Sun, Sep 20, 2020 @ 16:29 GMT
The financial markets are rocked by Trump's over-the-top escalation in trade spat with China. At the time of writing, FTSE is down -0.4%, DAX down -1.2% and CAC down -1.1%. Dow opens by dropping more than -300%. In the...
Global stock markets are boosted by optimism over US-China trade negotiation. And commodity currencies ride on positive sentiment to strengthen broadly today. On the other hand, Yen is clearly under broad based pressure as risk aversion receded. It's followed...
Dollar and US equities came back from holiday stronger. The markets are looking through the geopolitical uncertainties in North Korea. Instead, they listened to comments from US Treasury Secretary Steven Mnuchin. Mnuchin conceded that completing tax reforms through Congress before August deadline was "highly aggressive to not realistic at this point". However, he noted that it would "probably delayed a bit" because of the healthcare. Meanwhile, he noted that the border-adjustment tax, seen as a sticking point among Republicans, could be excluded in the tax reform.
Yen weakens broadly as concerns over North Korea tensions continue. Japan Finance Minister spoke in a conference in California, US, yesterday. He warned that while yen is always "said to be a safe-haven currency", the situation in North Korea made it "extremely unstable". And he emphasized that "we should always think about what the yen would be like if something happens in North Korea." Regarding trade relationship, Aso said Japan and 10 other countries should push ahead with the Trans-Pacific Partnership with the involvement of the US. But he is optimistic that US will eventually find it better to rejoin. He said that "it's not a fact that the U.S. will be able to gain more from bilateral framework than TPP." The Japanese currency is also weighed down by renewed strength in US treasury yields. US Treasury Secretary Steven Mnuchin said yesterday that ultra-long bonds are "something that could absolutely make sense for us at Treasury."
Euro surged broadly last week and led European majors higher on expectation that pro-EU centrist Emmanuel Macron will have an easy win in French presidential election this Sunday. Traders seemed to have ignored the news about hacking attack on Macron's campaign. With 20 pt lead over EU-sceptic far-right Marine Le Pen, there should be enough safety margin for Macron. The focus is now on the reactions in that markets on the results during the initial part of next week. As Macron's win should be well priced into the markets, there is prospect of a setback in Euro after the facts. However, judging from the strength in European indices, it's believed that there is solid underlying optimism in the European economy. And, strategy could indeed be "buy-pull-back" rather that "sell-on-news".
Dollar's broad based weakness continued last week and ended as the worst performing major currency. Stronger than expected consumer inflation reading listed treasury yield and raised the chance of a March Fed hike. Fed fund futures are now pricing in 83% chance of a March hike. But that provided just very brief support to the greenback. Dollar index extended the long term down trend to new three year low, suffering the worst weekly decline since September. Some pointed to Friday's rebound as a sign of reverse in fortune in Dollar. But we'll, for now, take a more cautious stance on it first. Elsewhere, Canadian Dollar and Australian Dollar ended as the second and third weakest ones. Yen, Kiwi and Pound were the strongest.
Yen surges broadly as Asian markets tumble sharply on US-China trade war escalation. Gold also resumed recent up trend and hit as high as 1555. But traders turn a bit more cautious as mixed messages came out of China....
British Pound ended as the strongest major currency last week as boosted by hawkish BoE announcement. A November rate hike by BoE is now a real possibility. Kiwi ended as the second strongest in spite of some volatility ahead of generally election. Dollar followed on revived speculations of a December Fed hike. Meanwhile, Yen ended as the weakest as markets on return of risk appetite. US equity indices made records highs while strong rebounds were seen in DAX and CAC. FTSE was the exception due to BoE rate expectation. Yen is also additionally pressured as markets are back looking at diverging global interest rates.
It was a roller coaster ride in US stocks overnight. The markets cheered Trump's backing down on the hard-line position on curbing Chinese investments in US companies. But White House economic advisor Larry Kudlow spoiled the party said the...
Yen softens mildly in quiet Asian session, accompanied by the rebound in Nikkei, as markets digest Prime Minister Shinzo Abe's resignation. Dollar is also paring some of last week's steep losses. But overall, major pairs a crosses are bounded...
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
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...
Focus somewhat turns from stock markets to currencies today. Major global indices are staying in rather tight range today, based on recent volatility. Fiscal and monetary measures from major central banks and governments are providing little support to sentiments,...
The British Pound surges sharply as markets perceive BoE announcement today as a hawkish ones. There is no surprise from the policy decision, nor the vote split. The key is that BoE now indicated that stimulus exit could start in the coming "months". Swiss Franc stays soft after SNB left interest rates unchanged and sounds less concerned with the exchange rate in the statement. Meanwhile, Dollar is struggling to extend yesterday's tax reform new triggered gain after US President Donald Trump denied a DACA deal with Democrats. That raises the doubt again on whether Trump is working on bipartisan solutions with Democrats which leads to speedy approval of tax reforms.
Sterling remains strong in general today, next to Australian and New Zealand Dollar. UK and EU officials came out dismissing the news regarding a Brexit financial services deal. But that didn't harm the Pound a bit. Instead, Sterling ignore...
Market sentiments staged a strong rebound overnight after US Trade Representative announced to delay tariffs on some Chinese imports. However, there seems to be no committed follow through buying/selling yet. DOW hit as high as 26426.97 but closed at...
Dollar recovers mildly today but momentum has been weak. There is no change in it's general down trend against Euro, Yen and Sterling. And, not the mention the greenback's weakness against Canadian and Aussie. Political uncertainty in US is one of the key factors in limiting any rebound attempt in the greenback. Fed fund futures are now pricing in less than 50% chance of another rate hike by end of the year. And indeed, markets are starting to question that even if Fed does hike, the sluggish inflation outlook will keep it standing pat next year. The drama in the White House seems never-ending with US President Donald Trump replacing his chief of staff Reince Priebus last Friday. Retired General John Kelly was installed in the place. Some analysts noted that could be a turning point for Trump as he's now shaking up his top team.
Global stock market crash on fear of Wuhan coronavirus pandemic continues today, while treasury yields are pressured too. Euro and Swiss Franc are currently the strongest ones. There are a couple of explanations, like safe haven flows out of...
The financial markets are generally in risk-off mode in Asia, following the selloff in US overnight. Worries over a double dip recession increased after initial jobless claims unexpectedly rose for the first time in nearly four months. Selloff was...
Dollar starts the month with a much firmer footing, trading broadly higher as the strongest one so far. The rally is particular against Swiss Franc, which is currently the weakest one. Yet the greenback will firstly need to overcome...
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