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FOMC Minutes Reinforced Patience Approach to Monetary Decision

The FOMC minutes for the meeting in May unveiled that the members remained optimistic about the economic outlook. They also viewed that soft inflation was a transitory phenomenon. These resulted in the judgment that “a patient approach” to monetary policy decision remains appropriate and the policy rate should stay...

Rising US Inventory Adds Selling Pressure To Crude Oil

Crude oil price weakened for a third consecutive day. Besides the risk-off mode driven by intensifying US-China trade war, further increase in oil inventory has substantiated near-term bearishness in the oil market. The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products...

Canadian Dollar Jumps on Retail Sales, Sterling Lower on Brexit, FOMC Minutes Next

US stocks open slightly lower today while major European indices are trading in red. But it's too early to say if risk aversion in back. US-China trade war is the biggest risks to the global economy and there is no end insight. Instead, it's reported that US is going...

Brexit Update – PM May’s Last Attempt to Win a Deal Likely in Vain

Possibly in her final attempt, UK Prime Minister Theresa May tries to win the parliamentary approval of the Brexit Withdrawal Agreement with a “bold new plan”. While the most eye-catching ingredient is a green light of a second referendum, the remainder of the plan was made by cobbling together...

Markets Mixed as Brexit and Trade War Remain Unresolved

Direction isn't very clear in the financial markets today as they're generally in consolidative mode. Sterling was lifted briefly overnight by UK Prime Minister Theresa May's new Brexit plan. But it was quickly back to square one after the plan was overwhelmingly rejected by MPs. For now, Canadian Dollar...

Yen Lower as Investors Relieved by Suspension of Huawei Ban, Sterling Higher on Short Covering

Risk aversion eased mildly today as markets respond positive to US decision to delay the sanctions of Huawei for 90 days. After some initial hesitation, Yen sell-off is picking up momentum in early US session, because of rally in stocks and treasury yields. On the other hand, Sterling is...

Australian Dollar Tumbles as RBA Hints on Rate Cut; Huawei Sanctions Temporarily Eased

Australian Dollar continues to be the spotlight of the week. It's knocked down by RBA Governor's comment that they's going to consider cutting interest rates in June meeting. It's actually slightly earlier than market expectations of an August cut. The selloff is more than enough to reverse post election...

RBA Removes Rhetoric of “No Strong Case” for Near-Term Rate Cut

RBA turned more dovish, than what was suggested in the meeting statement, in May. As the minutes revealed, policymakers expected to cut the policy rate if inflation remains weak while the unemployment rate climb higher. The latest economic forecasts, published two weeks ago, were based on the assumptions that...

US-China Trade War Intensifies with Huawei Isolation, Currency Markets Shrug Risk Aversion

US-China trade war remains a dominant theme in the global financial markets today. Words from both sides continued to indicate hard line stances. It doesn't quite matter how much close to facts are their rhetorics. What matters most is that neither the US or China is going to back...

Australian Dollar Cheers Election Results, Euro and Franc Turn Softer

Australian Dollar open generally higher this week as traders cheer election results over the weekend. Canadian Dollar is also firm after USMCA members reached an agreement to remove steel tariffs and retaliations. Risks sentiments are steady in mixed Asian markets. Nikkei closed mildly higher following much stronger than expected...

OPEC+ Maintains Output Cut. Market Balance Suggests No Practical Need to Raise Output

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. Despite US sanctions against Venezuela and Iran, as well as...

CFTC Commitments of Traders – USD Bets Trimmed Further as Trader War Uncertainty Persists

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 other hand, bets on both sides were increased in the...

CFTC Commitments of Traders – Oil Traders Awaited OPEC+ Meeting; Bets for Higher Gold Price Surged Amidst Safe Haven Demand

According to the CFTC Commitments of Traders report for the week ended May 14,  NET LENGTH for crude oil futures fell -6 528 contracts to 487 808 for the week. Speculative long positions declined -8 810 contracts while shorts slipped -2 282. Overall bets for crude oil diminished as...

CHF, USD & JPY Surged on Deals, Sterling Plummeted

Deal, deal, deals. They're the main themes in the markets last week. The cross-party Brexit talks in UK collapsed and a high profile Brexiteer is tipped to lead the Brexit process after current Prime Minister steps down. Tensions between US and China escalated further. A trade deal is now...

Sterling Pressured as Cross-Party Brexit Talks Collapsed, Sentiments also Weighed Down by Trade Worries

Sterling suffers heavy selling today as after Brexit negotiations between the UK government and opposition Labour formally collapsed. More uncertainties lie ahead as Prime Minister Theresa May will lay our the time line for stepping down, whether her Brexit deal would be approved by the Commons in June or...

Yen Mildly Higher as China Said to be Unkeen to Resume Trade Talks with US

Asian markets once again decouple from the US. While US stocks staged a strong rebound overnight, Asian indices are generally mixed. Weakness is indeed seen in China's Shanghai SSE while Yuan resumes recent free fall. There is some negative reaction to report that China is not eager to resume...

Sterling Extends Decline, Markets Shrug Trumps Huawei Threats

Market sentiments are generally steady today. Better than expected job and housing data lift Dollar mildly higher in early US session. Yen and Swiss Franc are trading of the softer side, paring some of this week's gains. While US moves to contain Huawei catch a lot of headlines, there...

Yen Firm as Risk Aversion Remains, Australian Dollar Lower on Unemployment Rate

US stocks recovered overnight on talks that Trump is going to delay auto tariffs decision, due May 18, by up to 6-months. All major stock indices staged mild recovery. German DAX also reversed earlier losses to close higher. However, such optimism wasn't carried through to Asian session today. In...

US Crude Oil Inventory Jumped to Highest Level since 2017

The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks surged +14.64 mmb to 1270.26 mmb in the week ended May 10. Crude oil inventory rose 5.43 mmb to 472.04 mmb (consensus: -0.8 mmb). While this marks the highest...

Yen and Franc Surge as German Yield in Free Fall on Italy Budget

Worries over Italy's budget takes center stage today. Italy 10-year yield hit as high as 2.812. On the other hand, German 10-year yield dived to as low as -0.131. US 10-year yield is also dragged down to as low as 2.364 so far. These are clearly signs of risk...