Weekly Report
Markets Back in Risk-on Mode, But Forex Mixed Awaiting Central Bank Meetings
Investors seemed to have already put Omicron risks behind last week, with markets turned back into risk-on mode. But the forex markets were indeed quite mixed. Commodity currencies were the strongest ones, but the rebounds are looking more like corrective. Yen was the worst performer, but the pull-backs were...
Swiss Franc and Yen Surged after Fed Powell Stirred Up Omicron-Nervous Markets
Just as the world is concerned and confused with the newly discovered Omicron, Fed Chair Jerome Powell stirred up the markets further, by talking up faster tapering. The biggest reactions were found in US treasury yields on strong safe-haven flows. Major stocks indexes also turned sharply lower, solidifying the...
Investor Confidence Shattered by Omicron Variant, Yen and Swiss Franc Surged
Investor confidence was shattered by the news of the heavily mutated B.1.1.529 coronavirus variant, now called omicron. WHO warned that this variant has a large number of mutations, some of which are concerning. It added that preliminary evidence suggested an increased risk of reinfection with this variant. It may...
Euro Dived on Dovish ECB and Lockdown Fears, More Downside Risks ahead
Euro tumbled broadly and deeply last week, and ended as the run away worst performer. It's firstly weighed down by dovish comments from ECB officials, who talked down the need for policy action to counter inflation. More importantly worries grew after Austria returned to full lockdown.
Daily new COVID-19 infections...
Dollar Surges as Markets Added to Bets on June Fed Hike
Traders added to the bet of a June rate hike by Fed after stronger consumer inflation reading. Dollar surged across the board with Dollar index taking out an important fibonacci level. Benchmark currency yields staged a strong rebound. But stocks were very resilient despite intensify speculation of an early...
Yen and Franc Followed Bonds Higher, Ignored Record Running Stocks
The developments last week were a bit confounding, as both stocks and bonds rallied notably. Yen and Swiss Franc followed the path of falling yields and rose as the biggest winner of the week.
Dollar was not much helped by Fed's tapering and solid job data. Australia Dollar ignored broad...
Euro Selloff to Continue, At Least in Some Crosses
Euro ended as the worst performing one after the post ECB rally faded quickly. It's clear that ECB would lag behind other major central banks in stopping to add stimulus, not to mention raising interest rate. The selloff in Euro also dragged down Sterling, as both were sold off...
Dollar Ended Lower Despite Increasing Bets on Fed Hike, US Stocks Hit New Records
The markets have turned a bit mixed last week and have likely entered into a near term consolidative mode already. Dollar ended broadly lower even though traders continued to add their bet on a Fed rate hike next year. Indeed, the odds for a hike by June is now...
Yen Selloff Accelerated on Strong Energy and Commodity Rallies
Yen's selloff accelerated rather steeply last week, on the back of surging commodity and energy prices. Dollar was also pressured this time, as treasury yields retreated and on late rally in stocks. Euro was not to far away, as pressured by selloff in crosses. On the other hand, commodity...
Yen Crosses Followed Yields Higher Against, Loonie Rode on Oil
Yen was once again sold off broadly last week, following late rally in treasury yields despite disappointing US job report. Resilience in overall risk appetite also kept the Japanese currency pressured. Meanwhile, Euro followed as as distant second worst on selloff in crosses, as well as Dollar. New Zealand...
Dollar Index Could Be Capped by 94.46 Fibonacci Level as Yields Rally Halts
Dollar had been the strongest for most of the week but lost it first place at the time, as treasury yields retreated. Instead, resilient risk appetite in the US, as well as firm oil price helped Canadian and Australian Dollars stole the first and second place. On the other...
Yen Dropped Broadly as Treasury Yields Jumped on Hawkish Fed
Yen's fortune reversed last week as US treasury yields accelerate up after hawkish FOMC meeting and projections. US stocks also display strong resilience and closed generally higher, reversing prior losses. Sterling, on the other hand, shrugged off hawkish BoE voting and ended as second weakest. Aussie and Kiwi were...
Dollar and Yen the Runaway Leader on Increasing Risk of Correction in Stocks
Dollar and Yen were the runaway leaders in the forex markets last week. While Fed is not quite likely to announce tapering this week, recent solid data argues that November would finally be the date. Stocks in US and Europe have been losing much upside momentum as central banks...
Dollar Rebounded as DOW’s Selloff Posts a Warning to Risk Sentiment
Dollar ended as the strongest one last week, with some held from the late selloff in US stocks. Yen was the second strongest on risk aversion while Swiss Franc was not too far away. Commodity currencies, on the other hand, ended generally lower. Traders ignored the dovish tapering of...
Dollar Weakness to Stay after Substantial Setback in Job Recovery
Dollar was under pressure most of the week and selling accelerated again after the big disappointment in employment data. The non-farm payroll report could show that job market recovery had made a "substantial setback" rather than "substantial further progress". A tapering announcement from Fed in September is basically off...
Stocks at New Record, Dollar Plummeted, Aussie Turning Around
Fed Chair Jerome Powell's speech at the Jackson Hole Symposium didn't disappoint. He did what the markets expected, affirming the openness for beginning tapering this year, without indicating the need for an imminent start. Just as Philadelphia Fed President Patrick Harker described, Powell laid out where the center of...
Sentiments Deteriorated on Delta, China and Fed Tapering
Overall market sentiments deteriorated notably last week, with concerns over the swift spread of Delta variant and return to lockdowns, Fed's tapering and slowdown in China. A softening tone from a Fed hawk on tapering gave sentiment a late lift, but it remained to bee seen if that could...
Slowing Core Inflation, Deteriorating Consumer Sentiment, and Split Fed
It's all about the consumers. After slowing core inflation and sharp deterioration in sentiment, Dollar took a steep dive towards the end of the week. Markets are suddenly less sure about a tapering announcement by Fed in September, not to mention anything concrete from Jackson Hole symposium later in...
Dollar Turned Around While Tapering Talks Heated Up Again
Dollar soared towards the end of the week as the stellar job report should give Fed much confidence to start tapering later in the year. Reactions from stock markets and yields were also positive, with DOW and S&P closing at new records while 10-year yield rebounded. Together with the...
More Downside for Dollar and Aussie, Swiss Franc Outperforms
Dollar's selloff caught much attention last week, but slowed towards the end. Traders are holding their bets for now, awaiting the coming batch of July data. Indeed, Australian Dollar was the worst performer, mainly on RBA QE expectations, and partly on risk aversion in China and Hong Kong. New...