FOMC More Hawkish on Inflation, June Rate Hike a Done Deal
As widely anticipated FOMC left the Fed funds rate target at 1.5-1.75% in May. The accompanying statement also came in largely in line with our expectations – shrugging off moderation in first quarter growth and getting more confident in the inflation outlook. The more hawkish FOMC statement maintained market...
Euro and Sterling Recovered on Economic Data, Dollar Patiently Awaits FOMC
Dollar is trading slightly lower today as markets digest recent against ahead of FOMC rate decision and statement. Slightly better than expected ADP employment is shrugged of by the markets. Euro survived the test of GDP data and recovers mildly. Sterling also gets some support from better than expected...
Dollar Firm as FOMC Awaited, Euro and Sterling Shaky ahead of GDP and PMI
After yesterday's strong rally, Dollar retreats mildly today as markets await FOMC decision. For the week, the greenback remains the strongest one. Canadian Dollar follows as the second strongest, riding on better than expected GDP data. Sterling, on the other hand, is trading as the weakest one, as weighed...
Dollar Resuming Recent Rally, Sterling Tumbles after PMI, Canadian Up on GDP
Dollar resumes recent rally today and breaks last week's high against all major currencies except Canadian Dollar. In particular, GBP/USD has taken out 1.3711 key support level after UK PMI manufacturing missed market expectations. The development is in line with the view of medium term reversal. AUD/USD also breached...
RBA More Upbeat on Growth, Likely on Hold for 2018
Extending the streak for a 19th month, RBA left the cash rate unchanged at 1.5% in May. Benign inflation and recent slowdown in employment growth are allowing policymakers to keep the monetary policy accommodative. The accompanying statement was largely unchanged from the previous one, with the key positive coming...
Australian Dollar Steady after RBA Stands Pat, UK PMI Manufacturing to Watch
Australian dollar is steady after RBA left cash rate unchanged at 1.50% as widely expected. Governor Philip Lowe continued to be confident on the economy. He noted in the accompanying statement that "the bank's central forecast for the Australian economy remains for growth to pick up, to average a...
FOMC Preview: Focuses on Inflation and Shrugs Off Temporary Disruption on Growth
There have been both positive and negative data released since the March FOMC meeting. We expect policymakers to view slowdown in GDP growth as driven by temporary factors which should not affect the monetary policy outlook. Meanwhile, the central bank would likely acknowledge recent pickup in core inflation and...
Dollar Staying Range Bound an PCE Matched Expectations, Sterling Rebounds after Initial Selloff
Dollar remains firm in early US session after release of personal income and spending data. But now, the green back is held below Friday's high against all but Sterling. Canadian Dollar follows as the second strongest. The Pound was initial sold off earlier today but then quickly rebounded. It's...
Official PMI Shows Slowdown in China’s Manufacturing Sector
China’s National Bureau of Statistics reported that manufacturing PMI eased to 51.4 in April, from 51.5 a month ago. This, however, came in better than consensus of 51.3. The non-manufacturing improved to 54.8 in April from 54.6 in the prior month. The composite PMI output index also edged +0.1...
Forex Markets Steady as Heavy Weight Data from US, Eurozone and UK Awaited
The forex market open the week rather steadily with major indices stuck inside Friday's range. Aussie is generally lower followed by Yen. Meanwhile, Sterling, Dollar and Swiss Franc are generally higher. But the picture could quickly change as volatility comes in. The week ahead is full of important events...
Brexit Uncertainty Remains Key Determinant of BOE’s Rate Hike Path
British pound remains under pressure after Friday’s selloff. GBPUSD slumped almost -1% on Friday, resulting in a second consecutive weekly decline of the pair, as weakness in first quarter GDP growth was accompanied with BOE Governor Mark Carney’s dovish BBC interview in the prior week. The double disappointment also...
Traders Mixed over Oil’s Outlook
Speculators were mixed over the energy complex in the week ended April 24. Net LENGTH for crude oil futures plunged -15 708 contracts from a week ago to 712 423. NET LENGTH of heating oil rose +6 420 contracts to 22 656 while net LENGTH for gasoline gained +9 813 contracts...
Dollar and Yield Reached Critical Junctures after Strong Rally, Determining Events ahead
Dollar was given a powerful boost last week on a couple of factors. Firstly, 10 year yield extended recent bull run and hit 3% level for the first time since 2014. Secondly, Euro was sold off steeply after the confusing messages from ECB President Mario Draghi during the post...
Dollar Rally Exhausted after Multiple Boosts this Week, Sterling and Euro Tumbled on GDP Misses
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 GDP miss in European session. Hence, even though the greenback...
US and UK GDP to Take Center Stage, BoJ Stands Pat
Dollar is trading mildly lower today but remains the overwhelmingly strongest one for the week. The greenback was, on the one hand, pushed higher overnight thanks to the steep post ECB selloff in Euro. Dollar index hit as high as 91.63 and continued to build up the case of...
ECB Refrained from Hinting on Policy Outlook
In line with our expectations, ECB largely judged the recent slowdown in economic data as driven by temporary factors and moderation after periods of strong growth. The members maintained the view that risks to growth were “broadly balanced” and remained confident that inflation would converge towards the +2% target....
Euro breaks down after reassessing ECB Draghi, where next?
We've pointed out in the quick comment updates that there was no follow through buying in Euro despite the rebound attempt. That rebound was initially triggered by ECB President Mario Draghi's introductory statement that talked about the "solid and broad-based expansion" despite weaker than expected data. However, there was...
Euro Holding on to 1.2154 against Dollar on Cautiously Upbeat ECB Draghi, Dollar Weakens as Yields Retreat
Euro recovers against Dollar after ECB president Mario Draghi tried to play down concerns over recent weak Eurozone data. But his usual cautiousness is so far capping Euro buying. On the other hand, Dollar's rally also loses some steam, in particular against Yen as 10 year yield dips back...
EUR/USD Eying 1.2154 Key Support as Markets Seek ECB Draghi’s View on Q1 Slowdown
Dollar retreats mildly in Asian session today but remains the strongest one for the week. US 10 year yield finally took out 3% level overnight with some conviction. TNX hit as high as 3.035 before closing at 3.024, up 0.041. The development helped lifted Dollar Index above key near...
Crude Oil and Gasoline Inventories Surprisingly Increased
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products stocks gained +1.39 mmb to 1182.36 mmb in the week ended April 20. Crude oil inventory added +2.17 mmb to 429.74 mmb, amidst increases in 3 out of 5 PADDs. The market...