Weekly Report
Worsening Inflation, Dovish Central Banks and Falling Treasury Yields
Yen and Dollar were the biggest winners last week on worsening inflation outlook, dovish central banks and falling treasury yields. Australian Dollar was the weakest one as CPI just rose 1.3% yoy in Q1 versus expectation of 1.5% yoy. The added heavy weight to the case of RBA rate...
Yields Surged, Yen Tumbled on Receding Global Risks
The financial markets were generally dominated by positive sentiments last week. Major global economic risks seemed to be receding generally, even though some uncertainties remain. The development was best seen in the strong rally in treasury yields. US 10-year yield closed the week up 0.059 at 2.56, above 2.554...
Fundamentals Improved But Uncertainties Remain, Forex Markets Isolated From Optimism Elsewhere
After a strong Q1, risk appetite extended into the first week of Q2. The most notable improvements were seen in the bond markets, as German 10-year yield turned positive again. US 10-year yield also reclaimed 2.5 handle. However, stocks and 10-year yield are both near to key resistance zone....
Risk Aversion to Come Back in Q2 as Stocks and Yields Recouple
Intensifying recession fear was the main theme in the markets in March, alongside never-ending Brexit and trade tensions. With downside risks to growth starting to materialize, major global central banks started their dovish turns. Most notably, Fed now forecasts no rate hike this year. ECB will keep interest rates...
Sentiments Turned Very Fragile as Recession Fears Intensified
After the much more dovish than expected Fed economic projections and shockingly poor Eurozone manufacturing data, it looks like major world economies are at the brink recessions. German 10-year bund yield turned negative for the first time since 2016, and it was as high as 0.12 during the week....
With No Clarity on Brexit and Trade War Yet, Focus Will Turn to FOMC Projections
Sterling ended last week as the strongest one as no-deal Brexit is now politically ruled out. But it should be noted that the path forward remains unclear, as least for a few more days. Thus, the upside breakout of Sterling was indecisive. The Pound has indeed closed below recent...
Sentiments Turned Sour on Slowdown Worries, But No Panic Button Hit Yet
Looking through all the financial market news last week, the message was rather unified. That is, 2019 will be a year of slowdown, globally. Economic data, central banks, governments and independent organizations are all reinforcing this message. While ECB's "pre-emptive" dovish turn triggered wild market reactions, it was just...
Treasury Yield Surged on Abating Global Risks and Bets on Bottoming in Economic Slowdown
There were so many high profile events last week. In the end, the positive ones were more than enough to offset the negative ones. US-China trade truce was extended indefinitely and it looks closer than ever to have deal. MSCI's increase of weighting of Chinese stocks gave China another...
Trade Optimism Boosted Risk Appetite, Dollar and Yen Ended Lower
Yen and Dollar closed the week generally lower on strong risk appetite. There was some sort of optimism over US-China trade negotiations throughout the week. And that helped DOW and China SSE extend recent rally. DOW closed above 26000 for the first time since November. SSE also closed above...
Risk Appetite Boosted by Unknown Progress in US-China Trade Negotiation, More Talks Ahead
Trade talk optimism, trade pessimism, drove markets up and down last week. In the end, Presidents of US and China decided to give markets some lip service and boosted stocks towards weekly close. Words, rather than substance, are enough to make investors happy. Yen and Swiss Franc ended as...
Dollar Emerged as Strongest in a Bad Batch on Global Slowdown Worries
Dollar ended last week as the strongest ones, mainly due to weakness elsewhere. Worries of global slowdown, or even recession, sent Germany and Japanese stocks sharply lower. Global treasury yields also tumbled on safe haven demand. Adding to that, renewed concern over re-escalation of US-China trade war also weighed...
Dollar Down But Not Out after Fed, Oil Lifted Canadian, Iron Ore Boosted Australian
Fed's dovish turn occupied a lot of head lines last week. Stocks were lifted while Dollar was pressured. However, the moves were not as drastic as they could seem to be. There was no upside acceleration in stocks. Treasury yield actually dropped at the long end, indicating that expectations...
FOMC, Government Reopen, US-China Trade Talks & NFP ahead for Dollar
Dollar ended last week as the weakest one after deep selloff before weekly close. A whole lot of events are scheduled ahead to keep the greenback busy. Those include FOMC rate decision, US-China trade talk, non-farm payrolls. Also, the partial government shutdown has finally ended temporarily and we'll have...
Trade Optimism Lifted Stocks, Yields and Dollar
Brexit and US-China trade negotiation were the two major themes last week. After a week of drama, it's still unclear exactly what kind of Brexit deal would get through the Parliament. There's some anticipation for UK Prime Minister Theresa May on her plan B on Monday. Yet she could...
Brexit to Take the Spotlight from Fed, Trade War and US Government Shutdown
Risk sentiments continued to recover last week as Fed officials indicated they would be patient before making the next rate move. Positive developments of US-China trade talks also helped. One notable development was the rebound in US treasury yields as 10-year yield reclaimed 2.7 while 30-year yield is back...
Sentiments Saved as Fed Powell Turned Cautious, China Stepped Up Supporting Measures
There were big roller coaster rides in the financial markets last week. Apple's sales outlook downgrade heightened the concerns over serious slowdown in the Chinese economy. There was the "Currency Flash Crash" which sent through all key technical resistance levels while Australian Dollar tumbled to multi-year low. The partial...
Stock Markets Correcting 10-Year Up Trend But Fed’s Not to Blame
The global stock markets just turned from bad to worse last week. DOW suffered its worst week since the global financial crisis back in 2008, down the week by nearly -7%. S&P 500, down the month by -11.4%, is also on track to have its worst week since 1931,...
Fed’s Economic Projections to Provide Guidance as Concerns on Global Slowdown Intensify
Sterling and Brexit was the center of focus during the early part of last week. The parliament vote on Brexit was postponed to at least January. UK Prime Minister Theresa May survived leadership challenge but her position is shaky with more than one-third of her MPS voted against her....
Yield Curve Inversion and Global Slowdown Hammered Stocks, Not US-China Trade Talks
It was another volatile week with multiple theme working on the markets. US-China trade truce, arrest of Chinese business executive, stock market routs, treasury yield free fall, US yield curve inversion, weak economic data and global slow down, OPEC+ production cut, UK Brexit parliament debate, Italy budget. All have...
A Look at Market Pricing on Fed Rate Path after Powell’s U-Turn
Fed Chair Jerome Powell's speech last week was sort of a turning point. Stocks staged a strong rally and helped lifted Kiwi and Aussie as the strongest ones. Nevertheless, despite being sold off steeply, Dollar has indeed reversed much the the losses and ended as the third strongest one....