Euro Pares Gains ahead of ECB, Canadian Dollar Rebounds on Tariff Exclusion
The financial markets show that investors are well prepared for the steel and aluminum tariff by the US. Dow closed down just -0.33% overnight, at 24801.36. 10 year yield gained 0.006 to 2.883, staying in near term sideway consolidation. Nikkei is trading up 0.5% at the time of writing...
BOC Left Rates On Hold, More Concerned About US Trade Policy
As widely anticipated, BOC left the policy rate unchanged at 1.25% in March. The accompanying statement was more cautious than the previous one, over the trade outlook. Policymakers suggested that 'trade policy developments are an important and growing source of uncertainty for the global and Canadian outlooks', in addition...
Dollar Attempting to Rebound as ADP Job Beat Expectation, But Momentum Weak
Dollar is trying to regain some ground in early US session after better than expected job data. But momentum of the greenback is so far very week. Dollar suffered some selling on news of White House top economic advisor Gary Cohn's resignation, due to his opposition to President Donald...
Dollar Lower on Gary Cohn Resignation, Stocks Shrugged Off
Dollar is broadly pressured on news of White House economic advisor Gary Cohn's resignation. The dollar index dipped to as low as 89.42 and staying below 90 handle. EUR/USD is staying comfortably back above 1.24 and is set to have a take on 1.2555 key resistance. Meanwhile, USD/JPY might...
Risk Appetite Returns as EU’s Retaliatory Tariff Proposal Would Force Trump to Fold His Cards
Kiwi and Aussie are leading the way higher in the currency markets as risk appetite returns. On the other hand, Yen and Dollar are trading as the weakest ones today. Markets are increasing getting convinced that US President Donald Trump will back off from his steel and aluminum tariffs....
Trump Said He Won’t Back Down on Tariffs, But Markets Bet He Will
Market sentiments improved as some considered US President Donald Trump's threat of trade war is merely a "political show". And pressures from the Republicans and business executives will eventually force him to back down. DOW closed up 336.7 pts or 1.37% at 24874.76. S&P 500 also rebounded 29.69 pts...
RBA Left Cash Rate Unchanged At 1.5% As Property Markets Cooled
As widely anticipated, RBA left the policy rate unchanged at 1.5% in March. A cooling property market signals that further rate hike is less urgent. On top of the central bank’s agenda has returned to boosting inflation and employment. In 2017, Australia’s CPI averaged at 1.9% while the unemployment...
Canadian Dollar Dives as Trump Plays Tariff Card in NAFTA Negotiations
Canadian Dollar suffers steep selling today as US President Donald Trump singles out Canada and Mexico in his trade war rhetorics. He said in a tweet that "NAFTA, which is under renegotiation right now, has been a bad deal for U.S.A. Massive relocation of companies & jobs." And, "tariffs...
Markets Stay Defensive as Trump Steps Up His Words on Trade Wars
The forex markets are pretty steady in Asian session as an extremely busy week starts. Reactions to Italy election and Germany SPD vote on grand coalition were muted. Euro remains steady so far, staying as the second strongest major currency for the month after Yen. Canadian Dollar and Australian...
Trade Wars Overwhelmed the Markets, More Volatility ahead
The theme of trade wars overwhelmed the global financial markets last week and overshadowed any other topics. It started on news that US President Donald Trump is going to impose tariffs of 25% on steel and 10% on aluminum. Trump then doubled down by tweeting "trade wars...
Global Markets Tumble Further as Trump Declares Trade Wars are Good, Dollar Pressured
Risk aversion continues to be the main theme today as US President Donald Trump declared that trade wars are good. At the time of writing, German DAX is trading down -2.2%, French CAC down -1.9% and UK FTSE down -1.1%. That follows -2.5% decline in Japanese Nikkei. US futures are pointing to triple digit decline in DOW at open. In the currency markets, Dollar is suffering steep selling against Euro, Yen and Swiss Franc. Nonetheless, commodity currencies are even weaker with Canadian Dollar leading the way down.
Trump to Impose Steel and Aluminum Tariffs, Markets Cried No!
The broader markets responded very negatively to US President Donald Trump's push for steel and aluminum import tariffs. DOW closed down -420 pts or -1.68% at 24608.98, breaking key near term support at 24792.99. S&P 500 lost -36.16 pts or -1.33% to close at 2677.67, breaking equivalent support at 2697.77. NASDAQ, the relatively stronger one recently, also dropped -92.45 pts or -1.27% to close at 7180.56, confirming failure below 7505.77 record high. Treasury yields also suffered with 10 year yield dropping -0.064 to 2.80. It looks like TNX has already topped below 3% handle. Asian markets follow with Nikkei losing over -500 pts or -2.3% at the time of writing. Hong Kong HSI is down -430 pts or -1.4%.
