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BOE Preview – BOE to Signal More Easing on Weak Recovery and Brexit Uncertainty

Renewed uncertainty of Brexit talks, sharp selloff of sterling last week and increased speculations of further rate hike have made this week's BOE meeting a closely-watched one. While the central bank is expected to leave the policy rate and QE unchanged at the meeting, we anticipate it to deliver...

NZD Mildly Higher on Lockdown Exit, Yen Awaits Breakout

New Zealand Dollar trades generally higher in otherwise quiet markets today. The news of lockdown exit is lift sentiments on Kiwi, even though upside is relatively limited. Other major forex pairs and crosses are bounded inside Friday's range though. Trading could remain subdued due to a light calendar today....

FOMC Preview – Policy Incorporating Average Inflation Targeting. New Economic Forecasts and Dot Plots Awaited

After announcing to adopt a new monetary policy framework at Jackson Hole symposium weeks ago, the focus of the upcoming FOMC meeting is on the more clarification of average inflation targeting, the members’ view on the economic outlook (to be revealed in the policy statement and the staff economic...

CFTC Commitments of Traders – Expect NET LENGTH for GBP Futures to Decline in Coming Week on No-Deal Brexit Concerns

As suggested in the CFTC Commitments of Traders report in the week ended September 8, NET SHORT for USD Index futures dropped - 988 to 5 758 contracts. Speculative long positions slipped -895 contracts and short positions fell -1 883 contracts. Concerning European currencies, NET LENGTH in EUR futures...

CFTC Commitments of Traders – NET LENGTH for Crude Oil has Sharpest Decline since May, on Demand Concerns

According to the CFTC Commitments of Traders report for the week ended September 8, NET LENGTH for crude oil futures slumped  -41 549 contracts to 449 366 for the week. Speculative long position declined -28 235 contracts, but shorts rose +13 314 contracts. Crude oil prices sank over -6%...

No-Deal Brexit Could Push Sterling Back into Medium Term Down Trend

Sterling's selloff was the most decisive move last week. UK-EU negotiations seemed heading to a dead-end as UK published the so-called internal market bill, which violates part of the Brexit Withdrawal Agreement. WTO style of trade relationship after Brexit looks more likely than ever. Technical developments in Sterling pairs...

Markets Steady ahead of Weekend, USD Shrugs CPI

The markets are generally rather steady today, awaiting weekly close. Major European indices are mixed in tight range. US futures point to mildly higher open, arguing that yesterday's selloff might not extend for now. Commodity currencies are generally firmer today while Dollar and Yen are the weakest. Stronger than...

Euro Rebound Fades Quickly, Sterling Decline Continues

Sterling weakness remains the unified theme in the markets this week. The Pound remain under pressure in Asian session today while recovery attempt was brief and weak. As for the week, Canadian Dollar is currently the second weakest, in tandem with the sharp decline in oil price. Swiss Franc...

ECB Upbeat about Recovery, Resorted to Verbal Warning of Strong Euro

ECB left all the monetary policy measures unchanged in September. The staff upgraded the near-term growth outlook, as well as core inflation forecasts for 2021 and 2022, suggesting the central bank's optimism over the recovery. Policymakers continued to stress that risks to growth remain skewed to the downside and...

Crude Oil Prices Fell as US Inventory Gained for the First in 7 Weeks, While OPEC+ Output Produced More than Quota

The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks gained -3.42 mmb to 1124.86 mmb in the week ended September 4. Crude oil inventory gained +2.03 mmb (consensus: -1.34 mmb) to 500.43 mmb. Stockpile rose in 4 out...

Euro Surges as ECB Gives No Red Light to Appreciation

Euro jumps notably as ECB insist that it doesn't target the exchange rate, despite recent appreciation, suggesting that they're still comfortable with the current level. The common currency also takes Swiss Franc higher with it. On the other hand, Sterling is left behind as European majors. The Pound suffers...

Euro Awaits ECB for Next Move, Sterling Weakness Persists

Sterling remains the weakest one for the week, without a doubt in the otherwise mixed forex markets. Overall risk sentiments stabilized with the overnight rebound in US stocks. Dollar has pared back much of this week's gains together with Yen. Euro is currently the stronger one for today, as...

BOC Left Policy Rate and QE Unchanged, Pledged to Calibrate Measures when Needed

BOC announced to leave the policy rate at the effective lower bound of 0.25% and maintain the pace of asset purchases at CAD 5B/week of Canadian government bonds. While acknowledging that economic activities have rebounded more than expected since the July meeting, the members remained cautious about the outlook,...

Pound Selloff Continues, Risk Sentiments Stabilized

The Pound's selloff continues today as the UK government's so called internal market bill draws wide criticism, from EU to Scotland and Wales. Traders continue to off-load Sterling on no-deal Brexit risks. European markets, though, somewhat stabilized and recovered from yesterday's selloff. US stocks futures also point to recovery...

Subdued Core CPI and Contraction in Imports Suggest It Takes Time to Revive China’s Domestic Demand

Headline CPI moderated to +2.4% y/y in August, from +2.7% a month ago. High base and softened growth in food inflation was the key reason for the slowdown. Food price rose +11.2% y/y, decelerated from +13.2% in July. This was mainly driven by the sharp moderation of pork inflation...

Euro Vulnerable Against Dollar and Yen as Risk Aversion Intensifies

Yen remains generally firm as Asian session as deep risk aversion carries forward from US markets. Concerns over coronavirus vaccine development was a major factor weighing on sentiments. Dollar turns softer, digesting yesterday's gains, but remains generally firm. Sterling continues to trade as the weakest one and selloff is...

Risk Aversion Comes Back on Tech Rout, No-Deal Brexit

Risk aversion is back in the markets today. On the one hand, US stocks are set to open sharply lower as they return from holiday. Tech rout is continuing with NASAQ futures down more than -3% at the time of writing. On the other hand, no-deal Brexit worries intensify...

Dollar Firm But No Breakthrough Yet, Except Versus Swiss Franc

Sterling remains generally weaker today, on Brexit concerns. But Swiss Franc is apparently worse for now, dropping through a near term support level against the greenback. On the other hand, Yen and Dollar stay firm in mixed Asian markets. Yen is not too troubled by data that showed deeper...

Pound Decline Accelerates on Brexit Risks, Yen and Dollar Firmer

Sterling's decline gathers some momentum on resurfacing no-deal Brexit risk. The Pound is currently followed by New Zealand Dollar as the second weakest. Canadian Dollar is the third worst performing so far, follow oil price lower. On the other hand, Yen and Dollar and trading firmer today, despite rebound...

Gold Pressured by Better Data, Stronger USD and Yields

Gold price slashed more than 1.8% last week. Reasons for the selloff include better-than-expected US employment report, recovery in US dollar and rebound in Treasury yields. Gold's correction from the peak has lasted for a month with over 6% of loss. More optimistic news about economic recovery and the...