OPEC+ Deal on Output Cut Unlikely Helps Reduce Surplus. Downside Risk on Oil Price Remains
OPEC+ eventually agreed on a final deal to reduce oil production by -10M bpd. Despite the significant headline figure, the effective cut is much lower. Actual output cut, late start and compliance issues suggest that the deal should not offer much help to the demand/supply balance in the oil...
CFTC Commitments of Traders – Bets on US Dollar Trimmed while Increased in Safe Haven Currencies
As suggested in the CFTC Commitments of Traders report in the week ended April 7, NET LENGTH in USD Index added +959 contracts to 15 014. Traders trimmed bets on both side as the market awaited more stimulus from the Fed. Speculative long positions dropped -134 contracts and short...
CFTC Commitments of Traders – Recovery on Oil Prices Fades on Failure to Agree on Coordinated Output Cut
According to the CFTC Commitments of Traders report for the week ended April 7, NET LENGTH for crude oil futures surged + 49 787 contracts to 484 895 for the week. Speculative long positions jumped +31 374 contracts while shorts declined -18 413 contracts. Crude oil price recovered from...
Moderation in China’s CPI Allows Government to Accelerate Stimulus
Inflation in China eased in March. Headline CPI slowed to +4.3% y/y in March, from a 8-year high of 5.2% in the prior month. The market had anticipated moderation to +4.8%. From a month ago, inflation contracted -4.6%, compared with a +9% gain in February.
Both food and non-food prices...
Dollar and Loonie Pressured after Poor Job Data
Canadian and US Dollars are both trading as the weakest ones today, after release of job data. US initial claims stood over 6m level for the second week while Canada lost more than 1m jobs in March. Meanwhile, Australian Dollar is trading as the strongest one, following higher stock...
Markets Steady Without Sustained Risk Buying, Aussie Remains Firm
Markets are steadily mixed in Asian session today. US stocks rose notably overnight but major indices actually closed below Tuesday's highs. No apparent follow through risk-on in seen in Asia too. Overall, Yen and Dollar remain the weakest ones for the week. Australian Dollar leads commodity currencies higher. Major...
FOMC Minutes Revealed Rationale for Emergency Cuts and QE Inifinity
As noted in the FOMC minutes for the March emergency meeting, the members agreed that economic situation has "deteriorated sharply" in light of the coronavirus pandemic. They were also in "strong support" of the measures to facilitate the flow of credit to households and businesses. Despite the consensus that...
US Crude Oil Inventory Made the Biggest Increase Since 2017
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks surged +21.04 mmb to 1286.82 mmb in the week ended April 3. Crude oil inventory soared +15.18 mmb (consensus: +9.27 mmb) to 484.37 mmb. Stockpile rose in ALL PADDs....
Euro and European Stocks Soften as EU Fails to Agree on Coronavirus Rescue
Global markets lack a clear direction today. European stocks are generally lower for the moment after EU failed to agree on coronavirus rescue stimulus. But US futures point to higher open. In the currency markets, Sterling is the strongest one for now as Prime Minister Boris Johnson is said...
Dollar Recovers as Risk Rebound Lost Steam, Aussie Lower after Rating Outlook Downgrade
Dollar recovers mildly today as stock rebound somewhat lost momentum. In particular, DOW closed lower after gaining nearly 1000 pts overnight. Asian markets turned mixed despite rally in Nikkei. Investors could be awaiting the results of OPEC++ decision on production cuts before taking another move. Yen is following Dollar...
Dollar Selloff Extends as Stock Rebound Gathers Momentum
Global stock market rebound continues today on optimism the world is finally seeing the coronavirus curve flattening. As US futures point to another day of high open, current rebound is starting to look sustainable. In the currency markets, Australian Dollar continues to lead the way higher, followed by New...
Aussie Gained as RBA Hinted the Possibility of Easing the Pace of QE
As widely anticipated, RBA left the cash rate unchanged at 0.25% in April. This is following two emergency rate cuts (50 bps in total) a month ago. The central bank pledged to maintain the stimulus measures announced last month for combating the coronavirus pandemic. Aussie gained after the announcement...
Aussie Follows Stocks Higher, While RBA Stands Pat
Australian dollar jumps broadly today after RBA kept monetary policies unchanged as widely expected. Aussie is additionally helped by the strong rally in US stocks overnight, even though the rise in Asia markets is relatively muted. Also, China, the origin of the coronavirus pandemic, is set to end the...
Stocks Rebound as Germany Prepares Lockdown Exit But Japan Readies State of Emergency
Global stocks strength in general as major coronavirus epicenters seem to be starting to flatten the curve. It's reported that Germany is even planning for lockdown exit. However, it remains uncertain when this coronavirus pandemic is going to end, and the world would return to normal. Risk in second...
Markets Recover Mildly as Coronavirus Deaths Slow, But Sterling Weak
Asian markets are trading up mildly as the week starts, after coronavirus deaths in New York State fell for the first time. Italy also reported the fewest deaths in more than two weeks. However, investors remain cautious as it's still almost impossible to forecast the full impact of the...
Dollar Jumped as Markets Started Q2 With Risk Aversion, But Oil Rebounded
The financial markets didn't start the second quarter with a bang even though coronavirus pandemic carried on. Globally, confirmed cases surged through 1.1m level but that's now more of an indication of the speed of tests. Death toll, on the other hand, remains worrying as it broke 60k handle...
CFTC Commitments of Traders – Bet on Higher Euro should Fade as Data in Eurozone Disappoint
As suggested in the CFTC Commitments of Traders report in the week ended March 31, NET LENGTH in USD Index gained +1 545 contracts to 14 065. Speculative long positions added +496 contracts and short positions dropped -1 049 contracts. Concerning European currencies, NET LENGTH in EUR futures jumped...
CFTC Commitments of Traders – Bets on Higher Oil Price Could Increase Temporary on Output Cut Speculations
According to the CFTC Commitments of Traders report for the week ended March 31, NET LENGTH for crude oil futures dropped -905 contracts to 435 108 for the week. Speculative long positions rose +46 031 contracts while shorts jumped +46 936 contracts. Bets for higher crude oil prices could...
Dollar Remains Firm, Markets Unmoved by Scary NFP
While the US continues to post scary job numbers, the markets couldn't care less. Investors know the numbers would be bad and it doesn't matter how bad they are. The point is, there has to be an end to the coronavirus pandemic, which originated from China. Otherwise, the economy...
Oil Rally likely Short-lived as Coordinated Output Cut Could Take Long to Materialize
Crude oil prices rebounded yesterday, on speculations that Saudi Arabia and Russia might agree to cut output. Donald Trump noted on Twitter that he expects that Saudi Arabia and Russia will reduce oil production by “approximately 10M bpd, and maybe substantially more which, if it happens, will be GREAT...