Dollar Mixed after Strong GDP, But Weak ADP Jobs
Dollar continues to trade mixed in early US session. Negative effect of ADP job data is more than offset by stronger than expected Q3 GDP growth. The greenback will now look into FOMC rate decision for guidance. The key is whether Fed will signal the end of mid-cycle adjustment...
Dollar Softer as Markets Await US GDP and Fed Rate Cut
Dollar and Canadian are both trading with an undertone as markets await BoC and FOMC rate decisions, as well as US GDP data. Sterling appears to be mildly firmer as UK is finally heading towards election in mid-December. But there is no clear follow through buying. Swiss Franc and...
Brexit Update – Early Elections to be Held in 5 Weeks
After EU’s approval of the request to extend Article 50 for another three months (January 31, 2020), the UK parliament passed a bill calling for early elections on December 12. The market remained cautious about these moves with both sterling and euro moving in narrow ranges. The best outcome...
Yen Mixed as Risk Appetite Fades, Europeans Soft on UK Election
Australian Dollar remains the strongest one for today as boosted by optimism over US-China trade deal. But the markets are relatively mixed elsewhere. Yen couldn't decide what to do as risk appetite fades in European session, while US stocks also open mildly lower. European majors are generally soft on...
Aussie Surges on US-China Trade Optimism, Yen Broadly Lower
Australian and New Zealand Dollar rise broadly on optimism that US and China are "ahead of schedule" in completing the phase one trade deal. Dollar and Canadian are not too far away but buying is relatively refrained ahead of Fed and BoC rate announcement. On the other hand, European...
Swiss Franc and Yen Weaken on Risk Appetite, US Stocks to Hit Record
Swiss Franc and Yen weaken broadly again today as risk appetite returns to markets. In particular, US stocks are set to challenge record high, on trade optimism, as well as expectation of another Fed rate cut. European stocks, except FTSE, also rise mildly as EU agreed on a three-month...
Dollar Mildly Higher ahead of FOMC and Lots of Data
Dollar trades mildly higher in quiet trading today so far, but Euro is a bit stronger. On the other hand, Sterling and Canadian Dollar are the relatively weaker ones. All these four currencies have something to look at this week, which might trigger strong moves. In particular, the greenback...
FOMC Preview – Third Rate Cut on Table. Will Fed Signal A Pause or More to Come?
The market has almost fully priced in a rate cut of -25 bps in the FOMC meeting this week. Some in the market are speculating that the Fed would change the forward guidance. Some expect the central bank to signal a temporary end to rate cut in October. This...
BOC Preview – Policy Rate will Stay Unchanged. But for How Long?
Although the Fed and ECB have resumed monetary easing, BOC is not expected to follow suit. This is also the key reason for the recent strength in Canadian dollar. At the meeting next week, we expect the central bank to leave the policy rate unchanged at 1.75%.
Upside surprise in...
CFTC Commitments of Traders – Net LENGTH for CAD futures has More than Double amidst Narrowing Yield Spread with USD
As suggested in the CFTC Commitments of Traders report in the week ended October 22, NET LENGTH in USD Index declined -6 226 contracts to 31 210. Speculative long positions fell -3 455 contracts and short positions added +2771 contracts. USD fell across the board as market turned trade...
CFTC Commitments of Traders – Bets for Higher Oil Prices Increased as Market Sentiment Improved
According to the CFTC Commitments of Traders report for the week ended October 22, NET LENGTH for crude oil futures soared +9 288 contracts to 366 172 for the week. Speculative long positions jumped +12 545 contracts while shorts added +3 257 contracts. For refined oil products, NET LENGTH...
Dollar and Loonie Strengthened as USD/CAD Presses 1.3 ahead of Fed and BoC
Canadian and US Dollars ended last week as the strongest ones. It now appears that US and China are on track to complete the easier phase 1 trade deal in November. Optimism lifted stocks as well as oil prices, which indirectly helped the Loonie too. Also, recent developments in...
Euro Soft on Weak Business and Consumer Sentiments
Trading in the forex markets remain subdued ahead of weekly close. Euro is generally softer as data showed German business and consumer sentiments remained weak. Also, professional forecasters downgraded Eurozone inflation and growth projections in latest survey. For the week, Canadian Dollar remains the strongest one, followed by Dollar...
Dollar Still Lacks Committed Buying as Markets Stay in Consolidation Mode
Consolidations continue generally in the forex markets today, with the exception of notable strength in Canadian Dollar. The Loonie is so far the strongest one follow the week as helped by rebound in oil price. Dollar is currently following as second strongest but there is no committed follow through...
ECB Review – Outgoing Draghi Defended the Need to Easing Package
President Mario Draghi’s last ECB meeting came in without surprise. He sent a cautiously dovish message about Eurozone’s economy and reiterated the importance of the stimulus package announced last month. The new leadership will likely maintain the existing policy stance unless there are dramatic changes in the domestic and...
Euro Shrugs ECB Meeting, Dollar Ignores Weak Durable Orders
The forex markets remain generally steady in early US session. ECB rate decision triggered little reactions as widely expected. Also, markets was also indifferent to poor PMIs from Eurozone. Meanwhile, weak durable goods orders report from US was shrugged off. And positive news regarding US-China trade deal was ignored....
Euro Softer in Consolidations ahead of Draghi’s Last ECB Meeting
Consolidative trading continues in the forex markets as major pairs are crosses are stuck in tight range. Yen weakened mildly overnight but there was no follow through selling through recent highs. European majors are also mildly softer, without sustainable decline. ECB meeting is a focus today but it will...
US Oil Inventory Stabilized after Weeks of Stockbuilds
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks dropped -1.59 mmb to 1286.81 mmb in the week ended October 18. Crude oil inventory dropped -1.7 mmb to 433.15 mmb (consensus: +2.23 mmb). Inventory in PADD 3 (Gulf...
Yen Softens as Risk Sentiments Stabilized, in Quiet Trading
The forex markets turns mixed in relatively quiet trading today. Earlier selloff in Asia stocks didn't carry forward to other markets. Yen turned slightly softer, following Australian Dollar as second weakest. Sterling's selloff halted and recovers broadly as consolidations continue. Stabilization in the Pound also takes other European';s mildly...
China Watch – PBOC Paused Rate Reduction in October. RRR Cut Still Likely as Growth Continues to Slow
The market was surprised to see that PBOC left the loan prime rate (LPR), its latest benchmark rate, unchanged in October following two consecutive cuts in the prior two months. Yet, this came in line with our expectations that elevation inflation could retrain PBOC from extending monetary easing.
Recall that...