Dollar and Yen Mildly Higher, Sterling Weak ahead of CPI
Dollar and Yen trade mildly higher in Asian session as markets turned into mild risk avers mode. Sterling remains the weakest one on concern of another Brexit cliff-edge at the end of transition period. The Pound will face another test from UK inflation data today, before heading to BoE...
Trade Deal and Strong November Data will Not Derail PBOC’s Easing Bias
A number of good news has increased optimism over China. Following announcement of a Phase I trade deal with the US, the latest set of economic data surprised to the upside in November. However, we expect the bullishness will be short-lived. For the year ahead, the government will have...
Euro and Swiss Lifted by Pull Back in Sterling, Dollar Mixed
Sterling's pull back extends deeper today on renewed Brexit concern. Setting a hard deadline of December 2020 for trade negotiations UK and EU could create another Brexit cliff-edge. Meanwhile, Australian and New Zealand Dollars follow the Pound as next weakest, partly weighed down by risk aversion. On the other...
BOE Preview – Members might Set a Dovish Tone while Leaving Rate Unchanged
BOE will likely leave the Bank rate unchanged at 0.75% this week. There will be no press conference or inflation report accompanying the meeting. However, it will be interesting to see if the members adjust its tone after UK elections. We expect the central bank to skew to the...
Sterling Extends Retreat on Johnson’s New Brexit Move, Aussie Soft on RBA
Trading in the forex markets continue to be relative quiet today. Sterling is mildly softer as consolidations continues. It's weighed down slightly by Boris Johnson's move to block transition period extension. Australian Dollar is the second weakest after RBA minutes affirm the chance of more easing. On the other...
RBA Hinted Further Easing in 1Q20
At the RBA minutes for the December meeting, policymakers affirmed that it was appropriate to leave the cash rate unchanged at 0.75%. While acknowledging stabilization in the economy, the members, however, noted that further easing would be possible. They pledged to reassess the economic development in February 2020 and...
Investors Shrug Poor Eurozone and UK Data, Risk Appetite Continues
Commodity currencies are general higher today, with the help from risk appetite in European markets, and US futures. Poor Eurozone and UK data are largely shrugged off by investors. Canadian Dollar is so far the strongest, additionally supported by mild strength in oil prices. On the other hand, Yen...
Risk Appetite Takes a Back Seat, Sterling to Face More Event Risks Ahead
Risk appetite is taking a back seat for now as investors are not too satisfied with the tiny tariff rollback in the US-China phase one trade deal. Better than expected economic data from China also provide little inspiration. Australian Dollar trades mildly lower in relatively quiet markets in Asia....
CFTC Commitments of Traders – Net Short of GBP Declined Sharply as Brexit Uncertainty Diminished
As suggested in the CFTC Commitments of Traders report in the week ended December 10. NET LENGTH in USD Index dropped -1 616 contracts to 22 261. Speculative long positions slipped -428 contracts and short positions addd +1 188 contracts. Concerning European currencies, NET SHORT for EUR futures fell...
CFTC Commitments of Traders – Improved Risk Appetite Lifted Bets on Oil Prices
According to the CFTC Commitments of Traders report for the week ended December 10. NET LENGTH for crude oil futures jumped +67 504 contracts to 495 539 for the week. Speculative long positions gained +46 096 contracts while shorts declined -21 408 contracts. For refined oil products, NET LENGTH...
Dissatisfied With Tiny US-China Tariff Rollbacks, Risk Appetite Might Struggle to Push Forward
The markets were rocked by three key events last week, UK Election, US-China trade deal and FOMC rate decision. Sterling ended as the strongest one last week as boosted by the Conservative's landslide victory in UK election, removing a large of of Brexit uncertainty. Canadian Dollar followed crude oil...
US-China Tariffs Rollback in Question, Sterling Firm on Brexit Certainty
Sterling remains undoubtedly the strongest one for today, and the week, cheering Conservative's landslide victory in UK elections. Boris Johnson pledged that "we will get Brexit done on time by the 31st of January, no ifs, no buts, no maybes." That's what markets are firmly believing in now. Meanwhile,...
Markets in Ecstasy on UK Election and US-China Trade Deal
Sterling strengthens broadly today as an important hurdle for Brexit is cleared with Conservative's landslide victory in the UK election. Yen and Swiss Franc are broadly pressured on return of risk appetite, helped also by completion of US-China trade deal phase one. Over the week, the Pound is the...
Lagarde Carries On Draghi’s Legacy at ECB
At the first ECB led by Christine Lagarde, the members decided to leave the deposit rate unchanged at -0.5%. Meanwhile, the main refi rate and marginal lending rate also stay unchanged at 0% and 0.25%, respectively. The pace of the asset purchase program, effective on November 1, also stays...
Euro Firm after ECB, Dollar Slightly Lower after Poor Jobless Claims
Both Euro and Swiss Franc are generally firm today after ECB and SNB rate decisions, as not much reactions are being triggered. Though, as for today, Australian Dollar is the strongest one so far. Sterling, on the other hand, pares back some of recent gains as traders lighten up...
SNB Maintains World’s Lowest Policy Rate
SNB left the policy rate unchanged at -0.75% in December. Again, the members reiterated the commitments to intervene in the currency in order to curb the appreciation of Swiss franc, which is described as “highly-valued”. They also affirmed to maintain the expansionary monetary policy so as to lift inflation...
Dollar Dives as Fed Might Not Hike Until after 2022, ECB and SNB Next
Dollar was sold off deeply overnight after Fed left interest rate unchanged. Most importantly, Fed chair Jerome Powell indicated that there is no need for any rate hike unless inflation materially surprises on the upside. Considering that Fed projects inflation to be around target through 2022, interest rate might...
US Crude Oil and Petroleum Gained in Stockpile
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks soared +17.22 mmb to 1281.05 mmb in the week ended December 6. Crude oil inventory increased +0.82 mmb (consensus: -2.76 mmb). Inventory gained in 3 out of 5 PADDs....
Fed Set a Neutral Tone and Signaled that Rate will Stay Unchanged Throughout 2020
As widely anticipated, FOMC left the Fed funds rate unchanged at 1.5-1.75% in December. Trying to deliver a neutral tone, there were only few changes in the policy statement and the updated economic projections. The median dot plot shows that the members expect the policy rate to remain the...
Dollar Shrugs Higher Than Expected CPI, Awaits FOMC
Dollar shrugs off slightly better than expected consumer inflation data and weakens mildly in early US session. But loss is limited as focus turns to FOMC rate decision, statement and new economic projections. At this point, European majors are generally weak as markets also look forward to tomorrow's UK...