Thu, Feb 21, 2019 @ 14:03 GMT
Dollar stays generally soft as FOMC minutes delivered little surprise overnight. Fed is generally still expected to hike interest rate again in June. The plan for shrinking the balance sheet was outlined too. US equities were firm with DOW, S&P 500 and NASDAQ heading back to record highs. But treasury yields and Dollar didn't follow. The Dollar index is trading soft at around 96.9 at the time of writing as renewed strength in seen in EUR/USD in Asian session. The Dollar index is still on course for medium term fibonacci level at 96.46. Meanwhile, Canadian dollar jumps overnight as markets responded positively to BoC statement and strength in oil price.
Recent weakness in Swiss franc against the euro has not yet boosted Switzerland's economic outlook in a meaningful way, evidenced by the disappointing KOF indicator and Credit Suisse (formerly conducted by ZEW) investor sentiment index for August. While, at the meeting on September 14, the SNB would certainly affirm the stance that the franc remains "overvalued" and the pledge the combat deflation, we are concerned that there would still be a long way to go for the country's economy to get back in shape, as the pass-through of exchange rate into inflation is subdued. Meanwhile, a recent study by the SNB suggests that its monetary policy would have to stay relatively more accommodative (than ECB's) for longer to push inflation higher. We believe this reinstates the central bank's commitment to leave the policy unchanged.
While the US markets staged an historic comeback yesterday, sentiments didn't stay long. After Asian markets turned mixed, European markets are now trading broadly lower. DOW's over 1000pts rebound yesterday was impressive. But futures suggest that it's going to...
Yen gains broadly on risk aversion as the drama of US president Donald Trump's immigration ban continued. DJIA closed down -122.65 pts, or -0.61%, at 19971.13 overnight, below 20000 handle. S&P 500 lost -13.79 pts, or -0.6%, to close at 2280.90. NASDAQ dropped -47.07 pts, or -0.83%, to end at 5613.71. Nikkei follows and is trading down -1.7% at the time of writing. Treasury yields, on the other hand, was steady, with 10 year yield closed at 2.482, up 0.002. Dollar struggled to find a clear direction but weakened mildly, except versus Sterling. The dollar index hit as high as 101.02 yesterday but failed to sustain above 55 day EMA, and is now back at 100.35. In other markets, WTI crude oil stays in recent range and hovers around 52.50. Gold is trying to regain 1200 as consolidation extends.
Yen's weakness continue in quiet trading today and trades a touch softer after trade balance release. But overall, the markets are trading in tight range. The only exception is New Zealand Dollar which is resuming this month's broad based rally ahead of RBNZ rate decision on Thursday. Sterling recovers mildly as Brexit negotiations are finally starting today. Dollar and Euro are mixed. In other markets, gold is trading in tight range between 1250/60 for the moment. WTI crude oil is also range bound below 45 handle.
Canadian Dollar rebounds in early US session after stronger than expected inflation data. CPI rose 0.7% mom, 1.7% yoy in January. The annual rate slowed from 1.9% yoy in December but beat expectation of 1.5% yoy. CPI core common accelerated to 1.8% yoy, up from 1.6% yoy. CPI core median was unchanged at 1.9% yoy. CPI core trim slowed to 1.8% yoy, down from 1.9% yoy. Canadian Dollar is now trading as the strongest one for today, and reversed some of earlier losses and be mixed for the week. Elsewhere in the forex markets, Dollar remains the strongest one for the week, followed by Sterling. Kiwi and Aussie are the weakest ones.
There were big roller coaster rides in the financial markets last week. Apple's sales outlook downgrade heightened the concerns over serious slowdown in the Chinese economy. There was the "Currency Flash Crash" which sent through all key technical resistance...
Dollar surges in early US session after non-farm payroll report beat market expectation on all front. The job market grew 223k in May, above expectation of 190k. Unemployment rate dropped to 3.8%, beat expectation of 3.9%. That's also the...
