Weekly Report
Swiss Franc and Yen Ended as Strongest, Worst of Trade War Yet to Come
The Swiss Franc and Japanese Yen ended last week as the strongest major currencies. Sentiments were hurt deeply by worries on global trade war. Over week, DOW lost -2.03%, S&P 500 lost -0.89%, DAX was down -3.31%, CAC dropped -2.08%, Nikkei lowered by -1.47%. China's Shanghai composite suffered most...
Dollar Surged on Hawkish Fed, Trade War Threat Ignored
Dollar surged broadly last week as Fed policymakers finally made up their mind on hiking a total of four times this year, as reflected in the new projections. The greenback was also helped by ECB monetary policy decision, with traders disappointed on the rate path. The headlines were then...
Markets to Look Through G7 to Fed Hike and ECB Judgement Day
While trade tension between the US and its allies dominated the headlines last week, Euro emerged as the strongest major currency. Receding Eurozone internal political risks was a key factor. German 10 year bund yield hit as high as 0.52, comparing to 0.186 low just two weeks ago, before...
A Look at Why Dollar Failed to Surge on Strong US Job Numbers
It was a roller coaster week with political turmoil in Italy dominated the first half of the week. The formation of the populist Italian government after acceptance by President Sergio Mattarella marked the end of the episode. Trade war then took over as US President Donald Trump decided to...
Yen Surged Again as Italy, Protectionism, Geopolitics and Central Bank Expectations Weighed on Yields
Yen ended as the strongest one last week followed by Swiss Franc. Meanwhile Sterling was the weakest one, followed by Euro, Canadian and then US Dollar. A number of factors were behind such development and they're all inter-related. The most direct one is decline in major European and US...
USD Index Futures Recorded Net Length, First Time since March
As we expected, USD Index futures turned to NET LENGTH of 18 contracts in the week ended May 15. This was driven by increasing pessimism over other major currencies. According to CFTC's Commitments of Traders report, reduction in speculative long positions greatly surpassed that of short for EUR futures,...
Dollar Rally Limited by a Number of Political Factors, Swiss Franc Ended as Strongest
Swiss Franc ended last week as the strongest one, very much thanks to the selloff in EUR/CHF. Uncertainty over the EU policy of the new Italian government sent Euro broadly lower, which ended as the weakest. Despite surge in 10 year yield to 7-year high, Dollar could only extend...
Traders Getting More Bearish on AUD and Less Bullish on GBP
We initiate coverage on speculators' activities on major FX futures. According to CFTC's Commitments of Traders, speculators were bearish (NET SHORT) on CHF, JPY, AUD and CAD in the week ended May 8. Meanwhile, they remained bullish (NET LENGTH) over EUR, GBP and NZD. However, the positive sentiment has...
Dollar Turned into Consolidation Phase, Sterling Survived BoE but Vulnerable to Job Data
Canadian Dollar surged broadly last week following the rally in oil prices. Weaker than expected employment capped the Loonie's gain, but it ended as the strongest still. Sterling survived BoE super Thursday and ended up against all but Canadian. That's a clear indication that markets didn't see BoE announcements...
Yen Beat Dollar as the Strongest in Yields Driven Forex Markets
Dollar ended last week broadly higher except versus the Japanese Yen. While economic data from the US were generally disappointing, they were not bad enough to alter Fed's path of three rate hikes this year. Just that, the data didn't add to the chance of the fourth hike in...
Dollar and Yield Reached Critical Junctures after Strong Rally, Determining Events ahead
Dollar was given a powerful boost last week on a couple of factors. Firstly, 10 year yield extended recent bull run and hit 3% level for the first time since 2014. Secondly, Euro was sold off steeply after the confusing messages from ECB President Mario Draghi during the post...
Dollar Dominated the Markets as Treasury Yields Could be Reversing Multi-Decade Down Trend
Dollar ended broadly higher last week as boosted by surge in treasury yields. 10 year yield finally completed its consolidation that started back in February, and rose through 2.943 high to close strongly at 2.951. That came with the background that recent comments from Fed officials affirmed its gradual...
Yen and Franc Ended as the Weakest Ones as Risk Aversion Temporarily Eased, Reaction to Syria Strikes Watched
Easing risk aversion was the main theme last week as Japanese Yen and Swiss Franc ended as the weakest two. It's not the kind that investors were in euphoria. But nonetheless, major stock indices around the world ended up higher. Dollar ended as the third weakest despite markets firming...
Dollar Mixed as Markets Pared Back Expectations of Fed Hikes Slightly, after NFP and on Trade War
US-China trade war was the dominant theme in the financial markets last week. US started by announcing the list of 1300 product lines to be tariffed under Section 301 actions. China quickly responded by announcing 25% retaliation tariffs to US imports, matching the size of USD 50b product values....
Global Stock Market Crashed, Dollar Tumbled after Episode 1 of US-China Trade War
Global stock markets suffered steep selloff last week as US President Donald Trump has finally declare the start of trade war with China. Dollar was under broad based pressure with the development, but it was only the second weakest one. Australian Dollar suffered most for it's close trade link...
CAD, AUD, NZD All Suffered as Trump Stepping on Protectionist Acceleration Pedal
Yen maintained solid strength throughout last week as it ended as the strongest one. Meanwhile, the fortunes of commodity currencies suddenly reversed towards the end. Canadian, Australian and New Zealand Dollar ended as the three weakest ones. Some blamed the selloff in commodity currencies to Dollar's strength. But the...
Stocks Survived Trump’s Tariffs, Boosted by Perfect NFP, Commodity Currencies Came Back
The stock markets in the US ended the week up solidly as boosted by the "perfect" job report as seen by investors. Worries over trade wars also receded as US President Donald Trump has backed down on his steel and aluminum tariff even on the day of its arrival....
Trade Wars Overwhelmed the Markets, More Volatility ahead
The theme of trade wars overwhelmed the global financial markets last week and overshadowed any other topics. It started on news that US President Donald Trump is going to impose tariffs of 25% on steel and 10% on aluminum. Trump then doubled down by tweeting "trade wars...
Dollar Rebound Lacks Conviction for Trend Reversal
Dollar ended last week as the strongest major currency Fed communications solidified the case for three hikes this year. Nonetheless, as pointed out a few times, the greenback was held below key near term resistance levels against others and there is no change in its bearish outlook yet....
Dollar Hit Three Year Low as Down Trend Resumed, No Clear Sign of Reversal Yet
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.