Stocks Weighed Down By Fed Powell, Yen and Dollar Back in Control
Yen and Dollar are back in control today as Asian markets turned red, following weakness in the US overnight. Fed Chair Jerome Powell's comments somewhat disappointed investors. Australian Dollar weakens in general after data showed record contraction in employment. Though, Sterling is the worst one as it stays pressured...
Unexpected Decline in US Inventory Lent Support to Oil Price
The front-month WTI crude oil contract strengthened to the highest level in more than a month. The WTI-Brent spread also narrowed to the level not seen since March 31. The recovery in WTI crude price was helped by the unexpected decline in US oil inventory. The report from the...
Dollar Dips on PPI, Supported by Fed Powell
Dollar stays generally soft today so far but weakness is relatively limited. Some selling pressure was seen as poor PPI inflation data. But Fed chair Jerome Powell's comments on negative interest rates is giving the greenback a slight pop. For now, New Zealand Dollar remains the worst performing one...
Kiwi Dives after RBNZ, Fed Officials Talk Down Negative Rates
New Zealand Dollar drops broadly today following RBNZ's decision to nearly double the QE program, and indicates its openness to negative rates. Australian Dollar is following as a distant second weakest. The sharp decline in US stocks overnight doesn't carry forward to Asian markets. Other major currencies are relatively...
Dollar Tumbles on Record Core CPI Decline, and Improving Sentiments
Dollar is sold off notably in early US session after data showed record decline in core inflation reading. In the background, sentiments also improved mildly on WHO's "potentially positive data" comments. Following Dollar, Canadian is the second weakest for the day, then Yen. On the other hand, New Zealand...
Aussie Softens on Trade Tensions with China, Loss Limited
Asian markets started with mild risk aversion today but sentiments quickly stabilized. Australian Dollar is pressured after China bans four of its abattoirs, but there is no follow through selling afterwards. While the Aussie is staying soft, it's holding generally above yesterday's low for the moment. Canadian Dollar is...
China’s Inflation Slowed Further in April, Giving Room for Further Easing
Headline CPI eased to +3.3% y/y in April, from +4.3% a month ago. This also marked a two-percentage-point fall from January’s peak. While the major growth driver remained food price, it has been decelerating as the corovavirus outbreak has hurt demand. Food price gained +14.8% y/y last month, easing...
Dollar Rebounds Broadly as Investor Sentiment Turns
Dollar rebounds broadly today as investors turn cautious since European session. Fear of a second wave of coronavirus pandemic is cited by some as a reason for mild risk aversion. US-China tension is another factor named. For now, Swiss Franc is following as the second strongest, then Euro. On...
RBNZ to Maintain Dovish Tone in May, Preparing for QE Expansion
We expect RBNZ to leave its OCR at 0.25% at the May meeting. However, given the prospect of very gradual economic recovery, policymakers would maintain a dovish tone and suggest that further stimulus measures are likely. QE expansion is a likely move. The question is whether it will be...
Yen Tumbles as Markets Return to Risk Appetite
Return to risk appetite is a main theme in the markets as another week starts. Another rate move by China's PBoC support sentiments in general. Yen drops broadly as a result while Canadian and Australian Dollar strengthen. Though, New Zealand Dollar is somewhat under pressure ahead of this week's...
Risk Rally Inconclusive, Dollar Index and Gold Range Bound
Global stock markets somewhat strengthened last week as most countries continued with their coronavirus lockdown exit plan. Yet, with the exception of NASDAQ, major indices were capped below prior week's high. Tensions between US and China remained a major focus. News flows on the topic were confusing. US Trade...
CFTC Commitments of Traders – Traders Trimmed Bets on USD Index Futures amidst Economic Uncertainty
As suggested in the CFTC Commitments of Traders report in the week ended May 5, NET LENGTH in USD Index added +337 contracts to 16 425. Speculative long positions dropped -1 556 contracts and short positions were down -1 893 contracts. Concerning European currencies, NET LENGTH in EUR futures...
CFTC Commitments of Traders – NET LENGTH in Crude Oil Futures Declined after Weeks of Price Recovery
WTI crude oil price continued to recover last week as increase in US inventory decelerated. The market also anticipated that demand would gradually improve amidst signs of stabilization in the coronavirus pandemic. However, caution is still warranted as storage at Cushing, the delivery point of WTI crude oil, is...
Markets Shrug Record Labor Down Turn, Dollar Soft With Yen on Risk Sentiments
Economic data from the US shows the sharpest labor downturn in history due to coronavirus pandemic. Yet, the financial markets have little reactions to the terrible data. US futures are pointing to higher open while European indices are in black. Investors are somewhat relieved by a formal statement by...
What to Expect from CCP’s Two Sessions?
After two months' delay, the long-awaited “two sessions” will be held in two weeks’ time. The National People’s Congress (NPC) is scheduled on May 22 while the Chinese People’s Political Consultative Committee (CPPCC) is scheduled on May 21. The meetings this year have symbolic meaning from the perspective of...
RBA Forecasts Double-Digit Contraction and Unemployment in First Half of the Year
As revealed in the latest Statement of Monetary Policy (SMP), RBA sharply cut economic forecasts for this year. GDP is projected to record double-digit contraction in the first half of the year before recovery in 2021. The unemployment rate could peak at 10%, while inflation could fall the negative...
Dollar Softens on Negative Rate Talks, US-China Trade Deal Made Progress
Dollar turned weaker overnight as markets on talks that Fed could eventually go into negative interest rates. Safe haven flows also continued to recede in generally, with NASDAQ extending recent rebound, even though DOW's rally was still capped. Australian Dollar continues to surge higher, shrugging off RBA's economic projections....
Yen Dips on Higher Stocks and Oil, Dollar Shrugs Job Numbers
Risk sentiments seem to have firm up again today despite rather poor economic data. Major stock indices in Europe are in black while US futures point to higher open. WTI crude oil is also extending recent rebound, with June contract now above 26.2. Commodity currencies are generally higher as...
Sterling Recovers after BoE, Yen Paring Gains
Sterling recovers mildly today after BoE left monetary policy unchanged as widely expected. Two members voted for an increase in asset purchase but that was shrugged off by the markets. Though, Australian Dollar is even stronger for the moment. Yen weakens mildly together with Swiss Franc. But for the...
Crude Oil Price Recovers as US Stockbuild Slowed and OPEC+ Began Output Cut
Crude oil price continued to recover after the collapse two weeks ago. Slowdown in the build-up of oil inventory, hopes of demand improvement, and expectations of demand/supply re-balance as OPEC+ began output cut in May are key driving forces. The report from the US Energy Information Administration (EIA) shows...