Wed, May 19, 2021 @ 00:25 GMT
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US Data Show Strong Inflation, Improving Job Market, Sentiment Stabilizing

Overall market sentiment stabilizes mildly entering into US session. Major European indexes pared back much of earlier losses, while US futures also turned positive. Even though US PPI showed stronger than expected reading, slightly better than expected jobless claims is support sentiment, in a way. Dollar attempt to extend...

Inflation Fear Prompted Selloff in Bonds and Stocks, Dollar Extending Recovery

Extremely higher volatility was seen in the markets overnight, with the steep decline in stocks and rally in yields. Bitcoin also had a free fall. Negative sentiments continue in Asia with major indexes trading in deep red. In the currency markets, Australia and New Zealand Dollars are under most...

BoJ Kuroda: Important to respond to pandemic’s impact for now

BoJ Governor Haruhiko Kuroda told the parliament today that "economic activity will remain below pre-pandemic levels for the time being." Also, "risks to the economic outlook are skewed to the downside." Nevertheless, the economy as a whole is picking up momentum thanks to robust exports and productions. "We'll take into...

Euro Up on Strong Economic Sentiment, Global Stocks in Deep Red

Tech led global equities selloff is a major theme today, spreading from Asia to Europe to the US. In the background, there seems to be heightened concerns on inflation over surging commodity prices. European indexes are all in deep red while NASDAQ future is down another -1.6%. The reactions...

Asian Stocks in Deep Selloff, But Yen and Dollar Remain Weak

While US stocks hit another record high overnight, the path reversed with the three major indexes closing lower, with particular heavy selling in NASDAQ. Bearish sentiment continues in Asia session today, with Nikkei and Hong Kong HSI in deep red. Reactions in currency markets are mild, however, with commodity...

BoJ members emphasized the importance of vaccination pace

In the Summary of Opinions of BoJ's April 26-27 meeting, board members noted that risks to economic activity are "skewed to the downside" due to the impact of COVID-19, including the "current spread of variants" and "recent reinstatement of state of emergency". Also uncertainties remain high, such as "progress...

Weekly Focus – Central Banks Remain in Wait-and-See Mode

The global Covid-19 situation remains challenging. New global coronavirus cases rose for a ninth consecutive week by a record 5.7 million, as a 52% surge in India outweighed declines in most regions. Still, on a positive note the vaccination drive in Europe is picking up pace and the US...

US Dollar Creeps Higher Pre-FOMC

US yields give the dollar a slight boost The US dollar advanced unevenly overnight, as positioning gets rejigged ahead of the FOMC meeting, with short US dollar exposure being trimmed. US 10-year and 30-year yields rose notably overnight for much the same reason, which supported greenback gains. The dollar index...

Sunset Market Commentary

Markets Central bank meetings in Japan, Sweden and Hungary today were nothing but some minor distraction ahead of tomorrow’s Federal Reserve gathering. The Fed is expected to stick to the view that a transient increase in inflation doesn’t warrant a premature reversal of its very accommodative monetary policy. For the...

Swiss Franc Mildly Firmer in Subdued Trading

Trading in the financial markets is rather subdued today. Swiss Franc is the stronger one at the time of writing, followed by Dollar and Sterling. Commodity currencies, on the other hand, turn softer with Australian Dollar leading the retreat. But overall movements in the markets are limited. Gold and...

USD Stabilises By Edging Higher

The greenback gained a bit against a number of counterparts yesterday, yet commodity currencies such as the Loonie and the Aussie tended to outperform the USD, with the latter gaining also from high copper and iron ore prices. USD’s gains though seemed to remain capped as stocks started the...

Everything You Need To Know About The Bank Of Japan

The Bank of Japan has always received a lot of attention for its unusual monetary policies. Its interest rate announcements have the potential to move markets such as the Yen, Nikkei 225 and big Japanese stocks. Discover everything you need to know here. What is the Bank of Japan? The Bank...

Japanese Yen Dips After BoJ Meet

The Japanese yen has posted slight losses for a second straight day. Currently, USD/JPY is trading at 108.30, up 0.20% on the day. BoJ pessimistic about inflation target As expected, the BoJ held the course and did not make any changes to its current policy. In an 8-1 decision, the Board...

Just In Case

Technology earnings send Nasdaq to record high The buy everything gnomes were out in force overnight, with US stocks markets closing at or near record highs despite Durable Goods missing. The main culprit was transport, with the automotive sector’s chip-shortage woes appearing in the numbers. Financial markets, though, quickly put...

BOJ Downgrades Inflation Forecasts Significantly as It Struggles with Limited Tools

The BOJ left its monetary policy measures unchanged in April. However, it revised sharply lower the inflation forecasts for this fiscal year. The country’s economy has been far below the +2% inflation despite a decade’s unconventional easing measures. On the economy, the central bank acknowledged that “Japan’s economy has picked...

