BoC Preview – Further QE Tapering
As further QE tapering to CAD 1B/week has been fully priced in, the focus of this week’s BOC meeting is the forward guidance on rate hike. The market has priced in 3 rate hikes in 2022. We expect the central bank to maintain the guidance that a rate hike...
Dollar Ended Lower Despite Increasing Bets on Fed Hike, US Stocks Hit New Records
The markets have turned a bit mixed last week and have likely entered into a near term consolidative mode already. Dollar ended broadly lower even though traders continued to add their bet on a Fed rate hike next year. Indeed, the odds for a hike by June is now...
CFTC Commitments of Traders – Relentless Rally Sent Crude Oil Price to 7 Year High
According to the CFTC Commitments of Traders report for the week ended October 19, NET LENGTH of crude oil futures jumped +24 818 contracts to 429 594. Speculative longs added +1 719 contracts but shorts plunged -23 099 contracts. The front-month WTI crude contract rallied 7 weeks in a...
CFTC Commitments of Traders – RIsk Currencies Gained Ground on Improved Sentiment
As suggested in the CFTC Commitments of Traders report in the week ended October 19, NET LENGTH of USD index futures added +872 contracts to 35 934. Bets decreased on both sides. Concerning European currencies, NET SHORT of EUR futures declined -6 291 contracts to 15 483. Speculative shorts...
Markets Staying in Consolidations, Dollar to End the Week as Worst Performer
The forex markets are staying in consolidative mode today and could remain so before weekly close. Though, that would depend on whether US stocks would surge again with powerful buying. For the week, Dollar is currently the worst performing, followed by Canadian and Euro. Aussie is the strongest followed...
Recovery in Dollar and Yen Capped, Downside Prospects in Euro
The forex markets are staying in mostly consolidation in Asian session. Recovery in Dollar and Yen is so far rather weak, capped by resilient market sentiment. S&P 500 closed at new record high while DOW was not far behind. Major Asian indexes are also trading higher after China's Evergrande...
Yen Recovering, Swiss Franc Rises in Consolidative Markets
Markets are generally in consolidative mode today. Dollar turns weaker against Swiss Franc and Yen despite better than expected jobless claims data. But the greenback is just range bound against other major currencies. Commodity currencies are digesting near term gains but losses are so far very limited. Euro is...
Yen and Dollar Recovering as Asian Stocks Weighed Down by Evergrande
While DOW hit new intraday record high overnight, positive sentiment was not carried forward to Asia. Instead, stocks tumbled as the troubled China's property giant Evergrande failed to close the sale of the controlling stake in its property management business. The company could official go into default next Monday....
Crude Oil Inventory Surprisingly Dropped, Supporting Price
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks slumped -9.81 mmb to 1228.91 mmb in the week ended October 15. Crude oil inventory slipped -0.43 mmb to 426.54 mmb, compared with consensus of a +1.86 mmb increase....
Sterling Retreats after CPI, Euro and Swiss Franc Lower Too
European majors turn generally softer today, in particular, with Sterling paring some gains after strong but lower than expected consumer inflation data. Dollar also weakens with treasury yield dipping slightly while Yen is trying to recover. But overall, Kiwi and Aussie maintain their position as the best performer. US...
Yen Sliding Again as DOW Ready to Resume Record Run
Yen continues to be under selling pressure, following the strong rally in US stocks overnight. Yen is additionally weighed down by rally in treasury yields. New Zealand Dollar is leading commodity currencies higher, while Australian and Canadian Dollars are also strong. Euro and Sterling are mixed for the moment,...
Dollar and Yen Heading South Again, Sterling and Kiwi Strong
Selling in Dollar and Yen persists again today. New Zealand Dollar is currently the biggest winner, on increasing expectation of RBNZ rate hikes. While Aussie is also strong, Sterling is slightly stealing the show too, with help from renewed buying against Euro. The cautious comments from ECB policymakers are...
Bets Increased for a Bigger RBNZ Hike in November. Yield Spread Widened to Above 200 bps with Japan
NZD remains firm. Hopes of a +50 bps rate hike in November have heightened after the strong inflation report. NZ-US yield spread widened to a level not seen since 2017. More remarkably, NZ-JP yield spread widened to over 200 bps. A more prominent policy divergence between the RBNZ and...
Dollar Selloff Resumes, EUR/USD Breaking Near Term Resistance
Dollar's selloff resumes in Asian session today, while Yen is also trading lower. Risk-on markets in Asia lift New Zealand and Australian Dollar. European majors are mixed for the moment, with Euro trying to recover against Sterling and Swiss Franc. The economic calendar is rather light today, and focuses...
Euro Trading Mildly Higher in Consolidative Markets
The forex markets are generally staying in consolidative mode today, with Euro and Swiss Franc trading mildly higher. Meanwhile, Aussie is leading other commodity currencies for retreats. Dollar is also trying to firm up with 10-year yield breaking above 1.62 handle. Yen, is also mildly higher with help from...
China’s Government is to Blame for Disappointing Growth. Fourth Quarter Not Likely Better as Power and Regulatory Problems Deepen
China's economy falters. GDP expanded +4.9% y/y in 3Q21, weaker than consensus of +5% and +7.9% in the prior quarter. From a quarter ago, the economy climbed only an annualized +0.8%. Power shortage, policy change, uncertainty about the pandemic were to blame for the disappointment. Without quick fixes to these...
Dollar and Yen Pare Losses, Inflation and PMIs to Highlight the Week
Dollar and Yen recover mildly as the week starts, paring some of last week's losses. Buying momentum in both currencies is rather weak so far, and they don't look like bottoming yet. New Zealand Dollar spiked higher earlier today after much stronger than expected consumer inflation data. But the...
Yen Selloff Accelerated on Strong Energy and Commodity Rallies
Yen's selloff accelerated rather steeply last week, on the back of surging commodity and energy prices. Dollar was also pressured this time, as treasury yields retreated and on late rally in stocks. Euro was not to far away, as pressured by selloff in crosses. On the other hand, commodity...
CFTC Commitments of Traders – Energy Prices Remain Strong as Power Shortage Persists
According to the CFTC Commitments of Traders report for the week ended October 12, NET LENGTH of crude oil futures rose +6 469 contracts to 404 776. Speculative longs jumped +15 440 contracts while shorts increased +8 971 contracts. For refined oil products, NET LENGTH for heating oil added...
CFTC Commitments of Traders – Risk Currency Rebounded on Bargain-Hunting
As suggested in the CFTC Commitments of Traders report in the week ended October 12, NET LENGTH of USD index futures rose +3 306 contracts to 35 062. Bets increased modestly on both sides. Concerning European currencies, NET SHORT of EUR futures dropped -3 936 contracts to 18 398....