Brexit Update – Johnson’s New Proposal Unlikely Resolves Irish Border Problem
British pound recovers modestly in light of the news that UK PM Boris Johnson would discuss a new Withdrawal Agreement (the deal) with the EU. We are not hopeful that the new proposal on Irish border would be accepted by EU members, let alone UK parliament. Johnson’s threat that...
CFTC Commitments of Traders – Sentiment Improves amidst Expectations of Trade Talks
As suggested in the CFTC Commitments of Traders report in the week ended September 24, NET LENGTH in USD Index added +165 contracts to 41 939. Speculative long positions added +687 contracts and short positions slipped -522 contracts. Concerning European currencies, NET SHORT for EUR futures plunged -7 837...
Moody’s and Fitch’s Downgrade Hong Kong on Concerns about Closer Link with China
On the 100th day of Hong Kong’s anti-extradition movement, Moody’s downgraded the territory’s outlook to negative from stable. Although the credit rating stayed unchanged at Aa2 (two notches above China's A1), a negative outlook signals that a rating downgrade could come in one to two years. Less than two...
CFTC Commitments of Traders – Traders Trimmed Bets on USD as Fed Expected to Cut Rate Next Week
As suggested in the CFTC Commitments of Traders report in the week ended September 10, NET LENGTH in USD Index added +296 contracts to 32 032. Speculative long positions ell -4 927 contracts and short positions also declined -5 223 contracts. Traders trimmed bets on the greenback ahead of...
CFTC Commitments of Traders – Greenback Lacks Direction Ahead of FOMC Meeting
As suggested in the CFTC Commitments of Traders report in the week ended September 3, NET LENGTH in USD Index added +1 839 contracts to 31 336. Speculative long positions rose +6 308 contracts and short positions also added +4 469 contracts. Greenback becomes directionless ahead of the FOMC...
Brexit Update – MPs Move to Pass a Bill to Reject No Deal Brexit
The Brexit drama continues. The bill that allows MPs to take over the parliamentary business on September 4 was passed with a 328-301 vote. This has paved the way for debate on whether MPs reject a “no-deal” Brexit. This motion proposes that PM Boris Johnson would have to seek...
CFTC Commitments of Traders – Long Bets Increased for Safe Haven Currencies
As suggested in the CFTC Commitments of Traders report in the week ended August 27, NET LENGTH in USD Index added +398 contracts to 29 897. Speculative long positions dropped -961 contracts while short positions fell -1 359 contracts during the week. Traders trimmed bets on the greenback. Concerning...
Japan’s Consumption Tax Hike Unlikely to Help Inflation Much
japan's inflation has stayed very weak. Despite hopes that the upcoming increase in consumption tax could boost the general price levels, the impact this time is likely limited.
Tokyo CPI signals that Japan’s inflation outlook remains dismal.Although consumption tax hike in October might boost inflation, the impact is expected to...
CFTC Commitments of Traders – USD’s Outlook Clouded by Trade War and Fed’s Policy
As suggested in the CFTC Commitments of Traders report in the week ended August 20, NET LENGTH in USD Index slipped -343 contracts to 29 499. Speculative long positions gained +1 189 contracts while short positions rose +1 532 contracts during the week. we expect greenback's outlook to remain...
Trade War, Not Protests, is Key Reason For Slowdown. USDHKD Peg Not at Risk
Ongoing massive protests in Hong Kong against extradition to China have raised concerns about a rapid deterioration in the city’s economy and, more importantly, the collapse of the HKD-USD linked exchange rate system (LERS). This report suggests that the major reason for growth slowdown in Hong Kong is its...
CFTC Commitments of Traders – NET LENGTH for JPY Rose as Sentiment in Rick- Off Mode
As suggested in the CFTC Commitments of Traders report in the week ended August 13, NET LENGTH in USD Index declined -1 487 contracts to 29 842. Speculative long positions dropped -1 457 contracts while short positions added +30 contracts during the week. Concerning European currencies, NET SHORT for...
Loonie Could Weaken Further as Crude Oil Price Remains Volatile and Disappointing Data Raised Rate Cut Hopes
Risk to Canadian dollar is skewed to the downside in the near term. Disappointing economic data since the July BOC meeting have raised speculations of a rate cut, although the consensus remains no change in the monetary policy for the rest of the year. Crude oil price, a key...
Political Turmoil In Italy Signals Further Widening Yield Spread
Matteo Salvini, the Deputy Prime Minister of Italy, announced last Friday that he would submit a no-confidence motion against Prime Minister Giuseppe Conte. This marks the collapse of the M5S- League coalition government. Two possibilities arise after Salvini’s move: snap election or a technocrat government. What makes the situation...
CFTC Commitments of Traders – JPY Drifted to NET LENGTH for First Time in Over a Year as Market in Risk- Off Mode
As suggested in the CFTC Commitments of Traders report in the week ended August 6, NET LENGTH in USD Index added +1 046 contracts to 31 329. Speculative long positions added +26 contracts while short positions dropped -1 020 contracts during the week. Concerning European currencies, NET SHORT for...
US’ Designation of China as Currency Manipulator Makes it Harder to Reach Trade Deal
US Treasury Department on Monday labeled as currency manipulator, first time since 1994. Before the announcement, Trump has threatened to label as currency manipulator while the Treasury Department has long placed China in its monitoring list. According to the criteria, set by the Treasury Department in 2015, for a...
CFTC Commitments of Traders – All Major Currencies in NET SHORT Positions, Except USD and CAD
As suggested in the CFTC Commitments of Traders report in the week ended August 1, NET LENGTH in USD Index added +1 155 contracts to 30 283. Speculative long positions rose +7 087 contracts while short positions gained +5 932 contracts during the week.Concerning European currencies, NET SHORT for...
CFTC Commitments of Traders – Gains in Long Bets Narrowly Outweighed Shorts ahead of Fed’s Rate Cut
As suggested in the CFTC Commitments of Traders report in the week ended July 24, NET LENGTH in USD Index gained +1 796 contracts to 29 128. Speculative long positions gained +5 766 contracts while short positions added +3 970 contracts during the week.
Concerning European currencies, NET SHORT for...
Japan- Korea Trade Tensions – Removal of Preferential Treatment to Korea Signals Trade Tension Should Escalate
As trade tensions between Japan and Korea evolve, the latest development is that Japan is preparing to remove Korea from its “white list”. Countries in the list can enjoy preferential treatment on trade with minimum retractions. The move marks escalation after Japan imposed control measures for exports of three...
Brexit Update – New PM, Old Challenge
UK’s new Prime Minister Boris Johnson has about 3 months to deliver Brexit. With the EU reiterating refusal to amend the Withdrawal Agreement (the deal), Johnson should face the same challenge as his predecessor, Theresa May. We continue to expect Brexit with a deal, as the composition of the...
CFTC Commitments of Traders – Traders Trimmed Bets on USD as Fed Funds Rate Cut Approaches
As suggested in the CFTC Commitments of Traders report in the week ended July 17, NET LENGTH in USD Index added +276 contracts to 27 332. Speculative long positions slid -27 contracts while short positions dropped -303 contracts during the week.
Concerning European currencies, NET SHORT for EUR futures...