Flash PMI Gives More Evidence that Japan has Entered Recession, Unlikely to be Rescued by Stimulus
A week before the final data, the flash PMI report for Japan gives a glimpse of how the coronavirus outbreak has hurt the country’s manufacturing and services activities. The composite output index slumped to 35.8, compared with 47 in February. Sector-wise, the services index dived to 32.7 in March...
CFTC Commitments of Traders – Bets on Major Currencies Reduced as Global Central Banks Rushed to Cut Rates
Bets on major currency futures were trimmed on last week, as major central banks announced emergency measures to contain risks of global recession. US dollar soared last week despite Fed's two rate cuts in 2 weeks, bringing the Fed funds rate -150 bps lower. Besides announcing to expand QE...
CFTC Commitments of Traders – Safe Havens Shone amidst Risk Aversion
As suggested in the CFTC Commitments of Traders report in the week ended March 10, NET LENGTH in USD Index declined -10 076 contracts to 12 412. Speculative long positions fell -6 280 contracts and short positions gained +3 796 contracts. Concerning European currencies, NET SHORT for EUR futures...
CFTC Commitments of Traders – Traders Trimmed Bets on Euro as the Currency Rallied Despite Soaring Coronavirus Cases in the Region
As suggested in the CFTC Commitments of Traders report in the week ended March 3, NET LENGTH in USD Index droped -2 589 contracts to 22 488. Speculative long positions fell -7 880 contracts and short positions declined -5 291 contracts. Bets on both sides obviously shrank as the...
CFTC Commitments of Traders – Traders to Bet USD Index Futures Lower as Fed might Cut Rate by -50 bps bps in 2 Weeks
As suggested in the CFTC Commitments of Traders report in the week ended February 25, NET LENGTH in USD Index added +849 contracts to 26 077. Speculative long positions dropped -638 contracts and short positions declined -1 487 contracts. Bets on both sides obviously shrank as the market pondered...
Losing Safe-Haven Status, Japanese Yen Weakens Despite Rising Global Uncertainty
Despite the recovery over the past few days, Japanese yen has still lost -1.6% against US dollar in the first 3 weeks of February. This phenomenon is puzzling as JPY, as traditional safe-haven currency, usually strengthens as global uncertainty and risk aversion intensify. There are a number of reasons...
Sudden Explosion of Coronavirus Cases in Korea might Urge BOK to Cut Rate this Week
Explosion of coronavirus cases should further delay Korea’s economic recovery, leading Bank of Korea to push forward the rate cut to as soon as this week. Last month, policymakers shifted the tone to neutral from dovish. However, the January meeting was held before the spread of China’s coronavirus to...
CFTC Commitments of Traders – Traders Continued to Bet Lower EUR on Disappointing Economic Data
As suggested in the CFTC Commitments of Traders report in the week ended February 18, NET LENGTH in USD Index gained +4 742 contracts to 24 228. Speculative long positions dropped -1 314 contracts and short positions dropped -6 056 contracts. Concerning European currencies, NET SHORT for EUR futures...
Haunted by Domestic Weakness and Coronavirus Uncertainty, Euro’s Weakness is Set to Continue
Currently trading at 1.083 against USD, lowest since April 2017, the single currency has plunged -2.4% in the first half of February. This follows a -1% decline in January. Disappointing economic data, renewed speculations on further rate cut by ECB and intensified global uncertainty as driven by coronavirus outbreak...
CFTC Commitments of Traders – Weak Economic Developments in Eurozone Drove Euro Lower
Weakness in Eurozone's economic data has led traders to trim bets on higher euro but raise short bets for further decline. As suggested in the CFTC Commitments of Traders report in the week ended February 11, NET LENGTH in USD Index gained +2 353 contracts to 19 486. Speculative...
CFTC Commitments of Traders – Uncertainty of Novel Coronavirus Continued to Support Safe Haven Currencies
Novel coronavirus has shown no signs of abating. The latest statistics indicate that the number of confirmed cases has increased to above 30 000 and casualty to over 800 in China. The epidemic has affected at least 28 countries in the world. Against this backdrop, safe-haven currencies outperformed risky...
CFTC Commitments of Traders – Safe-Haven Currencies Shined as Novel Coronavirus Exported from China sparks Global Worries
Safe-haven currencies shined as novel coronavirus exported from China sparks global worries. As suggested in the CFTC Commitments of Traders report in the week ended January 28. NET LENGTH in USD Index added +3 493 contracts to 16 433. Speculative long positions were gained +2 982 contracts and short...
CFTC Commitments of Traders – NET LENGTH on DXY Futures Dropped
As suggested in the CFTC Commitments of Traders report in the week ended January 21. NET LENGTH in USD Index slipped -323 contracts to 12 940. Speculative long positions were down -256 contracts and short positions added +67 contracts. Concerning European currencies, NET SHORT for EUR futures dropped -1...
CFTC Commitments of Traders – NET LENGTH for DXY Index Futures Climbed Mildly Higher
As suggested in the CFTC Commitments of Traders report in the week ended January 14. NET LENGTH in USD Index added +795 contracts to 13 263. Speculative long positions gaomed +1 765 contracts and short positions added +970 contracts. Concerning European currencies, NET SHORT for EUR futures declined -13...
CFTC Commitments of Traders – NET SHORT on Safe Haven Currencies Fell as Risk Sentiment Improved
As suggested in the CFTC Commitments of Traders report in the week ended January 7. NET LENGTH in USD Index added +414 contracts to 12 468. Speculative long positions dropped -1 120 contracts and short positions fell -1 534 contracts. Concerning European currencies, NET SHORT for EUR futures declined...
Gold Driven Higher by Iran Tensions, Falling Yields and Rising Inflation Expectations
Geopolitical tensions in Iran continue to evolve. The latest development is that Iran has launched over a dozen missiles at Iraqi bases hosting US and coalition troops. The Islamic Revolutionary Guard Corps (IRGC) announced in a statement that the attack was done “in the name of martyr General Qassem...
CFTC Commitments of Traders – NET LENGTH for USD Futures Shrank as Market Sentiment Improved
As suggested in the CFTC Commitments of Traders report in the week ended December 31. NET LENGTH in USD Index dropped -1 177 contracts to 12 054. Speculative long positions added +907 contracts and short positions added +2 084 contracts. Concerning European currencies, NET SHORT for EUR futures added...
US Dollar May Lose Appeal this Year if Market Sentiment Improves and US Growth Slows
As the world’s largest reserve currency, movement of US dollar reflects its two roles. First, the strength of USD reflects the well being of the domestic economic developments. The greenback rises against other currencies if US’ economy is expected to perform better than others. Second, as the world’s biggest...
Trade War Continues to Direct Outlook of USDCNY in 2020
As in last year, Chinese Yuan will remain directed by the US-China trade war in 2020. Although China’s economy continues to struggle and PBOC’s monetary policy is tilted to the accommodative side, CNY should stabilize against USD if trade negotiations are smooth. Elevated inflation should keep PBOC cautious in...
USDJPY to Firm in 1H20, Could Weaken as Uncertainties Resurface Later in the Year
US-China trade war, Brexit drama and concerns over global economic slowdown have resulted in a volatile FX market for most of 2019. Risk aversion raised demand for safe-haven assets, such as Japanese yen. USDJPY declined to as low as 105 in mid-August, recording a loss of about 4% in...