Wed, Apr 24, 2019 @ 00:40 GMT
Asian markets trade lower as the week starts on concerns of unrests and geopolitical tensions caused by US president Donald Trump's executive order regarding immigration ban. Trump signed an executive order last Friday, suspending entry of people from seven Muslim-majority countries for 90 days and suspending the refugee program for 120 days. The situation has then developed into a chaotic one as a federal judge in Brooklyn temporarily blocked part of the executive order. And there were waves of protests with ten of thousands of people rallied in US cities to voice the opposition of the order. The uncertainties over the situation weighed down on market sentiments As Nikkei lost -0.51%. In the currency markets, Dollar trades broadly lower except versus Kiwi. Yen surges on risk aversion. The uncertainties might take some time to clear.
Market sentiments improved as some considered US President Donald Trump's threat of trade war is merely a "political show". And pressures from the Republicans and business executives will eventually force him to back down. DOW closed up 336.7 pts...
The theme of trade wars overwhelmed the global financial markets last week and overshadowed any other topics. It started on news that US President Donald Trump is going to impose tariffs of 25% on steel and 10%...
Euro opens the week broadly lower as the Catalonian referendum for independence on Sunday turned into chaos. Legally recognized or not, preliminary results show that 90% votes were in favor of independence with a turnout rate of 42.3% (2.3M votes). What shocked the world is that the the peaceful campaign had met with violent suppression of the Spanish government, with brutal attack by the national police (firing rubber bullets, seizing ballot boxes from polling stations, etc). It's believed the violence of the government provoked more "yes" vote for independence.
As widely anticipated, BOE voted unanimously to keep all monetary policies unchanged in November. The Bank rate stays unchanged at 0.75%. Meanwhile, purchases of gilts and corporate bonds remain at 435B pound and 10B pound, respectively. The central bank...
Dollar dives broadly today on news that China is considering to diversify its foreign exchange reserves away from Dollar. It's reported by Bloomberg, without unnamed source, that Chinese officials are recommending the government to slow or even halt purchase of US treasuries. The China's State Administration of Foreign Exchange has yet provide a response to press query yet. But it's believed that the lowered attractiveness of US assets, as well as trade tensions between the two countries could be the reasons for the change in strategies.
Yen is staying strong today and it's extending recent rally. Falling major European and US treasury yields and risk aversion are the main factors. German 10 yield bun yield closed at 0.353% yesterday's concern. That's nearly half of this...
There were some conflicting movements in the markets last week. Risk appetite was clearly strong in US and Europe. S&P 500 and NASDAQ ended at record highs and DOW was not far from it. Dollar was firm as investors finally got some more details about the long awaited tax reform. Treasury yield also jumped as markets were getting more confident on the bet of December Fed hike. However, the greenback was overshadowed by Swiss Franc, which ended as the strongest one for the week. Dollar was only the second best performer. Yen also ended the third strongest ones. The decoupling of risk sentiments with Swiss Franc and Yen could be partly seen as the results of quarter end position squaring. Or, it's a sign that Dollar strength was indecisive due to lack of confidence over the tax plan.
Dollar continues to trade mixed after weaker than expected data. Durable goods orders grew 1.8% in January, below expectation of 1.9%. Ex-transport orders dropped -0.2% versus expectation of 0.5% growth. Traders are staying cautious ahead of the highly anticipated address to Congress by US president Donald Trump tomorrow. Trump would likely provide details on dismantling the Affordable Care Act, or so-called Obamacare. However, market's attention will be on other economic related issues. That include the long-awaited tax reform that boosted stocks to new records highs. Traders started to reposition late last week as seen in the divergence in major indices. Also the greenback pull backed back following sharp fall in yields. The greenback could be vulnerable to selloff if Trump fails to live up to expectations again.
Dollar remains general weak in early US session after mixed economic data, in particular against European majors. The greenback does try to rebound against Australian Dollar and Canadian Dollar. But momentum is being capped. Yen also tried to rebound...
The financial markets were generally dominated by positive sentiments last week. Major global economic risks seemed to be receding generally, even though some uncertainties remain. The development was best seen in the strong rally in treasury yields. US 10-year...
