Weekly Report
Dollar Rally Rejuvenated as Risk-on Sentiment Lost Steam, Yields Jumped
Dollar ended as the strongest one, closing notably higher against all other major currencies, as risk-on sentiment lost steam while treasury yields surged. The late momentum was rather impressive and argues that the greenback might be ready for breakouts. While Canadian Dollar ended as the second strongest, it's Swiss...
Downside Breakouts in Euro and Sterling Crosses to Overshadow Dollar Volatility
Expectations on the size of next Fed rate hike shifted again last week, with stocks cheering lower than expected consumer inflation reading in the US. Dollar ended as the worst performer but it did have a late come back following rebound in benchmark treasury yields. Indeed, it was the...
Dollar Rose, Yen Fell as Traders Adjusted Bet on Fed Hikes
The strong set of job market data seemed to have cleared much concern over recession in the US, and set the tone for the financial markets. Benchmark treasury yields jumped as traders added bets on Fed continuing with the current pace of tightening beyond neutral. Stocks markets were resiliently...
Yen Overwhelmed Dollar on Falling Benchmark Yields
Dollar ended broadly lower last week, as the worst performer, as hammered by the events of FOMC meeting and GDP release. In short, Fed chair has signalled slower tightening pace ahead and the message was reinforced by another quarterly GDP contraction print. Whether the US was already in recession...
Yield Curve Inversion and Recession Risks, Dollar the Worst Performer of the Week
Dollar ended as the worst performing one last week. Selloff somewhat intensified on Friday after poor PMIs indicated that the US economy was already in contraction. Deep fall in benchmark treasury yields dragged down the greenback while traders were betting on a lower terminal rate in Fed's tightening cycle....
Risk of Dollar Pull Back Growing, After Breaching Parity With Euro
Dollar was the strongest one for most part of the week, and even breached parity against Euro. But the greenback pared gains on late turn in market sentiment, and ended as the second best only. Swiss Franc was surprisingly the best performer, while Kiwi was the third. Yen was...
Euro Down on Recession Worries, Could Parity Against Dollar Provide Support for Long?
Euro ended as the worst performer last week on increasing worries of a deeper and longer recession. Selloff in the common currency also dragged down Swiss Franc, which ended as the second worst.
Sterling was originally pressured by stabilized after UK Prime Minister Boris Johnson announced to step down after...
Aussie Dived But a Bottom Around the Corner?
Extending fall in commodity prices and recession fears were the main theme in the markets last week. Australian Dollar ended as the worst performer, followed by New Zealand Dollar, and then Sterling. However, Canadian Dollar was surprisingly the strongest one, partly helped by resilient oil prices.
Meanwhile, extended pull back...
Falling Commodity Prices Support Sentiment, Dollar Downside Risk Increasing
The forex markets were rather mixed last week. Yen ended as the worst performer, but Swiss Franc was the best. Canadian Dollar rose against all but Franc, while Aussie and Kiwi were weak. Euro was mixed together with Sterling wile Dollar was ended lower against all but Yen and...
Markets Reacted Negatively to Rate Hikes, Franc and Dollar Shone
Net reactions of the global markets to Fed's 75bps rate hike were rather negative. Global stocks ended generally lower after initial recovery. Additionally, SNB delivered a surprised 50bps rate hike while BoE's 25bps had a hawkish undertone with three members wanted more. BoJ stayed calm and kept interest rate...
Stagflation Worries Pushed Dollar and Yield Higher, Stocks Lower
Worries of stagflation intensified a whole lot last week. In particular, even the habitually cautious ECB pre-committed to rate hikes in July and September, while delivering new economic forecasts with sharply higher inflation and lower growth projections. Selloff in risk markets accelerated further after US CPI re-accelerated to new...
Yen Bearishness Persists on Rising Yields, Loonie Strong on BoC and Oil
It's another poor week for Yen following the rally in benchmark treasury yields in US and Europe. It should be noted again that BoJ has a 0.25% cap on 10-year JGB yield, and thus, gaps are widening. Sterling was a distant second weakest, on risks of stagflation while Swiss...
Dollar Extended Correction as Stocks Rebound Finally Started
Dollar's correction continued last week and ended as the worst performer. Late rebound in stocks and extended correction in treasury yields are both weighing on the greenback. Yen followed as the second weakest, mainly on risk-on sentiment.
On the other hand, Kiwi was the best performer, additionally lifted by hawkish...
Swiss Franc Won the Week, But Aussie Could Jump on Turnaround Sentiment
It was another roller-coaster week. Swiss Franc ended as the strongest one after SNB Chairman Thomas Jordan surprisingly said it's ready to act if inflation solidified. But it should reminded that he reiterated the readiness on intervention too. Euro was somewhat pressured due to selling in crosses. Dollar, Canadian...
Euro Looking Increasingly Vulnerable, Overall Sentiment to Stabilize after Wild Rides
Extreme volatility was seen in the markets last week, in particular in the across the broad rout in cryptocurrencies. Stocks the tumbled sharp but stage a late come back. Gold and silver resumed recent decline. Yen ended as the best performer, helped by both risk aversion and pull back...
Traders Still Betting on 75bps Hike by Fed in June, Dollar Rally Capped
While RBA, Fed and BoE announced rate hikes last week, the impacts and reactions were rather delivered. RBA's larger than expected hike was well received and helped Aussie secured the first place, even though it pared back much gains on risk-aversion. On the other hand, BoE's announcement was considered...
Dollar Index Hit Two-Decade High as Focus Turns to Fed Hike
Dollar ended up as the strongest one last week, having the best week since 2015 and with Dollar index hitting a two-decade high. Though, the rally somewhat slowed towards the end of the week. It could be a result of month end flow or traders' cautiousness ahead of Fed....
Dollar Powered Up, Fed to Hike 50bps in May and 75bps in Jun?
Speculations on aggressive Fed tightening intensified sharply last week after a chorus of hawkish comments from policy markets. Markets are indeed pricing in near 70% chance of federal funds rate at 1.50-1.75% by the end of first half, i.e., 125bps above current level. Stocks tumbled sharply towards the end,...
Dollar Ended Broadly Higher as 10-Yr Yield Hit 2.7
Dollar was initially mixed last week but buyers jumped in after FOMC minutes revealed the quantitative tightening plan. US benchmark treasury yields also surged to highest level since 2019. Both Canadian and Australian Dollars followed as second and third strongest. Aussie was boosted by RBA's hints on earlier rate...
Yield Curve Inversion, Stocks Rallied, Euro Rebounded
There were a couple of developments of last week to note. Firstly, US yield curve inverted for the first time since 2019. There is no reason to panic for the moment, but deeper inversion could set the tone in the risk markets ahead. Secondly, Euro ended as the strongest...