Wed, Jul 17, 2019 @ 04:29 GMT
Australian Dollar tumbles broadly today as weak employment data solidifies the case for more RBA rate cut ahead. The headline number might be strong but the details are generally weak. The Aussie is also generally pressured by mild risk...
Swiss Franc and Yen firm up again in Asian session as markets are gradually convinced that a full-blown US-China trade war is underway. Tensions between the two countries have clearly worsened after trade negotiation collapsed weeks ago. And it's...
Global stock market crashed last week as the US finally joined the others. It should be reminded that as DOW made record high in early October, all other major markets suffered selloff already. It's stretched to blame rising US...
As suggested in the CFTC Commitments of Traders report in the week ended July 24, bets on a higher US dollar increased modestly by +1 818 contracts. However, thanks to a -4 529 reduction in short positions, NET LENGTH...
Australian Dollar jumps broadly today after RBA rate decision. While growth and inflation forecasts are downgraded, the overall announcement suggests that RBA is maintaining tightening bias. The next move on interest rate is still a hike even though it...
Sterling jumps broadly after Reuters reported that UK Junior Brexit Minister Robin Walker said it's very close to transition deal with the EU. But so far, no detail is reported yet. Meanwhile, Australian Dollar remains one of the strongest...
Just ahead of the weekend, Swiss Franc shows broad based power today as it surges across the board. Yen is trading as the second strongest one, but with much weaker momentum. For now, we're unsure of the exact reason...
Dollar lost some momentum after yesterday's sharp rebound, as markets are waiting employment data from US. Non-farm payroll report is expected to show 180k growth in August while unemployment rate is expected to be unchanged at 4.3%. Wage growth is also a key to watch and average hourly earnings are expected to rise 0.2% mom. It's clearly that Fed will announce the plan to unwind its balance sheet later this month. The main question for all market participants is whether Fed will hike again this year. Fed fund futures are only pricing in 36.9% chance of another hike in December. Stronger than expected NFP numbers might lift the pricing a little. But Fed policy makers would still need to see evidence that inflation is back on track before making another move.
Dollar is trading generally lower, together with treasury yield, as weighed down by uncertainty over tax overhaul. Dollar index breached 94.14 resistance briefly last week but it's now back at 93.30. Similarly, 10 year yield breached 2.396 resistance last week but is back at 2.345. On the other hand, Euro remains broadly firm as Catalonia risk has eased at least for now. EUR/USD is having 1.1832 near term resistance in sight. This level will be closely watched and break there will probably trigger steeper selloff in Dollar and spread to other pairs.
European majors are trading notably lower today. Euro is weighed down by concerns over slowdown in Germany, which might already had a technical recession in Q3 and Q4 already. Sterling also pares back some gains again traders turn cautious,...
Yen remains the strongest one for today, extending this week's rally on risk aversion. Following steep decline in the US, Asian markets open broadly lower and stay pressured. Threat of full-blown trade war continues to weigh on investors' sentiments....
Yen recovers broadly today while Asian equities are trading generally lower as geopolitics is back haunting the markets. Tensions between North Korea and the US escalated again this week after US President Donald Trump's threat of "total destruction". This was followed by an executive order by Trump to forcefully push through trade embargo with North Korea. Then, North Korea responded by pledging to strike back with with countermeasures, including the use of hydrogen bomb. Dollar is mixed today as the boost from FOMC faded. Aussie and Kiwi are under much pressure. Aussie is still feeling heavy after China rate downgrade. Kiwi is cautious ahead of election in the weekend. On the other hand, Euro is staying firm ahead of Germany election on Sunday. Sterling is mixed a UK Prime Minister Theresa May's high profile Brexit speech is awaited.
