Sentiments Lifted as US-China Trade Talk Will Resume Next Month, Yen Weakens
Asian markets are generally lifted by confirmation that US-China trade talk is going to resume next month. Commodity currencies gain most as led by Australian Dollar. Swiss Franc and Yen are pressured in risk seeking environment naturally. But Sterling also turns softer on overnight condition. It's getting much more...
BOC Sounds Less Dovish than Expected, as Housing Market and Wage Growth Improve
BOC left the policy rate unchanged at1.75%. Policymakers’ monetary policy stance was less dovish than previously anticipated. While showing more concerns about US-China trade war and downplaying GDP growth in the second quarter, the members described the current monetary policy as appropriate. They also appeared upbeat about the situation...
Yen Lower on Return of Risk Appetite, Sterling Support by Hope of No No-Deal Brexit
Yen drops broadly today, as stock markets rally on supposed easing tension in Hong Kong. After more than two months of continuing protests, Hong Kong leader Carrie Lam finally announced withdrawal of the controversial extradition bill today. HSI closed up 3.9% on rumors leading to the announcement while HK...
Brexit Update – MPs Move to Pass a Bill to Reject No Deal Brexit
The Brexit drama continues. The bill that allows MPs to take over the parliamentary business on September 4 was passed with a 328-301 vote. This has paved the way for debate on whether MPs reject a “no-deal” Brexit. This motion proposes that PM Boris Johnson would have to seek...
Australian Dollar Rebounds on GDP and Services, Sterling also Recovers
Australian Dollar rebounds notably today as GDP data met market expectations while services data showed improvement. Though, upside is capped so far as RBA is still on track to another rate cut later in the year. Sterling is the second strongest after lawmakers cleared a hurdle to block no-deal...
Sterling Stays Pressured on Brexit, Canadian Dollar Pressured Too
Sterling and UK treasury are the major focuses today as all eyes are on Brexit again. UK Prime Minister Boris Johnson has indicated that he will call an election on October if the MP's bill to seize control of the Commons timetable to force Brexit delay is passed. The...
RBA Left Rate Unchanged, More Flexible on Future Policy Decision
As expected, RBA left the cash rate unchanged at 1% in September. The accompany gin statement is largely unchanged from the previous one. RBA has not made any hints about a rate cut next month. Policymakers might want to take more time to observe after seeing positive signs from...
Sterling Selloff Continues on UK Politics, GBP/USD Breaks 1.2
Sterling's selloff continues today as UK is entering into two crucial days regarding Brexit, and general election cold be called. Euro also follows as the second weakest on ECB easing expectations. On the other hand, Dollar is the strongest one as markets are awaiting more news on US-China trade...
Sterling Tumbles on Poor Manufacturing Data and Political Uncertainties
Sterling drops sharply today as after poor manufacturing data. Also, political and Brexit uncertainties remain in UK. There are "very strong" rumors that a general election could be called this week that could take place before Brexit date of October 31. Australian Dollar follows as the second weakest for...
Dollar and Yen Mildly Higher as Markets Shrug New US-China Tariffs
Dollar and Yen firm up mildly in Asian session as markets started the month mixed. New round of US-China tariffs took effect over the weekend but market reactions are muted so far. Australian Dollar softens mildly, followed by Swiss Franc and then Sterling. But overall, major forex pairs and...
RBA Preview – Staying Put before Further Easing
Although the market generally expects RBA to leave the cash rate unchanged at 1% this week, the chance of a surprise cut is not negligible. Despite mild pickup in confidence after the back-to back rate cuts in June and July, risks to economic outlook remains to the downside. Policymakers...
CFTC Commitments of Traders – Long Bets Increased for Safe Haven Currencies
As suggested in the CFTC Commitments of Traders report in the week ended August 27, NET LENGTH in USD Index added +398 contracts to 29 897. Speculative long positions dropped -961 contracts while short positions fell -1 359 contracts during the week. Traders trimmed bets on the greenback. Concerning...
CFTC Commitments of Traders – Bets for Higher Crude Oil Prices Trimmed amidst Recession Concerns
According to the CFTC Commitments of Traders report for the week ended August 20, NET LENGTH for crude oil futures slumped -22 985 contracts to 391 650 for the week. Speculative long positions declined -15 504 contracts and shorts gained +7 481 contracts. As we mentioned in our previous...
EUR/USD Resumed Down Trend as Dollar Surged after China Backed Down on Tariff Escalations
Dollar ended as the strongest major currency last week, largely thanks to late buying before weekly close. It remains to be proved whether that was due to month end flows. But somewhat receding risk of US-China decoupling and expectations of aggressive Fed cut could have provided some help too....
Canadian Dollar Higher on Solid GDP, Dollar Shrugs PCE Inflation
Markets turned a bit mixed as month end approaches. European stocks are generally higher while DOW up over 100pts at open. Meanwhile, treasury yields are steady tough, with German 10-year yield slightly lower, but US 10-year yield is recovering. In the currency markets, Canadian Dollar is notably stronger after...
Japan’s Consumption Tax Hike Unlikely to Help Inflation Much
japan's inflation has stayed very weak. Despite hopes that the upcoming increase in consumption tax could boost the general price levels, the impact this time is likely limited.
Tokyo CPI signals that Japan’s inflation outlook remains dismal.Although consumption tax hike in October might boost inflation, the impact is expected to...
Markets Cautious as Hong Kong Tensions Overshadow Trade Optimism
Asian markets opened higher earlier today following the strong close in US markets. China appeared to be backing down on further tariff retaliation, and there's hope for continuation in US-China trade negotiation. But sentiments turned sour quickly on escalating tensions in Hong Kong.
Two prominent activists in HK are arrested...
Stocks Rebound as China Backs Down on Tariff Escalation, Dollar Mixed
Stock markets stage a strong rebound today after China appears to be backing down from its hard line stance in trade war with US. Yen and Swiss Franc turn soft while commodity currency regain reverse earlier losses. Euro is also weak despite improvement in confidence indicators. Sterling remains mixed...
New Zealand Dollar Leads Commodity Currencies Lower, Yen and Franc Firm
Commodity currencies remain generally pressured on risk aversion today. In particular, New Zealand Dollar is weighed down by poor business confidence data. Australian is not much better after contraction in private capital spending. On the other hand, Yen and Swiss Franc are strongest on falling stocks and treasury yields....
BOC Prepares for Insurance Rate Cut
Global economic slowdown, escalations of US- China trade war and further Fed funds rate cut have heightened speculations that BOC would have to lower its policy rate in coming months. We agree on this assessment but expect that the insurance cut would come in October.
US- China trade war has...