FOMC Preview: Fed to Maintain Dovish Tone and Announce Plan to End Balance Sheet Reduction
At the upcoming FOMC meeting, the members would vote to leave the Fed funds rate target at 2.25-2.5%. We expect reinforcement of the dovish message conveyed in January. The focus is on the plan to complete the reduction of its balance sheet, which peaked at US$ 4.5 trillion in...
Yen Lower on Asian Stocks Rally, BoJ Notes Weakness in Exports
Risk appetite is having a mild comeback in Asia today and commodity currencies are taking advantage of that. Meanwhile, Yen, Dollar and Sterling are also soft. The greenback shrugs off strong rebound in treasury yields overnight. Yen is weighed down mildly by BoJ's downgrade on exports outlook. Meanwhile, Sterling...
Sterling Mixed as UK Will Decide on Brexit Delay, Aussie Dragged Down by China
Sterling turns mixed as markets await yet another vote about Brexit in the Commons today. MPs is now given a chance to vote for delaying Brexit beyond March 29. The question is whether it would be a short delay with a plan, a short delay without a plan, or...
Sterling Spiked Higher as No-Deal Brexit Ruled Out, Aussie Weighed Down By Chinese Data
Sterling spiked higher overnight after UK Commons voted to reject no-deal Brexit. But there was no follow through buying as the Pound settles back into familiar range quickly. It's indeed the weakest one for today so far, paring some of the gains. Focus will now turn to vote on...
Slowdown in China Remains Pronounced Even After Adjusting for Seasonal Factors
China released its latest macroeconomic data for the first two months of the year. Due to Lunar New Year holiday, the January figures for retail sales, industrial production and fixed asset investment were not released. Despite signs of improvement, the set of data, together with inflation and trade reports...
Canadian Dollar Jumps as WTI Crude Oil Breaks 58, Sterling Firmer ahead No-Deal Vote
The financial markets are pretty directionless and traders await vote on no-deal Brexit in the UK parliament. Sterling remains the strongest one for now on recovery. But upside is limited below near term resistance against other major currencies. That is, the Pound is merely gyrating in recently established range....
Sterling Range-Bound as Focus Turns to No-Deal Vote, Yen Firm
After much volatility in the past 24 hours, Sterling is staying in familiar range against Dollar, Euro and Yen. UK Prime Minister Theresa May's Brexit deal was voted down by the Commons. That puts Brexit back into the original path. A no-deal vote will be held today and is...
Brexit Update – Deal Rejected for Second Time
The UK parliament again defeated, by 149 votes, the Withdrawal Agreement that PM Theresa May secured from the EU parliament. Despite the changes, attorney general Geoffrey Cox suggested the UK still would risk struck in the Irish backstop indefinitely. His opinion has raised concerns of both Brexit hardliners and...
Sterling Reverses as Brexit Turns Back into a Mess after Legal Setback
Sterling reverses and dives sharply as Brexit turns into a mess again. The new assurances UK Prime Minister Theresa May got from EU provided some nervous hope earlier today. But legal advice from Attorney General Geoffrey Cox killed the chance of getting the Brexit deal through the meaningful vote...
Pound Surges on Brexit Breakthrough, Yen Lower as Risk Appetite Returns
Sterling made a massive come back and is trading as the strongest one for today, as boosted by breakthrough in Brexit. At least, UK Prime Minister Theresa May believe she got important legally binding changes that's adequate to satisfy the parliament. The Pound could be given further lift ahead...
Sterling Recovers Awaiting Brexit Clarify, Dollar Shrugs Retail Sales Data
Risk markets attempt to recover today but lacks clear momentum. Nonetheless, that's enough to send Swiss Franc generally lower. At the time of writing, Canadian Dollar is the second weakest. Dollar follows as third weakest despite better than expected retail sales. Sterling on the other hand recovers broadly after...
Sterling Lower as Crucial Brexit Votes Loom But There’s No Sign of Progress
Sterling opens the week lower and stays generally weak today. As the crucial Brexit votes loom there is no breakthrough on the issue of Irish backstop. EU's so called "concessions" were rejected by the UK government. And there is practically no chance of getting the same Brexit deal through...
CFTC Commitments of Traders – Traders Increased Bet for Rising Crude Oil Price
According to the CFTC Commitments of Traders report for the week ended March 5, NET LENGTH for crude oil futures soared +21 130 contracts to 348 801 for the week. Speculative long positions rose +11 421 contracts while shorts declined -9 709. For refined oil products, NET LENGTH for...
CFTC Commitments of Trades – Traders Trimmed Bets on USD amidst Uncertainty of Rate Hike Outlook
As suggested in the CFTC Commitments of Traders report in the week ended March 5, NET LENGTH in USD Index gained although bets decreased on both sides. With the exception of NZD, all major currencies stayed in NET SHORT positions. Although the market has trimmed expectations of a rate...
Sentiments Turned Sour on Slowdown Worries, But No Panic Button Hit Yet
Looking through all the financial market news last week, the message was rather unified. That is, 2019 will be a year of slowdown, globally. Economic data, central banks, governments and independent organizations are all reinforcing this message. While ECB's "pre-emptive" dovish turn triggered wild market reactions, it was just...
Dollar Weakens after Dismal 20k NFP Growth, But Loss Limited by Improvements in Unemployment Rate and Wage Growth
Dollar trades broadly lower in early US session after poor job report which shows only 20k growth, weakest since September 2017. However, weakness is at this point limited since the set of data is not totally negative. Unemployment rate did decline while wage growth accelerated. For now, Sterling is...
Yen Rally Accelerates as Shocking China Export Contraction Adds to ECB Misery
The impact of dovish ECB quickly spread to the whole world. Following weakness in the US and Europe, Asian stocks tumble broadly today. Adding to the misery, China's February trade data were shockingly terrible, recording -20.7% yoy contraction in exports. Weak export outlook adds to the case of "tough...
EUR/USD Dives after All-the-Way Dovish ECB, Heading Towards 1.1215 Low
Euro tumbles broadly after ECB delivered and all-the-way dovish meeting. There will be no rate hike until at least 2020. New TLTRO-III is announced. ECB expects sizeable moderation in growth. GDP growth forecast was revised down substantially. Yet, risks surrounding outlook are still tilted to the downside. Selloff in...
ECB Announces new TLTROs, Markedly Downgrades Growth and Inflation Forecasts
ECB left the main refi rate, the marginal lending rate and the deposit rate unchanged at 0.00%, 0.25% and -0.40%, respectively. However, much change was made in the economic assessment and the forward guidance, as a result of “moderation in the pace of the economic expansion”. The central bank...
Euro Soft ahead of Dovish ECB, Canadian Sings BoC Blues
Asian markets are mixed today despite selloff in US overnight. Investors are generally non-committal, probably waiting for more concrete developments regarding US-China trade negotiations and Brexit. Though, the decline in US treasury yields is worth a note as 10-year yield closed back below 2.7 handle at 2.692. It remains...