BOC Pledges to Continue with Easing Until Inflation Returned to +2% Sustainably.
As widely anticipated, BOC maintained both the policy rate and all the asset purchases programs unchanged at the July meeting. While acknowledged positive economic developments since the last meeting, policymakers cautioned that the economy’s recuperation will be slow and pledged to maintain the ultra accommodative monetary policy. They took...
Crude Oil Prices Firm in Sharp Fall in US Inventory and Better Demand Outlook. Upside Limited as OPEC+ to Raise Output
Crude oil prices climbed higher on more upbeat demand outlook and huge decline in US inventory. However, the upside would likely be limited as OPEC+ is prone to taper output cut, by 2M bpr, to 7.7M bpd from August. In the latest energy reports, all three major agencies revised...
Coronavirus Vaccine Hopes Prompt Full Risk-On, Dollar and Swiss Franc Dive
Markets are in strong risk-on mode again on coronavirus vaccine hopes. Moderna group said earlier that the vaccine candidate produced a robust immune system response in a large group of people. Next will be a decisive clinical trial in July. Major indices in Asia and Europe record strong gains,...
Dollar Tumbles as Fed Stimulus Hope Boosts Risk-On Trades
Risk-on trades dominated the US markets overnight, as Fed officials indicated the willingness to keep accommodative measures in place. Yet, sentiments turned mixed in Asian markets. Hong Kong and Chinese stocks are weighed down by US President Donald Trump's decision to end Hong Kong's special status, after China imposed...
Euro Surges in Indecisive Markets, Sterling Stays Weak
Risk sentiments continues to be weak today but selloff in the stock markets is so far limited. Euro rides on the indecisive markets and surges broadly today, with help by strong rally against Sterling. Swiss Franc is following as the second strongest so far. On the other hand, New...
Sentiments Turning on Lockdown Concerns, Sterling Down on Weak GDP Rebound
Sentiments seemed to have a turn as surge of coronavirus cases in the US pushed California back into lockdown. Asian markets are under some selling pressure. But the more indicative development was the sharp -2.13% decline in NASDAQ overnight. It remains to be seen if tech index is finally...
ECB Preview – Sounding Cautiously Optimistic on Economic Recovery
After the big move in June, ECB is likely to keep its powder this month. At this week’s meeting, we expect the central bank to acknowledge the improvement in economic activities, mainly driven by consumption. However, the members will remain cautious, highlighting the high uncertainty and downside risks to...
Yen Down Further on Risk Appetite, Sterling Also Weak
Risk appetite is generally firm today with European indices trading in black while US stocks also open higher. Rebound in oil prices help push Canadian Dollar to be the strongest one today, followed by Australian. On the other hand, Yen and Swiss Franc are generally weakest. Though, it's a...
BOC to Turn More Upbeat about Economic Recovery, While Caution about Uncertainty and Keep Monetary Policy Unchanged.
At the BOC meeting this week, we expect new Governor Tiff Macklem to continue Stephen Poloz’s legacy and leave the policy rate unchanged at 0.25%, the effective lower bound. The asset purchases programs (QE) will also be maintained. Canada’s reopening since the June meeting has largely been smooth. Economic...
Risk-On in Asia, Dollar and Yen Weaken Again
Asian markets open the week with risk-on sentiments, carrying forward the optimism over coronavirus treatment. Dollar and Yen are back under pressure again while Australian Dollar, Euro and Sterling are trading generally higher. Gold also firms up above 1800 handle, riding on Dollar's softness. The economic calendar is rather...
Weekly Report: Coronavirus Drove Markets, Second Wave Concern Offset by Treatment Optimism
Development of coronavirus pandemic was the main driver in rather dull markets last week. Just when it looked like risk-off was back on second wave of infections, markets were saved by news from Gilead Sciences regarding the test results on redmesivir. NASDAQ has extended its record run, helping treasury...
CFTC Commitments of Traders – Traders Bet Euro and Sterling to Go Higher
As suggested in the CFTC Commitments of Traders report in the week ended July 7, NET SHORT for USD Index futures slipped -36 to 4 939 contracts. Speculative long positions increased +2 324 contracts and short positions gained +2 288 contracts. Bets increased on both sides. Yet, traders were...
CFTC Commitments of Traders – Bets on Crude Oil Trimmed on Renewed Inventory Build-Up
According to the CFTC Commitments of Traders report for the week ended July 7, NET LENGTH for crude oil futures plunged -17 850 contracts to 686 543 for the week. Speculative long positions fell -17 850 contracts while shorts dropped -9 341 contracts. For refined oil products, NET LENGTH...
Yen Staying Firm But Risk Markets Refuse to Give Up
The financial markets are still refusing to commit to a direction. Major European stocks are generally higher despite broad selloff in Asia. US futures point to lower open while 10-year yield is doing its best to hold on to 0.6% handle. Swiss Franc is currently the worst performing one...
Aussie Tumbles on Coronavirus Spike, Yen Flies on Risk Aversion
Yen surges broadly today as the financial markets are back in risk-off mode. Or at least, rally in Chinese stocks is having a pause. Investors some what turned cautious ahead of the week. US Secretary of State Mike Pompeo announced sanctions on some Chinese officials, including a Politburo member,...
BOJ Preview: Maintaining Negative Rates and QE, while Downgrading Economic Forecasts
While we expect BOJ to maintain all of its monetary policy measures unchanged, the central bank would likely downgrade the economic forecasts for FY2020. BOJ’s Tankan survey revealed that companies of all sectors were worse off in 2Q20, sending the sentiment to the weakest level since global financial crisis...
Sterling Continues to Shine While Stocks Take a Breather
Sterling continues to trade as the strongest one on stimulus optimism while Europe majors are also firm. On the other hand, Dollar remains the weakest one, even worse than Japanese Yen. Stock market rally might take a breath again today with US futures pointing to flat open. Major European...
China CPI Picked Up Due to Temporary Food Price Increase, Unlikely Derail Easing Monetary Policy Stance
Headline CPI improved further to +2.5% y/y in June, from +2.4% a month ago. This came in line with market expectations Core CPI (excluding food and energy) eased to +0.9% y/y, from +1.1% in May. While staying in the negative territory, PPI improved to -3% y/y in June, up...
Dollar Selloff Resumes as Euro Powers Up
Dollar is sold off broadly while Yen is following as the second weakest. Sentiments are apparently lifted by stimulus hopes despite surge in global coronavirus cases. European majors are leading the way higher, with Sterling having a touch more strength. Commodity currencies, on the other hand, somewhat lag behind....
Upside in Crude Oil Prices Limited: OPEC+ Cut Prone to Ease Next Month while US Inventory Gained on Imports
The rise in oil prices paused while hovering at recent highs. While there are signs that OPEC+ has cut output more than promised, the increase in US inventory has again raised concerns about oversupply. S&P's survey suggests that OPEC-10 as a whole reduced output aggressively in June. The aggregate...