Mon, Mar 25, 2019 @ 18:03 GMT
EU-US trade talk and surge in yields in Japan and the US were the two major themes last week. But it was Canadian Dollar which quietly ended as the strongest one last week. US holding off car tariffs is...
Markets are engaging in quiet holiday trading today while Dollar is paring some losses. But for the week, the greenback is still set to end as the worst performing one. Trading will likely stay subdued today as traders are already having their eyes on next week. In particular, the Senate will return from Thanksgiving recess and would floor the tax bill. Markets will then have a clearer idea on what the final version of Senate tax bill then. And assessment could then be done on the final reconciled version between House and Senate.
Yen strengthens broadly today and remains the strongest one for the week. New wave of risk aversion trades was triggered by news that US President Donald Trump is using national security as excuse again to study imposition of tariffs...
Dollar trades mildly higher in Asian session today but remains the second weakest major currency for the week, next to Sterling. Main focus is turning to employment data from US. Markets are expecting non-farm payroll report to show 175k growth in January while unemployment rate would be unchanged at 4.7%. Average hourly earnings are expected to grow 0.3% mom. Looking at other employment related data, ADP report showed 246k growth in January, much stronger than December's 151k. Four week moving average of initial jobless claims dropped 10k to 248k during the period. Employment component of ISM manufacturing surged to 56.1, up from 52.8. Conference board consumer confidence, however, dropped to 111.8, down from 113.3. Overall, other employment data points to a strong NFP report today. But the question is, based on current market sentiment, it's unsure if Dollar will respond positively to a set of good numbers.
Yen rebounds strongly in Asian session today following steep in decline in China and Hong Kong stocks markets. In particular, the HK HSI is trading down -400 pts, or -1.5% at the time of writing, led by tech titan Tencent and casino stocks. Some attributes the selloff to North Korea's firing of another ballistic missile just ahead of July 4. That drew response from US President Donald Trump, with his tweet that "hard to believe that South Korea and Japan will put up with this much longer". And Trump tried to shift the spot to China again saying that "perhaps China will put a heavy move on North Korea and end this nonsense once and for all!" USD/JPY is back below 113 after surging to 113.46 overnight following the stronger than expected ISM manufacturing data.
Sterling strengthens against all other major currencies as its boosted by strong inflation data. Headline CPI accelerated to 2.3% yoy in February, up from 1.8% yoy and beat expectation of 2.1% yoy. Core CPI also accelerated to 2.0% yoy, up from 1.6% yoy and beat expectation of 1.7% yoy. Headline CPI is now back inside BoE's target zone. iIt's also the highest reading since September 2013. While BoE has been clear that it will allow inflation to overshoot for sometime, there are continuous speculation of the timing of a rate hike.
Sterling ended last week as the weakest major currency. The Conservatives' losing of majority in the parliament created much uncertainty on politics, economic policies and Brexit negotiation. While the selloff in the Pound was steep, it's so far holding on to key support level against Dollar, Euro and Swiss Franc. And it seems like traders are still holding some of their bets to watch the developments in near term. Euro ended as the second weakest major currency for the week as traders were not satisfied with the tiny hawkish move in ECB's language. And the general weakness in European majors also dragged the Swiss Franc.
Canadian Dollar suffers steep selling today as US President Donald Trump singles out Canada and Mexico in his trade war rhetorics. He said in a tweet that "NAFTA, which is under renegotiation right now, has been a bad deal...
Dollar surged broadly last week as Republican's tax plan overcame another hurdle. The news also sent DOW and S&P 500 to new records, with upside acceleration. Accompanying that, treasury yields closed sharply higher, reversing prior week's loss. Technical development in Dollar was not totally convincing yet. NZD/USD led the way lower as markets were unhappy with the new labour-led coalition in New Zealand. USD/CAD followed after disappointing economic data. Solid risk appetite also pushed USD/JPY and USD/CHF near term resistance to resume recent rally. But EUR/USD was kept in range only, showing much resilience in spite of political turmoil in Catalonia. GBP/USD was also held in range with support from some positive news regarding Brexit. AUD/USD also stays in recently established range.
