Markets in Risk Aversion Over Hong Kong’s Future, Yen and Dollar Rebound
Yen and Dollar surge in Asian session today as markets are clouded by new uncertainty over Hong Kong's future. The situation carries significance firstly on the direction of US-China trade tension. Secondly, Hong Kong's international financial hub status could be in question, which would limit China's ability to raise...
Dollar Recovery Attempt Falters Quickly, Swiss Franc Dives Again
The financial markets are, generally speaking, a bit mixed today. European stocks are slightly in red while US futures are down. But losses are very limited. Bulls are still in overwhelming control. In the currency markets, Swiss Franc drops sharply as recent volatile trading continues. Dollar attempted for a...
Sterling Soft as Risk Rally Pauses, Focus Turns to PMIs
Dollar recovers mildly in Asian session, together with Yen, as stock rally takes a breather again. But both remains the worst performing over the week. Similarly, Australian and New Zealand Dollars also retreats mildly but remain the strongest one for the week. Investors are generally optimistic on return to...
Crude Oil Price Supported by Decline in US Inventory. Cushing Stock Recorded Sharpest Fall on History
Crude oil prices continued to climbed higher. The front-month WTI contract has strengthened for six consecutive days. The latest catalyst is another week of surprising decline in US inventory. The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks...
FOMC Minutes Sent Dovish Message about Recovery, Preparing to Adjust QE and Forward Guidance
The FOMC minutes for the April meeting revealed that the members were very much concerned about the job market and inflation outlook as a result of the coronavirus pandemic. While leaving the Fed funds rate unchanged at 0-0.25%, the members also maintained QE. The minutes revealed that “several” members...
Sterling Softens after UK Sold Bonds With Negative Yield
Sterling weakens mildly today after UK sold government bond with a negative yield for the first time ever. According to the Debt Management office, It auctioned GBP 3.75B of 3-year bonds at an average rate of -0.003%. Demand was weak too with bid-to-cover ratio at 2.15, lowest since March....
PBOC Pauses in Rate Cutting. Outlook Remains Expansionary amidst Global Demand Uncertainty and Renewed Trade Tensions
PBOC this morning announced to leave the loan prime rate (LPR) unchanged at 3.85%. While this had been widely anticipated, it should not be interpreted as a signal of unwinding monetary stimulus. We believe the pause allows the central bank some time to assess the impact of previous easing...
Dollar and Yen Soft, Awaiting Next Move in Risk Markets
While risk market retreats mildly, the developments in currency markets are unchanged. New Zealand and Australian Dollar remain the strongest one for now. In particular, Kiwi is lifted a bit further by RBNZ governor's comment that it doesn't want to go to negative rates for now. Aussie somewhat shrugs...
Euro Surges of Recovery Fund Hope, Yen Tumbles
Yen, Dollar and Swiss Franc remain generally weak today eventual risk rally starts to take a breather in European session. On the other hand, currency market have some what shifted from commodity currencies to Euro and Sterling. Euro is lifted by optimism on the Franco-German recovery fund plan. Sterling...
Sterling Soars on New UK Tariff Regime, Broad Based Risk Appetite Continues
Sterling surges notably today after UK announced new tariff regime after Brexit, allowing 60% of trade to be tariff free. In the background, markets are supported by solid risk appetite, on coronavirus vaccine optimism. New Zealand and Australian Dollar are both strong together with the Pound. On the other...
Investor Cheers Coronavirus Vaccine news, Risk On
Global stock markets surge sharply today on optimism that coronavirus vaccine research took another big step. New Zealand Dollar leads commodity currencies generally higher. On the other hand, Yen, Dollar and Swiss Franc are under broad based pressure. Gold also retreats notably back below 1750 in the risk-on markets....
Crude Oil Price Supported by Improved Fundamentals; Upside Limited
Expiring tomorrow (May 19), the front-month WTI crude contract continues to climb higher. At the time of writing this report, price is trading narrowly around US$30/bbl, up almost 50% from end of April. Recall that last month, the WTI futures for April delivery collapsed to the negative territory before...
Sterling Weak of Negative Rate Talks, Gold Extending Up Trend
Sterling stays generally weak as another week starts. The Pound was weighed down by comments from BoE chief economists Andy Haldane, who said that negative rate was "something we'll need to look at – are looking at – with somewhat greater immediacy." Dollar is also slightly softer with mild...
Negative Interest Rate Expectations Drove Markets, Risk Reversal TBC Soon
The topic of negative central bank interest rates was a key driver in the forex markets last week. Dollar ended as the strongest one against a chorus of Fed officials expressed their objection. New Zealand Dollar, on the other hand, ended as the weakest as RBNZ was clearly preparing...
CFTC Commitments of Traders report – Traders Trimmed Bets on USD Futures
As suggested in the CFTC Commitments of Traders report in the week ended May 12, NET LENGTH in USD Index added +25 contracts to 16 450. Speculative long positions dropped -757 contracts and short positions were down -782 contracts. Concerning European currencies, NET LENGTH in EUR futures gained +1...
CFTC Commitments of Traders – Traders Trimmed Bets on Crude Oil, while Net Length on Gold Declined
Traders trimmed bets on crude oil futures. Although output cuts by OPEC+ and in the US have temporarily relieved storage, the outlook of the oil market remains uncertain. Macroeconomic data from major economies suggest that unemployment is rising. This could lead to demand disruption, and eventually cause selloff in...
Dollar Down Again of Record Retails Sales Fall, Gold Shines
Dollar weakens notably in early US session after retail sales data showed another record decline in April. Stock futures also tumble after the news In particular, gold rides on the greenback's selloff and it's set to resume larger up trend. . Nevertheless, for the day, New Zealand, Australian Dollar...
More Stimuli Needed to Support China’s Gradual Economic Recovery
Industrial production (IP) expanded +3.9% y/y in April, beating consensus of +1.5% growth and a -1.1% contraction in the prior month. The strong recovery was mainly driven by the low base effect. Production of automobile, and machinery and equipment contributed the most to the April recovery. These sectors were...
Dollar Rally Fades While Gold and Oil Rise
Gold and oil price strengthen notably in otherwise rather mixed markets. US stocks reversed initial losses overnight and closed higher. Asian markets also follow and are trading up slightly. In the currency markets, Canadian Dollar is currently the strongest one for today, thanks to oil price. Sterling and Yen...
Dollar Lifted as Trump Said Strong Dollar Now is Great, Markets in Risk Aversion Too
Dollar and Yen continue to be the strongest ones for today with help from risk aversion. Global stocks generally show weakness, from Asia to Europe to US futures. Major benchmark treasury yields also decline. The greenback is given another lift as US President Donald trump's comments. On the other...