RBA Review – Holding Rate On Record Low and Turning More Dovish on Economic Outlook
Unsurprisingly, RBA left the cash rate unchanged at 1.5% for a 29th meeting.
While the members acknowledged more downside risks on the economic outlook, they maintained the monetary policy forward guidance unchanged. However, Aussie weakened after the announcement, amidst heightened expectations that the central bank would cut the policy rate...
US Retail Sales Disappointment Raises Doubts on Optimism from Chinese Data
Global markets are generally in risk-on mode today as recession fears eased mildly after improvement in Chinese manufacturing data. While sentiments remain generally positive in early US session, there is a slight bit of cautiousness after disappointment retail sales from he US. Headline sales dropped -0.2% mom in February,...
China Manufacturing PMIs Back in Expansion, Asian Stocks and Australian Dollar Lifted
Stock markets staged a strong rally in Asian session as lifted by better than expected manufacturing data from China. Both official and Caixin PMI manufactured climbed back into expansionary region, suggests that the worst could be over. Australian Dollar jumps broadly following generally positive risk sentiments, followed by New...
CFTC Commitments of Traders – Bets for USD Trimmed on Both Sides
As suggested in the CFTC Commitments of Traders report in the week ended March 26, NET LENGTH in USD Index fell as both speculative long and short positions dropped. NET LENGTH for USD index slipped -650 contracts, to 25 285. All major currencies were in NET SHORT positions.
Concerning European...
CFTC Commitments of Traders – Traders Bet Higher Gold and Silver Prices as Fed Likely To Pause Rate Hike This Year
According to the CFTC Commitments of Traders report for the week ended March 26, NET LENGTH for crude oil futures jumped +33 873 contracts to 448 619 for the week. Speculative long positions rose +25 989 contracts while shorts plunged -7 884. Crude oil prices strengthened during the week....
Risk Aversion to Come Back in Q2 as Stocks and Yields Recouple
Intensifying recession fear was the main theme in the markets in March, alongside never-ending Brexit and trade tensions. With downside risks to growth starting to materialize, major global central banks started their dovish turns. Most notably, Fed now forecasts no rate hike this year. ECB will keep interest rates...
Canadian Dollar Surges on GDP Surprise and Oil Rally, Sterling Recovers ahead of Brexit Vote
Canadian Dollar jumps sharply in early US session after stronger than expected GDP data. At least, the three month-rolling average remained in expansion despite the contraction in December and November. Additionally, WTI crude oil surged through recent resistance to resume larger up trend to as high as 60.72. For...
RBA Preview – Expecting a Dovish Shift on Monetary Policy Stance
The lack of momentum in economic activities would soon dent RBA's hope of higher household consumption (and eventually higher inflation), as a result of further decline in the unemployment rate. We expect the central bank to turn more cautious at next week's meeting. Although the members agreed in March...
Yen Softer as Stocks & Yields Rebound, Pounds Awaits Another Brexit Vote
Yen is under some mild selling pressure today as China stocks lead Asian markets higher. While US 10-year yield failed to sustain above 2.4 handle overnight, it looks like recent decline has stabilized some what. And some more recovery in yield could be seen before quarter end. US-China trade...
Dollar Higher as Treasury Yields Attempting Rebound, Sterling Stays Weak on Brexit
Dollar rises broadly in early US session with help from rebound in treasury yields. 10-year yield is now trying to regain 2.4 handle. Poor Q4 GDP is ignored while traders could be hopeful on some progress in US-China trade talks in Beijing. The development drags down the Japanese to...
Brexit Update – PM May Seeks Third Vote after MPs Voted Down All Motions, Promising To Step Down
The Brexit drama continues! What has recently happened has offered little help to clear the mist of the matter. Rather, Britons, as well as global investors, have become more uncertain about the outlook. On Wednesday, the UK parliament has rejected ALL eight Brexit options in the “indicative votes”. Recall...
Brexit Stalemate Continues, US-China Trade Talks Resume, Euro Vulnerable
The forex markets are relatively quiet as quarter end approaches. Sterling remains stuck in range as Brexit stalemate continues. The UK Parliament continued to tell the world what they don't want regarding Brexit, but not they really want. Meanwhile, US-China trade talks are resuming in Beijing today. There are...
US Crude Oil Inventory Increased, Compared with Expectations of Another Week of Withdrawal
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks climbed +0.06 mmb to 1221.91 mmb in the week ended March 22. Crude oil inventory increased +2.8 mmb to 442.28 mmb (consensus: -1.2 mmb). Inventories rose in 3 out...
Sterling Higher ahead of Brexit Indicative Votes, Yen Higher as Treasury Yields Extend Slump
Indicative votes on Brexit alternatives in the UK House of Commons will catch most attention ahead. Debate is due to start by 1500GMT. We'll see what alternative Brexit path could gain majority in the Parliament. House of Commons Speaker John Bercow will select which of the proposals will be...
Selloff in New Zealand and Australian Dollar Dominates on Rate Cuts Bets
Selloff in New Zealand and Australian Dollar is the main theme in Asian session today. Kiwi plummets after RBNZ stands pat and indicates that the next move is a cut. After that, a full RBZN cut in priced in November but there are speculations on as early as a...
RBNZ Review – Next Move would be Rate Cut as Risks to Growth Skewed to Downside
As we expected, RBNZ has turned more dovish in March. A more pessimistic view about the domestic and global economic outlook has led members to adjust their forward guidance on the monetary policy stance. The members now expect to cut the policy rate in the next move. The market...
Yen Lower as CAC Leads European Stocks Higher, Sterling Rises on Revived Brexit Hope
The forex markets are staying in consolidative mode today. Sterling rises notably as some Brexiteers are finally agreeing that Prime Minister Theresa May's deal is better than no Brexit. At least, there is a chance for future governments to adjust the relationship with EU further. But in any case,...
Sterling Range Bound after Parliament Took Control on Brexit, Votes on Alternatives Next
The forex markets are relatively mixed this week, in particular Sterling. Pound is staying inside familiar range even though the Parliament finally seized control over Brexit from the government. Focus will turn to Wednesday's indicative votes but it's uncertain whether the government will follow the results. Prime Minister May...
RBNZ Preview – Can RBNZ Maintain Neutral Stance amidst Deteriorating Outlook?
RBNZ is expected to leave the cash rate at 1.75% in March. However, as both domestic and global economic slowdown has intensified since the February meeting, we doubt if the central bank could maintain the guidance that next rate change could be “up or down”. Indeed, we expect the...
Sentiments Stabilized after German Confidence Data, Brexit to Take Spotlight Again
Market sentiments generally stabilized today after initial selloff in Asia. While major European indices are still in red, losses are so far very limited. German 10-year bund yield even managed to turn positive briefly. Better than expected German Ifo Business Climate gave sentiment a mild lift. Yet, the picture...