Stocks Rebound as China Backs Down on Tariff Escalation, Dollar Mixed
Stock markets stage a strong rebound today after China appears to be backing down from its hard line stance in trade war with US. Yen and Swiss Franc turn soft while commodity currency regain reverse earlier losses. Euro is also weak despite improvement in confidence indicators. Sterling remains mixed...
New Zealand Dollar Leads Commodity Currencies Lower, Yen and Franc Firm
Commodity currencies remain generally pressured on risk aversion today. In particular, New Zealand Dollar is weighed down by poor business confidence data. Australian is not much better after contraction in private capital spending. On the other hand, Yen and Swiss Franc are strongest on falling stocks and treasury yields....
BOC Prepares for Insurance Rate Cut
Global economic slowdown, escalations of US- China trade war and further Fed funds rate cut have heightened speculations that BOC would have to lower its policy rate in coming months. We agree on this assessment but expect that the insurance cut would come in October.
US- China trade war has...
US Crude Oil Shows Double- Digit Decline
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks soared +4 mmb to 1315.23 mmb in the week ended August 23. Crude oil inventory slumped -10.03 mmb to 427.75 mmb (consensus: -2.11 mmb). Inventories decreased in ALL PADDs....
Sterling Tumbles as Johnson Takes UK into Constitutional Crisis
Sterling is back in focus today as UK is heading into constitutional with Prime Minister Boris Johnson's move to suspend the government. Risk aversion return of risk aversion also keep commodity currencies generally soft. On the other hand,Yen is generally stronger following further decline in major global treasury yields....
Dollar, Euro and Pound Stronger in Consolidative Markets
Dollar, Euro and Sterling are trading as the stronger ones today while commodity currencies are generally weaker. Dollar somewhat shrugs offer weaker treasury yields as markets await the next move in US-China trade war. Euro is underpinned by possible political resolution in Italy. Meanwhile, Sterling is lifted as UK...
Sterling Jumps as UK Oppositions Seek Brexit Delay, Swiss Franc Weakens
Sterling rises broadly today as UK opposition lawmakers are moving to seek Brexit delay. Swiss Franc weakens broadly at the same time, partly due to the same reason. The forex markets are otherwise mixed, staying in tight range as consolidations continue. Yen is having a slight upper hand with...
China Cuts Banks’ Lending Rates as Trade War Escalates
PBOC has recently made some changes in its interest rate policy. Following the move to link the loan prime rate (LPR) to open market operations, the medium lending facility (MLF) rate, the central bank over the weekend announced the plan to set a floor for mortgage rate. The first...
Risk Rebound to be Short-Lived, Yen Crosses Stay Bearish
Yen strengthens broadly today again as the pull back lost momentum. After all the words and rhetorics, US-China trade war is still in progress for escalation. Yesterday's early selloff in risk markets might be overdone. But current recovery doesn't indicate any change in the down trend in stocks, nor...
Sentiments Stabilized after Trump Toned Down Trade Tension, Dollar Firmer
Sentiments stabilized a lot after US President Donald Trump toned down his rhetoric on trade war with China. There appears to be some conversations going on for resolutions. But recovery in stock markets is so far refrained, as tensions could intensify again suddenly. In the currency markets, major pairs...
Yen Jumps on Trade War Escalation, Yuan Tumbles
Yen surges broadly as Asian markets tumble sharply on US-China trade war escalation. Gold also resumed recent up trend and hit as high as 1555. But traders turn a bit more cautious as mixed messages came out of China. A bit more time is needed to gauge the formal...
Sentiments Sank as Abrupt US-China Trade War Escalation Raises Risk of Cold War
Last week started with anticipation of Fed Chair Jerome Powell's Jackson Hole speech, but ended with shocked escalation of US-China trade war. Risk aversion should continue to dominate the markets this week, as hard-line rhetorics are expected from both sides. Indeed, they look moving away from a September trade...
CFTC Commitments of Traders – Crude Oil Price to Fall Again in Coming Week as Trade War Re- escalates
According to the CFTC Commitments of Traders report for the week ended August 20, NET LENGTH for crude oil futures jumped +32 491 contracts to 414 635 for the week. Speculative long positions declined -18 071 contracts and shorts sank -50 562 contracts. Crude oil prices rallied during the...
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...
Dollar Softer as Fed Powell Points to New Events, But No Downside Breakout
Dollar weakens mildly after the rather uninspiring speech of Fed Chair Jerome Powell. The highly anticipated is slightly on the dovish side as Powell mentioned a number of new "events after July's rate cut. Though, sell off in the greenback is rather limited. For the week, Sterling remains the...
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...
Dollar Firms Up as Markets Await Fed Chair Powell’s Jackson Hole Speech
Sterling pares back some gains in Asian session today, but remains the strongest one for the week. It's lifted by hope that an Irish border solution could finally be reached before October 31 to avoid no deal Brexit. Dollar is generally firmer and it's trading as the second strongest...
Sterling Jumps on German Merkel’s Comments on Irish Backstop
Sterling rebounds strongly after German Chancellor Angela Merkel expressed her optimism that Irish border backstop solution could be achieved before Brexit date. The Pound is currently the strongest one, followed by Canadian Dollar. On the other hand, cautious risk sentiments keep Australian and New Zealand Dollar as the weakest....
Dollar Supported by FOMC Minutes, Aussie Tumbles on Poor PMIs
Yen and Swiss Franc attempt for rally again today as risk sentiments turned cautious. Dollar is also mildly firmer after FOMC minutes reaffirmed that last month's rate cut was just a mid-cycle adjustment. Though, upside in the greenback is capped so far as Fed Chair Jerome Powell's Jackson Hole...
US Crude Oil Inventory Resumed Decline
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks soared +4 mmb to 1315.23 mmb in the week ended August 16. Crude oil inventory declined -2.73mmb to 437.78 mmb (consensus: -1.89 mmb). Inventories decreased in 3 out of...