Fed Judges Weak Inflation as Transitory, Dismissing Rate Cut Chance
FOMC members decided unanimously to keep the target range for the fed funds rate unchanged at 2.25-2.50%. Meanwhile, the IOER was lowered to 2.35% from 2.4%. The slight change in the accompanying statement showed a more upbeat assessment on the economic developments, despite softening inflation. It was Chair Jerome...
US Crude Oil Inventory Jumped Much More Than Expected, Paring Price Rally on Venezuelan Turmoil
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks surged +12.73 mmb to 1257.33 mmb in the week ended April 26. Crude oil inventory soared +9.93 mmb to 470.57 mmb (consensus: +1.49 mmb). Inventories rose in 3 out...
Dollar Ignores Strong ADP, Drops on Weak ISM, Looks to Fed for Rescue
Economic data released from the US are mixed today. ADP report shows much stronger than expected growth in private sector jobs. However, ISM manufacturing points to deep cool down in the manufacturing sector, with deteriorating new orders, prices and employment. Dollar chooses to react to the negative one and...
Dollar Generally Lower as Markets Await Fed Powell’s Comments on Inflation and Interest Rates
Dollar trades broadly lower in thin holiday market as trades await FOMC rate decision. There is no expectation of a change in interest rate nor Fed's patient stance. But Fed chair Jerome Powell's comments on inflation could make or break recent rally in the greenback. For now, Dollar it's...
Euro Surges as Data Paint Improved Growth and Inflation Outlook
Euro surges broadly today as boosted a series of better than expected economic data. GDP beat market expectations and argue that the slowdown wasn't as worse as expected. In particular, strength was also seen in problematic countries like Italy and Spain. Unemployment rate dropped to lowest in more than...
China PMI Misses Raise Doubt on Recovery, Australian Dollar Turns Soft
S&P 500 and NASDAQ made record highs overnight but sentiments turned around in Asia. Weaker than expected China PMIs raised doubt on the sustainability of the post lunar new year recovery. There is even question on whether slowdown has bottomed. Nevertheless, Chinese stocks remain resilient so far, with Shanghai...
BOE Preview: Looking Through Strong First Quarter, with Focus on Softer Inflation and Prolonged Brexit Uncertainty
Some positive notes are seen in the first quarter, both domestically and globally. Yet, these are neither sufficient not strong enough to alter BOE’s stance in May, the first monetary policy meeting since Brexit was offered an extension until October 31. The central bank is certain to leave its...
Dollar Mildly Higher after Strong Personal Spending, Upside Capped by Cooling Core Inflation
Dollar strengthens mildly in early US session as supported by strong personal spending growth in March. Though, upside is capped by steadily cooling core inflation. For now, today's set of data is not decisive enough to trigger a breakout in the greenback yet. Dollar would likely engage in more...
Markets Steady Ahead of Busy Week With Trade Talks, Fed, BoE, and Heavy Weight Data
The forex markets are rather quiet in Asia, as Japan starts an ultra-long 10-day holiday ahead of Imperial succession. New Zealand and Australian Dollar extends the corrective recovery started late last week, ignoring initial weakness in Chinese stocks. On the other hand, Yen is generally lower, followed by Canadian....
FOMC Preview -Fed to Reiterate Patience Rhetoric Despite Strong First Quarter Growth, Focus on Soft Inflation
Despite the pleasant surprise in the first quarter GDP growth, the Fed would still leave its policy rate unchanged at the upcoming meeting. The Fed funds rate target is expected to stay at 2.25-2.50%. Its forward guidance would stay unchanged, calling for patience in future monetary policy move. At...
CFTC Commitments of Traders – Net Long Positions Rallied as Crude Oil Price Soared to Half-Year Year before Pullback
According to the CFTC Commitments of Traders report for the week ended April 23, NET LENGTH for crude oil futures jumped +32 101 contracts to 557 359 for the week. Speculative long positions roas +28 560 contracts while shorts dropped -3 541. For refined oil products, NET LENGTH for...
CFTC Commitments of Traders – Traders Turned Risk- off in Both Euro and British Pound
As suggested in the CFTC Commitments of Traders report in the week ended April 23, NET LENGTH in USD Index decreased -183 contracts to 28 755. Both speculative long and short positions gained during the week. Yet, the latter slightly pervailed. All other major currencies stayed in NET SHORT...
Worsening Inflation, Dovish Central Banks and Falling Treasury Yields
Yen and Dollar were the biggest winners last week on worsening inflation outlook, dovish central banks and falling treasury yields. Australian Dollar was the weakest one as CPI just rose 1.3% yoy in Q1 versus expectation of 1.5% yoy. The added heavy weight to the case of RBA rate...
Strong US GDP With Weak Details Send Dollar Lower, 10-Yr Yield Breaks 2.5
Dollar spikes higher in early US session as Q1 GDP grew much more than market expectations. However, the greenback quickly pulled back as details are seen as much weaker than the headline number suggests. It's actually a set of data welcome by stock traders as Fed will likely stay...
Dollar and Yen Pare Gains as Focus Turns to US Q1 GDP
Commodity currencies recover broadly in Asian session as risk markets somewhat stabilized. US stocks closed mixed with DOW paring much of initial losses overnight. New Zealand Dollar is additional supported by record exports in March, and helps lift Australian too. Yen is the weakest so far for today, followed...
Strong Durable Goods Fail to Boost Dollar, Yen Taking the Driving Seat
Yen takes the driving seat from Dollar today as markets could be turning into risk averse mode. The greenback is still firm and remains the second strongest for the week. But strong US durable goods orders is not giving it enough boost to extend this week's rally. On the...
Dollar Surges on Flight to Quality Flows, EUR/USD Breaks Key Support
It appears that the global economy is now running at two different speed. US is maintaining firm momentum despite all the uncertainties and slowdown elsewhere. Strong corporate earnings provide evidence on underlying resilience. While global central banks are turning cautious or even dovish, there is little pressure for Fed...
BOC Erases Rate Hike Possibility in Near- to Medium- Term
BOC sent a mixed message in its April meeting. As shown in the accompanying statement, it has turned more dovish as it removed any chance of rate hike in the near- to medium- term. The central bank downgraded GDP growth forecast, both domestically and globally. It also lowered the...
US Crude Oil Inventory Increased Four Times More than Expected
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks surged +8.82 mmb to 1244.6 mmb in the week ended April 19. Crude oil inventory soared +5.48 mmb to 460.63 mmb (consensus: +1.26 mmb). Inventories rose in 4 out...
Euro Weakens as German 10-Year Yield Threatens to Turn Negative, Swiss Franc Rebound
Swiss Franc regains much ground today in mixed financial markets. Optimism over US corporate earnings had virtually no impact in Asian and European markets. Instead, European stocks turned mixed after German Ifo business confidence turned south again after brief recovery last month. German 10-year yield also suffers rather steep...