Sun, Aug 25, 2019 @ 20:03 GMT
Movements in the forex markets are very limited today. Sterling dips mildly after PMI manufacturing missed expectation. Euro stays soft in general even though comments from policy makers should be Euro supportive. Aussie weakened earlier in the day on retail sales disappointment but no follow through selling is seen so far. Yen stays in tight range after uninspiring release of Tankan survey. Dollar on the other hand, trades mixed as markets await ISM indices and employment data later in the week, as well as FOMC minutes. In other markets, Gold continues to struggle in tight range around 1250. WTI crude oil is staying firm above 50 handle but can't extend gains so far.
The CFTC Commitments of Traders report in the week ended November 6 shows that all major currencies (except USD) remained in NET SHORT positions. Speculative longs on USD index fell -1 564 contracts while shorts declined -2 323, sending...
The financial markets some what stabilized mildly after the selloff triggered by the terrorist attack in Spain and drama in the White House. At the time of writing, FTSE is trading down -0.1% while DAX is down -0.4%. US futures point to a flat open. In the currency markets, Dollar is trading broadly down today, but for the week, it's still in black against Euro and Sterling. The Pound will most likely end the week as the weakest. Commodity currencies are holding the ground even though yen surged since yesterday. In particular, Canadian Dollar is helped by positive inflation data. In other markets, Gold finally takes out 1300 handle today as buying gains steam.
The financial markets are rocked by Trump's over-the-top escalation in trade spat with China. At the time of writing, FTSE is down -0.4%, DAX down -1.2% and CAC down -1.1%. Dow opens by dropping more than -300%. In the...
Dollar is trading as the strongest major currency for the week as markets await employment data from US. The general consensus is that barring a disastrous non-farm payroll report, Fed will still hike interest rate in the FOMC meeting next week. It would be a big blow to the credibility of Fed if they don't deliver after the chorus of hawkish messages. Nonetheless, the NFP numbers, including the headline job growth and wage growth, are still important for Fed to determine the policy path for the year. FOMC members generally maintained the expectation of three rate hikes this year. But now that the first hike will likely be done next week, there is indeed possibility for four hikes should the economy perform well with boost from US president Donald Trump's expansive policies.
Market reactions to the US government shutdown is rather muted. Dollar is trading generally lower today but is held within Friday's range. Asian markets are pretty steady with Nikkei trading down just -0.14% at the time of writing. The Senate was in session yesterday but failed to deliver any breakthrough. The shutdown is extending into its third day and there is no sign of a resolution in the Senate yet. A procedural vote is expected at noon today. But there are unlikely enough votes to pass the bill to keep government running through February 8. For forex traders there are so many key events ahead in the week that they couldn't care less regarding the government shut down.
The US markets responded positively to the passage of the tax bill in House and in Senate Finance Committee. DOW jumped 187.08 pts, or 0.8% to close at 23458.36. Technically, it defended 23251.1 key near term support and maintained bullishness. Focus is back on historical high at 23602.1. NASDAQ has indeed made new record at 6806.67 before closing at 6793.29, up 1.3%. 10 year yield also showed some resilience and ended up 0.026 at 2.361, keeping itself well above 2.304 key support. In the currency markets, Dollar remains generally soft, though, except versus Aussie and Kiwi. Euro and Yen would probably end the week as the strongest ones.
The US markets responded negatively overnight as Senate's version of tax plan confirmed they wanted to delay corporate tax cut by a year. But considering intraday price actions, the reactions were not disastrous. DOW dropped initially to 23310.02 before paring much losses to close at 23461.91, down -101.42 pts or -0.43%. That's close to open at 23492.09. S&P 500 dropped as low as 2566.33 before closing at 2584.62, down -9.76 pts or -0.38%. That's even slightly higher than open at 2584.00. NASDAQ dropped to as low as 6687.28 then closed at 6750.05, down -39.07 pts or -0.58%. That's notably higher than open at 6737.45. After all, US equities has now entered into a consolidation phase after recent record runs. 10 year yield tried to recovery and ended up 0.006 at 2.331. Dollar, on the other hand, stays pressured and is set to end as the weakest one for the week.
The spotlight moves back to the Swiss Franc today as EUR/CHF surges past 1.12 key resistance level. The cross is now setting up the momentum to regain 1.2 handle in medium term, which is the prior SNB imposed floor. Back in January 2015, SNB shocked the market by removing the floor and EUR/CHF dived to as low as 0.86, depending that what chart you read. With all the improvements in Eurozone, fundamentally, politically and system-wise, it now looks like there is no longer the need of safe haven parking in the Franc, with negative interest rates. The surge in commodity and energy prices would also help lift Eurozone inflation which keep ECB on course for stimulus exits.
