Brexit Update – EU and UK Agree on Draft Deal, Still More Challenge Ahead
Brexit news again dominates the headline as UK Prime Minister Theresa May announced that she has gained support from the Cabinet the Withdrawal Deal hammered out between the UK and EU. End of the story? Not yet. If both the UK Cabinet and the EU approve the deal, the...
Sterling Turned Cautious as Markets Await May’s Brexit Cabinet Meeting
Sterling turned cautious as markets are now awaiting the result of UK Prime Minister Theresa May's Cabinet meeting on Brexit. The withdrawal agreement text should have been agreed with the EU. Approval by the Cabinet will give the green-light to EU chief negotiator Michel Barnier to declare that "decisive...
Sterling Firm, But Uncommitted, as Markets Await UK Cabinet Meeting on Brexit Agreement
Sterling is trading generally firm today as the EU and UK finally agreed on the withdrawal agreement. It will now have to go through Prime Minister Theresa May's Cabinet today. That shouldn't be too much a problem despite some open objection from Brexiteers. The main hurdle lies in the...
China’s October Data Encourage More Easing From Government
The latest set of macroeconomic data in China was mixed. Retail sales grew +8.6% y/y in October, weaker than consensus of, and September's +9.2%. Automobile sales, contributing 10% to retail sales, declined -11.7% in October, marking the first annual contraction in almost 3 decades. Alongside the personal tax reform,...
Sterling Surges as Brexit Agreement, Including Irish Backstop, Will be Ready Soon
Sterling rebounds solidly today and there is new wave of buying coming in at early part of US session. Positive news regrading Brexit negotiation is the key driver of the Pound. It's reported that the Brexit agreement is now closer than ever. And, there are only a small number...
Australian Dollar Lifted as Asian Stocks Rebound on US-China Trade Optimism
Asian stocks gapped sharply lower follow steep fall in US equities overnight. But sentiments were then lifted by optimism over US-China trade negotiations. Australian and New Zealand Dollar benefited from the development and are now trading as the strongest ones. On the other hand, Yen and Dollar turn softer,...
Upbeat Chinese Trade Data Masked Impact of Trade War
China’s trade surplus widened to US$ 34B in October. Exports grew +15.6% y/y, beating consensus of +11.7% and September’s +14.5%. Import expanded +21.4% during the month, exceeding market expectations of +14.5% and +14.3% in September. Interestingly, the headline trade data does not seem to be dragged by US’ trade...
More Upside in Dollar after Breaking Key Resistance, Sterling Selloff Continues
Sterling continues to trade as the weakest one for today as negative Brexit news fly around. It's reported that European Council President Donald Tusk has given UK Prime Minister Theresa May a deadline for an extra November summit. And enough progress has to be made by this Wednesday night....
Sterling Dives as Nov Brexit Deal Becomes Distant, Canadian Dollar Follows Oil Rebound
Sterling opens the week sharply and broadly lower as it's getting less and less likely to complete a Brexit deal within November. Yen is the second weakest as Asian stocks recover mildly after last week's selloff. Meanwhile, Euro is following as the third weakest at the time of writing....
CFTC Commitments of Traders – USD Index Stayed in NET LENGTH Although Traders Trimmed Bets on Both Sides
The CFTC Commitments of Traders report in the week ended November 6 shows that all major currencies (except USD) remained in NET SHORT positions. Speculative longs on USD index fell -1 564 contracts while shorts declined -2 323, sending the NET LENGTH higher, by +759 contracts, to 40 282...
Commitments of Traders – Natural Gas in NET LENGTH for the First Time in Over a Year
According to the CFTC Commitments of Traders report for the week ended November 6, NET LENGTH for crude oil, heating oil and gasoline futures all continued to drop. Oil prices slumped during the reporting week, with the front-month WTI crude oil contract pluning -6% while the Brent contract was...
Dollar and Yen Building Up Bullish Turnaround, Canadian Down on Oil Price Free Fall
There were some interesting turns in the financial markets last week. Global equities initially cheered after Democrats sealed a tremendous win in the US mid-term election by regaining majority in the House. But the lift quickly faded as stocks suffered quite notable setbacks towards Friday's close. It looked like...
Dollar Firmer Up Again after Strong PPI, But More is Need to Prove Underlying Strength
Dollar turns a bit firmer again in early US session after stronger than expected PPI readings. For now it's on of the strongest one today, along with Yen and Swiss Franc. But still, more technical breakthrough is needed in the greenback to prove its underlying bullishness. USD/JPY and USD/CAD...
Dollar Strikes Back as Yields Jumped after FOMC, Yen Following
Dollar is making a come back as US treasury yield surged after FOMC rate decision and statement. The decision to stand pat was widely expected. One surprise was probably the lack of reference to the stock market crash in October. Fed policymakers appear to be not bothered by it...
Limited News from FOMC, December Rate Hike Hopes Unaltered
As widely anticipated, FOMC left the target range for the federal funds rate unchanged at 2.00-2.25% at its November meeting. The changes in the accompanying statement were limited. This is not unusual as the November meeting is in between important ones in September and December. No press conference and...
Dollar a Bystander ahead of Fed, Euro and Sterling Turn Soft
Dollar's decline slowed today, ahead of FOMC rate decision. But there is so far no momentum for a sustainable rebound. It's like trading mixed as a bystander for now. Instead, major movements are found in Euro and Sterling, which start to weaken mildly. Euro is somewhat weighed down by...
Rising Inventory Perpetuates Crude Oil Selloff in the Fifth Week
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products stocks gained +4.83 mmb to 1253.43 mmb in the week ended November 2. Crude oil inventory increased +5.78 mmb (consensus: +2.43 mmb) to 426 mmb. Inventories increased in 3 out of of...
US Midterm Elections – Split Congress Paves the Way for Slower, but More Sustainable, Growth Outlook
The dust is settled on the result of US midterm elections. As polls have suggested, the Congress is split with Republicans continuing the control of the Senate and Democrats is taking over the House.
In our election preview, we have suggested that the most Democrats can do is delaying the...
No Acceleration in Dollar Selloff, Focus Turns to FOMC
Strong risk appetite carries through from US to Asian markets after Democrat's regain of majority in House after the mid-term election. Nikkei closed up strongly by 401.12 pts or 1.82% at 22486.92. Hong Kong HSI is up 0.76% at the time of writing. Singapore Strait Times is up 0.90%....
RBNZ Affirmed the Next Move Can be Up Or Down, Despite Upbeat Data
RBNZ left the OCR unchanged at 1.75% in November. The move had been widely anticipated. Despite recent strong dataflow, the central bank downplayed the improvements and Governor Adrian Orr affirmed that the next rate change can be up or down. Kiwi, which has jumped to the highest level in...