USD Bulls Remained Intact
Traders were increasingly bullish over US dollar, as suggested in the CFTC Commitments of Traders report in the week ended May 22. USD Index (DXY) futures stayed in NET LENGTH for a second consecutive week. Rising speculative long positions and dropping shorts resulted in NET LENGTH of 2 586 contracts,...
Bulls on Crude Oil and Gold Getting Less Excited
According to the CFTC Commitments of Traders report for the week ended May 22, traders apparently turned less bullish on crude oil with the reduction of speculative long positions nearly doubling that of shorts. This resulted in a decrease in Net LENGTH, by -11 058 contracts, to 633 386...
Yen Surged Again as Italy, Protectionism, Geopolitics and Central Bank Expectations Weighed on Yields
Yen ended as the strongest one last week followed by Swiss Franc. Meanwhile Sterling was the weakest one, followed by Euro, Canadian and then US Dollar. A number of factors were behind such development and they're all inter-related. The most direct one is decline in major European and US...
Italy Concerns Hammer German Yield and Euro, Canadian Dollar Falls With Oil Price
Canadian Dollar, Euro, to a lesser extend Sterling, are the clear losers today. The Loonie is dragged down by oil price as WTI drops through 70 handle. It reaches as low as 68.96 so far on news that OPEC and Russia are considering to raise production. On the other...
Markets Calm as North Korea Responded Diplomatically to Trump’s Unilateral Cancellation of Summit
Markets are rather steady in Asian session today. Major forex pairs and crosses are staying in yesterday's range. Dollar is a bit firmer entering into European session. But there is no follow through buying yet. US President Donald Trump's cancellation of the summit with North Korean leader Kim Jong...
Trade Wars and Auto Tariffs Dominate the Markets, 10 Year Yield Losing 3% Handle
Sterling recovers mildly today as there was finally a piece of better than expected key data from the UK. Nonetheless, Swiss Franc outshines Sterling as the strongest one for today. And the Pound is still the weakest one for the week, followed by Euro. Canadian Dollar, on the other...
Yen Stays Strong on Risk Aversion and Trump Pushes for Auto Import Tariffs
Yen strengthens broadly today and remains the strongest one for the week. New wave of risk aversion trades was triggered by news that US President Donald Trump is using national security as excuse again to study imposition of tariffs on import cars. Nikkei closed down -1.11% at 22437.01 as...
Crude Oil Inventory Jumped Last Week, In Contrast with Expectations of a Draw
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products stocks jumped +6.73 mmb to 1192.25 mmb in the week ended May 18. Crude oil inventory rose +5.78 mmb (consensus: -1.57 mmb) to 438.13 mmb, as inventories rose in PADD I and...
FOMC’s May Minutes Shows Some Dovish Tweaks
The FOMC minutes for the May meeting contain some dovish signs from the Fed. The members remained confident over the economic developments, acknowledging strong employment market and improvement in inflation. However, many of them remained wary of limited wage pressures. The minutes emphasized “the aim of keeping inflation near...
Yen Crosses Dive with Treasury Yields on Risk Aversion, UK and Eurozone Data Misses
Yen surges broadly today as driving by steep decline in major European and US treasury yields. German 10 year bund yield dropped to as low as 0.497, comparing to prior day's close at 0.559, and it's now at 0.500. UK 10 year gilt yield reached as low as 1.446,...
Yen Surges Broadly Risk Appetite Fades, GBPJPY on Shaky Ground ahead of UK CPI
Yen surges broadly today and is trading as the strongest one, followed by Swiss Franc. On the other hand, Canadian, Australian and New Zealand Dollar are under heavy selling pressure. The boost from optimism in China-US trade talk faded quickly and the markets are back in risk-off mode. DOW...
Sterling’s Rebound Lacks Steam as BoE Carney Offered No Inspiration
The forex markets are lacking a clear direction today. Commodity currencies were generally higher earlier today but there was no follow through buying. Instead, as in early US session, the Swiss Franc is the strongest one. Dollar is retreating quite notably since yesterday. But again, there is no follow...
Re-emergence of Monetary Policy Divergence I -European Currencies
Policy Divergence was once a hot topic back in 2015 through early 2017, when the FOMC began to increase the Fed funds rate, while other major central banks maintained extra accommodative monetary polices as they struggled to boost the economies. This was then replaced by the story of convergence...
Australian Dollar Leads Commodity Currencies Higher on Strong Risk Appetite
Global markets are blessed by strong risk appetite this week so far. DOW closed up 298.2 pts or 1.21% at 25013.29. S&P 500 also gained 0.74% while NASDAQ jumped 0.54%. FTSE jumped to record high at 7859.17 while CAC 40 also extended recent up trend to 5637.5. These were...
Sterling Lower ahead of Important Week Brexit Talks, CPI and GDP Revision
The development in the forex markets are pretty much unchanged. Australian, Canadian and US Dollar remain the strongest ones for the day. On the other hand, Japanese Yen and British Pound have been taking turns to be the weakest. Receding risks of US-China trade war is a key focus...
Yen Lower as Receding Trade War Fears Lifts Risk Appetite, Dollar Extending Rally
Yen suffers broad based selling in today as lifted by return of risk appetite. Asian equities trade generally higher on receding fear of US-China trade war. The joint statement released on Saturday is seen as a "vow" to avoid trade war. It's affirmed by comments from US Treasury Secretary...
Italy Policy Turmoil Not Yet Resolved although More Hurdles Cleared for New Government
Italy’s two populist parties – the anti-establishment Five Star Movement and the far-right League- have agreed on a prime minister candidate, clearing another hurdle to forming a new coalition government. Over the weekend, members of both parties approved the joint economic policy, finalized last Friday, which showed softer stance...
USD Index Futures Recorded Net Length, First Time since March
As we expected, USD Index futures turned to NET LENGTH of 18 contracts in the week ended May 15. This was driven by increasing pessimism over other major currencies. According to CFTC's Commitments of Traders report, reduction in speculative long positions greatly surpassed that of short for EUR futures,...
Traders Trimmed Long Position on Crude Oil as Price Approaches Peak in Near Term
Speculators generally stayed bullish over the energy complex in the week ended May 15. Although Net LENGTH for crude oil futures slumped -35 484 contracts from a week ago to 644 444, that for heating oil rose +9 610 contracts to 42 070. Also, net LENGTH for gasoline added +11 166 contracts...
Dollar Rally Limited by a Number of Political Factors, Swiss Franc Ended as Strongest
Swiss Franc ended last week as the strongest one, very much thanks to the selloff in EUR/CHF. Uncertainty over the EU policy of the new Italian government sent Euro broadly lower, which ended as the weakest. Despite surge in 10 year yield to 7-year high, Dollar could only extend...