Stocks in Strong Rally as US-China Trade Deal Close in, Currencies Tread Water
Strong risk appetite dominates Asian markets today on trade optimism after WSJ said a deal could be sealed by the end of the month. In particular Chinese Shanghai SSE surged through 3000 handle for the first time since June 2018. Japan 10-year JGB yield also turned positive again at...
BOC Preview – Risk on Growth is to the Downside
BOC would leave the policy rate unchanged at 1.75% at this week’s meeting. Since the last meeting, economic data released pointed to slowdown in Canada’s growth momentum. Although Governor Stephen Poloz has recently affirmed at the central bank should still increase the policy rate to the neutral level at...
Treasury Yield Surged on Abating Global Risks and Bets on Bottoming in Economic Slowdown
There were so many high profile events last week. In the end, the positive ones were more than enough to offset the negative ones. US-China trade truce was extended indefinitely and it looks closer than ever to have deal. MSCI's increase of weighting of Chinese stocks gave China another...
Markets Cheer Positive News from China, Yen Drops Further
The financial markets are back in full risk on mode today. China Shanghai SSE jumped 1.8% to 2994.01, just missed 3000 handle. Optimism of bottoming in the slowdown is a factor as Caixin PMI manufacturing rebounded to 49.9, just missed 50. More importantly, MSCI said that it will quadruple ...
Yen Decline Accelerates on Widening Yield Spreads
Yen's decline continues today and remains the weakest one for the week. Widening treasury yields is seen as the main driving force behind Yen's selloff. German 10-year yield at 0.186 is now heading back towards 0.2 handle. The rebound on improving outlook is remarkable, considering it closed at 0.096...
China’s February PMI Sent Mixed Message. Update on PBOC’s New Tool to Stimulate Economy
The official manufacturing PMI data, published by the National Bureau of Statistics, slipped -0.3 point to 49.2 in February. The market had anticipated no change from the prior month. This shows that large corporations in the sector, staying in contraction for three months in a row, has been in...
Dollar Surges as US Q4 GDP Grew 2.6%, Eyes on Treasury Yields for More Strength
Dollar regains some ground in early US session after stronger than expected Q4 GDP report. But at the time of writing, it's still trailing behind Euro and Swiss Franc. The common currency is boosted up by strong rally in German 10-year yield, which is up 0.028 at 0.178. Swiss...
Yen and Treasury Yields Await US GDP for Inspirations
The finance markets turned mixed in Asian session today. Yen was sold off overnight, following the strong rebound in US treasury yields. In particular 30-year yield staged the biggest rise in a about a month and looks completed the consolidation from 3.109. But there is no follow through selling...
Crude Oil Inventory Surprisingly Declined in US
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks fell -2.49 mmb to 1263.03 mmb in the week ended February 22. Crude oil inventory plunged -8.65 mmb to 445.87 mmb (consensus: +2.84 mmb). Inventories declined in 4 out...
Sterling Extends Unstoppable Rally, Swiss Rises on Pakistan-India Tensions
After taking a brief Brexit, Sterling's rally extends again today on optimism that risk of no deal Brexit is fading. Also, key figure of Brexiteer also expressed condition support for UK Prime Minister Theresa May's Brexit deal. For now, with some key resistance levels already taken out, the Pound...
Delaying Brexit might prolong UK Economy’s Suffering
Indeed, there is not much update after the parliament voted down the original Brexit deal (Withdrawal Agreement) proposed by PM Theresa May back in January. Yet, things evolving since then appear to have diminished, or delayed, the risk of a no-deal Brexit. There are a number of votes scheduled...
Yen & Dollar Recover as Markets Turned Cautious, Trump-Kim Summit & USTR Testimony Watched
Yen and Dollar trades mildly firmer today as markets turn cautious ahead of Trump-Kim summit. But the biggest risks could lie on US Trade Representative Robert Lighthizer's testimony at the House Ways and Means Committee. After Trump postponed trade truce deadline with China "indefinitely", there is added optimism on...
Sterling Breaks Key Resistance as UK Moves a Big Deal to Avoid No-Deal Brexit
Sterling rises broadly today and takes out key resistance against Dollar and Euro. UK has moved a big step in avoiding no-deal Brexit. Prime Minister Theresa May announced to hold three separate votes on Brexit deal, no-deal Brexit and delay. The key is, no-deal Brexit is no longer the...
Sterling Surges as BoE Hearing and May’s Cabinet Meeting Watched
Sterling rises broadly today on news that opposition labor is going to back second Brexit referendum. Meanwhile, the UK government is also considering delaying Brexit. The Pound stays firm entering in to European session and eyes will be on Prime Minister Theresa May's post Cabinet meeting update. Meanwhile, Sterling...
China’s Monetary Easing to Continue after End of Trade War
Market sentiment improves further as Trump sent more hints on trade truce extension and “substantial progress” on striking a trade deal with China. Indeed, his indication that a deal on “currency manipulation” has send renminbi (Chinese yuan) to the 7-month high against the US dollar. Meanwhile, China January money/...
Trump Knocks Down Oil Price after Shooting Up Chinese Stocks
Trump is the biggest market mover in an otherwise rather listless day. Chinese stocks surged 5.6% on news that trade truce deadline on March 1 is postponed. He's now planning a summit in Mar-a-Lago to seal the trade deal with Chinese President Xi Jinping. Later in the day, WTI...
Asian Markets Lifted Mildly as US-China Trade Truce Extends
Asian markets traded higher earlier today after Trump announced to extend trade truce with China beyond March 1. But there is no sustainable buying, except in China. Australian Dollar is lifted by positive sentiments. But New Zealand Dollar is even stronger after better than expected retail sales. On the...
Trade Optimism Boosted Risk Appetite, Dollar and Yen Ended Lower
Yen and Dollar closed the week generally lower on strong risk appetite. There was some sort of optimism over US-China trade negotiations throughout the week. And that helped DOW and China SSE extend recent rally. DOW closed above 26000 for the first time since November. SSE also closed above...
Sterling Sold off ahead of Weekend, Aussie Rebounds
Sterling is sold off broadly today as it's getting unlikely to have a Brexit breakthrough at the Sharm El-Sheikh summit on Sunday. Prime Minister Theresa May is highly unlikely to bring back any revised deal for parliament approval next Wednesday. Dollar follows as the second weakest as markets await...
Markets Await US-China Trade Talk Results, NZD Hammered by RBNZ
The financial markets are slightly firmer today but lacks conviction. All eyes are on the results of US-China negotiations in Washington. There were rumors that the teams are drafting MOUs, and China pledged to increase agricultural purchases. But no details were leaked regarding the real core issues, in particular...