Mon, May 20, 2019 @ 04:32 GMT
There were some interesting turns in the financial markets last week. Global equities initially cheered after Democrats sealed a tremendous win in the US mid-term election by regaining majority in the House. But the lift quickly faded as stocks...
Dollar rose broadly last week as markets received Fed's hawkish rate hike rather week, despite initial hesitation. However, the greenback was just the second strongest, overshadowed by Canadian Dollar. Stronger than expected GDP data from Canada solidify the case...
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....
Dollar was sold off broadly last week as sentiments were rocked by political turmoil in the White House, regarding US President Donald Trump's alleged intervention in FBI investigation. Selloff in equities triggered massive safe haven flows into Swiss Franc and Japanese Yen. But Euro followed closely as political risks in the Eurozone faded and on ECB expectations. Commodity currencies performed poorly in spite of the rally in oil and gold price. Aussie and Kiwi ended the week as two of the weakest major currencies, just next to Dollar. Sterling and Canadian Dollar were among the weakest batch too but showed a turnaround as oil broke 50 handle. Political uncertainty in US is set to continue as former FBI director James Comey, fired by US President Donald Trump earlier this month, agreed to testify in open session before the Senate Intelligence Committee. Dollar is vulnerable to more selling against Euro and Yen.
Dollar ended last week as the weakest currency as markets took Fed Chair Janet Yellen's testimony as a dovish one. Traders further pared back bet on a rate hike in September. And the development was accompanied by surge in stock indices to record highs. Canadian Dollar ended as the second strongest as lifted by BoC rate hike and rebound in oil prices. But it was outshone by Australian dollar which soared on iron ore prices. Sterling followed as markets continued to adjust their expectations on a near term BoE hike after central banker comments. Euro and Swiss Franc followed Dollar as the weakest ones ahead of ECB meeting this week. Meanwhile, Yen traded mixed as focus is turning to BoJ meeting.
Sterling, Canadian Dollar and Euro surged broadly last week on hawkish comments from central bankers. The turn in BoE Governor Mark Carney was the most drastic as just a week a go, he said it's not the time of rate hike yet. But then, he indciated the BoE MPC will start debating raising interest rate in the coming months. BoC Governor Stephen Poloz repeated his comments that prior rate cuts in 2015 have already done their job. But this time, Poloz hinted that BoC is approaching a new interest rate decision. That tremendously raised the odds of a July hike by BoC. There were some jitters on Euro on report that markets misinterpreted ECB President Mario Draghi's comments. But after all, it's generally convinced that, with improvements in Eurozone inflation and growth, ECB is transiting into a phase of stimulus withdrawal. And there would likely be tapering announcement in September or by latest October.
US stocks soared to new record high last week on resurgence of talk of president Donald Trump's expansive policies. In particular, bulls regained control after Trump said he would announce "phenomenal" tax reforms within two or three weeks. DJIA closed the week up 197.9 pts, or 0.99% at 20269.37. S&P 500 gained 18.7 pts or 0.81% for the week to close at 2316.10. NASDAQ rose 67.4 pts or 1.19% to close at 5734.13. All three major indices closed at record highs. The developments helped lift treasury yield from intra-week selloff. 10 year yield closed at 2.409 after dipping to 2.325, comparing to prior week's close at 2.491. Dollar was given a boost and ended as the second strongest major currency, next to Sterling. The Dollar index closed at 100.71, up from prior week's close at 99.73. Fed chair Janet Yellen's testimony to Congress will be a major focus this week. But Trump's tweets and any economy-related announcements will be the things that move markets.
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...
The last week of August was unusually volatile and eventful. It's a week to remember yet it's hard to remember all the details. Almost every major currency got its own stories. Swiss Franc and Japanese Yen ended as the...
There were some major surprises in the markets, much volatility and some interesting developments, last week. Dollar ended the week as the weakest major currency as markets were clearly disappointed by the outcome of the dovish FOMC rate hike. Technical developments in Dollar index and treasury yields suggest there more down would be seen in the greenback in near term. There were some good reasons for Euro to surge last week. Those factors include speculations of ECB rate hike by the end of the year, as well as the Euro-friendly results of Dutch elections. But the common currency did end up as the second weakest one. In particular, the sharp pull back of EUR/CHF from as high as 1.0823 to close at 1.0718 indicates that traders are still concerned with political uncertainties ahead. On the other hand, Australian dollar ended as the strongest major currency last in spite of weak employment data. Sterling followed as the second strongest major currency after hawkish BoE minutes. Also, FTSE 100 closed at new record high despite all the Brexit and Scexit news.
The markets originally looked set for a general trend reversal with the synchronized sharp decline in US stocks, yield and the Dollar leading into 2017. Nonetheless, equities staged a strong come back towards the end of last week and helped stabilized both yields and the greenback. The overall solid non-farm payroll report, with strong wage growth, provided some support to sentiments. But it looked more like the trump rally is back in force. While there are still risks of trend reversals, it's much lowered now with S&P 500 and NASDAQ closing at record high at 2276.98 and 5521.06 on Friday. DJIA also just missed 20000 handle by a hair and reached as high as 19999.63 before closing at 19963.80. The coming would be crucial to the overall developments in the markets as Donald Trump's inauguration day on January 20 approaches.
US-China trade war was the center of global focus last week. Markets were expecting a deal with Chinese Vice Premier Liu He visited Washington Instead Trump announced to escalate to full-blown level after China reneged on its commitments during...
Japanese Yen ended as the strongest major currency last week as selloff in global stock markets intensified. Dollar followed closely as the second strongest. Sterling, however, ended as the weakest one despite hawkish BoE announcement which hinted at earlier and faster rate hikes. Euro followed as the second weakest while Aussie was the third weakest. DOW recorded two of the largest single day point drops over the week. And two days of more than 1000 pts decline was definitely historic. Judging from the technical pictures of DOW, FTSE and DAX, while the corrections are not finished, they would enter into "buy zone" of traditional medium term corrections on next fall. That is, we could see the selling recedes soon. However, we'd like to point out a big risk ahead, China stocks, that could make these global selloffs long term corrections.
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...
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.
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)...
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.
Sterling was overwhelming the weakest one last week on Brexit political drama in the UK. It's now even uncertain for how long Prime Minister Theresa would stay in position, not to mention if there would be an agreement for...
- advertisement -