Traders Shrank Bets for Further Oil Rally
According to the CFTC Commitments of Traders report for the week ended Jun 5, net LENGTH for crude oil futures fell -24 252 contracts to 583 576. Net LENGTH for heating oil futures dropped -6 506 contracts to 38 805 while that for gasoline declined -9 896 contracts to 93 833....
Markets to Look Through G7 to Fed Hike and ECB Judgement Day
While trade tension between the US and its allies dominated the headlines last week, Euro emerged as the strongest major currency. Receding Eurozone internal political risks was a key factor. German 10 year bund yield hit as high as 0.52, comparing to 0.186 low just two weeks ago, before...
Canadian Dollar Shrugs Off Weak Employment Data, Yen Higher head of G7 Showdown
Safe haven flow is the main theme today as markets await G6+1 showdown in Canada. Yen is the biggest winner today, followed by Dollar. But these two remain the weakest ones for the week next to Canadian Dollar. Despite weaker than expected job data, CAD is indeed rather steady...
USDJPY Rebound at Risk as US Yields Reversed, G6+1 in Focus
Yen is picking up some strength in Asian session today while commodity currencies are generally lower. Pull back in US treasury yield is a factor that's support the Yen. 10 year yield hit as high as 2.992 over night but reversed to close at 2.933, down -0.042. That development...
EURGBP Jumps as Fortunes of Euro and Sterling Diverge
Swiss Franc and Euro remain the strongest ones together. They're riding on the expectation that ECB will finally announce to quit the asset purchase program next week. Meanwhile, Sterling starts to lag behind and suffers some heavy selling today. Brexit uncertainty is back in spotlight, in particular the stick...
Concerns over Rising OPEC Supply Serve as Excuse for Profit- Taking
Crude oil prices remain under pressure after reaching 3.5-year highs in mid-May. While both benchmarks are declining, the selloff of WTI crude oil has been more severe than its Brent counterpart, resulting in a widening of WTI- Brent spread to a level not seen since March 2015 last Friday. We...
Yen Staying Weak on Solid Risk Appetite, Dollar Follows
Japanese Yen is trying to recover in Asian session today but remains the weakest one for the week. Risk appetites have been be strong as risk of trade war is shrugged off by investors. DOW rose 346.41 pts or 1.40% to 25146.39. S&P 500 rose 023.55 pts or 0.86%...
Euro Surges as ECB Praet Hints at Judgement Call on QE Next Week
Canadian Dollar, Australian Dollar and Euro are the strongest major currencies today. Meanwhile, Swiss Franc, Yen and Dollar are the weakest one. The reason for the strength in Loonie is not exactly clear. But Canadian could be benefiting from report that US Treasury Secretary Steve Mnuchin urged President Donald...
China’s PMIs in May Suggest Government’s Pro-Growth Policy Shift At Work
China’s official PMI report (focusing on big companies) signals improvement in both manufacturing and services sector. The Caixin/ Markit data (focusing on SMEs) suggest both sectors remained resilient in May. We believe the government’s policy shift, to prioritize over domestic growth from deleveraging, has proved effective so far. The...
Aussie Jumps on GDP Upside Surprise, Dollar and Yen Soft
Australian Dollar is back in the driving seat today as GDP beat market expectation. The Aussie is trading as the strongest one for today and for the week. But strength is so far limited as RBA has made its neutral stance very clear again yesterday. While Canadian Dollar follows...
Sterling Lifted by Services PMI But Buyers Hesitate
Sterling is so far the strongest major currency today. Better than expected UK services PMI raised the chance of an August BoE hike. But there is no follow through buying in the Pound yet. BoE's decision will be heavily data dependent, and there are still two more months of...
RBA Left Cash Rate Unchanged, Affirmed that Credit Condition Remained Accommodative
RBA left the policy rate unchanged at 1.5% in June, and made no change to the monetary policy guidance. The central bank remained confident over the global economic outlook. Indeed, it has so far not commented about the slowdown in economic activities in the Eurozone, UK and Japan, etc....
Dollar Higher as US Yields Rebound, Aussie Pares Gain as Neutral RBA Stands Pat
Dollar trades broadly higher today as helped by the rebound in US treasury yields. 10 year yield closed up 0.042 at 2.937 overnight. With a base formed at 2.759 last week, TNX will likely head higher to 3.000 handle. The development would be dollar supportive in near term. Meanwhile,...
Italy’s New Government Formed Eventually. Next Uncertainty is Economic Reform
Political deadlock in Italy was broken last week as President Mattarella approves the new cabinet after the euro-sceptic finance minister candidate, Paolo Savona, was replaced by Giovanni Tria. Tria supports that Italy should remain in the Eurozone, despite his call for reforms to the single currency. He is also...
Dollar Under Broad Based Pressure as Correction Extends, Aussie Hold Gains ahead of RBA
Australian Dollar remains the strongest one today as helped by strong risk appetite. At the time of writing, TSE is trading up 0.55%, DAX up 0.25% and CAC Is up 0.33%. US futures also point to another day of rally. New Zealand Dollar follows as the second strongest. Meanwhile,...
Australian Dollar Higher on Retail Sales, Trade Tensions Shrugged by the Markets
Australian dollar opens the week higher as lifted by stronger than expected retail sales today. That's followed by Euro as the second strongest as European political risks receded. As sentiments improved, Yen stays soft against all others, followed by the Swiss Franc. While trade tensions occupy a lot of...
Bulls Added Bets on USD Appreciation
Traders added more bets for higher USD, as suggested in the CFTC Commitments of Traders report in the week ended May 29. Net LENGTH for USD Index (DXY) futures added +1 338 contracts to 3 924. During the week, the DXY index gained +1.3%, as the greenback strengthened against major currencies...
Traders Reduced Bets for Higher Crude Oil Price
According to the CFTC Commitments of Traders report for the week ended May 29, net LENGTH for crude oil futures fell -25 558 contracts to 607 828. Net LENGTH for heating oil futures added +2 729 contracts to 45 311 while that for gasoline dropped -4 617 contracts to 103 729....
A Look at Why Dollar Failed to Surge on Strong US Job Numbers
It was a roller coaster week with political turmoil in Italy dominated the first half of the week. The formation of the populist Italian government after acceptance by President Sergio Mattarella marked the end of the episode. Trade war then took over as US President Donald Trump decided to...
Dollar Jumps on All Round Better than Expected NFP
Dollar surges in early US session after non-farm payroll report beat market expectation on all front. The job market grew 223k in May, above expectation of 190k. Unemployment rate dropped to 3.8%, beat expectation of 3.9%. That's also the lowest level in 18 years. More importantly, wage growth was...