Quiet Start to a Week of Guaranteed Volatility, on Yields, Central Banks, Data and Politics
The financial markets are pretty quiet as another week starts. Despite positive news regarding Korean peninsula, major Asian indices are trading slightly lower. At the time of writing, Nikkei is down -0.28%, HK HSI is down -0.66%. In the currency markets, major pairs and crosses are bounded in Friday's...
Trader were Largely Bullish on Energy and Precious Metals
Speculators were bullish over the energy complex in the week ended April 17. Net LENGTH for crude oil futures jumped +21 051 contracts from a week ago to 728 131. NET LENGTH of heating oil rose +8 258 contracts to 22 989 while net LENGTH for gasoline gained +4 245 contracts to...
Dollar Dominated the Markets as Treasury Yields Could be Reversing Multi-Decade Down Trend
Dollar ended broadly higher last week as boosted by surge in treasury yields. 10 year yield finally completed its consolidation that started back in February, and rose through 2.943 high to close strongly at 2.951. That came with the background that recent comments from Fed officials affirmed its gradual...
Canadian Dollar Selloff Extends after CPI and Retail Sales Misses, Dollar Rally Accelerating
Dollar's broad based rally continues today and is showing sign of acceleration. In particular, while Euro has been rather resilient, EUR/USD is starting to be dragged down by others as it dips through 1.23. While there is still some way to go, focus is now back o 1.2214 support...
Treasury Yield Rally Takes Dollar Higher, EUR/CHF Breaches 1.2
Dollar surged overnight as boosted by the strong rally in US treasury yield. 10 year yield gained 0.047 to close at 2.914, after hitting as high as 2.934. It's now close to a key resistance, February's high at 2.943. The greenback remains firm in Asian session. For the week,...
Sterling and Canadian Dollar Recover Losses, Markets Lack Dominant Theme
The major theme in the forex markets isn't too clear today. Sterling dips initially after retail sales missed expectation, but quickly recovered. Canadian dollar also pare back some of the post BoC decline, as lifted by strength in oil price. Australian Dollar gained earlier today but there is no...
Australian Dollar Shrugs off Job Data Miss, Sterling Looks into Retail Sales
Commodity currencies are trading broadly higher today as led by Australian Dollar. Strong rebound in the Chinese stock markets is seen as factor helping the Aussie, as SSE is gaining more than 1% at the time of writing. Canadian Dollar is also recovering some of yesterday's post-BoC loss. Sterling,...
BOC Revised Lower Growth Forecast for 2018, Sent a Mixed Message
BoC has sent a mixed message in yesterday's statement. Although the next rate adjustment remains a hike, the timing remains data-dependent and hinged on a number of uncertainties, including NAFTA negotiations and geopolitical tensions, something critical to Canada due to its position as oil exporter. Policymakers upgraded the assessment...
Oil Prices Extend Rally as US Inventories Unexpectedly Declined
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products stocks slumped -10.58 mmb to 1180.97 mmb in the week ended April 13. Crude oil inventory dropped -1.07 mmb to 427.57 mmb, amidst decreases in 3 out of 5 PADDs. Stockpile in...
Sterling Lost Ground and CPI Trend Raises Doubt on BoE May Hike
Sterling is the biggest loser today after CPI missed market expectations. Most importantly, it's the steep trend of slow down in inflation, from 3% in January to 2.5% in March that raised doubts on a BoE May hike. The Pound stabilized a bit after initial selloff. For the moment,...
UK CPI and BoC to Guide the Markets as Sentiments Improved
Markets sentiments turned positive as there were now continuous flow of bad news. All three of DOW, S&P 500 and NASDAQ closed higher overnight, with NASDAQ scoring the best performance. Technically, all three have taken out 55 day EMA decisively which suggests more near term upside. Nikkei follow and...
China Unexpectedly Loosens Monetary Policy by Cutting RRR
People’s Bank of China (PBOC) announced to cut 100 bps in the reserve requirement ratio (RRR), effective from April 25, for large commercial banks, joint-stock banks, city commercial banks, rural commercial banks, and foreign banks. While it would be applied to large and small-to -medium banks with current RRR...
US Oil Inventories Fell Across the Board
The industry- sponsored API estimated that crude oil inventory decreased -1 mmb in the week ended April 13. Cushing stock also dropped -1 mmb for the week. For refined oil products, gasoline stockpile declined -2.5 mmb while distillate slid -0.85 mmb for the week. The agency also estimated that...
Sterling and Euro Reverse Gains after Disappointing Data, Dollar Rebounds Broadly
Sterling and Euro strengthened earlier today but both reversed earlier gains after disappointing economic data. On the other hand, Dollar is trying to make a come back as buying accelerates in early US session. It's more a coincidence than a response. But the greenback picks up momentum after US...
China’s March Data Distorted by Holiday and Weather Effects
China’s macroeconomic data showed a mixed picture in March.
Growth in industrial production (IP) eased to +6% y/y, compared with consensus of +6.9% and January- February’s +7.2%. The inflation report released last week also showed that headline CPI slowed markedly to +2.1% y/y in March, from February’s +2.9%. Urban fixed...
Sterling Firm as Markets Look into UK Unemployment Rate and Wage Growth, Aussie Lower after RBA Minutes
Sterling retreats mildly in Asian session today, against Dollar, Euro and Yen. But it remains the strongest one for the week. The breach of 1.4345 resistance in GBP/USD overnight signals medium term up trend resumption. But the rally slowed a little bit above there. For now, GBP/JPY is limited...
Dollar Weak after Mixed Data, Sterling Shines
Dollar remains general weak in early US session after mixed economic data, in particular against European majors. The greenback does try to rebound against Australian Dollar and Canadian Dollar. But momentum is being capped. Yen also tried to rebound earlier today but quickly lost steam. Sterling is emerging as...
Singaporean Central Bank Turns Hawkish on Upward Core Inflation Pressure
The Monetary Authority of Singapore* (MAS) last Friday announced to increase the slope of the Singaporean dollar nominal effective exchange rate (SGD NEER) policy band “slightly”, the first adjustment since the policy tool was reduced to 0% in April 2016. As usual, the central bank did not disclose how...
Yen Making a Come Back in an Important Week for BoE and BoC
Yen is making a come back in Asian session today. The reaction to the Syria strike was muted. But risk aversion comes back with selloff in Chinese and Hong Kong stocks. Nikkei is maintaining slight gain of 0.25% at the time of writing. But China SSE and Hong Kong...
Traders Mixed on Oil as Prices Soared to Fresh 4-Year Highs
Speculators were mixed over the energy complex in the week ended April 10. Net LENGTH for crude oil futures rose +7 535 contracts from a week ago to 707 080. NET LENGTH of heating oil added +330 contracts to 14 31 while net LENGTH for gasoline plunged -7 566...