RBA More Concerned about Housing Markets, Disinflation Likely Keeps Policy Rate Unchanged for 2019
As widely expected, RBA left the cash rate unchanged at 1.5% for the 26th consecutive meeting. The accompanying statement contained little new information. Yet, it revealed that the members were dovish about the housing market. Meanwhile, disinflation in Australian economy should likely lead the central bank to keep its...
US-China Trade Ceasefire: Too Early to be Relieved
We remain cautious over the 90-day ceasefire on US- China trade dispute. Over the weekend, the US agrees to postpone raising tariff on US$200B worth of Chinese goods from 10% to 25%. In return, China would buy significant amount of US goods within agriculture, energy and industry products. Meanwhile,...
Sentiments Supported by Trade Truce, But Sterling Down on Renewed Brexit Worries
The global financial markets are blessed by strong risk appetite today, as US and China agreed on 90 days ceasefire on trade war. US stock futures point to sharply higher open, following strengthen and European and Asian markets. Australian Dollar, being a close trade partner of both the US...
US-China Trade War Ceasefire, Stocks and Aussie Surge, Dollar and Yen Weaken
US and China agreed not to escalate trade war after meeting between Trump and Xi. A cease-fire agreement was reached. Even though it's just for 90 days, Asian markets responded positively to the development with all major indices recording solid gains. DOW futures are also pointing to a day...
CFTC Commitments of Traders – Bets for Higher Euro Fell Sharply as Confidence Data Soured
As suggested in the CFTC Commitments of Traders report in the week ended November 27, NET LENGTH in USD Index slipped slightly whilst bets increased on both sides. All other major currencies stayed in NET SHORT positions. During the week, the greenback strengthened against major currencies. Note that the...
CFTC Commitments of Traders – Bets Trimmed on Oil and Petroleum, Traders Turned Cautious ahead of OPEC
According to the CFTC Commitments of Traders report for the week ended November 27 NET LENGTH for crude oil and gasoline futures continued to fall. Speculative long positions of crude oil futures declined -17 170 contracts, while shorts gained +1 896 contracts, resulting in a fall in NET LENGTH,...
A Look at Market Pricing on Fed Rate Path after Powell’s U-Turn
Fed Chair Jerome Powell's speech last week was sort of a turning point. Stocks staged a strong rally and helped lifted Kiwi and Aussie as the strongest ones. Nevertheless, despite being sold off steeply, Dollar has indeed reversed much the the losses and ended as the third strongest one....
Euro Lower after Inflation Data, Dollar Pare Losses ahead of Trump-Xi Meeting
The forex markets are generally staying in familiar range as traders turn cautious ahead of G20 summit and, of course, the highly anticipated Trump-Xi summit. There are rumors flying around on whether there will be a deal of no deal. But it's no to productive to guess at this...
Dollar Recovers after FOMC Minutes, But Overall Markets in Consolidative Mode
Dollar is trying to recover again today, with rather weak momentum so far. FOMC minutes released overnight didn't prompt renewed selling in the greenback. Instead, traders are turning cautious ahead of the highly anticipated meeting between Trump and China Xi in Argentina. For now, Yen is the second strongest...
FOMC Minutes Signals Rate Hike “Fairly Soon”, Policy Outlook Masked by Tariff and Debts
The FOMC minutes for the November revealed that the members still considered a rate hike in December is appropriate. Yet, they debated on the change in forward guidance regarding the pledge on “further gradual increases” in the policy rate. Some judged that the policy rate is near to the...
Dollar Rebound Attempt Capped by Weaker Core Inflation, Yen Gains ahead of G20
After yesterday selloff triggered by Fed Chair Jerome Powell, Dollar turns mixed today. It did try to regain some grounds in early European session. But the attempt falters after weaker than expected inflation reading from the US. Focus will now turn to minutes of the November FOMC meeting. It's...
Dollar Tumbled on Fed Powell’s Awkward Dovish Turn, FOMC Minutes Now Awaited
Dollar tumbled steeply overnight on Fed chair Jerome Powell's awkward dovish turn. Within a matter of weeks, interests rate went from being "long way from" to "just below" neutral. Markets took that as a sign Fed is nearing a pause in the current hike cycle. DOW staged a decisive...
Fed Chair Powell’s U-Turn on Interest Rates?
Stock markets rallied after Fed Chair Jerome Powell’s speech at the Economic Club, New York. Market players were thrilled amid their interpretation that Powell has turned dovish, probably succumbed to Trump’s endless criticism. We do not see an abrupt turn on Powell’s stance.
What the market focused on was Powell’s...
Sterling Makes a Come Back, Dollar Awaits Fed Powell
The British Pound makes a strong come back today and is trading as the strongest one at the time of writing. UK government released its long term Brexit economic analysis, showing that Prime Minister Theresa May's Brexit deal could bring as little as -0.1% drag in GDP in 15...
OPEC+: To Cut or Not to Cut?
Crude oil prices have steadied after the sharp correction over the past 7 weeks. Supporting the recovery are hopes of OPEC or OPEC+ production cut next month. OPEC and non-OPEC producer would meet in Vienna on December 6, discussing ways to defend oil prices. While the market generally expects...
Dollar Turns Mixed as Rally Attempt Lost Steam, Trump Attacks Fed Again
Dollar turned mixed after yesterday rally attempt met with no follow through commitments from bulls. Trump reiterated his attack on Fed and on Jay Powell personally. Comments from Fed officials were mixed. But the greenback paid little attention overall. Australian and New Zealand Dollar are again the strongest ones...
Sterling and Euro Turn Weaker, But Dollar Struggles to Extend Gain
Sterling and Euro are trading as the weaker ones today, in otherwise mixed markets. Dollar appeared to be lifted by Trump's renewed threats to China on tariffs. He said it's "highly unlikely" to drop the planned tariff hike on Jan 1 and more could come if no deal is...
CFTC Commitments of Traders – Traders Trimmed Bets on USD, GBP, JPY and AUD on Rising Uncertainty
As suggested in the CFTC Commitments of Traders report in the week ended November 20, NET LENGTH in USD Index persisted although bets were trimmed on both sides. All other major currencies stayed in NET SHORT positions. This came in line with the FX movement that the greenback strengthened...
CFTC Commitments of Traders – Bets on Commodities Shrank. Oil’s Outlook Dependent on OPEC
According to the CFTC Commitments of Traders report for the week ended November 20 NET LENGTH for crude oil, heating oil and gasoline futures continued to fall. Speculative long positions of crude oil futures declined -32 596 contracts, while shorts slipped -18 585 contracts, resulting in a fall in...
USD/JPY Surges in Mixed Markets, Euro and Sterling Lost Momentum
The forex markets are in a rather mixed mode this week so far, except that clear strength is seen in USD/JPY. Euro's rebound yesterday was rather brief as Italy eventually decided to stick with its 2019 budget plan despite rumors of some adjustments. Sterling did get any sustainable boost...