US-China trade war remains a dominant theme in the global financial markets today. Words from both sides continued to indicate hard line stances. It doesn't quite matter how much close to facts are their rhetorics. What matters most is...
Dollar is trading firm is Asian session today and maintains overnight gains inspired by positive ADP and GDP data. That was accompanied mild strength in stocks, with DOW closed up 0.12%. 10 year yield also edged higher by gaining 0.007 to 2.143. Dollar index dived to as low as 91.62 yesterday but seems to be getting strong support fro 91.91/3 key level and rebounded. The key will lie in tomorrow's non-farm payroll report. As risk aversion eased, Yen is trading in red against all other major currencies for the week, except Canadian Dollar. Gold also pares back much of this week's gain and is back pressing 1300, after hitting as high as 1331.9 earlier in the week. The Loonie is weighed down by weakness in oil price which sees WTI dips to as low as 45.58.
Recent Chinese economic indicators have been positive. The country surprisingly recorded trade deficit, of RMB 60B, in February. The market had anticipated a decline of surplus to RMB 173B from RMB 355B in January. Imports soared +44.7% y/y while exports gained +4.2% y/y, compared with growths of +15.9% and +25.2%, respectively, in January. The sharp rise uin imports might indicate improvement in domestic demand. China's FX reserve added +US$ 6.9B to US$ 3.01 trillion in February, marking the first increase in 8 months. The market had anticipated further decline for the month. After adjusting for currency valuation effects, the reserves probably increased US$ 19-25B in the month. While this might be the first sign of the effect of China's capital control measures, we expect the government remain cautious as outflow should remain a problem for the rest of year. Note that a reason for the uptick in February was the improved performance of renminbi at the beginning of the year. Further information, including PBOC's FX position and SAFE flow data, is needed to grasp a clearer outlook of the capital flow situation. We remains bearish over renminbi as the Fed's monetary policy normalization program should continue to support USDCNY.
Dollar's rally seem to be a bit exhausted in early US session. After all, the greenback was lifted firstly by yield earlier this week, then by ECB yesterday. Additional buying jumped in after French GDP miss and than UK...
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products stocks fell -1.55 mmb to 1186.18 mmb in the week ended May April 4. Crude oil inventory fell -2.2 mmb (consensus: -0.72...
Dollar continues to trade mixed in early US session. The greenback is seen weaker against European majors and Yen. Nonetheless, Dollar trades mildly up against Canadian Dollar thanks to pull back in oil price. Released from US, Q4 GDP growth was unrevised at 1.9% annualized in Q4, below expectation of 2.1%. GDP price index was revised lower to 2.1%. Trade deficit widened to USD -69.2b in January. Wholesale inventories dropped -0.1% in January. From Canada, IPPI rose 0.4% mom in January while RMPI rose 1.9% mom. Focus will turn to US president Donald Trump's address to Congress.
Dollar is steady in early US session and is little affected by job data miss. The ADP employment report showed 178k growth in private sector jobs in July, below expectation of 190k. DOW futures also stay steady and the index could have a go at 22000 handle today as recent rally extends. Non-farm payroll to be released on Friday is a key event to watch. And it's expected to show 180k growth overall in July.
The forex markets remain rather quiet today so far. The selloff in stocks and oil overnight triggered some pull back in Canadian and Australian Dollars, but losses were limited. Similar, Yen was given just a mild pop while it's...
The forex markets open the week rather steadily. New Zealand Dollar trades mildly higher after better than expected retail sales data. Canadian Dollar is also lifted mildly by rebound in oil price, which sees WTI back at 48.60, comparing to this month's low at 43.76. The Japanese Yen shows little reaction to another missile launch by North Korea while markets await the result of an emergency UN security meeting. Euro also shows little reaction to German CDU's win in an important state election. Meanwhile, UK is stepping up its rhetoric ahead of the Brexit negotiation. The focus of the week, though, will be on data from UK, Eurozone, Canada and Australia.
Sterling continues show a lot of resilience today. In despite of weaker than expected August GDP report, as well as mixed productions data. the Pound manages to trade as the strongest one for today. Optimism on Brexit negotiation is...
Dollar shows little reaction to mixed economic data released from the US. Personal income rose 0.3% in November, below expectation of 0.4%. Spending rose 0.6%, above expectation of 0.5%. Inflation data are positive. Headline PCE accelerated to 1.8% yoy, up from 1.6%, in line with consensus. Core PCE accelerated to 1.5% yoy, up from 1.4% yoy, meeting expectation of 1.5% yoy. However, durable goods orders disappoint. Headline durable goods orders rose 1.3% in November, below expectation of 2.2%. Ex-transport orders dropped -0.1%, below expectation of 0.5% rise. The greenback continues to trade as the third weakest one for the week, just next to Yen and Swiss Franc.
- advertisement -