FOMC Review – Divided Fed Signals Rate Cut This Year Still Likely
FOMC left the policy rate unchanged at 2.25-2.50% but with one dissent. St Louis Fed President James Bullard voted against the decision as he proposed to cut the rate by -25 bps. The dot plot projections show that more members are in favor of lowering interest rates. The policy...
US Crude Oil Inventory Fell For First Time in Three Weeks
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks decreased -0.41 mmb to 1316.77 mmb in the week ended June 14. Crude oil inventory fell -3.11 mmb to 482.36 mmb (consensus: -1.08 mmb). Inventories rose in 2 out...
Canadian Dollar Jumps on CPI, Dollar Mixed Awaiting FOMC Guidance
Canadian Dollar jumps broadly in early US session, after stronger than expected inflation data remove another reason for BoC rate cut. Though, for now, Loonie is overshadowed by Sterling and Swiss Franc, which are the strongest ones. Meanwhile, risk appetite recedes mildly ahead of FOMC rate decision. Dollar is...
Sentiments Boosted by Trump and Draghi, But Traders Hold Their Bets ahead of FOMC
Market sentiments were given two strong boosts yesterday, first by ECB's indication of monetary stimulus ahead, then by renewed optimism of US-China trade negotiations. Positive sentiments carried forward to Asian session, with strong rally seen in major indices. Though, reactions in currency markets are relatively "refrained" as traders are...
Euro Tumbles, German Yield Hits Record Low as ECB Prepares for More Easing
Surprisingly dovish comments from ECB President Mario Draghi sent Euro sharply lower, and German 10-year yield to new record low today. There are some speculations that ECB could eventually cut interest rates, with a tiered system", alongside released of new economic projections in July. The comments also send German...
Australian Dollar Tumbles on Dovish RBA Minutes, Sterling Weakens Too
Australian Dollar drops broadly today after RBA minutes confirm that more rate cuts are underway. Additional, worse than expected house price data gives the Aussie more selling pressure. Sterling is not far away as second weakest, ahead of the next round of UK Conservative leadership voting today. For now,...
RBA Minutes Indicate More Rate Cuts In Coming Months
RBA, in its June meeting minutes, explicitly noted that the policy rate would be lower. This message came in more dovish than market expectations. The major concern remained in the lackluster improvement in the labor market. RBA cut the bank rate by -25 bps to 1.25% in June. The...
BOE Preview – Record Low Interest Rate Remains Intact Despite Recent Hawkish Comments
We expect BOE to leave the policy rate unchanged at 0.75% this week. It would also keep the size of the asset purchase program at 435B pound. Although there has been some noise pushing for a rate hike, we expect the votes on both measures to be unanimous.
UK’s economy...
Euro Rises on Strong Wage Growth, Dollar Softens on Weak Data
Euro strengthens broadly in mixed forex markets today. Record wage growth in Q1 is a factor under-pinning the common currency. Poor US economic data also helps. But at this point, strength mainly centers in crosses, against Aussie most notably. Meanwhile, New Zealand Dollar is the second strongest one for...
Dollar Firm as Markets Skeptical on Fed Insurance Rate Cut Path
Dollar remains generally firm in quiet Asian markets today. The greenback continues to be supported by expectation that FOMC won't deliver any "insurance" rate cut this week. Instead, Fed policy makers will look at the upcoming developments before making a decision, in particular the result of G20 summit regarding...
FOMC Preview – Preparing for Rate Cut
The Fed could make a number of changes in the upcoming June FOMC meeting, to pave way for a rate cut in as soon as July. We would focus on three things: updated economic projections, adjustment in the forward guidance and median dot plot. It is likely that the...
CFTC Commitments of Traders – Bets on USD Futures Trimmed Further Ahead of FOMC Meeting
The CFTC Commitments of Traders report in the week ended June 11 suggests that bets for US dollar continued to fall on both long and short sides. NET LENGTH in USD Index dropped -2 245 contracts to 23 989. Both speculative long and short positions decreased during the week....
CFTC Commitments of Traders – Net Speculative Length for Crude Oil Futures Declined for Seven Weeks In A Row
According to the CFTC Commitments of Traders report for the week ended June 11, NET LENGTH for crude oil futures dived -48 513 contracts to 351 655 for the week. Speculative long positions plunged -23 490 contracts while shorts jumped +25 023. More traders were speculating weaker oil prices...
Dollar Rebounded Strongly as Focus Turns to FOMC Meeting
Dollar ended as the strongest one last week as economic data from the US affirmed that Fed is in no rush to deliver the "insurance" rate cut this month, that is, on June 19. Yen was the second strongest as US and German treasury yields stays pressured. Canadian Dollar...
China’s Economic Data Prove Economy Slowing Down. PBOC Could Follow FOMC in Cutting Interest Rate
Despite the mixed headline readings, China's macroeconomic data in May were in line with our view that the country's economy continues to slow.
Growth in industrial production fell to 5% y/y, missing consensus of , and April's, 5.4%. IP growth in May marks the lowest growth since 2002. Moreover, this...
Dollar Rises Broadly on Retail Sales and Industrial Production
Dollar jumps broadly in early US session after solid gain in retail sales in May, with upward revision in April figures. Yen is following as the second strongest on risk aversion, followed by Canadian Dollar. Geopolitical tensions heightened after US blame Iran for attacks on oil tankers yesterday. New...
Geopolitical Tensions and Poor China Down Weigh on Sentiments, Gold Shines and Yen Jumps
The financial markets are generally weighed down by risk aversion. Geopolitical tensions heightened after US blamed Iran for involving in the oil tanker attacks near the entrance to the Persian Gulf on Thursday. But Iranian officials denied any involvement and reiterated calls for a regional dialogue. Adding to that...
SNB Maintained Pledge to Intervene FX Market if SNF Too Strong. Question is How to React if Fed and ECB Ease Further
In its quarterly meeting, SNB announced to leave the policy rate – the interest rate on sight deposits, unchanged at -0.75%. On a technical change, the central bank introduced a new benchmark – the SNB policy rate- in replacement of the 3-month LIBOR. The members acknowledged recent strength in...
Swiss Franc Lifted by Attacks on Oil Tankers, Shrugs SNB
Attacks on two oil tankers in the Gulf of Oman is the biggest news in early US session. WTI oil price is up 3.5% and is back pressing 53 handle after dipping to 50.85 yesterday. The news is both supportive Swiss Franc and Canadian Dollar, which are currently the...
Australian Dollar Dives as Job Data Gives Nod to More RBA Rate Cuts
Australian Dollar tumbles broadly today as weak employment data solidifies the case for more RBA rate cut ahead. The headline number might be strong but the details are generally weak. The Aussie is also generally pressured by mild risk aversion in Asian markets. For now, Dollar is following Aussie...