The deal made by OPEC+ to cut output had only limited boost the oil prices. The renewed selloff in crude oil prices, indicating another leg of downturn, is driven by concerns over global growth slowdown, decline in stock markets...
Sterling opens the week broadly lower as weighed down by comments from UK prime minister Theresa May. May emphasized in a televised interview that Brexit is about "getting the right relationship, not about keeping bits of membership." And she noted that the right relationship is about being "have control of our borders, control of our laws" while having the "best possible deal" for trading with EU. The comments indicated that control of immigration and law prevail access to the single markets. Meanwhile, May also pledged to set out "some more details in the coming weeks" about Brexit ahead of the March 31 deadline for triggering Article 50 for Brexit negotiations. GBP/USD dips through 1.2200 near term support to resume recent decline next key support level at 1.1946.
US equities suffered the steepest decline for the year overnight. Doubts over US president Donald Trump's ability to push through his policies are seen as the major factor driving stocks down. In particular, some economists pointed out that there is simply not enough money in the government to allow for a tax cut, nor the fiscal stimulus programs. DJIA dropped -237.85 pts, or -1.14% to close at 20668.01. S&P 500 lost -29.45 pts or -1.25% to close at 2344.02. Financials led the way, dropping more than -2.5%. Treasury yield also suffered with 10 year yield extending the near term fall from 2.615 to close at 2.436, down -0.037. Dollar index broke 100 handle to as low as 99.66. In the currency market, risk aversion boosted Yen to be the strongest major currency for the week. Commodity currencies are the weakest with Aussie leading the way down. Sterling and Euro are relatively resilient.
Euro is initially short up as ECB turned a bit less dovish in the statement after keeping monetary policy unchanged. However, the common currency cannot extend gains as there is no follow through buying. More importantly, ECB President Mario...
The strong rally in both Swiss Franc and Japanese Yen, together with selloff in commodity currencies, argue that forex traders are preparing themselves for some risk aversion. US President Donald Trump's decision on Iran deal today should be the...
Sterling, Canadian Dollar and Euro surged broadly last week on hawkish comments from central bankers. The turn in BoE Governor Mark Carney was the most drastic as just a week a go, he said it's not the time of rate hike yet. But then, he indciated the BoE MPC will start debating raising interest rate in the coming months. BoC Governor Stephen Poloz repeated his comments that prior rate cuts in 2015 have already done their job. But this time, Poloz hinted that BoC is approaching a new interest rate decision. That tremendously raised the odds of a July hike by BoC. There were some jitters on Euro on report that markets misinterpreted ECB President Mario Draghi's comments. But after all, it's generally convinced that, with improvements in Eurozone inflation and growth, ECB is transiting into a phase of stimulus withdrawal. And there would likely be tapering announcement in September or by latest October.
Dollar's decline extended overnight after Fed left interest rates unchanged as widely expected. The dollar index reaches as low as 99.42 so far is is pressing 99.43 key near term support level. Markets continued to pare back expectation on Fed higher. Fed fund futures are pricing in 17.7% chance of March hike an 69.0% only. Nonetheless, treasury yield was steady with 10 year yield closed up 0.023 to 2.474. Stocks also stabilized with DJIA closed up slightly by 26.85 pts, or 0.14%, at 19890.94. S&P 500 rose 0.68 pts, or 0.03%, to close at 2279.55. In the currency markets, Dollar remains the weakest major currency this week. On the other hand Yen stays the strongest , followed closely by Aussie and Loonie. In other markets, Gold rides on Dollar weakness and surges to as high as 1210.2 so far today, and is set to take on 1220.1 resistance. WTI crude oil stays in familiar range and hovers around 53.5.
Canadian dollar soars in early US session after another month of stellar job data. The employment market grew and impressive 78.6k in December, just slightly smaller than prior month's 79.5k. It's also well above expectation of 0k growth. Unemployment ate, dropped to 5.7%, down from 5.9% and was way below expectation of 6.0%. That's also the lowest level in more than four decades, since the series began in 1976. The strength in job market is sealing the deal for BoC to hike again in Q1. And there could be more speculations for a January hike ahead. USD/CAD dives through 1.2380 handle, comparing to 1.2500 just an hour ago. Also from Canada, trade deficit came in larger than expected at CAD -2.5b in November.
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...
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