Thu, Oct 17, 2019 @ 05:29 GMT
British pound plunged on news that EU members would unlikely accept the new Withdrawal Agreement proposed by UK PM Boris Johnson. Market anxiety intensified as a report by The Times suggesting that German chancellor Angela Merkel demanded for Northern...
The CFTC Commitments of Traders report in the week ended June 25 shows that NET LENGTH in USD Index declined -6 183 contracts to 22 366. Speculative long positions fell -5 992 contracts while short positions added +191 contracts...
Political uncertainty re-emerged in Europe shortly after the being improved on French presidential election. Now, it is Italy's turn with a snap election later this year becoming increasingly likely. With major parties converging to a deal on a new electoral law, an early election might take place in coming months, probably synchronizing that of German's in September. The euro reacted negatively and declined to the lowest level in more than a week before rebound. The 10-year Italian-German yield spread soared to almost the highest level in a month on concerns that the rapidly-rising Five Star Movement, the populist, euro-skeptic political party, could eventually become part of the coalition in Italy and destablize European Union again.
Subdued economic growth and unconventional easing measures resulted in EURUSD's third consecutive yearly decline, although the loss was greatly trimmed to about -3%, last year. EURGBP, however, jumped +16% as sterling slumped on concerns over British economic outlook after Brexit. Risk is to the downside for the single currency in 2017 as pressured by elevated political uncertainties and ECB's dovish tapering stance. Recent upside surprises on inflation data would not make ECB less dovish. Core inflation remained weak and should only improve gradually this year, not sufficient for the central bank to commit to tapering. A break below the 1.0463 low in March 2015 has paved the way for EURUSD to go further lower. We expect EURUSD to reach parity by 2Q17, probably after French election.
On June 12 and 13 the House of Commons, the lower house of the parliament, is due to vote on the 15 amendments proposed by the House of Lords, the upper house of the parliament. The key amendment –...
OPEC+ stayed put, maintaining the output cut agreed in December last year while pledging to monitor market developments with an option to raise production later. In our opinion, there is no practical need for OPEC+ to officially raise output....
European Parliament approved that Brexit would be extended further to October 31, from April 12. It is possible for the UK to leave earlier should the UK Parliament approve a Withdrawal Agreement (the deal). A review of the situation...
As suggested in the CFTC Commitments of Traders report in the week ended May 14, traders trimmed their bets, on both long and short sides, on futures of US dollar index, euro, Swiss franc, and Canadian dollar. On the...
We are not convinced that the "flash crash" of USDJPY last Thursday was driven by Apple.Inc's lowering of guidance, especially on China. The rally in Japanese yen during the time did not just appear in USDJPY, but also other...
Ongoing massive protests in Hong Kong against extradition to China have raised concerns about a rapid deterioration in the city’s economy and, more importantly, the collapse of the HKD-USD linked exchange rate system (LERS). This report suggests that the...
As US-China trade war continues to evolve, the market is increasingly concerned over the pace of slowdown in China’s economic growth. Meanwhile, weakness in renminbi (China Yuan) has given more bullets for the White House to attack China and...
Are world leaders nowadays keen on breaking their own promises? Just days after Donald Trump's reversal of campaign pledge to label China as "currency manipulator", UK PM Theresa May announced that she would seek MPs' support for an early general election to be held on June 8. The news came in less than a month after her affirmation that "the next election will be in 2020". GBPUSD erased earlier losses and jumped to a 4.5-month high of 1.2755 after the announcement, on expectations that a landslide victory of the Conservative Party would strengthen May's mandate in the 2-year Brexit negotiations.
As suggested in the CFTC Commitments of Traders report in the week ended July 24, NET LENGTH in USD Index gained +1 796 contracts to 29 128. Speculative long positions gained +5 766 contracts while short positions added +3...
Canada and the US eventually reached a preliminary trade deal, named USMCA, just a few hours before the US-imposed negotiation deadline. Obviously, the market was thrilled by the “breakthrough”, evidenced by the rally of Canadian dollar and, to a...
Financial markets are in turbulence as China announced to raise tariff of US$60B of US exports to 25% from 10%, effective June 1. This was followed by US’ threat to levy tariff on the remaining Chinese exports (worth of...
The Brazilian presidential and German state elections over the weekend have sent a common message - the desire for change. The election results reveal that the anti-establishment and populist sentiment continues to ferment. Both elections have led to severe...
As suggested in the CFTC Commitments of Traders report in the week ended September 4, NET LENGTH of USD index dropped -1 085 contracts to 33 486 contracts for the week. Both speculative long and short positions increased. During...
As suggested in the CFTC Commitments of Traders report in the week ended August 13, NET LENGTH in USD Index declined -1 487 contracts to 29 842. Speculative long positions dropped -1 457 contracts while short positions added +30...
The latest testimonies of both the incoming and outgoing Fed chairs suggest that the FOMC's approach would be more the less the same after February next year. At his confirmation hearing before the Senate, Jerome Powell affirmed that...
As suggested in the CFTC Commitments of Traders report in the week ended March 12, NET LENGTH in USD Index gained as increase in longs outweighed that of shorts. With the exception of NZD, all major currencies stayed in...
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