FOMC Preview – Fed to Deliver Upbeat Message about Economy while Affirming Substantial Progress is Needed to Taper QE
We expect the Fed to turn more upbeat over the economic outlook at this week’s meeting. Yet, the economic improvement is not yet strong enough for any change in the monetary policy measures. As such, the Fed would leave the Fed funds rate target at 0-0.25%. On QE, the...
Dollar’s Near Term Bearishness Persists, Other Currencies Mixed
Dollar ended as the worst performing one last week as near term bearishness persisted. Q1's rebound should have completed and the main question is whether it's ready for new lows. That is, indeed, in favor unless overall risk-off sentiments were choked off by some unexpected events.
The forex markets were...
CFTC Commitments of Traders – Traders Bet Crude Oil Prices to Go Higher
According to the CFTC Commitments of Traders report for the week ended April 20, NET LENGTH for crude oil futures gained +7 305 contracts to 499 983 for the week. Speculative long position rose +7 060 contracts, while shorts slipped -245 contracts. For refined oil products, NET LENGTH for...
CFTC Commitments of Traders – Net Length of CAD Futures Jumped Over 6 Times on Hawkish BOC
As suggested in the CFTC Commitments of Traders report in the week ended April 20, NET LENGTH for CAD futures soared +10 840 contracts to 13 246 contracts, compared with 2 406 contracts a week ago. Speculative longs increased while shorts dropped during the week. A hawkish BOC is...
Dollar in Fresh Selloff, Yen and Euro Strong
Fresh selloff in seen in Dollar as we enter into US session. Euro was lifted earlier today by strong PMIs. But it could be taken over by Yen before weekly close. Mild risk aversion in Europe is keeping Yen afloat. US futures are mixed at the time of writing,...
Yen Firm in Quiet Markets, Bitcoin Free Fall
While US stocks tumbled overnight, Asian markets are just mixed. Gold and oil are stuck in range too, while the bigger move is found in bitcoin. The forex markets are also generally staying in tight range. Yen is currently the strongest one for the week, followed by New Zealand...
ECB Expects Growth to Resume in 2Q21. Yet, PEPP Tapering is Still Premature
As we have anticipated, the ECB left all monetary policy measures unchanged in April. Policymakers indicated the current pace (increased since March) of asset purchases in the PEPP would remain intact. Other monetary policy measures will stay unchanged with the Asset Purchase Program (APP) (traditional QE) at 20B euro/...
Euro Mildly Higher after ECB, But No Upside Breakout Yet
Euro rises mildly after ECB President Christine Lagarde sounded cautiously upbeat in the post-meeting press conference. Yet, there is no clear follow through buying for an upside breakout yet. Dollar is also not much supported by better than expected jobless claims data. The more notable movement today is the...
Euro Mixed Ahead of ECB, Dollar Sellers Await Stock Rally
Canadian Dollar surges broadly overnight after BoC's hawkish tapering. Yet, it's currently still one of the weakest for the week together with Dollar. The post-meeting buying was not enough to turn the Loonie into black against others yet. As for today, markets are rather quiet so far. US stocks...
BOC Tapers QE Program and Delivers Upbeat Economic Outlook
As we have expected, the BOC delivered a hawkish tapering of QE purchases in April. the weekly asset purchases will reduce to CAD3B/week, from CAD4B/week previously. Meanwhile, it also upgraded the economic assessments for both the country and the world. Policymakers now expect the spare capacity to be fully...
Dollar and Yen Fail to Extend Rebound in Mixed Markets
The financial markets are trading in mixed mode today. European stock indices are mixed while US futures point to slightly lower open. Sentiments are slightly on the risk-off side on coronavirus concerns, but selloff is so far relatively shallow. There is also no clear momentum for Yen and Dollar...
Yen Rebounds as Risk Markets Correct, Canadian Dollar Weak Ahead of BoC
Yen rebounds notably overnight, following the pull back in stocks. Market sentiment was weighed down by renewed concerns over coronavirus infections, which also dragged down oil prices. Dollar also followed and recovered. On the other hand, commodity currencies reversed their earlier gains. Overall, Yen is currently the strongest for...
Risk Markets Consolidate on Pandemic Concerns, Dollar Recovering Mildly But Stays Weak
Some renewed concerns over global spread of coronavirus appears to be putting risk-on rally to a halt. In Japan, Tokyo Governor is seeking the government o declare a state of emergence to curb the infections ahead of the Olympics that just three months away. Situation in some countries like...
ECB Preview – Looking for Hints on PEPP Destiny
We do not expect much news from the upcoming ECB meeting. European yields have stabilized since the central bank “accelerated significantly” the pace of PEPP purchases in mid-March. Inter-meeting economic data have been mixed. We believe policymakers would reinstate that downside risks to the economic outlook in the near-term,...
Sterling Firm ahead of Job Data, Dollar and Yen Pressured
Sterling stays firm in Asian session today, but remains the strongest one for the week so far. The Pound will look into UK job data for inspiration for further rally. Meanwhile, Dollar and Canadian remain the weakest ones for now. As near term bearishness in the greenback is pretty...
Dollar Selloff Resumes and Accelerates, Sterling Gaining Most For Now
Euro finally breaks through 1.2 handle against Dollar, as the greenback's selloff resumes today and accelerates broadly. Nevertheless, Euro is overwhelmed by others, in particular Sterling, which is the strongest for now, followed by Swiss Franc. Commodity currencies are somewhat lagging behind too, partly as they're facing some pressure...
Euro Falls in Crosses, Yen Bounces on Strong Export Data
Yen bounces broadly in Asian session session today, after Japan reported solid trade data. Sterling is currently following as second strongest, then Aussie. On the other hand, Euro weakens in general, dragging down the Swiss Franc too. The developments came as Sterling is reversing recent decline against other European...
BOC Preview – Expects Upgrades on Economic Forecasts and More Optimistic Forward Guidance
We expect the BOC to trim its asset purchases to CAD3B/week, from CAD4B/week previously. The reduction is likely driven by lower issuance by the Treasury. It will, however, leave the overnight rate at the effective lower bound of 0.25%. We also expect the central bank to upgrade the economic...
Pull Back in Treasury Yields Boosted Stocks to New Record, Dollar Set Up for More Downside
Dollar tumbled broadly again as falling treasury yield pushed US and German stocks to new record highs. Near term trend in the greenback should have reversed, but it's unsure whether it's ready for medium term down trend resumption yet. At least, EUR/USD will have to break through 1.2 handle...
CFTC Commitments of Traders – Net Long of Commodity Currencies Fell Across the Board
As suggested in the CFTC Commitments of Traders report in the week ended April 13, NET LENGTH of USD index futures gained +1 504 contracts to 5 953. Speculative long positions dropped -1 027 contracts while shorts fell -2 531 contracts. Concerning European currencies, NET LENGTH in EUR futures...