China’s PMIs Confirmed Manufacturing Sector in Contraction
The latest PMI data added further evidence that China’s economy is in bad shape. Trade war with the US has not only weakened trade, but also domestic demand. The job market has also deteriorated, suggesting further stimulus is needed to be in place as soon as possible. We expect...
Yen Jumps as Asian Markets in Deep Selloff to Start the New Year
Yen surges broadly while Australian Dollar is pressured as Asian markets start the new year with deep selloff. Hong Kong HSI is quickly down over -2.3% in initial trading. China Shanghai SSE is down -1.0% and Singapore Strait Times is down -0.48%. Japan is still on holiday. Canadian and...
FX 2019 – Market Too Optimistic about BOC’s Rate Hike Path and Success of NAFTA 2.0
Canadian dollar weakened against US dollar in 2018, first time in three years. Loonie declined over -7% against the greenback last year, with much of the selloff took place in the third quarter. Key factors driving CAD’s movement are BOC’s rate hike path, crude oil price, ratification of USMCA...
Less- than- Expected Decline in US Crude Oil Inventory Failed to Rescue Price
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products stocks dropped -2.05 mmb to 1227.54 mmb in the week ended December 21. Crude oil inventory slipped -0.05 mmb (consensus: -2.87 mmb) to 441.41 mmb. Inventories increased in ALL 5 PADDs. Meanwhile,...
Swiss Franc Shows Power ahead of Weekend, Stocks Rebound in Progress
Just ahead of the weekend, Swiss Franc shows broad based power today as it surges across the board. Yen is trading as the second strongest one, but with much weaker momentum. For now, we're unsure of the exact reason for the rally. European stocks are enjoying a solid rebound....
Asia Shrugs US Stock Rebound Again, Some Dollar Weakness Before Year End
Despite initial setback, US equities extended the post-Christmas historic rebound overnight. DOW ended up 1.14% to 23138.82. S&P 500 rose 0.86% and NASDAQ added 0.38%. But the improvement in sentiments isn't carried over to Asian session. Nikkei is currently down -0.39%. Hong Hong HSI is just up 0.09% while...
FX 2019 – USD Peaks, But Not Necessarily Sharply Lower
The consensus forecast that USD’s rally, which began in February this year, is coming to an end hinges on the theses of overvaluation and stretched FX market longs, the slowdown in US economic growth and the end of current tightening cycle. While we are also of the view that...
Yen and Swiss Franc Higher as Sentiments Turn Sour Again
While the US markets staged an historic comeback yesterday, sentiments didn't stay long. After Asian markets turned mixed, European markets are now trading broadly lower. DOW's over 1000pts rebound yesterday was impressive. But futures suggest that it's going to give back 300pts or more at open. Swiss Franc and...
No Follow Through in Risk Appetite after US Stocks Rebound
US equities staged a impressive rebound overnight and that's actually the strongest since 2009. DOW closed up 4.98% or 1086.25 pts at 22878.45. S&P 500 rose 4.96% to 2467.70. NASDAQ jumped even more by 5.84% to 6554.36. Reactions in Asia were mixed though. Nikkei closed up 3.88% to 20077.62,...
China’s Monetary Policy Outlook in 2019 – Easing While Refusing to Admit So
Ongoing trade war with the US is accelerating the slowdown in growth in China. As such, the monetary policy adopted by PBOC would continue to be accommodative. Echoing the rhetoric of the annual Central Economic Work Conference, PBOC affirmed that its policy for the coming year would remain “prudent...
Subdued Holiday Trading Continues, Yen and Swiss Franc Pare Gains
The forex markets are generally rather quite today as most major countries remained on holiday. After another day of free fall on Monday, US stocks futures point to higher open. DOW could recover by triple-digit but the sustainability of the rebound is questionable.
There is no end in sight on...
Yen and Swiss Franc Strong as US Stocks Extend Plunge, Trump Urges to Buy Dip
Yen and Swiss Franc are so far the strongest ones for this holiday week. But trading is rather subdued in Asia, as part of the region are still on holiday. Activity will likely remain low in European session with Germany, UK and Swiss on holiday today. The markets might...
CFTC Commitments of Traders – Bets on USD Trimmed amid Speculations of Slower Rate Hike Path in 2019
As suggested in the CFTC Commitments of Traders report in the week ended December 18, NET LENGTH in USD Index dropped as bets decreased on both sides. All other major currencies stayed in NET SHORT positions. During the week, the greenback was mixed against major currencies. Expectations of a...
CFTC Commitments of Traders- Bets on Crude Oil Fell Amid Price Slump
According to the CFTC Commitments of Traders report for the week ended December 18, NET LENGTH for crude oil futures climbed modestly higher as the decline in speculative short positions outweighed that in long positions. NET LENGTH added +102 contracts to 309 608 contracts for the week. Both crude...
Stock Markets Correcting 10-Year Up Trend But Fed’s Not to Blame
The global stock markets just turned from bad to worse last week. DOW suffered its worst week since the global financial crisis back in 2008, down the week by nearly -7%. S&P 500, down the month by -11.4%, is also on track to have its worst week since 1931,...
Risk Aversion Eased ahead of Holiday, But Yen Remains Strongest
Yen remains the strongest one for today even though risk aversion eased a bit ahead of long holiday weekend. Dollar is following as the second strongest, reversing a lot of post FOMC losses against Euro and Swiss Franc. Commodity currencies remain generally weak. But today, it's Canadian Dollar that's...
DOW Dropped to Critical Fib Level, Yield Curve Flattened Further
While risk aversion continued in Asian session, volatility cooled mildly. Major pairs and crosses are staying in relatively tight range. Swiss Franc and Sterling are generally higher while commodity currencies are soft. But the picture for the day could easily change. For the week, dusts have little settled. Yen...
Dollar Under Pressure But Loss Limited, BoE Dovish Shift Ignored
Dollar remains in the spotlight today as it suffers renewed selling in European session. It could be part of delayed reaction to the dovish FOMC rate hike yesterday. But then, while the greenback is the worst performing one today, loss greenback is limited so far except versus the Japanese...
BOE Turns Dovish as Brexit Deadline Nears, Yet No Deal is Secured
BOE voted 9-0 to leave the Bank rate unchanged at 0.75% in December. The committee also voted unanimously to leave the asset purchase program at 435B pound .It has turned more cautious than November, warning that Brexit uncertainty has “intensified considerably” since November. Thanks to lower oil prices, policymakers...
Yen Surges as Markets Tumble on Insufficiently Dovish Fed
US stocks tumbled overnight, extending recent decline, as FOMC raised interest rate and the overall announce was less dovish than expected. Risk aversion also spread to Asian session. Commodity currencies are generally pressured as a result. New Zealand Dollar additionally weighed down by poor GDP while Aussie is soft...