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BOC to Look Through Strong March Inflation and Maintain Dovish Stance

At the BOC meeting next week, we expect Governor Stephen Poloz to reinstate the stance that the next policy rate move would be data-dependent. The latest inflation report surprised to the upside. Yet, the central bank would likely look through it as other data continued to show decelerating growth...

Eurozone PMIs, Retail Sales from UK, US and Canada Watched

Asian markets turned softer today, ahead of long weekend. Major indices are trading in slightly in red as traders lighten up positions. In the currency markets, Yen is so far the strongest one for today, naturally. Australian Dollar is the second strongest, as lifted slightly by solid employment data....

US Crude Oil Inventory Surprisingly Declined as Production and Imports Trimmed

The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks surged +7.22 mmb to 1229.13 mmb in the week ended April 12. Crude oil inventory surprisingly dropped -1.4 mmb to 455.15 mmb (consensus: +1.71 mmb). Inventories declined in 3...

Canadian Dollar Jumps on CPI, Treasury Yields Rise on China Data

Global treasury yields are boosted by solid data from China today. German 10-year yield hit at high as 0.104 and is now back at around 0.08. US 10-year yield breaches hit 2.614 and it's now trying to own 2.6 handle. These are both signs of improvements in market sentiments...

Aussie Lifted by Strong China Data, Kiwi Tumbles on CPI and RBNZ Bets

Australian and New Zealand Dollars have very different fortunes today. Aussie was boosted higher by stronger than expected Chinese data. On the other hand, Kiwi dived as weaker than expected CPI raises the chance of RBNZ rate cut at next meeting. In between, Euro is the second strongest so...

China First Quarter GDP Growth Beat Expectations. Key Macro Data Rebounded in March, albeit from Low Base

China’s GDP expanded +6.4% y/y in 1Q19, same pace as 4Q18 but beating consensus of +6.3%. Major macroeconomic data showed strong rebound in March and exceeded expectations. Over the past weeks, data flow in China has already signaled improvement in China’s economy: Both headline CPI and PPI markedly recovered...

Funds Flowing Out of Safe Haven Swiss Franc, Gold and Bonds

Funds are flowing out notably from safe haven assets today. Gold dives through 1280 handle and is resuming fall from 1346.71 high. German 10-year yield is up for another day at 0.067. US 10-year yield is also trading stronger at 2.575, possibly targeting 2.6 handle. In the currency markets,...

Australian Dollar Tumbles on Dovish RBA Minutes, New Zealand and Canadian Also Weak

Commodity currencies are generally under some selling pressure today. Australian Dollar is the weakest one as RBA took another step to laid the ground for rate cut by dovish minutes. RBNZ Governor Adrian Orr reiterated the central bank's easing bias. Canadian Dollar was sold off overnight after poor Business...

RBA Minutes – Confirming Dovish Monetary Policy Stance. Low Inflation Raises the Chance of Rate Cut

While RBA had left the cash unchanged at 1.5% in April, the minutes for the meeting was closely-watched. Recall that the central bank turned more dovish as it acknowledged more downside risks to the growth outlook. The minutes reinforced this view. More importantly, the minutes affirmed that the central...

Forex Markets Turn Mixed as Risk Appetite Cools, More Inspirations Needed

The forex markets turn relatively mixed today and markets lack a general direction. Risk appetite appeared to be firm earlier in Asian session but quickly faded. Major US indices open the day mildly lower. While German 10-year yield is trading up at the time of writing, US 10-year yield...

Risk Appetite Lifted by More US-China Trade Optimism, Eurozone and China Data Watched This Week

Dollar trade mildly lower in Asian session after more verbal attack on Fed by Trump. Australian Dollar follows as second weakest, paring some of last week's gains. On the other hand, New Zealand Dollar is the second strongest one, followed by Sterling. But after all, all major pairs and...

Yields Surged, Yen Tumbled on Receding Global Risks

The financial markets were generally dominated by positive sentiments last week. Major global economic risks seemed to be receding generally, even though some uncertainties remain. The development was best seen in the strong rally in treasury yields. US 10-year yield closed the week up 0.059 at 2.56, above 2.554...

CFTC Commitments of Traders – Traders Trimmed Bets on USD, EUR, GBP and NZD

As suggested in the CFTC Commitments of Traders report in the week ended April 9, NET LENGTH in USD Index increased +598 contracts to 29 446. Both speculative long and short positions dropped as the market awaited the FOMC minutes. All other major currencies stayed in NET SHORT positions....

CFTC Commitments of Traders – Trades Bet Higher Prices in Crude Oil, Gold and Silver

According to the CFTC Commitments of Traders report for the week ended April 9,  NET LENGTH for crude oil futures jumped +35 301 contracts to 516 662 for the week. Speculative long positions rose +31 454 contracts while shorts dropped -3 847. Traders remained bullish as crude oil price...

Global Sentiments Boosted by Rebound in Chinese Exports, German & US Yields Surge

Global market sentiments appeared to be given a strong boost by trade data from China. The much larger than expected rise in export is seen as positive sign of global demand. While there were some weak spots in the set of data, investors are enjoying the rally anyway. The...

Euro Picks Up Broad Based Strength Thanks to Rebounds in Crosses

Euro jumps broadly in Asian session today, partly by extended rebound in EUR/AUD, EUR/CAD, and more importantly EUR/CHF. The common currency has clearly left behind the mild dovishness of ECB earlier this week. EUR/JPY also resumed recent rise thanks to broad based weakness in Yen. Stocks markets are mixed...

Brexit Update – Article 50 Extended Again

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 would take place in June so as to check if...

Dollar Rebounds as Boosted by Jobless Claims, But No Confirmation of Turnaround Yet

Dollar strengthens notably in early US session with help from another set of solid job data. Initial claims is back trending down and hit another low since 1969. 10-year yield is also recovering and could head back to 2.5 handle. Meanwhile, Euro is following as a close second. Canadian...

ECB Review – Reinforcing Dovish Tone. TLTROs Details to be Announced in Coming Months

ECB shrugged off the improvement in the economic data since the last meeting, reinforcing its dovish stance and raising the likelihood of further easing measures. The focus of the meeting was arrangements for TLTRO III and the tiered deposit rate system. For the former, President Mario Draghi has suggested...

FOMC Minutes – Pouring Cold Water on Doves who Expect Rate Cut This Year

Contrary to the market which has been pricing in a rate cut later this year, the Fed affirmed in the minutes for the March meeting that the members’ consensus was no change in the monetary policy for the rest of the year. Indeed, a few of them still favored...