RBA Keeps Policy Intact but Signals Amendments in July
The RBA left all monetary policy measures unchanged in May and reiterated that a rate hike would "unlikely to be until 2024 at the earliest". However, the central bank upgraded economic projections and signaled that some amendments would be made on yield curve control (YCC) and QE in July.
Economic...
Australian Dollar Steady after RBA, Dollar Firmer in Consolidations
The forex markets are staying in consolidative mode this week so far. Aussie is steady in tight range after RBA stood pat as widely expected, even though GDP forecast was upgraded. Dollar is recovering again as the retreat overnight didn't last long. Canadian Dollar and Yen also trade with...
Markets Back in Risk on Mode, Dollar Softens Mildly
Markets seem to be back in mild risk on mode in Europe, shrugging off the selloff in Asia. US futures also point to higher open, as the record run could resume this week. The currency markets are relatively mixed. Yen is stabilizing into US session after earlier selloff. Dollar...
RBA Preview: Upgrading Economic Assessment while Pledging to Expand QE Purchases
While the RBA is likely to leave all monetary policy measures unchanged at this week’s meeting, the quarterly Statement on Monetary Policy (due May 7) would be closely watched. We expect policymakers to upgrade economic assessments moderately and pledge to monitor rising home prices.
Economic developments have generally improved since...
Yen Selloff Continues Despite Risk Aversion in Asia
The forex markets are relatively quiet in Asia, with Japan and China on holiday. Main theme is extended selloff in the Japanese Yen despite steep decline in Hong Kong and Singapore stocks. Aussie and Kiwi are the mildly firmer ones while Swiss Franc is softer. Also, a major talking...
Canadian Dollar Rally to Continue after a Strong Week, But Medium Term Strength Uncertain
Canadian Dollar ended last week as the strongest ones on a couple of factors. With some near term resistance taken out, such rally will likely continue for the near term. Swiss Franc ended as the second strongest. While Dollar was pressured for most of the week, it staged a...
CFTC Commitments of Traders – Traders Trimmed Bets on US Dollar
As suggested in the CFTC Commitments of Traders report in the week ended April 27, NET LENGTH of USD index futures dropped -772 contracts to 2 746. Speculative long positions slipped -855 contracts while shorts were down -83 contracts. Concerning European currencies, NET LENGTH in EUR futures added +159...
CFTC Commitments of Traders – Bets on Higher Crude Oil Price Trimmed as OPEC+ Sticks with Output Increase
According to the CFTC Commitments of Traders report for the week ended April 27, NET LENGTH for crude oil futures plunged -10 272 contracts to 489 711 for the week. Speculative long position slipped -567 contracts, while shorts declined -9 705 contracts. OPEC+ has confirmed to increase output by...
Dollar Rebounds after Strong PCE Inflation, Euro Retreats on Mixed GDP
Dollar rebound in early US session after much stronger than expected PCE inflation data. Though, at this point, Canadian Dollar remains slightly firmer, as supported by GDP data. Yen is also recovering with mild retreat in German and Japan yields, as well as mild risk aversion. European majors are,...
Asian Markets in Mild Risk-Off Mode Despite Japan and China Data
The financial markets are trading with a mild risk-off tone in Asia today, despite the resilience in US overnight. Solid economic data from Japan and China provided little support to sentiment. The region is generally in deep worry over record coronavirus infections in India. As for the currency markets,...
Yen Dives as Global Yields Surge, Dollar Recovers Mildly after Data
Yen's selloff is a dominant theme in the markets today as major global treasury yields strengthen. In particular, Germany 10-year bund year is back at around -0.18, above -0.2 handle. US 10-year yield is trading at 1.675 at the time of writing, with a take on 1.7 handle before...
Dollar Selloff Resumes after Clearing FOMC Risk, Canadian Powers Up
Dollar's selloff resumed overnight after FOMC risk was cleared. Basically, Fed just reaffirmed it's stance that it's far from considering stimulus exits. Though, for the week so far, Yen is even weaker with strong rebound in global treasury yields. Euro is no far, follow Dollar as third weakest so...
Fed Refrained from Giving Any Hint about QE Tapering
The Fed voted unanimously to leave the Fed funds rate target at 0-0.25%. It also decided to keep the asset purchases at US$120B per month. As expected, the Fed upgraded the economic assessments but continued to warn of downside risks. Fed Chair Jerome Powell at the press conference noted...
US Crude Inventory Increased, but Less than Expected
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks sank -1.63 mmb to 1285.52 mmb in the week ended April 23. Crude oil inventory climbed higher, by +0.09 mmb (consensus: +0.66 mmb) to 493.11 mmb. Stockpile increased in...
Dollar Staying in Consolidations With Bearish Outlook, FOMC Next
The financial markets are generally steady today as traders are holding their bet ahead of FOMC announcement. US President Joe Biden is set to unveil a USD 1.8T package for family and education, but that's unlikely to trigger much reaction. New Zealand Dollar and Canadian Dollar are currently the...
US Growth and Fed’s Policy Outlook to Lift Yields Again, Lending Support to USD
Weakness of US dollar in most of April has been mainly driven by falling Treasury yields. We believe US’ strong economic growth in coming quarters, market expectations of Fed funds rate hike and the Fed’s plan to taper QE would again lift Treasury yields, lending support to the greenback....
Aussie Tumbles after CPI, Yen Falls as FOMC Awaited
Australian Dollar tumbles broadly in Asian session after weaker than expected CPI data. Sterling is following as the second weakest , and then New Zealand Dollar. Dollar firms up mildly as traders await FOMC rate decision, but the rebound is mainly centered against Yen and Aussie. Indeed, Yen was...
Swiss Franc Mildly Firmer in Subdued Trading
Trading in the financial markets is rather subdued today. Swiss Franc is the stronger one at the time of writing, followed by Dollar and Sterling. Commodity currencies, on the other hand, turn softer with Australian Dollar leading the retreat. But overall movements in the markets are limited. Gold and...
BOJ Downgrades Inflation Forecasts Significantly as It Struggles with Limited Tools
The BOJ left its monetary policy measures unchanged in April. However, it revised sharply lower the inflation forecasts for this fiscal year. The country’s economy has been far below the +2% inflation despite a decade’s unconventional easing measures.
On the economy, the central bank acknowledged that “Japan’s economy has picked...
Canadian Dollar Jumps While Dollar Recovers, Yen Shrugs BoJ
While NASDAQ and S&P 500 closed at new records overnight, there is no follow through risk-on buying in Asian session. Investors are generally still cautious ahead of Fed meeting. Dollar recovers in general but upside momentum is very weak. Canadian is extending gains and is now leading other commodity...