate cut in as soon as July. We would focus on three things: updated economic projections, adjustment in the forward guidance and median dot plot. It is likely that the...
CFTC Commitments of Traders – Bets on USD Futures Trimmed Further Ahead of FOMC Meeting
The CFTC Commitments of Traders report in the week ended June 11 suggests that bets for US dollar continued to fall on both long and short sides. NET LENGTH in USD Index dropped -2 245 contracts to 23 989. Both speculative long and short positions decreased during the week....
CFTC Commitments of Traders – Net Speculative Length for Crude Oil Futures Declined for Seven Weeks In A Row
According to the CFTC Commitments of Traders report for the week ended June 11, NET LENGTH for crude oil futures dived -48 513 contracts to 351 655 for the week. Speculative long positions plunged -23 490 contracts while shorts jumped +25 023. More traders were speculating weaker oil prices...