RBA Preview – Keeping Expansionary Policy Stance with Focus on 3-Year Yield
We expect RBA would leave the monetary policy unchanged in September. Since March, RBA has been adopting a number of measures to lower the borrowing costs and provide liquidity to the market. These include keeping the cash rate at record low of 0.25%, targeting 3- year government bond yield...
CFTC Commitments of Traders – NET LENGTH in Crude Oil and Gold Fell, while that in Natural Gas Climbed Higher
All commodity futures under our coverage were in net speculative long positions last week. NET LENGTH in natural gas futures rose the most as hurricane Laura had raised concerns about supply, outweighing demand worries. NET LENGTH in crude oil futures declined, although price slowly climbed higher. Gold's NET LENGTH...
CFTC Commitments of Traders – More Downside on USD following Fed’s Dovish Policy Outlook
As suggested in the CFTC Commitments of Traders report in the week ended August 25, NET SHORT for USD Index futures added +258 to 7 773 contracts. Speculative long positions declined -5 005 contracts and short positions fell -4 747 contracts. There can be more downside to greenback. Fed...
Dollar Shrugs Income and Spending Report, Selloff Continues
Fed chair Jerome Powell inspired a fresh round of Dollar selloff which his Jackson Hole speech, which carries on to today. Stronger than expected personal income and spending, as well as core inflation reading provide little support. Though, for now, the decline appears to be mainly centered against commodity...
Yen Down on Surging Yield, Rebounds on Abe Resignation Talks
Dollar spiked lower overnight after quickly stabilized, as supported by surge in treasury yields. Fed Chair Jerome Powell announced that adoption of "average inflation targeting". That goes beyond the "symmetric" targeting, and allows inflation to overshoot to average out at 2% over time. While there was some initial jitters...
Powell Announced Dovish Shift to Fed’s Monetary Policy, Targeting Averaging Inflation and shortfall of Maximum Employment
At the annual Jackson Hole Symposium, Fed Chair Powell briefed the market on the results of the Fed's strategic review of its monetary policy strategy. Powell announced the new approach to deal with price stability and maximum employment, the dual mandate of the Fed monetary policy. The Fed will...
Dollar Tumbles as Fed Adopts Average Inflation Targeting to Allow Inflation Overshoot
Dollar appears to have finally taken a side, the downside, with Fed chair Jerome Powell's Jackson Hole speech. In short, Fed is now adopting a "flexible form of average inflation targeting", to achieve inflation that "averages 2 percent over time". Therefore, following periods when inflation has been running below...
Dollar Softer in Mixed Markets, No Decisive Selling Yet
Markets continue to be rather mixed as investors are awaiting Fed Chair Jerome Powell's speech at the Jackson Hole symposium. S&P 500 and NASDAQ surged strongly overnight to new record highs. But Asian markets are mixed, with weakness seen in Japan, Hong Kong and Singapore. Dollar weakens broadly today...
WTI-Brent Spread Narrowed on Hurricane and Inventory Draw
Crude oil prices firmed with WTI-Brent spread narrowing slightly on Wednesday. Hurricane Laura, now a catastrophic Category 4 hurricane, is expected to an “unsurvivable storm surge,” extreme winds and flash floods over Eastern Texas and Louisiana. This could likely cause damage in oil production facilities in Gulf Coast. Meanwhile,...
Dollar Surges on Strong Durable Goods Orders, Gold Tumbles
Dollar surges broadly in early US session in response to much better than expected durable goods order data. Yet, it's actually still held well below near term resistance level to confirm bottoming. Gold's decline is a positive sign for the greenback and we'll see if there is following buying....
Factors Supporting Gold Price Remain as ETFs Add Holdings and Low Yields Persist
Gold price has corrected about -7% over the past weeks, after making a record high of US$ 2060/oz earlier in the month. While further weakness appears likely, we remain bullish on the yellow metal as factors driving its price higher, e.g. low yields, expansionary monetary policy, etc, remain intact....
Range Trading Continues With Eyes on Gold, Oil and Yields
The forex markets continue to stay in rather tight range today, shrugging off strong movements in the stock markets. Yen is generally soft but there is no sign of breakout yet. Similarly, Dollar is also struggling to find a clear direction, staying as the second weakest for the week...
Euro Rises on German Data, Yen Tumbles Broadly
European majors, as well as stock indices, are boosted by better than expected Germany business sentiments, as well as small than expected Q2 GDP contraction. There were talks that investors welcomed the US-China trade phone calls. But judging from the decline in China and Hong Kong stocks, that might...
Fiscal Stalemate to Lead to More Fed Stimulus and Further USD Weakness
We expect US dollar's downtrend to resume downtrend in coming months after consolidation. Fiscal stalemate suggests that the Fed would shoulder more burdens in delivering stimulus. This should lead yields to decline further, supporting weakness in the greenback.
Stalled Hopes on Fiscal Stimulus
Failure to strike a deal on a new...
S&P 500 Hit Record, Forex Markets Yawn in Range
Coronavirus vaccine optimism sent US stocks to record high overnight but the positive sentiments are not carried forward to Asia. The forex markets are also treading water, with major pairs and crosses stuck inside last week's range. US and Canadian Dollars are the relatively weaker ones while European majors...
Vaccine Hopes Boost Sentiments, Dollar and Yen Down
Global markets surge broadly today on more optimism on coronavirus treatment. S&P 500 and NASDAQ are both set to extend recent record runs. Yen and Dollar are back under some selling pressure, but New Zealand Dollar is not far away. On the other hand, Australian Dollar is currently the...
Kiwi Lower as Lockdown Extends, Dollar Mixed Awaiting Jackson Hole
Canadian and Australian Dollar trade generally higher today, following mild strength in Asian stocks. But New Zealand Dollar diverges from them as the country extends lockdown of Auckland until Sunday night. Following Kiwi, Swiss Franc and Yen are the next weakest in risk-on markets. Dollar is mixed and could...
Euro Tumbled as Optimistic Investors Reassess Outlook, Turning Around?
Euro ended as the worst performing one last week as investors could have started to reassess the economic outlook. As ECB meeting accounts pointed out, recent positive market developments were "not fully backed by economic data". Indeed, they might be based on "overly optimistic expectations" about the Next Generation...
CFTC Commitments of Traders – Bets on Crude Oil and Gold Continued to Drop
According to the CFTC Commitments of Traders report for the week ended August 18, NET LENGTH for crude oil futures declined -10 240 contracts to 510 695 for the week. Speculative long position fell -17 242 contracts, while dropped -7 002. For refined oil products, NET LENGTH for gasoline...
CFTC Commitments of Traders- Trades Trimmed on EUR while Sentiment on CAD Remained Weak
As suggested in the CFTC Commitments of Traders report in the week ended August 18, NET SHORT for USD Index futures slipped -667 to 7 515 contracts. Speculative long positions added +337 contracts and short positions were down -330 contracts. It is possible for further decline in NET SHORT...