Dollar ignores mixed economic data and surges broadly, except versus Canadian in early US session. Sentiments are generally lifted by news that Trump is backing down again on his tough stance on curbing Chinese investments, after backfires from businesses...
Japan Yen and, to a slightly lesser extent, Dollar suffer broad based selloff today as global markets return to risk seeking mode. Major European indices are generally higher with DAX up near 1% at the time of writing. CAC...
Dollar stays in tight consolidation against European majors but strengthens against commodity currencies in holiday trading. In particular, Canadian dollar is weighed down by the dip in oil price. Released in US, initial jobless claims rose to 274k in the week ended December 17, above expectation of 255k. Durable goods orders dropped -4.6% mom in November, slightly better than expectation of -4.9%. Ex-transport orders rose 0.5% mom, above expectation of 0.2% mom. Q3 GDP was finalized at 3.5% annualized, GDP price index at 1.4%. From Canada, retail sales rose 1.1% mom in October while ex-auto sales rose 1.4% mom. Both were above expectation. But headline CPI slowed to 1.2% yoy and BoC core CPI slowed to 1.5% yoy, missing expectations.
Euro surged broadly last week as economic data suggested a "boom" in Germany ahead. Also, political situation in Germany has improved. Ending as the strongest currency, Euro also took Sterling and Swiss Franc high. On the other hand, Dollar ended as the weakest one as traders held their bet during thin holiday trading. The US tax plan is entering into a "make or break" week. Despite sharp rally in oil price, Canadian Dollar ended as the second weakest one as data suggested that BoC would remain on hold. Aussie and Yen were both weak too. We perceive the rout in China stock markets as a factor in pressuring both.
Dollar strengthens broadly today, in particular against commodity currencies, as global ex-US markets are back in risk averse mode. Trade tensions and emerging market problems are staying as the two main themes that weigh on investors' sentiments. The greenback...
Yen strengthens broadly today as Asian stocks are weighed down by rather terrible Chinese trade balance data. Trade war with the US is hurting both exports and imports. But judging from the data alone, it's unsure who suffered more....
Yen spikes higher after BoJ turned slightly optimistic over the country's inflation outlook. But there is no follow through buying seen. USD/JPY is kept in middle of range of 110.18/114.17. Dollar also recovers mildly after US government reopens. But overall, the greenback is staying in near term down trend against all major currencies. In other markets, risk appetite stays strong. DOW hit another record by gaining 0.55% to 26214.60. S&P 500 and NASDAQ were even stronger, closed up 0.81% and 0.98% at record highs. 10 year yield extended recent rally by rising 0.028 to 2.665. A take on 3% handle is now having realistic possibility.
Canadian Dollar makes a massive strike back as boosted by very strong inflation reading. The Loonie is now trading as the biggest gainer for today. While Yen's no.1 place is taken, it's staying the second strongest as supported by...
Despite a string of upbeat confidence data from Eurozone, Euro tumbles broadly today. Weaker than expected German retail sales could be a factor. Some also point to the risks of upcoming election in Italy. But it's seen that the decline in Euro is due to recent loss in momentum, and the failure of EUR/USD to break through 1.2091 key resistance. On the other hand, the greenback is trying to regain some ground, together with the Japanese Yen. BoC business outlook survey is the only economic release in US session. Focus will be on speeches of Fed officials including Atlanta Fed Raphael Bostic and San Francisco Fed John Williams.
Dollar remains in the spotlight today as it suffers renewed selling in European session. It could be part of delayed reaction to the dovish FOMC rate hike yesterday. But then, while the greenback is the worst performing one today,...
Global financial markets are trading in general risk seeking mode today. At the time of writing, European indices are trading in black with FTSE up 0.4%, DAX up 1.7% and CAC up 1.1%. US futures also point to higher open as S&P 500 and NASDAQ could extend their record runs. Meanwhile, DJIA is head for a take on 20000 handle again. In the currency markets, while the greenback remains generally weak, Aussie is even weaker after disappointing consumer inflation data. On the other hand, recent news regarding Brexit seems to be welcomed by the markets as Sterling surges broadly.
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