RBNZ Review – Stand Pat and Stay Cautions
NZDUSD climbed higher after RBNZ left the OCR unchanged at 1.5%, a well-anticipated move. The members maintained a dovish tone, but not more dovish than in the previous meeting. Although the central bank indicated that interest rates might need to be lower, it does not sound like it would...
Dollar Rebounds as Fed Dismissed Aggressive Cut, NZD Rebounds Despite Dovish RBNZ
New Zealand rises broadly even though RBNZ hints on an August rate cut. The easing bias is actually well priced in and traders responds to the positive reference to the economy instead. Dollar also trying to extend yesterday's rebound as even the most dovish Fed official dismissed an aggressive...
Yen Surges on Renewed Weakness in Treasury Yields
Yen rises broadly today as major treasury yields are resuming recent decline. German 10-year yield hits new record low at -0.33 while US 10-year yield is back below 2.0 handle. Though, New Zealand Dollar is even stronger as record export in May solidifies the case for RBNZ to stand...
Yen & Gold Jumps on Fresh Iran Sanctions, Dollar Awaits Fed Powell
Yen and Gold surge today as global sentiments are weighed down by new US sanctions on Iran. In particular, Gold hits as high as 1439 and is currently up more than 1%. Nevertheless, New Zealand Dollar outshines Yen and is currently the strongest one for today. Kiwi is boosted...
Dollar Ignores Trump’s Fed Attack, Euro Mixed after German IFO
Dollar stays generally soft in quiet markets but selling seems to have slowed in early US session. Trump criticizes Fed as sticking like a "stubborn child" on interest rates. Such comments are ignored by markets, sensibly, in general. The key to Fed's policy is whether Trump is able to...
HKD’s HIBOR Soars, But With Limited Upside
Recent spike in HIBOR has sent HIBOR-LIBOR spread to the positive territory, a situation not seen in a decade for both 1-month and 3-month spreads. In our opinion, the upside for HIBOR is limited although it could stay elevated in the near-term due to seasonal factors.
On June 13, both...
Dollar Stays Soft as Markets Await G20, Aussie Mildly Firmer
The financial markets are relatively steady in a light day today. The imminent risk of war between US and Iran is eased, as Trump opts for more economic sanctions. Meanwhile, it appears that US and China are both preparing for the Trump-Xi summit at G20 in Japan later in...
CFTC Commitments of Traders – Precious Metals Glittered as Rate Cut Hopes Heightened
According to the CFTC Commitments of Traders report for the week ended June 18, NET LENGTH for crude oil futures rose +24 140 contracts to 363 087 for the week. Speculative long positions fell -12 708 contracts but shorts declined by a sharper -24 140 contracts. Escalated tensions between...
CFTC Commitments of Traders – Rising Bets for Higher USD Likely Short-lived
The CFTC Commitments of Traders report in the week ended June 18 shows that NET LENGTH in USD Index gained +4 560 contracts to 28 549. Speculative long positions added +3 434 contracts while short positions decreased -1 126 contracts during the week. We expect NET LENGTH to decline...
RBNZ Preview – Maintaining Cautious Tone to Pave Way for Further Cuts
After lowering the policy rate by -25 bps to 1.50% in May, RBNZ would likely remain on hold this month. Domestic economic developments came in largely consistent with policymakers’ projections. Yet, global economic outlook remains uncertain and major central banks have recently shifted their stance on the dovish side.
As...
Fed & ECB Turned Dovish, But It’s Too Early to Confirm July Policy Actions
Major global central bankers sang a chorus of dovishness last week. Most importantly, both ECB and Fed signaled the possibility of rate cuts ahead. Comparatively, RBA's indication of more rate cut was not much a surprise. In the background, it appeared US and China were back on track to...
Euro Jumps as Eurozone PMIs Show Tentative Signs of Turnaround
Euro rises broadly today as PMI data showed no further deterioration in sentiments in Eurozone. Underlying growth momentum remained weak, but there were more tentative signs of improvement in Germany and France. Swiss Franc remains firm on Middle East Tension. It's reported that Trump has given Iran a warning...
Dollar in Weak Recovery as Focus Turns to Eurozone PMIs
Dollar recovers mildly today but there is apparently no follow through buying for a turn around. The greenback is still feeling heavy on dovish Fed which opened the door for rate cut at this week's FOMC meeting. Weakness in Dollar is also apparent in the strength of Gold, which...
Middle East Tensions Overshadow Dovish Central Banks, Swiss Franc and Canadian Steal the Show
Dollar remains broadly weak, suffering heavy selling pressure after Fed turned dovish yesterday and opened the door for rate cut. Though, Swiss Franc and Canadian Dollar steal the show today on escalating middle tensions. WTI crude oil rises over 4% on news that a US drone was shot down...
Dovish Fed Sent Dollar and Yields Lower, More Downside in Near Term
Dollar drops broadly overnight after Fed indicates that it's ready to "act as appropriate" on interest rates, depending incoming data. It's clearly a sign that Fed is opening door for rate cut, even though it may not come as soon as in July. Selling picks up momentum today together...
FOMC Review – Divided Fed Signals Rate Cut This Year Still Likely
FOMC left the policy rate unchanged at 2.25-2.50% but with one dissent. St Louis Fed President James Bullard voted against the decision as he proposed to cut the rate by -25 bps. The dot plot projections show that more members are in favor of lowering interest rates. The policy...
US Crude Oil Inventory Fell For First Time in Three Weeks
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks decreased -0.41 mmb to 1316.77 mmb in the week ended June 14. Crude oil inventory fell -3.11 mmb to 482.36 mmb (consensus: -1.08 mmb). Inventories rose in 2 out...
Canadian Dollar Jumps on CPI, Dollar Mixed Awaiting FOMC Guidance
Canadian Dollar jumps broadly in early US session, after stronger than expected inflation data remove another reason for BoC rate cut. Though, for now, Loonie is overshadowed by Sterling and Swiss Franc, which are the strongest ones. Meanwhile, risk appetite recedes mildly ahead of FOMC rate decision. Dollar is...
Sentiments Boosted by Trump and Draghi, But Traders Hold Their Bets ahead of FOMC
Market sentiments were given two strong boosts yesterday, first by ECB's indication of monetary stimulus ahead, then by renewed optimism of US-China trade negotiations. Positive sentiments carried forward to Asian session, with strong rally seen in major indices. Though, reactions in currency markets are relatively "refrained" as traders are...
Euro Tumbles, German Yield Hits Record Low as ECB Prepares for More Easing
Surprisingly dovish comments from ECB President Mario Draghi sent Euro sharply lower, and German 10-year yield to new record low today. There are some speculations that ECB could eventually cut interest rates, with a tiered system", alongside released of new economic projections in July. The comments also send German...