Bulls Continued to Outweigh Bears Despite Mixed Outlook in Oil Price
According to the CFTC Commitments of Traders report for the week ended July 31, traders were generally bullish towards the energy complex. Net LENGTH for crude oil futures rose +2 929 contracts to 613 400. Net LENGTH for heating oil futures added +305 contracts to 42 017 while that...
Euro as a Casualty as US-China Trade War Turns into Something Bigger
Much volatility was seen in the markets last week with a lot of themes developed. Canadian Dollar ended as the strongest one as strong data boosted chance of August BoC hike. Swiss Franc followed as the second strongest on risk aversion in Europe. Dollar was original set to perform...
Dollar Rally Hits the Wall of Chinese Intervention, Dragged Down by Mixed NFP
In early US session, Dollar is still trading as one of the strongest major currencies for the week, together with Canadian Dollar and Swiss Franc. However, it's clearly losing some steam today and it's in red against all others at the time of writing. One factor that triggered an...
EUR/USD Eyes 1.1574 Minor Support ahead of Non-Farm Payrolls
Sterling stabilizes after yesterday's post BoE selloff. It's trying for a recovery in Asian session today but lacks committed buying so far. Nonetheless, renewed selloff in New Zealand Dollar makes it the worst performing one for the week. The Pound is just the second weakest for the week. Canadian...
Sterling Hammered as BoE Paints a Slower Rate Path ahead, Dollar and Yen Strong on Trade War
Sterling falls sharply today even though BoE delivers the highly anticipated rate hike. Selloff comes in after the dovishness as seen in the inflation report is confirmed by Carney's press conference. Australian Dollar and New Zealand Dollar follow as the second weakest on risk aversion. The stock markets are...
BOE Review: Unanimous Rate Hike Decision Fails to Revive Pound
BOE surprisingly voted unanimously to raise the Bank rate, by +25 bps, to 0.75%. This marks the first increase since last November and the second since global financial crisis. The Committee revised higher forecasts for GDP growth and inflation for this year and in 2019. At the press conference,...
Asian Markets in Deep Red on Trade War, Dollar Surfs Up
The FOMC rate decision overnight was largely ignored by the markets. Instead, Asian equities plunged sharply today as US formally announced to raise the tariffs on USD 200B of Chinese imports from 10% to 25%. Chinese stocks lead the decline with Shanghai SSE down -2.45% at the time of...
FOMC Review – Gradual Rate Hike Path Remains Intact and Economic Assessment Upgraded
The August FOMC statement contained few changes, following quite remarkable amendments in the June one. The only change came from the upgrade in the assessment of the economic developments. Interestingly, Chair Powell’s “for now” qualifier on the rate hike path was not included in the statement, let alone any...
Dollar Pares Gain Despite Strong ADP Employment, FOMC Unlikely to Inspire
Dollar pares back some of today's gain in early US session. The better than expected ADP employment data provides no lift to the greenback. Focus will be turning to ISM manufacturing and FOMC rate decision. Nonetheless, as at the time of writing, Dollar is still the second strongest one...
BOE Expected to Deliver Dovish Rate Hike in August
BOE’s rate hike in August is almost fully priced in. The focus is, thus, on the monetary policy outlook. The upcoming increase of +25 bps is the second one in more than a decade. Although the pickup in growth in the second quarter has reinforced most policymakers’ view that...
Dollar Higher as Trade War Heats Up Again, Manufacturing Data and Fed Watched
Dollar trades broadly higher today as talks of trade war heat up again. It's reported that Trump is considering to impose 25% tariffs on USD 200B in Chinese goods, instead of 10%. The greenback is followed by Canadian Dollar and then Yen. Meanwhile, New Zealand Dollar, Australian Dollar and...
Euro Strengthens on CPI Surprise, Yen Extends Post BoJ Selloff
Euro emerges as a strong one today after a number of volatility triggering events. Upside surprise in Eurozone inflation is a key factor lifting the common currency higher. Australian Dollar is also strong, competing with Euro for the biggest gainer today. Meanwhile, stronger than expected GDP data lifted Canadian...
BOJ Introduced Forward Guidance and Made Subtle Changes in YCC
BOJ made some changes in its unconventional monetary policy in July. We believe these changes sent a dovish message that it takes longer time than previous anticipated for inflation to reach the +2% target. At this meeting, BOJ introduced forward guidance reinforcing the commitment to keep for policy rate...
Yen Spikes Lower after BoJ, But No Follow Through Selling Yet
Yen spikes lower broadly after BoJ announced to strengthen the framework for continuous powerful easing. But at this point, there is no follow through selling seen yet. Instead, of raising the target on 10 year JGB yields, BoJ simply allow flexibility to move it in move directions of up...
Fed Prepares for Rate Hike in September
The upcoming FOMC meeting later this week aims at preparing the market for another +25 bps rate hike in September. As no press conference and economic projections would follow the August meeting, the post-meeting statement, and the minutes in three weeks, would be used for communication and setting expectations....
Unclear Direction in Forex Markets, Yen Softer ahead of BoJ
Euro and Swiss Franc are lifted in earlier today but was then out-performed by New Zealand Dollar. On the hand, Yen and Australian Dollar are trading as the weakest ones, followed by Dollar. Direction in the forex markets is relatively unclear as traders turned a bit cautious ahead of...
Renminbi/Chinese Yuan Depreciates as a Result of Economic Weakness and Loosening Policies
Renminbi’s depreciation since April this year has accelerated over the past two months. While USDCNY has in aggregate rallied over +6% in June and July, renminbi’s weakness was less pronounced against a basket of currencies. The CEFTS index, the official reminbi index, fell -4.4% over the past two months....
Forex Markets Steady, But Volatility Guaranteed in an Unusually Busy Week ahead
Dollar opens the week broadly firmly, followed by Sterling as the second strongest. On the other hand, Australian Dollar is trading with and broad-based soft tone, followed by Canadian Dollar. Nonetheless, all major pairs and crosses are bound in Friday's range only, suggesting that they're in consolidative mode. In...
Only USD and EUR Maintained Net Length Positions amidst Monetary Policy Divergence
As suggested in the CFTC Commitments of Traders report in the week ended July 24, bets on a higher US dollar increased modestly by +1 818 contracts. However, thanks to a -4 529 reduction in short positions, NET LENGTH for USD Index (DXY) futures added +6 347 contracts to 25...
Traders Bet for Higher Fuel Prices as Crude Oil In Correction
According to the CFTC Commitments of Traders report for the week ended July 24, net LENGTH for crude oil futures declined -20 823 contracts to 610 471. Net LENGTH for heating oil futures increased +1 689 contracts to 41 712 while that for gasoline rose 2 860 contracts to 99...