US equities surged yesterday on Santa rally, yet DJIA failed to take out 20k handle and closed at 19974.62, up 91.56 pts, or 0.46%. It was, nonetheless, a record high. Meanwhile, S&P 500 also gained 8.23pts, or 0.36%, to close at 2270.76. Treasury yields also closed higher with 10 year yield gained 0.026 to 2.568 but stayed in recently established range. Dollar stays firm and is trading higher against most major currencies for the week, except versus Yen as USD/JPY is stuck in consolidation. In other markets, Gold trading sin tight range between 1125/1145 as sideway consolidation extends. WTI crude oil is trading higher at 53.6 but is held below recent resistance at 54.51..
RBA left the cash rate unchanged at 1.5%, as widely anticipated. Little news was seen in the accompany statement with the more notable change was policymakers' acknowledgement in the rise in commodity prices. However, they stopped short of projecting its impacts on growth, for now. Today's announcement lacks indication for the central bank's monetary policy outlook. We expect future moves remain data-dependent but the central bank is not urgent in making another change in the policy rate.
Sterling and Dollar remain the two strongest currencies today. The Pound surges further as boosted by comments from European Parliament's chief Brexit negotiator Guy Verhofstadt that there is a 50/50 chance of making "sufficient progress" today. Dollar, on the other hand, is firmly supported by optimism on getting the tax bill done before end of the year. Swiss Franc and Yen are trading broadly lower as risk appetites return. At the time of writing, DAX is trading up 1.4%, CAC up 1.0%. US futures point to sharply higher over as DOW will likely extend the record run.
US Dollar tumbled broadly and is now trading as the weakest major currency after US President Donald Trump talked down the exchange rate. The Dollar index reaches as low as 100.01 so far. It's still holding on to 100 handle mainly thanks to the relative weakness of Euro, who's trading as the second weakest one. But this 100 psychological level looks vulnerable. Commodity currencies are broadly higher. Canadian Dollar maintains post BoC gains. Aussie is lifted by strong employment data. Yen pares back some gains but remains the strongest one for the weak on falling treasury yields. US 10 year yield closed at 2.296 and is now close to last week's low at 2.271. In other markets, Gold is staying firm at 1287 at the time of writing. But it's starting to feel a bit heavy ahead of 1300 handle, as risk aversion eases. WTI crude oil also retreats mildly and is back at around 53.
Sterling surges broadly today and is so far trading as the strongest one. Some point to solid housing data as a trigger for the buying. Mortgage lender Halifax house price rose more than expected by 2.7% in Q1. And...
RBA minutes for the April meeting came in less upbeat than the March one, underpinning concerns over developments in Australia's labor and housing market. Policymakers concluded by noting that "developments in the labour and housing markets warranted careful monitoring over coming months". Note, however, that the meeting was held ahead of the release of the March employment report which showed that full-time payrolls rose the most in nearly 30 years. Aussie slumped after the minutes to a 3-day low 0.552.
Yen falls broadly today on news that BoJ boosted JGB purchases. The move is seen as an act under the so called yield curve control to cap surge in yields, which touched 11 month highs earlier this week. The central bank said today that it would buy JPY 450b of JGBs with maturity of more than five to 10 years. That's nearly 10% above the prior size of JPY 410b. Released from Japan, national CPI core improved to -0.2% yoy in December, up from -0.4% yoy and above expectation of -0.3% yoy. Tokyo CPI core rose to -0.3% yoy in January, up from -0.6% yoy, and above expectation of -0.4% yoy. The set of inflation data showed mild improvement to inflation outlook. But it's still far from hitting BoJ's 2% target. Technically, yen is staying in consolidation against Dollar, Euro and Sterling for the moment in spite of the selloff in the past two days.
Global stock markets selloff continues today. At the time of writing, all major European indices are trading in red. FTSE 100 is down -1.9%, DAX down -2.4% and CAC 40 down -2.7%. DOW just had the biggest single day point drop yesterday. US futures suggest the selloff is going to continue, at least in the early part of today's US session. In the currency markets, Dollar is trading broadly higher today, but overwhelmed by New Zealand Dollar. Yen follows closely as the third strongest today, but the strongest for the week. Notable weakness is seen in European majors
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