Dollar Soared as Data Support Fed Hikes, Trade War to Intensify
Economic data, Fed expectations, trade war, Brexit were among the biggest themes last week. Emerging market risks seemed to have abated. Meanwhile, Italy was less of a threat to Eurozone after the government pledged not to blow up the account. Yen and Swiss Franc ended the week as the...
CFTC Commitments of Traders – Greenback Rose Across the Board
As suggested in the CFTC Commitments of Traders report in the week ended September 4, NET LENGTH of USD index dropped -1 085 contracts to 33 486 contracts for the week. Both speculative long and short positions increased. During the week, the DXY index gained +0.76%. The greenback rose...
CFTC Commitments of Traders – Traders Expect Gasoline Prices to Fall as Driving Season Ends
According to the CFTC Commitments of Traders report for the week ended September 4, NET LENGTH for crude oil and heating oil futures rose, while that for gasoline futures dropped. Speculative long positions of crude oil futures jumped +19 043 contracts, while shorts climbed +3 626 contracts higher, resulting...
Dollar Rises on Solid NFP and Wage Growth, Sterling Even Stronger on EU Barnier
Sterling surged sharply today as once against lifted by Brexit. The direct trigger isn't clear but it's believed to be comments by EU Barnier. Dollar is following as the second strongest with help from another set of solid non-farm payroll data. In particular, wage growth beat an already high...
Yen Jumps as Asian Selloff Extends, Dollar Cautious ahead of NFP Job Data
Australian and New Zealand Dollar suffered heavy selling today as risk aversion weighs. Major Asian indices are all in red on trade war worries and selling is intensifying into mid-Asian session. Dollar doesn't ride on the wave and is trading as the third weakest. But the greenback is seen...
US Crude Oil Inventory Fell More Than Expected, While Fuel Stockpiles Unexpectedly Soared
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products stocks rose +3.55 mmb to 1226.61 mmb in the week ended September 1. Crude oil inventory declined -4.3 mmb (consensus: -1.29 mmb) to 401.49 mmb. Inventories decreased in 4 out of 5...
Dollar Weakens after Mixed Job Data, Awaiting Trade War Developments
Dollar weakens again in early US session after mixed job data, but selling pressure is so far limited. Markets are cautiously awaiting tomorrow's non-farm payroll report for sure. But more importantly, the development in trade relationship with Canada and China is the focal point. Canadian Foreign Affairs Minister Chrystia...
Yen and Swiss Franc Higher after Sharp Sterling Volatility, Dollar Looks to ISM Services
After sharp volatility overnight, the forex markets relatively calm in Asian session. Australian Dollar is trading as the weakest one so far with larger than expected trade surplus providing no support. Dollar follows as the second weakest as it turned soft after the rally attempt failed. Canadian Dollar and...
BOC Affirmed the Case of October Rate Hike, Downplayed Strong Growth and Inflation
BOC left the policy rate unchanged at 1.5% in August. Comments from Governor Stephen Poloz also signaled that a rate hike in October is highly likely. Yet, the market interpreted the message sent in the meeting was more cautious than previously. While acknowledging strong growth in the second quarter,...
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,...