We expect the BOE to vote 7-2 to leave the Bank rate unchanged at 0.25% and the asset purchase at 435B pound. Despite overshooting of inflation, most members would remain cautious and cite slow economic growth and Brexit uncertainty as reasons for keeping the monetary policy accommodative. However, the MPC is expected to adopt a more hawkish tone and strengthen the warning of a weak sterling. The new deputy governor Dave Ramsden would be voting for the first time. He is perceived as a dove amidst his warning of dire consequences after Brexit. He is expected to vote to maintain the status quo in the first 9-member MPC meeting since May.
Dollar's selloff continues as markets enter into US session. It's clear that Democrats have regained control of the House while Republicans retained control of Senate. The reactions in the financial markets are not too straightforward. Stocks are cheering the...
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...
Dollar recovers mildly today but stays weak for the week, next to Sterling. Focus is turning to US president-elect Donald Trump's first post election press conference tomorrow. Markets are looking for clues on whether Trump is prepared to deliver his election promises and push expansive fiscal policy after his inauguration on January 20. While the greenback weakens this week, it's still holding on to key near term support levels. Thus, the pull back is still seen as a correction technically. Meanwhile, markets will also pay close attention to whether DJIA would power through 20000 handle, or bounce off from there. Meanwhile, Sterling remains on the weakest major currencies on Brexit worries.
The strong stock rallies in the US generally carry through to Asian session. At the time of writing, Nikkei is up trading up 0.45%, Hong Kong HSI up 0.58%, Singapore Strait Times up 0.52%. That followed the impressive 1.58%...
Canadian Dollar strengthens mildly in early US session and is trading as the strongest one for today so far. Recovery in oil price has been supporting the Loonie through the day. And, further lift is given by stronger than...
As widely anticipated, ECB left the policy rates unchanged, with the main refinancing rate, the marginal lending rate and the deposit rate staying at 0%, 0.25% and -0.40% respectively. The focus of the meeting was on the updated economic projections and the press conference. For the former, accompanying the upbeat statement were upgrades of GDP growth and inflation forecasts. The staff has also unveiled the 2020 outlook for the first time. For the latter, little news revealed with President Mario Draghi refraining from discussing the internal division over the future of the QE program. He, however, reiterated that the monetary policy should remain accommodative as inflation has yet to be self-sustainable.
Dollar ended last week as the weakest one after deep selloff before weekly close. A whole lot of events are scheduled ahead to keep the greenback busy. Those include FOMC rate decision, US-China trade talk, non-farm payrolls. Also, the...
Dollar rides on a bunch of strong economic data and surges broadly. CPI rose 0.6% mom, 2.5% yoy in January, above consensus of 0.3% mom, 2.3% yoy. The headline annual consumer inflation rate was the highest since March 2012. Meanwhile, headline retail sales rose 0.4% in January versus expectation of 0.1%. Ex-auto sales rose 0.8% versus expectation of 0.4%. Empire state manufacturing index also jumped to 18.7, up from 6.5 and beat expectation of 7. The dollar index jumps to as high as 101.76 so far. The development affirms the case for the index to retest January high at 103.82. The greenback has now turned into the strongest major currency for the week while Japanese yen remains the weakest.
Dollar is broadly pressured on news of White House economic advisor Gary Cohn's resignation. The dollar index dipped to as low as 89.42 and staying below 90 handle. EUR/USD is staying comfortably back above 1.24 and is set to...
Headline CPI eased to +1.7% y/y in January, missing consensus of and December’s +1.9%. The slowdown was mainly driven by food price which fell -0.6 percentage point to +1.9%. Non-food inflation steadied at +1.7%. PPI decelerated sharply to +0.1%...
The US stock markets closed sharply lower overnight while treasury yields also dived. Such patterns continue in Asia, seeing major indices pressured while JGB year yields also drop. There are clear flows out of stocks into bonds. Fed has...
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