Mon, Apr 19, 2021 @ 14:44 GMT
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USD Remains Near One Month Low

The USD was rather weak on Friday remaining near a month low against a basket of its peers, as the Fed reiterated its view that any spike of inflationary pressures is more likely to be temporary. Also an improved market sentiment, did not allow for the greenback to gain...

Slow Start To A Busy Week

Asian shares were mostly higher on Monday while US equity futures are trading mixed after the S&P 500 and Dow Jones closed at all-time highs on Friday. Last week's strong economic data from the United States and China have fueled hopes ofa solid global economic recovery. Bumper corporate earnings from...

Technical Picture In The Interest Rate Markets And The FX Market Will Prevail

Markets Markets last week showed a remarkable disconnect from a series of high-profile (US) data releases. A set of very strong US data, including higher than expected inflation, a strong beat in retail sales, promising confidence indicators and strong housing data weren’t enough to prevent a (technically) significant setback in...

Pull Back in Treasury Yields Boosted Stocks to New Record, Dollar Set Up for More Downside

Dollar tumbled broadly again as falling treasury yield pushed US and German stocks to new record highs. Near term trend in the greenback should have reversed, but it's unsure whether it's ready for medium term down trend resumption yet. At least, EUR/USD will have to break through 1.2 handle...

Has Gold Ended the Eight Months Correction?

There’s a lot of talk in Fintwit lately suggesting that precious metals may have ended the long 8 months correction and ready for the next glorious rally. In this article, I will attempt to answer the question whether Gold has ended correction or not using technical analysis. I will...

European Open: China GDP Accelerates To Highest On Record

China's growth more than delivered in Q1 with a rise of 18.3% YoY. Still, it was slightly below expectations but, with number as punchy as these, it will do. Asian Indices: Australia's ASX 200 index rose by 1.5 points (0.02%) and currently trades at 7,060.10 Japan's Nikkei 225 index has...

Don’t Fight The Fed! Yields, Gold, And DXY

The Federal Reserve has been telling us time and time again that they are going to keep monetary policy accommodative until ACTUAL inflation is within the 2%-3% range. They told us inflationary expectations are transitory and that the rising in yields was unsustainable. Yet even with strong US data...

US Dollar Index Outlook: Dollar Index Falls To One-Month Low But Bears May Take A Breather

The dollar holds in red against its major counterparts for almost two weeks and hit one-month low on Thursday. Falling US Treasury yields and signals that the US central bank will keep ultra-low interest for some time, despite recent strong economic data which point to accelerating economic recovery, continue to...

European Open: AU Jobs ‘Hire’, Ominous Day On The Nasdaq

Yet more positive data from Australia saw the ASX 200 hit fresh highs, yet AUD traders look elsewhere. And yesterday’s key reversal on the Nasdaq warrants a look. Asian Indices: Australia's ASX 200 index rose by 44 points (0.63%) and currently trades at 7,067.10 Japan's Nikkei 225 index has risen...

Is USD/CHF Trying To Tell Us Something About DXY?

DXY and USD/CHF is known to have a positive correlation, and it’s usually a strong one. As such, when traders don’t have access to the DXY, they sometimes trade USD/CHF as a proxy. Except for a brief dip in late February, the correlation between the 2 assets has been...

CPI Data: Buy the Rumor, Sell the Fact: DXY, EUR/USD

The US March CPI headline YoY print was 2.6% vs 1.7% in February.  2.5% was expected.  While it is true that March’s print is much stronger, the YoY data is distorted.  Recall that between March and May last year, businesses were closing their doors and lockdowns were in place...

US Stockmarkets Rally On Optimism

US stockmarkets were on the rise on Friday, with Dow Jones and S&P 500 reaching new record highs, while Nasdaq also rose, as the market seems to shake off inflation worries adopting a more risk on approach. The USD continued to remain pinned down against a number of its...

USD Index Outlook: Dollar Gained Traction After The Worst Week In 2021 But 200DMA Caps For Now

The dollar extends consolidation above 2 –1/2 week low after bears were sidelined by stronger than expected US producer price data that improved the mood. Lower Treasury yields kept the greenback under pressure last week which resulted in the biggest weekly loss this year. Larger uptrend from early January, driven by...

European Open: Powell Talks Of ‘Inflection Point’ For US Economy

Fed Chair Jerome Powell’s comments were aired on Sunday night in the US on '60 minutes', although he also reiterated that risks to the recovery remain. Powell also said that the principles risk to the economy is that the disease would spread again, and the recovery would be uneven. Yet...

The Dollar Tries To Extend Friday’s Rebound With The DXY At 92.30

Markets Markets on Friday backtracked on the benign environment of softer yields and a weaker dollar that reigned most of last week. Inflation roared back into spotlight. Chinese CPI and PPI were stronger than expected. This narrative was solidified as US PPI jumped 1.0% M/M and 4.2% Y/Y, with core...

