Dollar Softer as Fed Powell Points to New Events, But No Downside Breakout
Dollar weakens mildly after the rather uninspiring speech of Fed Chair Jerome Powell. The highly anticipated is slightly on the dovish side as Powell mentioned a number of new "events after July's rate cut. Though, sell off in the greenback is rather limited. For the week, Sterling remains the...
Trade War, Not Protests, is Key Reason For Slowdown. USDHKD Peg Not at Risk
Ongoing massive protests in Hong Kong against extradition to China have raised concerns about a rapid deterioration in the city’s economy and, more importantly, the collapse of the HKD-USD linked exchange rate system (LERS). This report suggests that the major reason for growth slowdown in Hong Kong is its...
Dollar Firms Up as Markets Await Fed Chair Powell’s Jackson Hole Speech
Sterling pares back some gains in Asian session today, but remains the strongest one for the week. It's lifted by hope that an Irish border solution could finally be reached before October 31 to avoid no deal Brexit. Dollar is generally firmer and it's trading as the second strongest...
Sterling Jumps on German Merkel’s Comments on Irish Backstop
Sterling rebounds strongly after German Chancellor Angela Merkel expressed her optimism that Irish border backstop solution could be achieved before Brexit date. The Pound is currently the strongest one, followed by Canadian Dollar. On the other hand, cautious risk sentiments keep Australian and New Zealand Dollar as the weakest....
Dollar Supported by FOMC Minutes, Aussie Tumbles on Poor PMIs
Yen and Swiss Franc attempt for rally again today as risk sentiments turned cautious. Dollar is also mildly firmer after FOMC minutes reaffirmed that last month's rate cut was just a mid-cycle adjustment. Though, upside in the greenback is capped so far as Fed Chair Jerome Powell's Jackson Hole...
US Crude Oil Inventory Resumed Decline
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks soared +4 mmb to 1315.23 mmb in the week ended August 16. Crude oil inventory declined -2.73mmb to 437.78 mmb (consensus: -1.89 mmb). Inventories decreased in 3 out of...
FOMC Minutes Explained the Rationale for Precautionary Rate Cut. Further Reduction Likely in Coming Months
The FOMC minutes for the July meeting explained that the key reasons for the rate cut are slowdown in global economic outlook and subdued US inflation. An insurance reduction was needed to prevent these factors from dragging US economy. Yet, the decision to lower the Fed funds rate, by...
Canadian Dollar Jumps on CPI, Risk Appetite Lifted by Fed Expectations
Canadian Dollar jumps broadly in early US session after stronger than expected consumer inflation data. Australian Dollar follows as the second strongest, with help from risk appetite since European session. Fed Kashkari's push for forward guidance raises expectation that Fed will keep rates low for longer. Yen and Swiss...
Markets in Consolidation, But Risk Aversion Ready to Come Back Soon
Directions in the forex markets are not very clear for now as consolidations continued. There were lots of reasons for a move but traders remained generally cautious. The US is stepping up its hardline rhetoric on China, and prompted some worries of RBA Governor. Italy is in political turmoil...
Sterling Falls after Brexit Comments from UK and EU, Yen Rises Broadly
Sterling drops broadly today as comments from UK and EU suggested that there is no compromise on Brexit any time soon. Euro is also pressured as German is back pressing -0.7 handle. Yen jumps again and is trading as the strongest one with fading risk appetite. Aussie follows after...
Australian Dollar Mildly Higher after RBA Minutes, But No Follow Through Buying Seen
Asian markets opened higher earlier today, following another day of strong rebound in the US overnight. But buying lost momentum entering into European session. Australian Dollar is currently the strongest one for today as RBA minutes indicates the central bank will stand pat in September first. New Zealand Dollar...
RBA Minutes Indicates Data- Dependence in Future Policy. Further Rate Cuts Likely Given Limited Decline in Unemployment Rate
RBA’s minutes for the August meeting indicated that future monetary policy action would be data-dependent. While acknowledging some improvements in the economic developments after the two consecutive rate cuts, spare capacity in the labor market remained significant. The country’s unemployment rate would stay above the longer-term target for some...
Risk Appetite Coming Back on Huawei Reprieve and Stimulus Talks
Global markets stage a strong rebound today with help from talk of global stimulus. China has already indicated that it will reform rate system to lower lending cost. There were also talks that Germany is considering stimulus measures. Markets response well to US decision to delay Huawei sanctions for...
Risk Appetite Lifted by PBoC Reform, But Forex Markets Shrug
Risk appetite is striking a come back as another week starts, lifted by China's measure to lower lending rates. Though, the response in the currency markets is rather muted. For the moment, major pairs and crosses are stuck inside Friday's range. Dollar and Euro and the firmer ones while...
An Important Week for EUR/USD as Fed and ECB Easing Expectations Built
Euro ended last week as the weakest one as comments from a top ECB official suggested a forceful easing package to be announced in September. Additionally recession fear in Germany sent 10-year bund yield to new record low. New Zealand Dollar followed as the second weakest on dovish RBNZ...
CFTC Commitments of Traders – Long Bets Trimmed on Gold and Silver Futures
Energy prices remained under pressure as US- China trade re-escalates. According to the CFTC Commitments of Traders report for the week ended August 13, NET LENGTH for crude oil futures increased +6 503 contracts to 382 144 for the week. Speculative long positions gained +6 116 contracts and shorts...
CFTC Commitments of Traders – NET LENGTH for JPY Rose as Sentiment in Rick- Off Mode
As suggested in the CFTC Commitments of Traders report in the week ended August 13, NET LENGTH in USD Index declined -1 487 contracts to 29 842. Speculative long positions dropped -1 457 contracts while short positions added +30 contracts during the week. Concerning European currencies, NET SHORT for...
Euro Selloff Continues as German 10-Year Yield Hits Another Record Low Below -0.7%
Selloff in Euro picks up momentum again today as Germany yields dive on ECB easing expectations. Swiss Franc is also pressured as SNB could sometime be forced to intervene. Yen is the third weakest, following rebound in stocks rather than falling yields. On the other hand, Sterling recovers broadly,...
Dollar Mildly Higher as Sentiments Stablized, Yields Remain Pressured
Asian markets turned mixed after US stocks stabilized overnight. Treasury yields remain pressured though, as 10-year JGB yield hit the lowest level since 2016. In the currency markets, Dollar strengthens mildly today after a Fed dove dismissed an emergency rate cut. Though, Australian Dollar is the strongest one. On...
Euro Dives on German Yield, Dollar and Pound Supported by Retail Sales
The global financial markets turned a bit mixed today even though risk aversion remains the underlying theme. European stocks are generally lower while US stocks recovers, turning into consolidations. Comments from China suggests that retaliation is still underway despite delay of part of the new US tariffs. Germany 10-year...