New “Season” of US-China Trade War to Start Soon, Sentiments Weak
Risk aversion Dominates the market today as the world awaits a new "season" in US-China trade war drama. At this point, with Trump's hard line rhetoric, it's very doubt if Chinese Vice Premier Liu He could turn around the situation in his visit to Washington today. New rounds of...
Stocks in Free Fall Again as Trump Vows Not to Back Down on Tariffs
Risk aversion took a breath overnight in the US. But selloff in stock markets intensified again after Trump condemned that China "broke the deal" and pledged "we won't back down" on tariffs. It's so far highly doubtful if Chinese Vice Premier Liu He could turn around the situation in...
Sterling Tumbles on Brexit Impasse Again, Yen Stays Strong
Sterling suffers steep selling today after the UK Government conceded that there will be no Brexit compromise with opposition Labour any time soon. Thus, UK is prepared to participate in European election on May 23. New Zealand Dollar pared back much of the post RBNZ rate cut spike losses....
Decline in Chinese Exports Signals Global Demand Slowdown. Renewed Trade War Forces PBOC to Ease Further
Disappointing trade data in China was mainly driven by the large contraction in exports. Instead of merely bilateral trade conflict between the US and China, the broadly based slowdown in exports to China's major trading partners indicates that global demand is weakening again. Donald Trump's threat of raising tariff...
New Zealand Dollar Tumbles on RBNZ Dovish Rate Cut, Yen Firm as Global Stocks Tumble on Trade War
Yen remains the strongest one for today, extending this week's rally on risk aversion. Following steep decline in the US, Asian markets open broadly lower and stay pressured. Threat of full-blown trade war continues to weigh on investors' sentiments. New round of tariffs on Chinese imports is ready to...
RBNZ Cut Policy Rate to 1.5%, Resuming Rate Cut for the First Time since 2016
For the first time since November 2016, RBNZ lowered the OCR, by +25 bps, to 1.5% in May. At the monetary policy statement, it indicated that “a lower OCR is necessary to support the outlook for employment and inflation consistent with its policy remit”. Some banks, including ANZ and...
Yen and Dollar Take Spotlights on Risk Aversion, Trade War Concerns Stay
Risk aversion remains the dominant theme in the global financial markets on trade war threats. In particular, German 10-year yield turns negative again on safe haven flows. Based on currently available information, the trigger for Trump's escalation was China's pull back on its commitments in the negotiation progress. And...
RBA Left Rate at 1.5%. Pledged to Monitor Job Market
RBA left the cash rate unchanged at 1.5% in May. Yet, the accompanying statement remained dovish, citing sharp deceleration in core inflation, decline in house price and subdued household consumption as key areas of concerns. On the monetary policy outlook, the members would monitor the employment situation closely, as...
The Show of US-China Trade Talks Will Go On Despite Tariff Threats
Markets sentiments stabilized as more information was revealed regarding escalation of US-China trade tensions. The Chinese delegation will still travel to the US, with Vice Premier Liu He remaining as the lead negotiator. While there are still a lot of uncertainties with tariffs threats on, there is a least...
Yen and Dollar Stand Tall on US-China Trade War Threat
Imminent threat of full blown US-China trade war is the dominant theme in the global financial markets today. Chinese stocks were hardest hit, down the most in more than three years. Other Asian markets were generally down while Japan continued to enjoy its ultra-long 10-day holiday. European markets are...
RBNZ Preview – Chance of Rate Cut Increases as Job Market and Inflation Disappoint
The market has priced in over 50% chance that the RBNZ would lower the OCR, by -25 bps, to 1.50% in May. Major economic indicators since the last meeting weakened. In particular, disappointing employment report and inflation in the first quarter appear to have increased the odds of a...
Sentiments Turn Sour as Trump Decides to Escalate US-China Trade War When a Deal is Very Close
Risk sentiments are knocked down heavily in Asia after Trump confused the markets by announcement to push trade war with China to full blown level. Just as investors were told dozens of times by Trump and his administration that both sides were "very close" to a deal, Trump made...
CFTC Commitments of Traders – Precious Metals Seen Broad-based Increase in Long Bets
According to the CFTC Commitments of Traders report for the week ended April 30, NET LENGTH for crude oil futures plunged -23 256 contracts to 524 103 for the week. Speculative long positions fell -6 372 contracts while shorts rose +16 884. For refined oil products, NET LENGTH for...
CFTC Commitments of Traders – Traders Increased Short Bets on World Currencies (Except For USD)
As suggested in the CFTC Commitments of Traders report in the week ended April 30, NET LENGTH in USD Index increased +194 contracts to 28 949. Both speculative long and short positions gained during the week. All other major currencies stayed in NET SHORT positions.
Concerning European currencies, NET SHORT...
Sterling Surged as UK Politicians Could Finally Drop Differences to Deliver Brexit
Sterling was the star winner last week as boosted by renewed hope of a Brexit deal between the government and opposition. Poor results for both Conservatives and Labours are piling pressure on both parties to end the Brexit standoff and drama as soon as possible. In short, Conservatives lost...
Dollar Inaction to Strong NFP, Wage Growth Offsets Strong Job Number
Even though US non-farm payroll report came in much stronger than expected. There is no apparent buying in Dollar as initial reactions. Weaker than expected wage growth seems to be a factor that's capping the greenback's strength. On the other hand, stocks are apparently boosted with DOW futures trading...
Dollar Bulls in Hesitation as Markets Await US Non-Farm Payrolls
Dollar turns mixed in Asian session today as markets turn their focus to non-farm payroll reports from US. The greenback has indeed been regaining grounds this gradually this week. In particular, it's helped by Fed Chair Jerome Powell who talked down the need of rate cut. But buyers are...
BOE Upgraded GDP Growth Outlook, Warned of Faster- than- Expected Rate Hike Path
BOE voted unanimously to leave the Bank rate unchanged at 0.75% and the asset purchase program at 435B pound. As expected, the central bank delivered a slightly more hawkish tone as Brexit was delayed to October 31, temporarily lowering the risk of no-deal Brexit. The members are more upbeat...
BoE Triggers Little Reactions, Forex Markets Staying in Slow Motions
The forex markets are in slow motion today. Major pairs and crosses are bounded inside yesterday's range, with no follow through movement yet. BoE Super Thursday is a high profile event, but triggers no sustainable price actions yet. It's rather hard to react to BoE's new economic projections. Growth...
Dollar Rebounds after Fed Powell Talked Down Rate Cut, Focus Turns to BoE
The forex markets are generally quiet in Asian session today. Major pairs and crosses are bounded inside yesterday's range. Australian and New Zealand Dollars are mildly firmer while Yen and Canadian are the weakest. Dollar rebound overnight after Fed Chair Jerome Powell talked down the chance of a rate...