Dollar Trying to Extend Rally as Jobless Claims Dropped to Near Five Decade Low
Dollar is trying to ride on strong job data to extend recent rally. Initial jobless claims dropped 10k to 210k, lower than expectation of 226k. That's the lowest level in nearly five decades since December 1969. Four week moving average dropped to 220.5k, also the lowest since 1969. Continuing claims rose 57k to 1.93m in the week ended February 17. Personal income rose 0.4% in January, above expectation of 0.3%. Personal spending rose 0.2%, in line with expectation. Headline PCE was unchanged at 1.7% yoy, core PCE unchanged at 1.5% yoy. Both met expectation. Also released, Canada current account deficit narrowed to CAD -16.4b in Q4. Focus will turn to round two of Fed Chair Jerome Powell's testimony.
Chinese Official PMIs Fell In February
China's official PMIs surprised to the downside in February. Manufacturing PMI dropped -1 point to 50.3 in February, while non-manufacturing PMI slipped -0.9 point to 54.4. The readings came in weaker than expectations of 52.1 and 55 respectively. The Caixin manufacturing index released earlier today, however, increased to...
Dollar Showing Sign of Reversal, But Yen Even Stronger on Risk Aversion
Yen overtakes Dollar as the strongest major currency for the week so far as helped by risk aversion. DOW dropped -380.83 or -1.5% overnight to close at 25022.42. That also marked the first monthly decline after a 10 month winning streak. All markets will turn their focus to round two of Fed Chair Jerome Powell's Congressional testimony. But seen as being a straight forward person, he's not expected to alter his messages that rocked the markets two days ago.
Sterling Tumbles as EU’s Brexit Treaty Draft Shows Significant Divergences, Dollar Firm on Fed Expectations
Sterling is trading as the weakest major currency today. Fresh selling is seen on strong comments from EU Brexit negotiator Michel Barnier. That came as European commission published its own draft Brexit withdrawal treaty. The document highlighted, in Barnier's words "significant divergences" between UK and EU. Yen is trading as the strongest for the day, thanks to risk aversion. But Dollar is still the strongest for the week. The greenback was boosted by upbeat comments from Fed Chair Jerome Powell. Technically, EUR/USD is now finally pressing trend defining 1.2205 key support. This level will be the major focus in US session.
Hawkish Powell Raises Hopes For Four Rate Hikes This Year
While mainly maintaining the FOMC's stance, the new Fed Chair Jerome Powell's Congressional testimony before the House Finance Services Committee was interpreted as a hawkish one. Heightened speculations for three, or more, rate hikes this year were reflected in higher yields, the rise of the US dollar to...
Dollar Jumped, Yields Surged, Stocks Tumbled after Fed Powell’s Upbeat Q&A
The initial response to Jerome Powell's first Congressional Testimony as Fed Chair was muted as his prepared speech provided nothing new. Nonetheless, stocks tumbled while Dollar surged as Powell offered an upbeat outlook in his Q&A. There are notable increase in chance of continuous rate hikes towards the end of the year as indicated by fed fund futures. DOW ended down -299.24 pts or -1.16% at 25410.03. S&P 500 dropped -35.32 pts or -1.27% to close at 2744.28. 10 year yield regained 2.9 handle by rising 0.049 to 2.908. Dollar index jumped to as high as 90.49 and is heading back towards 91.01 key structural resistance.
Fed Powell at His First Testimony, Markets Yawn
Dollar strengthens on Fed chair Jerome Powell's prepared remarks for his first Congressional testimony. But the movements in the markets are slight. The markets are generally staying in consolidation mode. Indeed, Powell offered nothing new comparing to the Fed's Monetary Policy Report released last week. Elsewhere, the Swiss Franc is trading as the strongest today while commodity currencies and Sterling are soft. Overall, the currency markets are quiet.
Stocks Heading Back to Record Highs as Sentiments Improved, Forex Mixed, Fed Powell Watched
Risk sentiments are generally positive this week so far. DOW gained 399.28 pts or 1.58% to close at 25709.27 overnight. The rebound from 23360.29 resumed with solid momentum and is set to extend to retest 26616.71 record high. Comparatively, NASADAQ was even strongly, up 11.15% to 7421.46, just inches below 7500.61 record high. Asian markets follow with Nikkei trading up over 300 pts, or 1.4%, at the time of writing. Pull back in treasury yields was a factor helping stocks as 10 year yield dipped -0.012 to 2.859 after recent rally lost momentum. The currency markets are mixed though, with major pairs and crosses stuck in range. Euro is mildly firmly against the others but there is no clear momentum.