US Bond Yields Continue To Bottom Out

Markets We weren’t expecting much impact from yesterday’s US durable goods data given important events and data due later this week. Yet it proved a pivotal moment for day trading, especially in core bond markets. Goods orders, be it headline or core, by and large disappointed. Some special factors including...

European Open: Asia Trades Lower, Reversal Patterns Cloud European Indices

It wasn’t exactly a bear feast, but Asian equities were mostly lower overnight, yet volatility was capped. But do take note of the bearish reversal candles on European indices as it suggests all is now well at these highs. Asian Indices: Australia's ASX 200 index fell by -24.7 points (-0.35%)...

Japanese Yen Retreats After Dovish BoJ Decision

The Australian dollar was little changed in the Asian session after relatively positive economic numbers from China. According to the government, the country’s industrial profit jumped by 92.30% year-on-year in March after rising by 20.10% in the previous month. Year-to-date, industrial profits rose by 137% after rising by 178.9%...

Riksbank’s Repo Rate Path Will Stay Put

Market movers today The highlight of the day is the Riksbank meeting. The key questions are will the Riksbank provide new signals about the policy rate and will the central bank specify QE volumes in Q3? Since the February meeting, the pandemic has turned dramatically worse, which in conjunction...

Canadian Dollar Jumps While Dollar Recovers, Yen Shrugs BoJ

While NASDAQ and S&P 500 closed at new records overnight, there is no follow through risk-on buying in Asian session. Investors are generally still cautious ahead of Fed meeting. Dollar recovers in general but upside momentum is very weak. Canadian is extending gains and is now leading other commodity...

BoJ upgrades GDP forecasts on strong domestic and external demand

In the Outlook for Economic Activity and Prices, BoJ said, "the economy is likely to recover" with as impact of COVID-19 wanes gradually. Thereafter, it is projected to "continue growing with a virtuous cycle from income to spending intensifying". GDP growth forecasts were revised higher, "on the back of stronger...

BoJ stands pat, continue to closely monitor impacts of pandemic

BoJ kept monetary policy unchanged today as widely expected. Under the yield curve control framework, short-term policy interest rate is held at -0.1%. 10-year JGB yield target is kept at around 0%. The central bank will continue to purchase ETFs and J-REITS with upper limits of about JPY 12T...

Currency Pair of the Week: USD/JPY

This is shaping up to be a potential busy week for the US Dollar.  On Wednesday afternoon,  the FOMC meets to discuss interest rate policy. That evening, Joe Biden will address the Joint Sessions of Congress.  In addition, economic data could cause USD volatility this week.  Also this week,...

BoJ Meeting In Focus As Yen Drifts

The Japanese yen continues to drift. Currently, USD/JPY is trading at 107.20, down 0.13% on the day. It was a quiet week for the yen, which recorded small losses after three weekly gains. The yen has enjoyed an excellent month of April, rising 2.6% against a struggling US dollar. Last...

Dollar Selloff Extends as Focus Turns to Fed, BoJ, GDP and Inflation

Dollar's decline continues as another week starts as focus turns to Fed and BoJ, as well as a batch of important economic data. . European majors are also soft even though they managed to gain against the greenback. On the other hand, Australian and New Zealand Dollar are firmer...

Aussie Underperforms Despite Iron Ore Surge

Last week AUD/USD traded with the 0.7800 handle for the first time since 18 March, but it starts this week around 0.7750, almost dead flat overall. In the week ahead, data includes Australia Q1 CPI, while the global focus will be the FOMC meeting, testing investor confidence in the...

Weekly Economic & Financial Commentary: Raising the Bar Even Further

U.S. Review: Raising the Bar Even Further This week's lighter economic calendar allowed forecasters more time to assess the implications from the prior week's blowout retail sales report. We have revised our forecast for Q1 growth up to a 5.5% pace from 4.8% previously, and growth for the year...

Week Ahead: Central Banks, Coronavirus, Joe Biden and Big Tech Earnings

Heading into the end of April, central banks and earnings will give direction to the markets.  The ECB held its ground last week while the BOC chose to taper bond purchases from C$4 billion per week to C$3 billion per week. Are the FOMC and the BOJ in the...

BoJ to Lower Inflation, Raise Growth Projections; Yen Likely to be Unmoved

The Bank of Japan (BoJ) announces the outcome of its April monetary policy meeting on Tuesday and will also publish its latest Outlook Report. Japan is facing a fourth wave of the coronavirus, threatening new state of emergencies being declared across the country. However, the economy has been recovering...

Week Ahead – Fed to be a Yawn but Glowing US Data Could Spoil the Calm

Never have central bankers so seemingly sung from the same hymn sheet as Fed policymakers have in the past few weeks. Having successfully aligned market expectations, the Federal Reserve is almost certain to repeat the message that QE tapering is not on the near-term horizon when it meets next...