BOC Preview – Rate Hike Fully Priced In, Data and Trade with US Continue to Guide Future Path
Since the BOC meeting in May, at which the policymakers removed the “cautious” rhetoric, the market has been raising its bet on a July rate hike. As of today, the market has priced in over 90% chance of a +25 bps rate hike at this week’s meeting. GDP growth...
US, European and Asian Markets Reacted Differently to Start of US-China Trade War
The global markets reacted rather differently as the US-China trade war formally started while there were only signs of further escalations. Over the week, NASDAQ was a star performer and rose 2.37% to 7510.30. S&P 500 rose in tandem by 1.52% to 2759.82. DOW lagged behind but also managed...
Dollar Pullback Resumes as NFP Risks Cleared
Dollar trades notably lower in early US session despite stronger than expected headline NFP number. The rise in unemployment rate and slower than expected wage growth could be the factors. But it's more likely just continuing this week's pull back after NFP risk is cleared. Yen is following as...
US Crude Oil Inventory Unexpectedly Increased
Crude oil prices fell as US inventory surprisingly increased last week. The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products stocks gained +3.3 mmb to 1206.9 mmb in the week ended June 29. Crude oil inventory added +1.25 mmb (consensus: -3.54...
FOMC Minutes: Members Urged Attentions on Yield Curve, Change in Forward Guidance
The FOMC minutes for the June meeting revealed that the members were confident over the growth and inflation outlook, although they acknowledged intensifying trade conflicts. There were discussions over the term structure of interest rates. While many of them were concerned over the flattening of US treasury yield curve,...
Asian Markets Down as US-China Trade War Formally Starts, Dollar Recovers ahead of NFP
Asian markets are trading broadly lower today as the US is set to start the Section 301 tariffs on Chinese imports, and the latter's retaliation is also ready. This would mark an important turning point as the risks of trade war is finally realized. China's Shanghai SSE breached 2700...
Euro Rises Broadly on Hope of Averting US-EU Trade War on Cars
Euro surges broadly today on hope that there will finally be a point of convergence between European Union and the US to avoid a trade war on cars. The optimism is also reflected in stocks as automaker shares led DAX higher, which is up 1.44% at the time of...
Yen Slightly Higher as Markets Stay in Consolidative Mode
Yen is trading slightly higher in Asian session today as the markets are quietly soft. Australian Dollar and Canadian Dollar are the weakest ones. At the time of writing, Nikkei is down -1.0%, HK HSI is down -0.9% while China SSE is down -0.9% too. Some attention will be...
Sterling Jumps after PMI Hat Tricks, Gains Limited in Subdued Market
Activity in the financial markets are relatively muted today with the US on holiday. European indices are mixed in tight range with FTSE dropped -0.2%, DAX down -0.3%, CAC up 0.1% at the time of writing. In the currency markets, Sterling is lifted but a hat-trick of stronger than...
Dollar Broadly in Red ahead of Holiday, Risk Aversion Continues
Investor sentiments remain generally pessimistic. US stocks attempted for rebound in shortened session overnight but failed. DOW ended losing -132.36 pts or -0.54%. S&P 500 dropped -0.49% while NASDAQ declined -0.86%. Safe haven flows limited treasuries with 10 year yield dropped -0.028 to 2.838. Selloff continues in Asia with...
After Historic Election, Mexico’s Future Still Depends on Trade and Fed
Andres Manual Lopex Obrador (a.k.a. AMLO), leader of the leftist National Regeneration Movemen (MORENA), won the presidency with landslide victory at Mexico’s general election held last Sunday. Gaining 53% of the vote, his support is far higher than his major competitor Ricardo Anaya (22.5%) of the National Action Party....
Dollar Pare Gains as Worries on Germany and China Eased
Dollar trades broadly lower today, followed by Swiss Franc and Japanese Yen, as risk aversion eased. News that Germany Chancellor Angela Merkel averted an immediate political crisis is sentiment supporting. But that impact could be mainly confined to Germany or Europe. The more broad based support come from the...
RBA Left Cash Rate Unchanged at 1.5%, Content with Aussie Depreciation
RBA left the cash rate unchanged at 1.5% for a 21st meeting in July. The outcome had been widely anticipated. Indeed, the market has expected no interest rate adjustment at least until late 2019. As a result, market reaction outcome was rather muted.
On the global economic development, RBA acknowledged...
Has China Given Green light to Renminbi Selloff?
Weakness in renminbi has accelerated recently, driven by Donald Trump’s new list of tariff against China announced in mid-June, PBOC’s RRR cut and the jump in risk aversion over the Chinese market. USDCNY’s rally of more than +4% over the past two weeks has raised speculations about China’s retaliation...
Yen and Dollar Strong on Asian Market Rout, Aussie Steady after RBA
After initial selloff, the US markets staged an impressive rebound overnight. DOW hit as low as 24077.56 but reversed to close at 24307.18, up 0.15%. S&P 500 gained 0.31% while NASDAQ rose 0.76%. However, investor sentiments turned sour again in Asian session as China leads decline again. At the...
Dollar Stays Strong as Sentiment Turns Sour Again on Trump’s Trade Spats
Risk aversions dominate the markets today starting from China, spreading to Asia and Europe. Escalation of trade tensions is the main driving force as the Section 301 tariffs and China's retaliation are set to come to effect this week on July 6. After his threat to impose auto tariffs,...
Dollar Regains Ground as Markets Prepare for an Eventful Week
Dollar strengthens broadly in Asian session, followed by New Zealand Dollar and Japanese yen. On the other hand, Australian Dollar is the weakest, followed by Canadian Dollar and the Euro. But after all, major pairs and crosses are bounded in Friday's range. Movements are so far very limited. Weakness...
Traders Reduced Bets on USD on Profit-taking after Recent Price Rally
As suggested in the CFTC Commitments of Traders report in the week ended June 26, bets for US dollar trimmed on both sides as the DXY index rose to a one-year higher on June 21. Speculative long positions for USD Index (DXY) futures added +586 contracts while shorts added +432...
Traders Increased Bets for Higher Oil Prices after Uneventful OPEC Deal
According to the CFTC Commitments of Traders report for the week ended Jun 26, net LENGTH for crude oil futures jumped +44 144 contracts to 625 091. Net LENGTH for heating oil futures dropped -4 104 contracts to 47 146 while that for gasoline fell -2 065 contracts to 95...
Dollar Rally Halts after a Solid Quarter, Stays Bullish on Trade Tensions
Canadian Dollar ended last week as the strongest one. Strength in oil price, with WTI hitting four-year high was a factor. Solid Canadian GDP and Business Outlook Survey also support a July BoC hike. Euro followed as the second strongest as markets cheered EU agreement on migration during the...