Wed, Dec 08, 2021 @ 03:43 GMT
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Risk-on Sentiment Coming Back, Aussie Extending Rebound

Risk-on sentiment is gather steam today with major European indexes trading broadly higher, while US futures point to higher open. WTI crude oil is also up another 2.5% and is back above 70 handle. In the currency markets, Australian Dollar is leading the rebound in commodity currencies, with help...

BOC Preview – Reiterating Rate Hike in First Half 2022 amidst Strong Economic Data

Following a hawkish move in October, we expect the BOC to keep the powder dry this week. Policymakers should acknowledge the strong GDP growth and job market data, while cautioning over the uncertainty of the Omicron variant. They are also expected to reiterate the stance that the rate hike...

RBA Stayed Put, Cautiously Optimistic Over Domestic Economy

The RBA left the cash rate unchanged at 0.1% and the asset purchase program at AUD 4B/week. Policymakers maintained a cautiously optimistic outlook over economic recovery despite Omicron uncertainty. Again, policymakers reiterated that the next meeting (February) would be the time to discuss the pace of QE purchases. The central...

Yen Crosses Rebounding as Sentiments Turned Positive

Overtone in the markets turned positive with the strong rebound in US stocks overnight, while Asia indexes follow higher. Australian Dollar is recovering broadly after RBA stood pat and gave nothing new to the markets. On the other hand, Yen is trading broadly lower for now, followed by Dollar...

RBA Preview – Keeping Powder Dry on Mixed Data and Omicron Uncertainty

The RBA is widely expected to leave the cash rate unchanged at 0.1%. Given the mixed economic data flow since the last meeting, the uncertainty of the Omicron variant and the scheduled discussion about asset purchases in February, policymakers would stand pat at the upcoming meeting. They would also...

Aussie Recovering Slightly in Range-bound Markets, Yen Softens

Major currencies remain largely in range against each other in quiet trading today. Australian Dollar continues to lead other commodity currencies to recover. But Aussie's recovery could be short-lived if RBA delivers some unexpected dovish surprise in the coming Asian session. Meanwhile, Swiss Franc is turning notably weaker, followed...

PBOC Cut RRR; More Easing is Expected to Boost Recovery

The PBOC announced to cut the reserve requirement ratio (RRR) by -50 bps, effective December 15. Yet, the reduction will not apply to financial institutions with existing RRR of 5%. Releasing about RMB 2 trillion in long-term liquidity, the amount is not significant but sent a signal that more...

Markets in Consolidation as Focus Turns to RBA, BoC and US CPI

The markets are relatively quiet in Asian session today. Major Asian indexes are mixed despite steep selloff last Friday. Currencies are bounded inside tight range, with Swiss Franc and Yen consolidation some of recent gains. Aussie and other commodity currencies also recover mildly. Gold and oil prices are also...

Swiss Franc and Yen Surged after Fed Powell Stirred Up Omicron-Nervous Markets

Just as the world is concerned and confused with the newly discovered Omicron, Fed Chair Jerome Powell stirred up the markets further, by talking up faster tapering. The biggest reactions were found in US treasury yields on strong safe-haven flows. Major stocks indexes also turned sharply lower, solidifying the...

CFTC Commitments of Traders – JPY’s Net Short Trimmed Sharply on Safe Haven Demand

As suggested in the CFTC Commitments of Traders report in the week ended November 30, NET LENGTH of USD index futures added +104 contracts to 35 879. Bets on both sides fell further. Concerning European currencies, NET SHORT of EUR futures gained +6 788 contracts to 23 240 while...

CFTC Commitments of Traders – Traders Remained Bearish over Commodity Prices amidst Omicron Uncertainty

According to the CFTC Commitments of Traders report for the week ended November 30, NET LENGTH of crude oil futures slumped -20 423 contracts to 387 234. Speculative longs added +1 276 contracts while shorts soared +21 699 contracts. For refined oil products, NET LENGTH for heating oil declined...

CAD Surges on Strong Job Data, USD Mixed after NFP Miss

Canadian Dollar rises strongly entering into US session, as boosted by much stronger than expected job data. On the other hand, Dollar is struggling to react to mixed non-farm payroll data. As for today, the Loonie is the strongest one, followed by Swiss Franc and Euro. Aussie and Kiwi...

November PMIs Reveals China’s Fragile Economic Outlook

Both official and Caixin’s PMI reports suggest that China’s economic recovery remains fragile. Slipping into the contractionary territory, Caixin’s manufacturing PMI dropped -0.7 point to 49.9 in November. The official manufacturing PMI, however, climbed +0.9 point to 50.1 during the month, reclaiming expansion for the first time in 3...

Dollar Slightly Higher as Markets Await US NFP

Dollar rises slightly in Asian session today, as markets await non-farm payrolls report from the US. Commodity currencies are generally lower despite to strong rebound in US stocks overnight. As for the week, Swiss Fran and Yen remain the strongest ones followed by Dollar. Aussie and Kiwi are the...

Commodity Currencies Turning Softer, But Traders Are Still Holding Their Bets

Commodity currencies are turning weaker again in otherwise range trading markets. As for today, European majors are the stronger ones, as lead by Sterling. But there is no clear sign of follow through movements. Omicron seems to have slipped to the backstage. Traders are probably looking through to tomorrow's...

US Stocks Extended Selloff on Faster Fed Tapering, Dollar Mixed

While the US stock extended the near term steep pull back overnight, Asian markets are relatively steady and are just mixed. Major currency pairs and crosses are also stuck in tight range for consolidation. As for the week, Swiss Franc and Yen are the stronger ones on risk off...

US Crude Oil Inventory Dropped Less than Expected. Price Continued to Fall on Omicron Concerns

The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks rose +4.27 mmb to 1222.16 mmb in the week ended November 26. Crude oil inventory dropped -0.91 mmb to 433 mmb, compared with consensus of a -1.24 mmb decrease....

Franc and Yen Softer in Consolidations, Gold Presses Channel Support

Global stock markets are recovering slightly today, continuing to stabilize from Omicron worries for now. Major currency pairs are also bounded in consolidative trading in tight range. While Aussie is trying to lead commodity currencies higher, it's lacking clear upside momentum. Swiss Franc and Yen are the softer ones...

Dollar Failed to Rally on Hawkish Powell, Aussie Rebounds after GDP

Dollar attempted for a rally overnight after hawkish comments from Fed Chair Jerome Powell, but momentum quickly faded. Instead, the greenback was dragged down by extended weakness in benchmark treasury yields. Overall market sentiment is stable in Asian session, helping commodity currencies rebound. Aussie is additionally lifted by better...

Hawkish Powell Expects Fed to End QE Tapering a Few Months Earlier than Previously Anticipated

Despite concerns over the new coronavirus variant Omicron, Fed Chair Jay Powell’s testimony before the Senate was hawkish. He suggested that the Fed could accelerate the tapering of asset purchases in order to curb strong inflation. US dollar extended rally against major currencies, with the exception of Japanese yen...