Budget Discipline Narrows Italian-German Yield Spread, Yen and Swiss Franc Lower
Risk aversion is the general theme in European and Asian markets today while US futures point to lower open. But that's not quite reflected in the currency markets. New Zealand Dollar is trading as the strongest one so far. Canadian Dollar also recovered some ground as markets await BoC...
Tale of Two Crises – Comparing Argentina and Turkey
Since our last discussion in May, the financial situation in Argentina has not improved. Rather, it has deteriorated rapidly over the past few months. Last week, President Mauricio Macri announced that he had asked the IMF to accelerate disbursement of its 3-year stand-by loan worth of US$ 50B, after...
Asian Stock Rout Limits Aussie Rebound, Dollar Rise Halted by Dovish Fedspeak
Australian Dollar is lifted broadly today after stronger than expected GDP data. But the Aussie quickly pared gains as weighed down by stock market rout in Asia. At the time of writing, Hong Kong HSI leads the decline by falling -1.65%. China Shanghai SSE is down -0.92%, Singapore Strait...
Dollar Surges as Ex-US Markets Back in Risk Aversion, Canadian Dollar Tumbles Sharply
Dollar strengthens broadly today, in particular against commodity currencies, as global ex-US markets are back in risk averse mode. Trade tensions and emerging market problems are staying as the two main themes that weigh on investors' sentiments. The greenback is followed by Yen and Sterling as the next strongest....
RBA Left Cash Rate Unchanged for 25 Months in a Row
RBA left the cash rate unchanged at 1.5% for a 25th consecutive month. Similar to previous meetings, policymakers were upbeat over the growth and the employment outlook, while acknowledging soft wage growth and inflation. In short, the central bank is optimistic over the business conditions and higher levels of...
Australian Dollar Supported by Dull RBA Statement, Canadian Dollar Weakens Further
The forex markets are rather quiet in Asian session today, with the exception of some notable weakness in Canadian Dollar. Euro is so far the weakest one but it's kept above yesterday's low. Sterling follows as second weakest together with Loonie. On the other hand, Dollar, Australia and New...
BOC Preview – Growth Upbeat, Just Not Justifies Another Rate Hike Until October
Recent upbeat macroeconomic data has lifted speculations for a BOC rate hike in September. Yet, we do not expect the developments since the last meeting should change the central bank’s gradual normalization policy. Policymakers should bear in mind the lesson of a back-to-back rate hike (July and September) last...
Italy’s Debt Problem Returns to Spotlight as Agencies Threaten to Downgrade
There is a comeback of concerns over Italy’s financial situation as next year’s fiscal budget would soon be revealed. As an election promise, the populist M5S/League coalition government could likely propose a number of expansionary measures including tax cut and increase in welfare. Such worries have been exacerbated by...
Sterling Selloff Accelerates on PMI Manufacturing, Australian Dollar Recovers ahead of RBA
Sterling's selloff accelerates today and Brexit optimistic faded. The Pound was lifted by EU chief Brexit negotiator Michel Barnier's offer of an unprecedented relationship last week. It's now single-handedly hammered by Barnier too as he blasted UK's Brexit plan. Adding further pressure to the Sterling, UK PMI manufacturing dropped...
Sterling Lower as EU Barnier Rubbished UK Brexit Plan, Yen Jumps on Risk Aversion and JGB Yields
Sterling opens the weak broadly lower and stays soft after EU chief Brexit negotiator Michel Barnier said he "strongly opposed" to UK's impractical plan. The Pound has been sensitive to any Brexit headlines and will continue to be so. New Zealand Dollar is the second weakest one. But Canadian...
CFTC Commitments of Traders – Euro at Risk as Concerns over Italy Rekindle
As suggested in the CFTC Commitments of Traders report in the week ended August 28, NET LENGTH of USD index added +449 contracts for 34 571 contracts for the week. Both speculative long and short positions dropped, suggesting the market was decisive about its outlook. during the reporting week,...
CFTC Commitments of Traders – Rising Output Might Cap Oil’s Rally
According to the CFTC Commitments of Traders report for the week ended August 28, NET LENGTH for crude oil, heating oil and gasoline futures rose, in tandem with higher prices. Speculative long positions of crude oil futures gained +12 322 contracts, while shorts climbed +794 contracts higher, resulting in...
US Trade War Again Dominated, But Everyone Has Their Own Stories
The last week of August was unusually volatile and eventful. It's a week to remember yet it's hard to remember all the details. Almost every major currency got its own stories. Swiss Franc and Japanese Yen ended as the first and third strongest ones on risk aversions. And apparently,...
Canadian Dollar Selloff Accelerates on Talk of No Trade Deal, Yen and Swiss Franc Stay Strong
Trade war is back into the spot light today, sparkled by Trump's Bloomberg interview with hostile comments on EU and China. Investor sentiments are clearly weighed down. At the time of writing, FTSE is down -0.58%, DAX down -0.75% and CAC down -1.04%. That followed broad based selling in...
Stocks Pressured as Trump is Ready to Bring US-China Trade War to Another Level
Canadian Dollar is trading as the weakest one for today, followed by New Zealand Dollar and then Australian Dollar. Asian stocks are under pressured broadly, following the pull back in US equities overnight. Investors seemed to be bother by the worsening tensions between US and China. Trade is definitely...
Yen Regains Ground as Investor Sentiments Weighed Down by Turkey and China Again
Yen regains some ground today as global markets, except US, are back in risk averse mode. Another day of selloff in the Turkish Lira is a reason for the selloff in European stocks. USD/TRY hits as high as 6.839 today and is currently up 4.76 %, 7.00 handle is...
The Real Meaning of “No Deal” Brexit
The market is thrilled by comments from Michel Barnier, EU chief negotiator on Brexit, who noted that the EU is “prepared to offer Britain a partnership such as there never has been with any other third country”. We do not see any breakthrough from those comments, just as we...
Sterling Surged on Brexit Deal Optimism, New Zealand Dollar Tumbles on Business Confidence
Sterling surged overnight as boosted by comments from EU indicating that they're committed to a deal Brexit deal with the UK. The Pound remains firm in Asian session and is now the strongest one for the week. Swiss Franc is mixed in Asia but remains the second strongest one....
Crude Oil Prices Soared on US Inventory Decline and Expectations of Tighter Market
Crude oil prices extended recent rally, as US inventory dropped more than expected and the International Energy Agency (IEA) forecast oil market to tighten towards year end. The front-month WTI crude oil contract gained +1.43% while the Brent contract rose +1.57%. Both benchmarks rebounded, by +4.26% and 5.56% respectively, in...
Euro Tumbles as Turkish Crisis Re-emerges, Lira Down 3%
Euro suffers broad based selling today, except versus Australian Dollar, as Turkish Lira crisis re-emerges. Notable rally is seen in USD/TRY which is up around 3% at the time of writing. On the other hand, Sterling, Swiss Franc and Dollar take advantage of the situation and rises broadly. Canadian...