USD Retreats Ahead Of The Fed’s Minutes Release

The greenback weakened to a two-week low against a basket of its counterparts yesterday after U.S. treasury yields declined as high expectations for the Fed to tighten its policy earlier than stated, seem to be on the retreat. In the epicenter of trader's attention is the release of the...

European Open: GBP Looking Weak Ahead Of The Open

After a noteworthy bearish session for the pound yesterday, its not look much happier today ahead of the open. Asian Indices: Australia's ASX 200 index rose by 38.2 points (0.55%) to close at 6,924.10 Japan's Nikkei 225 index has risen by 61.1 points (0.21%) and currently trades at 29,757.73 Hong...

Dollar Bulls Losing Traction; US NFP Could Spark Deeper Pullback

The dollar extends consolidation into second day as bulls take a breather under new five-month high (93.45). Lower volumes in pre-holiday trading and higher than expected US jobless claims, could cause deeper drop, as reversal pattern is forming on daily chart. Investors focus on US March non-farm payrolls data, which could...

What Is The US Dollar Index And How Can You Trade It?

What is the US Dollar Index? The US Dollar Index (DXY, DX, USDX) measures the value of the United States dollar relative to a basket of other currencies, including the currencies of some of the US's major trading partners. The Dollar Index rises when the US dollar gains strength compared...

Dollar Could Hold Strong Again Today

Markets Biden's leaked $2.25tn stimulus plan supported risk sentiment on US markets yesterday. Despite ambitions to fully fund the proposal by raising corporate taxes, WS finished a tech-lead rally up to 1.5% (Nasdaq) higher. Some end-of-month rebalancing from surging value stocks to growth was also at play. Very strong US...

Two Trades To Watch: FTSE, US Dollar Index

FTSE bulls need to break above 6800 After a weak handover from Wall Street & Asia the FTSE is pointing to a mildly negative start. Elevated US treasury yields continue to sap demand for equities. UK Q4 GDP final reading came in better than expected recording 1.3% QoQ growth versus 1% previously....

The Rise of the US Dollar and Yields into Month/Quarter End

In our Week Ahead for last week, we highlighted the daily US Dollar Index (DXY) as the Chart of the Week.   We noted that price had broken out of a flag pattern on the daily timeframe and was heading towards the target price from the flag breakout and a...

Markets Cautious Ahead Of Holiday-Shortened Week

Biden's infrastructure plan and US jobs report in focus. Dollar enters the week on firm footing. Gold lingers around $1730. Asian shares turned mixed on Monday while US equity futures slipped despite Wall Street ending Friday on a strong note. Investors seem to have entered the holiday-shortened week in...

Risk Sentiments Turned On Again, But Euro Likely to Stay Weak on Third Wave

After staying cautious for most of the week, risk sentiments were turned on again towards the end, bringing DOW and S&P 500 to new record highs. Aussie, Kiwi and Sterling staged a strong come back while Yen and Swiss Franc were deeply sold off. Yet, Dollar ended as the...

Week Ahead: Where Do We Start?

This could be one of the busiest weeks of the year for the markets or it could be extremely dull.  The coronavirus is still plaguing Europe. With more lockdowns and restrictions on the way, the vaccine rollout continues to be slow.  There is still a ship stuck in the...

DXY Tests Key Levels

As the US dollar index (DXY) reaches its 200-DMA for the 1st time since May of last year and EURUSD breaks below its own 200-DMA, traders ought to watch these key levels for a possible breakout(down). That is expecially the case if oil makes a fresh descent under 58.00....

7-Year Auction Preview: Will It Be As Bad As February’s Auction?

What: US 7-year Treasury Auction When: Thursday, March 25th, 2021 1:00pm Why is it important: Recall the 7-year Treasury note auction on February 25th. It was bad. The bid-to-cover was 2.045, which is the lowest on record. In addition, indirect bidders fell to 38.06%. Indirect bidders are often used as a...

Would US PMI’s And Durable Goods Highlight The Divergence In The Pace Of The Recovery?

Markets From moderation to risk-off, that's the change in narrative on global (bond) markets this week. End of last week and early this week, a pause in the sharp rise of long term yields provided breathing space to risky assets, especially ‘highly valued' tech stocks. This feeling of relief eroded...

Fed: Progress Is Developing More Quickly, But The Recovery Is Far From Complete

Markets A moderation in US yields facilitated benign global trading yesterday. The correction was modest and didn’t change the broader steepening trend. US yields declined between 0.2 bps (2-y) and 3.5 bps (30-y). The correction was due to lower real yields (-4.25 bps 10-y). While modest, it supported interest rate...

Sunset Market Commentary

Markets The Fed reiterated its commitment at Wednesday’s policy meeting to keep policy extremely accommodative until its aim for inflation above 2% and maximum employment will be visible in hard data. Late last week, investors doubted that this would be enough to halt the protracted curve steepening. US yields held...