Sun, Sep 15, 2019 @ 16:10 GMT
Activity in the financial markets are relatively muted today with the US on holiday. European indices are mixed in tight range with FTSE dropped -0.2%, DAX down -0.3%, CAC up 0.1% at the time of writing. In the currency...
Australian dollar was given a brief boost by retail sales data in Asian session but quickly reversed. It's trading as the biggest loser so far for the day and the week. Retail sales rose 1.0% mom in April, above expectation of 0.3% mom. However, markets seem to be more sensitive to private capital expenditure, which rose a mere 0.3% in Q1, even worse than expectation of 0.5%. Meanwhile, China's private Caixin PMI manufacturing tumbled to 49.6 in May, down from 50.3 and missed expectation of 50.2. That's the first contraction reading in 11 months. Comparing with the official PMI, the Caixin one focuses more on SMEs and indicates that these companies could be under some pressure in May which might drag down the economy ahead.
Dollar and Euro are both trading firm today. The greenback is supported by hope of passing Republican's tax plan by the end of the year. US President Donald Trump will visit Senate Republicans for lunch today for talks on tax cut. Meanwhile, Solid PMI data fro Eurozone supports that case for ECB to announce tapering later this week. New Zealand Dollar trades broadly lower as markets react negatively to the labor led coalition's policies. Yen and Aussie follows closely and as the second and third weakest.
Yen trades broadly lower today, followed by Dollar, as Asian markets recovered broadly. China's Shanghai SSE composite leads the way by gaining 1.9% and breaches 2800 handle. It looks like some solid support was obtained between 2016 low at...
The week open relatively quietly again with Swiss Franc leading the way down, followed by Aussie and Kiwi. Dollar strengthens broadly but it's again out shone by Japanese Yen. Asian markets are mixed with Nikkei trading down -0.8% at...
Risk aversion dominates in the Asian markets today as recession fears spread. But the currency markets are steady though. Major pairs and crosses are bounded inside Friday's range at the time of writing, with mild weakest in Sterling and...
Dollar pares back some of today's gain in early US session. The better than expected ADP employment data provides no lift to the greenback. Focus will be turning to ISM manufacturing and FOMC rate decision. Nonetheless, as at the...
Nikkei surges today while Yen tumbles on landslide victory of Prime Minister Shinzo Abe's Liberal Democratic Party (LDP) at the snap election on Sunday. At the time of writing, Nikkei is gaining over 1% and more than 220 pts. On the other hand, Yen is trading broadly lower. Removing political uncertainty is a key factor in lifting Japanese stocks. Meanwhile, continuation of ultra-loose monetary policies under Abenomics is a factor pressuring Yen. The forex markets are a bit mixed in initial trading, with Sterling leading the way up. Euro and Swiss Franc are slightly lower, following Yen.
Euro surges broadly today as supported by solid economic data that supports ECB's tapering plan next year. Growth in Germany was particularly impressive. Technically, EUR/USD's strong break of 1.1689 resistance now indicates near term reversal. And more upside would likely be seen back to 1.18 level. Euro's strength also helps lift its cousin Swiss Franc, which follows as the second strongest one. On the other hand, Sterling remains one of the weakest as CPI was unchanged at a five year high but didn't accelerate. Both Dollar and Yen are also struggling.
Dollar is trading generally higher in early US session as markets await job data from US. But for the week, Dollar is clearly mixed. In particular, the greenback is under some selling pressure against European majors and Canadian Dollar. EUR/USD, with yesterday's rebound, is back pressing 1.25 handle. Markets are expecting 180k growth in NFP in January. Other employment related data supports this healthy NFP number. Focus will again be on wage growth as average hourly earnings are expected to rise 0.3% mom.
Asian markets responded positively to the highly anticipated speech by China President Xi Jinping. At the time of writing, Nikkei is trading up 0.65% and HK HSI is up 1.14%. But it should be noted that Nikkei is already...
After being pressured initially, Dollar staged a strong come back European session. The greenback is now trading as the strongest one for day, followed by Canadian Dollar and then Yen. On the other hand, Sterling and Euro are suffering...
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.
Dollar is back under selling pressure in early US session after all the way bad non-farm payroll report. NFP showed only 156k growth in August, below expectation of 180k. Prior month's figure was revised down from 209k to 189k. Unemployment rate rose to 4.4%, up from 4.3%. And more disappointingly, average hourly earnings grew a mere 0.1% mom, below expectation of 0.2% mom and slowed from prior month's 0.3% mom. EUR/USD took out 1.1928 minor resistance and should have completed this week's pull back. Further rise is now in favor through 1.2 handle back to retest 1.2069 high. USD/CAD dives through 1.2412 low and is now resuming medium term down trend. US will also release ISM manufacturing later today but it's unlikely to help the greenback.
The CFTC Commitments of Traders report in the week ended June 4 shows bets for US dollar dropped on bog long and short sides. NET LENGTH in USD Index dropped -864 contracts to 26 234. Both speculative long and...
There are a couple of developments to note in the forex markets last week. Firstly, Dollar ended as the strongest major currencies as markets firmed up the expectation of a June hike by Fed. However, the greenback tumbled sharply against Euro and Swiss Franc before close after weaker than expected inflation data. The dollar index was rejected from 55 day EMA and closed lower at 99.19. That was also accompanied by steep decline in 10 year yield which closed at 2.335. Overall development suggests that the greenback would turn weaker against Euro again as the post French election pull back ends.
Japanese Yen and Swiss Franc strike a strong come back today as markets are haunted by political developments. Spanish Prime Minister Mariano Rajoy announces to invoke the so called Article 155 of Constitution to suspend autonomy of Catalonia. That came after Catalan leader Carles Puigdemont refuses to withdraw the declaration of independence. Euro initially dipped against all major currencies after the news. But then, the common currency recovered strongly against all but Yen and Swiss Franc only. German DAX is trading down down more than -0.9% at the time of writing. US futures also point to a lower open.
Dollar weakens broadly in early US session despite solid employment data. In particular, USD/CAD leads the way with Canadian GDP meeting forecasts. The greenback will look into Janet Yellen's last FOMC announcement today. But it's unlikely for Dollar to get any support from there. The key level to watch is 1.25 handle in EUR/USD. It's close to 1.2494/2516 cluster fibonacci level. A firm break there would likely prompt broad-based selloff in Dollar.
As widely anticipated, RBA left its cash rate unchanged at1.5% in February, its first meeting in 2017. Policymakers acknowledged improvement in the global economic outlook. They also retained the view that the domestic economy would growth above-trend. The overall monetary stance is neutral, signaling the central bank is in no hurry to adjust the policy. The market is closely awaiting Governor Philip Lowe's speech on Thursday and RBA's Statement on Monetary Policy (SoMP) on Friday. The SoMP would reveal policymakers' updated economic forecasts. We expect downgrades of both growth and inflation outlooks.
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...
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