CFTC Commitments of Traders – USD Supported by Tapering Hopes
As suggested in the CFTC Commitments of Traders report in the week ended September 21, NET LENGTH of USD index futures ADDED +827 contracts to 25 100. The Fed signaled that QE tapering would coon "soon" while half of the committee members projected that rate hike would come as...
Yen Dives as Market Sentiment Turned Bullish, USD/JPY Pressing 110.44 Resistance
Market sentiment took a big turn overnight with strong rally in US indexes. Nikkei follows in Asia and reclaimed 30k handle, but other Asian markets are soft. Yen dropped notably following return of risk appetite while Dollar also weakened. On the other hand, commodity currencies rebounded notably. Yen is...
BOE Downgraded Short-Term Growth, but Turned Slightly More Hawkish about Tightening
The BOE voted 9-0 to leave the Bank rate at 0.1% at the September meeting. The members voted 7-2 to keep the QE program at 895B pound. Deputy governor Dave Ramsden and external member Michael Saunders favored lowering the amount of asset purchase to 840B pound. Policymakers warned that...
Sterling Rebounds on Hawkish BoE Surprise, Risk Sentiments Improved
Sterling rebounds strongly after two BoE MPC member voted for tapering. Also, recent developments strengthened the case of modest tightening. Commodity currencies are also firmer following mild rebound in the stock markets. On the other hand, Yen, Swiss Franc and Dollar turned softer on improvement overall risk sentiment. But...
Markets Responded Positively to FOMC, Sterling Stays Soft ahead of BoE
Dollar initially dipped after FOMC overnight, but quickly found its footing. Overall market reaction was positive, but insufficient to alter the near term outlook. Sterling remains the worst performing one for the week while Swiss Franc is the strongest. Both will look into BoE and SNB policy decision today....
US Crude Oil Inventory Fell More than Expected, while Gasoline Stockpile Gained
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks fell -8.78 mmb to 1234.64 mmb in the week ended September 170. Crude oil inventory fell -3.48 mmb (consensus: -2.44 mmb) to 413.96 mmb. Stockpile fell in 4 out...
FOMC Review: Tapering will Start “Soon” while First Rate Hike may Come in as Soon as 2022
The Fed turned more hawkish in September, with the first rate hike pushed forward to 2022. Fed Chair Jerome Powell indicated that QE tapering will come “soon”. The staff downgraded the GDP growth forecast for this year, but revised higher that for 2022 and 2023. Inflation projections were revised...
Sterling Staying in Selloff Mode, Quiet Markets Await Fed
Trading in the forex markets is rather subdued today, as FOMC policy decision, dot plot and economic projections are awaited. The markets could come back to live if there are some hawkish twists in Fed's projections. For now, Sterling is staying in selloff mode, even though momentum diminished a...
Markets Turned Cautious ahead of FOMC, Hawkish Surprise Possible
Markets have turned quiet today as focus is shifted to FOMC policy decisions. While a tapering announcement is highly unlikely, there are still prospects of hawkish surprises in the dot plot and the economic projections. In the currency markets, Sterling is currently the worst performing one for the week,...
Swiss Franc Jumps While Risk Aversion Eased
Risk aversion seems to have eased a bit today, with recoveries seen in European markets and US futures. Yen and Dollar have both turned into sideway consolidations. But no clear support is seen in Aussie and New Zealand, as both remain under pressured. Meanwhile, Swiss Franc and Canadian Dollar...
Sentiments Stabilized after Selloff, Downside Prospect for Weak Sterling
Risk sentiment appears to have stabilized in Asia a bit. The steep fall in Nikkei was just a post-holiday catch up. Yen and Swiss Franc are digesting gains but remain the strongest for the week. Sterling is indeed the worst performing so far, worse than even commodity currencies. Selling...
Yen Accelerates Further as China Fear Spreads, Dow to Press Key Support
Markets are generally in deep risk-off mode today, as China property fears spread from Hong Kong stocks to European to US. Yen remains the strongest one as rally extends, which Swiss Franc is trying to catch up. Dollar is is losing some ground but stays much better than others....
BOE Preview – How will New Members Shift the Views of Rate Hike Conditions?
Economic developments since the last meeting have raised concerns of "stagflation" in the UK, i.e. slow growth with strong inflation. As the main constraint to growth is supply chain, we do not expect this to derail BOE's monetary policy stance. We expect the central bank to vote unanimously to...
Yen Surges as Hong Kong Stocks Accelerate Free Fall
Yen jumps broadly in Asian session today as Hong Kong stocks are accelerating its free fall. Dollar is following as the second strongest for now, and then Swiss Franc. Commodity currencies are naturally the weakest, as led by Australian Dollar, but Sterling is not too far away. Four central...
FOMC Preview: Fed to Affirm Tapering Could Come This Year. Focus Turns to Dot Plot
Since the Jackson Hole symposium and the FOMC minutes, the pandemic has worsened in the US, while economic growth appears to be losing steam. These suggest that all monetary policy measures will stay unchanged with asset purchases staying at US$120B per month and the Fed funds rate target at...
Dollar and Yen the Runaway Leader on Increasing Risk of Correction in Stocks
Dollar and Yen were the runaway leaders in the forex markets last week. While Fed is not quite likely to announce tapering this week, recent solid data argues that November would finally be the date. Stocks in US and Europe have been losing much upside momentum as central banks...
CFTC Commitments of Traders – Net Longs Increased in Crude Oil Futures on Supply Disruption Concerns
According to the CFTC Commitments of Traders report for the week ended September 14, NET LENGTH of crude oil futures rose +5 906 contracts to 355 064. Although Hurricane Nicholas receded, disruption to US Gulf crude output could take some time to recover. For refined oil products, NET LENGTH...
CFTC Commitments of Traders – Net Longs Increased USD, EUR and GBP Amidst Tapering Hopes
As suggested in the CFTC Commitments of Traders report in the week ended September 14, NET SHORT of USD index futures gained +2 808 contracts to 24 273. In light of hopes that the Fed would announce plans to taper QE at next week's meeting, traders increased speculative longs...
Swiss Franc and Yen Under Some Selling Pressure ahead of Weekly Close
Swiss Franc and Yen are both under some selling pressure today, following rallying major global treasury yields. Sterling is weighed down by weak retail sales while Euro is not too far away. Dollar is mixed and Canadian and Aussie are the relatively stronger ones. The economic calendar is light...
Sterling Dips after Retail Sales, Yen Reversing Gains in Quiet Markets
Overall markets are relatively quiet today so far. Yen continues to reverse this week's gain as risk sentiment appear to have stabilized. Dollar also softens while Sterling dips mildly after poor retail sales data. On the other hand, commodity currencies are recovering, as lead by Canadian, which is then...