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Week Ahead: Bank of Canada to Reduce Purchases; Global Economic Recovery to Pickup

The global economic recovery is gaining momentum as the world’s two largest economies continue to deliver robust economic readings. China’s economy grew 18.3% in the first quarter, a record rate that sets the example of what we can expect as the rest of the world recovers from COVID-19. The...

Dollar Edges Lower in Quiet Trading, Gold Extends Rally

Dollar edges lower today but there is no follow through selling so far, in quiet markets. Still, the greenback is set to end the week as the worst performer, followed by Canadian and Swiss Franc. Sterling dipped notably earlier today but quickly recovered. Australian and New Zealand Dollar are...

Falling Yields Boosts Stocks and Sentiments, Dollar in Consolidations

Sharp decline in US treasury yields overnight boosted DOW and S&P 500 to new record highs. Positive sentiments also somewhat carried on in Asian session today, as supported by solid data from China. The forex markets are quiets, however. Dollar is recovering some of this week's losses, but remains...

BoJ Kuroda: It’s still possible to achieve 2% inflation target

BoJ Governor Haruhiko Kuroda reiterated to the parliament today that there is no need to change the 2% inflation target. He expected inflation to be negative for now due to the impacts of the pandemic. But consumer prices will "rebound thereafter, gradually accelerate the pace of increase." "It will...

Strong US Data Boosts Futures, But Dollar Has Little Reaction

A batch of very strong US economic data shoots DOW futures sharply higher ahead of open. Retreat in 10-year yield is also helping sentiments mildly. But Dollar is having little reaction so far, except recovery mildly against Euro and Swiss Franc. Australian Dollar is now the strongest one for...

Dollar Taking a Breather as EUR/USD Presses Near Term Resistance

The forex markets turned mixed in Asian session. Dollar is taking a breather after yesterday's selloff, but remains the worst performing one for the week. Australian Dollar retreats mildly after strong employment data. But the Aussie is still the second strongest for the week, just after New Zealand Dollar....

BoJ downgrades assessment of Hokkaido and Tohoku regions

In BoJ's Regional Economic Report, assessments for two regions, Hokkaido and Tohoku, were downgraded. Hokkaido's economy has "remained in a severe situation" and has been "more or less flat. Tohoku's economy has "picked up as a trend" but impact of resurgence of coronavirus appears to be "growing recently". Assessments...

Swiss Franc Weakens With Dollar, Aussie and Kiwi Firm

The financial markets are generally steady today, as European indices are mixed in tight range. US futures point to slightly higher open, as S&P 500 could extend record run. Gold and oil are both still range bound. In the currency markets, Aussie and Kiwi continue to trade as the...

BoJ Kuroda: Recovery sustains as business sentiments improves for three straight quarters

BoJ Governor Haruhiko Kuroda said "while Japan's economy remains in a severe state due to the pandemic's impact, it is picking up as a trend". As a whole, "recovery is being sustained as business sentiment improves for three straight quarters." Still, Kuroda warned that "downside risks remain high". BoJ will...

Dollar and Stocks Lower on J&J Vaccine Pause, Euro Rises

Dollar trades mildly lower entering into US session, after US FDA and CDC recommend pause of J&J COVID-19 vaccines on blood clot issue. DOW futures also turn south and point to slightly lower open. Meanwhile, UK Prime Minister Boris Johnson also warned that the fall in infections was due...

Yen Softens in Quiet, Directionless Markets, Dollar Regains Ground

The forex markets are generally quite and directionless for the time being. After very brief selloff yesterday, Dollar is regaining some ground in Asian session today. Sterling is mildly firmer too, but there is no follow through buying. Yen is currently the weaker one together with Swiss Franc and...

BoJ Kuroda: There’s quite a lot of positives from a weak yen

BoJ Governor Haruhiko Kuroda told the parliament today that there's "quite a lot of positives for Japan from a weak Yen". Companies with overseas profit could have their yen-denominated value increase from a lower yen. Nevertheless, a weak Yen might not boost export as much as the part, because...

Week Ahead: Fed’s Inflation Calm About to Get Tested

The Fed has clearly signaled they are not worried about inflation and that should worry financial markets. The Fed has repeated that inflation will be transitory, but financial markets have never seen this record amount of stimulus get pumped into the economy. The US economy is about to run...

Week Ahead: US Jobs Hiring Spree Suggests Reflation Trade is Back

Country US The US economy is about to run hot as a hiring spree has officially started.  The dollar may have got its groove back as Treasury yields are rising again.  It will take several months of massive job gains to alter the Fed’s stance, so investors can feel confident that...

Dollar Retreats after Jobless Claims, Sluggish Pre-Holiday Trading Elsewhere

Dollar retreats mildly in early US session after weaker than expected job data. Also, treasury yield is retreating mildly while stocks point to higher open, in particular NASDAQ. Pre-holiday trading in the currency markets is generally mixed. Aussie tumbled earlier today but has recovered a large part of the...

