Brexit Update – Article 50 Extended Again
European Parliament approved that Brexit would be extended further to October 31, from April 12. It is possible for the UK to leave earlier should the UK Parliament approve a Withdrawal Agreement (the deal). A review of the situation would take place in June so as to check if...
CFTC Commitments of Traders -Traders Turned More Bullish on USD as Other Currencies Fared Worse
As suggested in the CFTC Commitments of Traders report in the week ended April 2, NET LENGTH in USD Index increased +3 563 contracts to 28 848. Both speculative long and short positions rose but the former outweighed the latter. All other major currencies stayed in NET SHORT positions....
CFTC Commitments of Traders – Bets for USD Trimmed on Both Sides
As suggested in the CFTC Commitments of Traders report in the week ended March 26, NET LENGTH in USD Index fell as both speculative long and short positions dropped. NET LENGTH for USD index slipped -650 contracts, to 25 285. All major currencies were in NET SHORT positions.
Concerning European...
Brexit Update – PM May Seeks Third Vote after MPs Voted Down All Motions, Promising To Step Down
The Brexit drama continues! What has recently happened has offered little help to clear the mist of the matter. Rather, Britons, as well as global investors, have become more uncertain about the outlook. On Wednesday, the UK parliament has rejected ALL eight Brexit options in the “indicative votes”. Recall...
CFTC Commitments of Traders – NET SHORT for GBP Declined Significantly Despite Brexit Crossroads
As suggested in the CFTC Commitments of Traders report in the week ended March 19, NET LENGTH in USD Index fell as speculative long positions dropped while shorts gained. NET LENGTH for USD index declined -9 139 contracts, to 25 935. All major currencies were in in NET SHORT...
CFTC Commitments of Traders – Bets on Rising USD Rose ahead of FOMC Meeting
As suggested in the CFTC Commitments of Traders report in the week ended March 12, NET LENGTH in USD Index gained as increase in longs outweighed that of shorts. With the exception of NZD, all major currencies stayed in NET SHORT positions. Speculative longs on USD index gained +3...
Brexit Update – Deal Rejected for Second Time
The UK parliament again defeated, by 149 votes, the Withdrawal Agreement that PM Theresa May secured from the EU parliament. Despite the changes, attorney general Geoffrey Cox suggested the UK still would risk struck in the Irish backstop indefinitely. His opinion has raised concerns of both Brexit hardliners and...
CFTC Commitments of Trades – Traders Trimmed Bets on USD amidst Uncertainty of Rate Hike Outlook
As suggested in the CFTC Commitments of Traders report in the week ended March 5, NET LENGTH in USD Index gained although bets decreased on both sides. With the exception of NZD, all major currencies stayed in NET SHORT positions. Although the market has trimmed expectations of a rate...
Delaying Brexit might prolong UK Economy’s Suffering
Indeed, there is not much update after the parliament voted down the original Brexit deal (Withdrawal Agreement) proposed by PM Theresa May back in January. Yet, things evolving since then appear to have diminished, or delayed, the risk of a no-deal Brexit. There are a number of votes scheduled...
US-China Trade Talks – Likely Extension of Trade Truce also Means Extension of Uncertainty and Market Volatility
We refrain from overtly optimistic over US-China trade negotiations. Following US officials’ Beijing trip which included a meeting with China’s Xi Jinping on Friday, both countries released their own statements. Yet, the tones of which suggested that discrepancies remain. While the market appears thrilled by the likely extension of...
BOJ Tapers? It’s Only Yield Curve Control Adjustment. Fragile Growth Outlook Despite Rebound in 4Q18
BOJ’s asset purchase activities have again caught market attention. Talks of tapering heightened last week as the central bank offered to buy 180B yen of 10- to 25-year JGBS. Concerns over a less accommodative monetary environment eased as the central bank offered to buy 430B yen of 5- to...
Brexit Update : Less Clarity, More Confusion after Another Vote
The UK Parliament voted on the amendments of the PM Theresa May’s Brexit deal, which they have rejected two weeks ago. Among the seven amendments selected by John Bercow, Speaker of the House of Commons, for debate and vote, the so-called Copper plan and Brady plan caught most attention....
PM May’s Brexit Deal Rejected. What Next?
The UK Parliament rejected the Brexit deal (Withdrawal Agreement) proposed by PM Theresa May at 432 to 202 votes. The 230- vote margin marks the biggest defeat in the country’s political history. The government now has three days to work on a new plan, which has to be agreed...
FX 2019 – EUR’s Upside Limited by Growth Deceleration and Political Risks
GDP growth should have moderated in 4Q18 and would remain lukewarm 1H19. Although the Italian government eventually backed down in the budget plan, political risks in the region have not yet abated. European Parliament election scheduled in mid-May and ongoing uncertainty about Brexit would still cause the euro to...
FX 2019 – Persistent Brexit Uncertainty Suggests GBP to Stay Volatile
Brexit uncertainty continues to be the key determinant of sterling’s movement in the coming quarters. Market consensus signals that GBPUSD would rally as much as 4% in 6 months and about 6% in 2019. The forecasts are based on the assumption of a smooth Brexit. We are, however, skeptical...
FX 2019 – JPY to Shine In Risk-Off Environment
We are not convinced that the "flash crash" of USDJPY last Thursday was driven by Apple.Inc's lowering of guidance, especially on China. The rally in Japanese yen during the time did not just appear in USDJPY, but also other JPY-crosses, such as AUD and TRY. There are factors underlying...
FX 2019 – Market Too Optimistic about BOC’s Rate Hike Path and Success of NAFTA 2.0
Canadian dollar weakened against US dollar in 2018, first time in three years. Loonie declined over -7% against the greenback last year, with much of the selloff took place in the third quarter. Key factors driving CAD’s movement are BOC’s rate hike path, crude oil price, ratification of USMCA...
FX 2019 – USD Peaks, But Not Necessarily Sharply Lower
The consensus forecast that USD’s rally, which began in February this year, is coming to an end hinges on the theses of overvaluation and stretched FX market longs, the slowdown in US economic growth and the end of current tightening cycle. While we are also of the view that...
CFTC Commitments of Traders – Bets on USD Trimmed amid Speculations of Slower Rate Hike Path in 2019
As suggested in the CFTC Commitments of Traders report in the week ended December 18, NET LENGTH in USD Index dropped as bets decreased on both sides. All other major currencies stayed in NET SHORT positions. During the week, the greenback was mixed against major currencies. Expectations of a...
CFTC Commitments of Traders – NET Bets for Higher USD Trimmed ahead of December Rate Hike
As suggested in the CFTC Commitments of Traders report in the week ended December 11, NET LENGTH in USD Index dropped modestly while bets increased on both sides. All other major currencies stayed in NET SHORT positions. During the week, the greenback strengthened against major currencies, except for against...