Wed, Jun 19, 2019 @ 15:06 GMT
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...
Both bulls and bears added bets on US dollar ahead of the June FOMC meeting, as suggested in the CFTC Commitments of Traders report in the week ended June 12. Both speculative long and short positions were increased in USD...
Despite government's violent intervention, Catalonia's referendum took place and resulted in an overwhelmingly "yes" to seceding the region from the rest of Spain. European financial markets' reactions are rather negative to the outcome. Euro's selloff accelerated in the European morning with EURUSD falling -0.7% at the time of writing this report. Spanish equities fell with the benchmark IBEX index losing over -1% in the morning session. Treasuries fell, sending yields higher. The 10-year Spanish government bond yields soared to a 2.5-month high of 1.68%. Spread between Spanish-German 10 yields rose to the highest in 3 weeks.
There is a comeback of concerns over Italy’s financial situation as next year’s fiscal budget would soon be revealed. As an election promise, the populist M5S/League coalition government could likely propose a number of expansionary measures including tax cut...
As suggested in the CFTC Commitments of Traders report in the week ended August 7, speculative long positions increased +1 039 contracts in USD index futures, while shorts dropped -607 contracts, resulting in an increase in NET LENGTH to...
In our report last week, we pointed out that monetary policy divergence between the Fed and other major central banks has re-emerged since April. While economic developments in the first several months of the year have reinforced FOMC’s commitment...
The upcoming New Zealand election would be a tight race between the incumbent National Party and Labor Party. Polls of polls compiled by both RNZ and Stuff indicate that supports for both parties are at around 40%. Moreover, opinion polls have been suggesting that neither of the parties would be able to a government without forming coalition with smaller parties. This is such uncertainty that has increased the volatility of New Zealand dollar of late. This report compares the impacts of various scenarios on the economic growth outlook and the monetary policy, hence the exchange rate. We believe that maintain the status quo - a minority government led by Nationals- would be the most NZD-favorable, while a Labor + Green+ NZ First trio would lead to an immediate, but short-term selloff in the currency.
As suggested in the CFTC Commitments of Traders report in the week ended August 14, NET LENGTH of USD index increased further, by +1 931 contracts, to 30 102 for the week. This was driven by the fact that...
Failure to rescue currency slump despite aggressive rate hike has led Argentina to seek IMF bailout. Last week, it was reported by the government has asked for a flexible credit line worth $30B from the world lender. According to...
Italy’s two populist parties – the anti-establishment Five Star Movement and the far-right League- have agreed on a prime minister candidate, clearing another hurdle to forming a new coalition government. Over the weekend, members of both parties approved the...
The CFTC Commitments of Traders report in the week ended November 6 shows that all major currencies (except USD) remained in NET SHORT positions. Speculative longs on USD index fell -1 564 contracts while shorts declined -2 323, sending...
The CFTC Commitments of Traders report in the week ended May 28 shows that NET LENGTH in USD Index climbed higher, by +386 contracts, to 27 098. Both speculative long and short positions increased during the week. Traders continued...
GDP growth should have moderated in 4Q18 and would remain lukewarm 1H19. Although the Italian government eventually backed down in the budget plan, political risks in the region have not yet abated. European Parliament election scheduled in mid-May and...
The CFTC Commitments of Traders report in the week ended May 21 shows that NET LENGTH in USD Index edged slightly higher, by +35 contracts, to 26 712. Both speculative long and short positions increased during the week. All...
Since our last discussion in May, the financial situation in Argentina has not improved. Rather, it has deteriorated rapidly over the past few months. Last week, President Mauricio Macri announced that he had asked the IMF to accelerate disbursement...
As suggested in the CFTC Commitments of Traders report in the week ended May 7, NET LENGTH in USD Index decreased -716 contracts to 28 233. Both speculative long and short positions fell during the week. All other major...
As suggested in the CFTC Commitments of Traders report in the week ended August 21, NET LENGTH of USD index rose +2 089 contracts for 34 122 contracts for the week. However, this was driven by the decline in...
As suggested in the CFTC Commitments of Traders report in the week ended November 13, NET LENGTH in USD Index persisted despite little volume. All other major currencies stayed in NET SHORT positions. This came in line with the...
(Updated on 0230 GMT, May 30) 10-year Italy-Germany yield spread jumped further to 2.83%, highest since 2013, on May 29. Hopes of forming a populist coalition government in Italy hit the rocks as President Sergio Mattarella rejected eurosceptic Paolo Savona’s...
At the meeting later this week, we expect BOE members to vote unanimously to keep the Bank rate unchanged at 0.75% and the asset purchase program at 435B pound. The macroeconomic indicators released during the inter-meeting period are mixed,...
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