CFTC Commitments of Traders – British Pound Slumped as BOE Refrained from Hike Rate
As suggested in the CFTC Commitments of Traders report in the week ended November 2, NET LENGTH of USD index futures added +525 contracts to 34 982. Bets increased on longs but dropped on shorts. The greenback got supported as the Fed will formally start QE tapering in mid-November....
Yen and Franc Followed Bonds Higher, Ignored Record Running Stocks
The developments last week were a bit confounding, as both stocks and bonds rallied notably. Yen and Swiss Franc followed the path of falling yields and rose as the biggest winner of the week.
Dollar was not much helped by Fed's tapering and solid job data. Australia Dollar ignored broad...
Dollar Surges after NFP, Breaking Out Against Euro
Dollar rises in early US session after better than expected employment data. It's now attempting a breakout against Euro. Canadian Dollar is also firmer after job data. On the other hand, Sterling remains one of the weakest for the week, as post BoE selloff continues. But Euro and Swiss...
Yen and Franc Strong on Falling Global Yields, Dollar Looks into NFP
Yen and Swiss Franc are currently the strongest ones for the week and remain generally firm. Falling global benchmark treasury yields seem to be supporting both "safe-haven" currencies. Germany 10-year bund yield is back below -0.22, UK 10-year gilt yield is below 0.95 while Japan 10-year JGB yield is...
Market Disappointed at BOE Left Bank at Historic Low. Downgraded Growth Forecast
We were surprised that the Committee voted with overwhelming majority to leave the Bank rate at 0.1%. Despite Governor Andrew Bailey's hawkish comments ahead of the meeting, the was one of those who voted to leave the policy rate unchanged. The BOE also decided to leave the QE program...
Sterling Dives as BoE Refrains from Rate Hike, Yen and Franc Firm
Sterling drops sharply after BoE stands pat, disappointing those who expected a hike. Euro is currently following as the second weakest for the day. On the other hand, Yen and Swiss Franc rise broadly, supported by falling benchmark yields in Germany and UK. Dollar is also firm as general...
Stocks Surged, Dollar Mixed after Fed Tapering, BoE Next
US stocks surged to new records overnight despite Fed's tapering announcement. Positive sentiments also continued in general in Asia. Dollar remains mixed for now and traders are probably awaiting tomorrow's non-farm payroll report before taking a commitment. Focus will now turn to BoE rate decision, as Sterling is trading...
US Crude Oil Inventory Gained More Than Expected, Weighing on Prices
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks added +0.63 mmb to 1233.92 mmb in the week ended October 29. Crude oil inventory rose +3.29 mmb to 434.1 mmb, compared with consensus of a +2.23 mmb increase....
Fed Will Start Reducing Asset Purchases in Coming Weeks. Not in a Rush to Raise Rate
As widely anticipated, the Fed announced to taper its QE program. The Fed funds rate was kept unchanged at 0-0.25%. US dollar retreated after the meeting as the Fed continued to view inflation as "transitory" and did not appear to think that a rate hike was imminent.
On economic developments,...
Dollar Shrugs Strong ADP Job Data, Fed Tapering Next
The markets are generally quiet as FOMC tapering announcement is awaited. Major European indexes tread water while US futures are mixed. Global benchmark yields are trading lower for now. In the currency markets, Canadian and Dollar are both weakening mildly today. Stronger than expected ADP job report gives little...
Dollar Mixed as Markets Turn Cautious ahead of FOMC Tapering
Overall markets are quite mixed for now. While US indexes surged to new record highs overnight, positive sentiment was not carried forward to Asia. Major pairs and crosses are also stuck in range. It seems that traders and investors have turned into cautious mode, awaiting Fed's tapering decision. For...
Yen Extended Rebound as German Yield Dives, But Lacks Follow Through Buying
Yen extended rebound in European session following the sharp fall in benchmark Germany yield. But struggling to extend gain as markets enter into US session. Overall markets are mixed as investors are probably turning cautious ahead tomorrow's FOMC policy decision. As for today, Aussie remains the worst performing one...
RBA Review – Ending Yield Curve Control and Pushed Forward First Rate Hike to 2023
The RBA tilted modestly to the hawkish side by formally ending the yield curve control and adjusting its forward guidance on the first rate hike. Policymakers remained optimistic over the economic outlook and were not very concerned about inflation. Aussie plunged as Governor Philip Lowe indicated that a lift-off...
Aussie Tumbles after RBA, Yen Staging a Rebound
Australia Dollar tumbles broadly today as markets are dissatisfied with RBA's dovish stance, even though yield curve control is abandoned. Commodity currencies are also trading generally lower. On the other hand, Yen is staging a strong rebound after Japanese Finance Minister Shunichi Suzuki said he's keeping an eye on the...
BOE Preview – Rate Hike Cycle to Begin?
The market has fully priced in a +15 bps increase BOE's bank rate (currently at 0.1%). The mixed economic developments since the September indicate that the Committee will be very divided over whether to hike or to stand on the sideline this month. Th staff will also release the...
FOMC Preview – Tapering to Formally Begin
The November FOMC meeting would see the Fed making a formal announcement on QE tapering. We expect the plan would begin immediately and is expected to end by mid-2022. The Fed funds rate will stay unchanged at 0-0.25%. The market has priced in over 60% of a rate hike...
Swiss Franc Rallies Against Euro and Sterling, Dollar Mixed
Swiss Franc is strengthening notably today, but selling focus has somewhat shifted from Euro to Sterling. Still, the franc is outshone by New Zealand Dollar, which is overwhelming the strongest. On the other hand, Yen is the weaker one following extended risk-on sentiments from Japan to Europe. Sterling is...
Nikkei Surges on LDP’s Election Win, Yen Trades Lower
Japan's Nikkei index surges sharply by over 2% in Asian session, in very positive response to the easy win of the Liberal Democratic Party in Sunday's election. Prime Minister Fumio Kishida's LDP retained comfortable majority in the House of Representatives, ensuring continuity of the economic policies. While other Asian...
CFTC Commitments of Traders – GBP Futures Turned to Net Long as BOE Might Hike Rate Next Week
As suggested in the CFTC Commitments of Traders report in the week ended October 26, NET LENGTH of USD index futures dropped -1 477 contracts to 34 457. Bets decreased on both sides. Concerning European currencies, NET SHORT of EUR futures slipped -851 contracts to 11 256. ECB President...
CFTC Commitments of Traders – Bets Reduced on Crude Oil Futures as Price Soared to Highest since 2014
According to the CFTC Commitments of Traders report for the week ended October 26, NET LENGTH of crude oil futures dropped -5 876 contracts to 423 718. Speculative longs slumped -15 549 contracts while shorts fell -9 673 contracts. Bets were trimmed on both sides as price consolidated as...