WTI-Brent Crude Spread Widened Markedly on US Demand Concerns, Offsetting Inventory Draw
Crude oil prices plunged more than -2% on profit-taking. The front-month WTI contract settled at US$41.51/bbl, lowest since August 7. The front-month Brent contract fell to US$44.43/bbl, lowest since August 21, at close. WTI-Brent spread widened to US$ 2.92/bbl. The correction came in despite sharp draw in US inventory....
Dollar Extending Corrective Recovery, ADP Job Disappointment Ignored
Dollar remains generally firm into US session as corrective recovery continues. Much weaker than expected ADP job data is ignored by traders. US stocks are also set to open higher with S&P 500 and NASDAQ extending the record runs. Australian Dollar is currently the weakest one, extending its correction...
Aussie Down on GDP Contraction, Dollar Recovers ahead of More Data
Australian Dollar tumbles broadly today and it's trading as the weakest one so far. The decline partly follows worse than expected Q2 GDP data, and partly as profit taking on recent strong rise. Selloff against New Zealand Dollar the latter to be the strongest one. On the other hand,...
Sharp Rise in Manufacturing PMI Signals that PBOC will Keep the Powder Dry for the Month
China's manufacturing PMI (by Caixin) rose to almost a decade high of 53.1 August, from 52.8 a month ago. This indicates that China’s manufacturing activities have been expanding over the past 4 months and the rebound has accelerated. The accompanying report noted that output and new orders showed biggest...
Sterling Surges With Euro, Swiss Franc Tumbles, Dollar Mixed
Sterling overtakes Euro as the strongest currency for today, as cross buying against the latter resumes after brief consolidation. However, Swiss Franc is clearly left behind and it's trading as the worst performing one. Rallies in Gold and Silver are a factor pressuring the safe haven Franc. Yen is...
RBA Delivered a Mildly Dovish Tone as it Extended TFF and Hinted Further Easing
As widely anticipated, RBA left the cash rate and the 3-year bond yield target unchanged at record of 0.25% at today's meeting. Yet, the decision to expand the size of Term Funding Facility (TFF) and the tone in the accompanying statement have suggested a mildly dovish shift to the...
Euro Upside Breakout, Aussie Shrugs RBA
Euro trades broadly higher in Asian session as it finally takes out near term resistance against Dollar and Yen. Swiss Franc is following the common currency closely as second strongest. Gold is also tracking the Euro higher too. Dollar and Yen continue to stay under broad based pressure. The...
Yen Softens Further on Yields, Euro to Test Resistance Levels
Yen is trading with an undertone today despite mixed risk markets. Treasury yield is a factor weighing on Yen again, with US 10-year yield staying firm around 0.73 handle. Germany 10-year is also back above -0.4% handle. US stocks open slightly lower, following mild weakness in Europe, but that's...
Yen Softens as Nikkei Rebound, Busy Week Ahead
Yen softens mildly in quiet Asian session, accompanied by the rebound in Nikkei, as markets digest Prime Minister Shinzo Abe's resignation. Dollar is also paring some of last week's steep losses. But overall, major pairs a crosses are bounded in very tight range. Economic data from Japan and China...
Dollar Dived on New Fed Strategy, Aussie Shone ahead of a Key Week
Dollar tumbled sharply, and broadly last week as markets perceive Fed's adoption of average inflation targeting as a dovish move. Nevertheless, selloff were mainly against commodity currencies and, to a lesser extent, Sterling. The greenback ended in range against Euro, Swiss Franc and Gold. Even Gold just gyrated inside...
RBA Preview – Keeping Expansionary Policy Stance with Focus on 3-Year Yield
We expect RBA would leave the monetary policy unchanged in September. Since March, RBA has been adopting a number of measures to lower the borrowing costs and provide liquidity to the market. These include keeping the cash rate at record low of 0.25%, targeting 3- year government bond yield...
CFTC Commitments of Traders – NET LENGTH in Crude Oil and Gold Fell, while that in Natural Gas Climbed Higher
All commodity futures under our coverage were in net speculative long positions last week. NET LENGTH in natural gas futures rose the most as hurricane Laura had raised concerns about supply, outweighing demand worries. NET LENGTH in crude oil futures declined, although price slowly climbed higher. Gold's NET LENGTH...
CFTC Commitments of Traders – More Downside on USD following Fed’s Dovish Policy Outlook
As suggested in the CFTC Commitments of Traders report in the week ended August 25, NET SHORT for USD Index futures added +258 to 7 773 contracts. Speculative long positions declined -5 005 contracts and short positions fell -4 747 contracts. There can be more downside to greenback. Fed...
Dollar Shrugs Income and Spending Report, Selloff Continues
Fed chair Jerome Powell inspired a fresh round of Dollar selloff which his Jackson Hole speech, which carries on to today. Stronger than expected personal income and spending, as well as core inflation reading provide little support. Though, for now, the decline appears to be mainly centered against commodity...
Yen Down on Surging Yield, Rebounds on Abe Resignation Talks
Dollar spiked lower overnight after quickly stabilized, as supported by surge in treasury yields. Fed Chair Jerome Powell announced that adoption of "average inflation targeting". That goes beyond the "symmetric" targeting, and allows inflation to overshoot to average out at 2% over time. While there was some initial jitters...
Powell Announced Dovish Shift to Fed’s Monetary Policy, Targeting Averaging Inflation and shortfall of Maximum Employment
At the annual Jackson Hole Symposium, Fed Chair Powell briefed the market on the results of the Fed's strategic review of its monetary policy strategy. Powell announced the new approach to deal with price stability and maximum employment, the dual mandate of the Fed monetary policy. The Fed will...
Dollar Tumbles as Fed Adopts Average Inflation Targeting to Allow Inflation Overshoot
Dollar appears to have finally taken a side, the downside, with Fed chair Jerome Powell's Jackson Hole speech. In short, Fed is now adopting a "flexible form of average inflation targeting", to achieve inflation that "averages 2 percent over time". Therefore, following periods when inflation has been running below...
Dollar Softer in Mixed Markets, No Decisive Selling Yet
Markets continue to be rather mixed as investors are awaiting Fed Chair Jerome Powell's speech at the Jackson Hole symposium. S&P 500 and NASDAQ surged strongly overnight to new record highs. But Asian markets are mixed, with weakness seen in Japan, Hong Kong and Singapore. Dollar weakens broadly today...
WTI-Brent Spread Narrowed on Hurricane and Inventory Draw
Crude oil prices firmed with WTI-Brent spread narrowing slightly on Wednesday. Hurricane Laura, now a catastrophic Category 4 hurricane, is expected to an “unsurvivable storm surge,” extreme winds and flash floods over Eastern Texas and Louisiana. This could likely cause damage in oil production facilities in Gulf Coast. Meanwhile,...
Dollar Surges on Strong Durable Goods Orders, Gold Tumbles
Dollar surges broadly in early US session in response to much better than expected durable goods order data. Yet, it's actually still held well below near term resistance level to confirm bottoming. Gold's decline is a positive sign for the greenback and we'll see if there is following buying....