Aussie Tumbles in Pre-Holiday Markets, Dollar Awaits ISM

Dollar is generally firm today while selling focus turned to Australian Dollar, and other commodity currencies. It's unsure what's the exact catalyst for the selloff in Aussie. But recent pull back in copper price is likely one of the reasons at least. Euro, Yen and Swiss Franc, recover, except...

Japan Tankan large manufacturing index rose to 5 in Q1, highest since Q3 2019

Japan Tankan Large Manufacturing Index rose to 5 in Q1, up from -10, above expectation of 0. That's also the highest level since Q3 2019. Non-Manufacturing Index rose to -1, up from -5, above expectation of -5. Large Manufacturing Outlook rose to 4, up from -8, matched expectations. Non-Manufacturing...

Sunset Market Commentary

Markets Core bonds traded a choppy pattern with USTs underperforming the Bund today as markets await Biden raising the curtain on a new stimulus plan. Details of the proposal, dubbed “The American Jobs Plan” were already made available however. Biden aims to spend $2.25tn over the next eight years, channeling...

Sterling and Loonie Rises, Dollar Shrugs ADP and Awaits Biden

Yen remains generally weak in early US session today. But buying focuses against the Japanese currency has somewhat turned from Dollar to Sterling and Canadian. Both the Pound and Loonie were lifted slightly be better than expected GDP data. On the other hand, Dollar's rally is losing some momentum....

Wobbly Yen Pressing on 111

The Japanese yen continues to lose ground this week. Currently, USD/JPY is trading at 110.67, down 0.30% on the day. Earlier in the day, USD/JPY touched a high of 110.96. This was within a whisker of the 111 line, which has held since March 2020. Dollar having its way with the...

Selloff in Yen and Franc Continues, Euro also Weak

Selloff in Yen and Swiss Franc remain a main theme in the markets in Asia today, while Euro is also weak. Dollar is staying firm but it's struggling to extend gain against commodity currencies and Sterling for now. Indeed, Aussie and Loonie are now trying to reverse some of...

Japan industrial production dropped -2.1% mom in Feb, more contraction expected in Mar

Japan industrial production dropped -2.1% mom in February, worse than expectation of -1.3% mom. In addition to pandemic restrictions, production was disrupted by the 7.3-earthquake off the coast of eastern Japan on February 13. Manufacturers surveyed by the Ministry of Economy, Trade and Industry expected output to drop another -1.9%...

Dollar Surges on Renewed Rally in Yields, Yen and Gold Tumble

Dollar rides on renewed rally in US treasury yields and trades broadly higher today. The greenback's strength is quite overwhelming for now. On the other hand, Yen and Swiss Franc are trading as the weakest ones, followed by commodity currencies. The stock markets are having little reactions so far,...

Yen Drops Broadly as Yields Rose on Optimism

Yen trades generally lower today following surging treasury yields and some firmness in stock markets. While it's not yet a full risk-on market, sentiments are positive for now. Swiss Franc, Euro and Dollar also turn slightly softer. On the other hand, commodity currencies and Sterling are trading generally higher. Technically,...

BoJ Kuroda: Absolutely not that case of exiting ultra-loose policy

BoJ Governor Haruhiko Kuroda reiterated in an interview with the Japan Daily, the central bank had "absolutely no play" to stop ETF purchases, or unload its holdings. "We will continue to buy ETFs flexibly and in a nimble fashion, so it's absolutely not the case that we are exiting...

Currency Pair of the Week: USD/JPY

The US Dollar has been on a tear since the beginning of 2021, following interest rates higher. With the Fed still flooding the market with US Dollars via monetary stimulus, US President Joe Biden’s $1.9 trillion fiscal stimulus plan passed, an estimated $3 trillion of infrastructure spending on its...

Sterling Rises in Quiet Markets, Lifted by Buying Against Euro and Franc

Sterling trades generally higher today, with much help from buying in crosses against Euro and Swiss Franc. Australian and New Zealand Dollar are also firmer even though overall market sentiments are mixed. Canadian Dollar, on the other hand, remains a softer one, followed by Euro and then Swiss Franc....

Japanese Yen Starts Week In Calm Waters

The Japanese yen was almost unchanged last week and the lack of activity has continued in the Monday session. Currently, USD/JPY is trading at 109.61, down 0.06% on the day. Will US yields push yen above 110? USD/JPY has stabilized but remains within striking distance of the 110 line, which has...

Canadian Dollar Mildly Lower in Quiet Markets, Following Oil Retreat

The markets open a holiday-shortened week in a quiet note. Canadian Dollar is trading mildly lower, following retreat in oil prices. The giant container that blocks the Suez Canal, Ever Given, is finally starting to refloat, partly thanks to higher-than-usual spring tides. Elsewhere in the forex markets, Dollar and...

BoJ opinions: Important to firmly continue with pandemic policy responses

In the Summary of Opinions of BoJ's March 18-19 meeting, it's said, "for the time being, it is important for the Bank to firmly continue with policy responses to the impact of COVID-19. The Bank should continue to provide support for financing, mainly of firms, and ensure stability in...