ECB to stand pat…but sound optimistic? • The ECB is widely exp. to remain on hold. Focus will be on the updated forecasts and Draghi’s press conference. • Forecasts for GDP and inflation may be revised up, which could support EUR. • Draghi is likely to suggest that the Bank is in a “wait and […]
Aussie jumps on strong export data • AUD surged after data showed exports were stronger than exp. in Q1. • This increases the likelihood for a positive surprise in Q1 GDP, due out Wed. • A strong GDP reading tomorrow could reduce the likelihood for an RBA rate cut next week, and support AUD. Today: […]
• Yellen keeps the door open a for summer hike • Fed Chair Yellen said that a rate hike would probably be appropriate in coming months. • USD rallied on the comments, and could continue strengthening in comings weeks. • Focus now shifts back to the data, to determine the timing of next rate move […]
• Fed Chair Yellen to set the tone on hikes • Given the “hawkish” comments by FOMC members, Yellen’s speech will set the tone for the likelihood of near-term hikes. • Her last appearance was very dovish, but we expect a more neutral tone today. • Likely to indicate a June hike is still in […]
• BoC stands pat, remains neutral • The BoC remained on hold and sounded neutral, disappointing investors who expected a dovish shift in language. • Loonie strengthened on the news and continued higher in the following hours. • Given the Bank’s neutral stance and that many of the oil sands are restarting production, we could […]
Bank of Canada may strike a dovish tone • BoC is widely expected to remain on hold following the fiscal boost in Mar. • However, the recent fires in Alberta have decreased oil output by roughly 25%. • This could raise concerns about Q2 GDP, as the situation is not resolved yet. • CB’s usually […]
Japan’s Aso defines intervention criteria • USD/JPY moves of 5 JPY in either direction over 2 days is “disorderly”. • He also added that it could be good for the pair to stabilize at around 109. • After G7, the likelihood for intervention is lower, but if we see excessive moves it may be tolerated. […]
G7 meeting: No agreement on FX interventions • Japan and the US disagreed on whether the yen’s recent moves were “orderly”. • Further verbal intervention by Japanese officials is unlikely to move the yen. • But given the soft data, speculation of further BoJ easing may keep JPY under selling pressure in the near-term. Today: […]
Fed minutes: June hike still in play • The minutes of the April FOMC meeting showed that if data continue to improve, it would be appropriate to hike in June. • The Committee felt that its communication in March was interpreted as more dovish than it expected. • USD surged on the news, while stocks […]
Japan dodges technical recession • Japan’s economy grew more than expected in Q1, avoiding a technical recession (two quarters of negative growth). • However, the report also showed that inflation slowed in the quarter. • JPY strengthened at the release, but gave back its gains in the following hours. • Low inflation keeps speculation elevated […]
Aussie jumps on RBA minutes • AUD/USD surged after the minutes of the latest RBA meeting showed that officials considered remaining on hold (instead they cut rates). • Investors may have interpreted this as a sign that the Bank is unlikely to ease again in the near-term. • Amid a strong jobs market, the recent […]
Soft Chinese data revive stabilization concerns • Fixed asset investment, retail sales and industrial production, all slowed in Apr. adding to doubts whether the economy is stabilizing. • Chinese mainland markets (CSI,SSE) fell but managed to recover and gain a bit. • Commodity currencies such as AUD, NZD could remain under selling interest. Today: • […]
BoE stands pat, offers more “Brexit” warnings • The BoE stood pat by a unanimous 9-0 and revised down its GDP forecasts. • Speculation that some members could vote for a rate cut may have caused GBP/USD to rise following the decision. • Data we get until the vote will be treated cautiously, so GBP […]
BoE’s last “Super Thursday” ahead of the referendum • Rate decision, meeting minutes and Inflation Report with updated forecasts. • Then, Gov. Carney presents the Inflation Report in a press conference. • Bank is expected to remain unanimously on hold, so the focus will be on the forecasts and any “Brexit” comments by Carney. • […]
Kiwi spikes on RBNZ report • RBNZ’s Financial Stability Report did not introduce any new stability measures. • This disappointed investors who expected measures that would allow the Bank more freedom to cut rates further in the future. • Thus, NZD/USD surged on the news, on speculation the RBNZ will remain on hold for now. […]
Yen weakens as Tokyo fires another verbal shot • JPY weakened after Japan’s Finance Minister Aso reiterated that Tokyo is ready to intervene in the FX market if needed. Nikkei is up 2.1%. • With the May G7 meeting in Japan around the corner, we consider this as highly unlikely for now. • We believe […]
Soft US jobs data scale back Fed hike expectations • US jobs data for Apr. disappointed, raising concerns about one of the few Fed bright spots. • Dollar weakened initially but recovered its losses immediately to trade even higher. • USD’s forthcoming direction to stay sensitive on the incoming data. (retail sales Friday.) Oil prices […]
Highlight of the day: US jobs report for April • Nonfarm payrolls exp. 202k vs prev. 215k, unemployment rate unchanged at 5.0% and average hourly earnings also unchanged at +0.3% mom. • Initial reaction on USD is usually on the NFP figure, then the focus shifts on earnings. • Given the disappointing ADP report, we […]
ADP report: Fewer jobs in the private sector • The ADP employment change for April rose by 156k vs 194k prev., missing expectations of a rise to 196k. • This raises speculation that the NFP print may also miss its estimate and disappoint. • In such a case, USD could weaken considerably, as the risks […]
New Zealand’s jobs report: Good or bad? • NZ’s Q1 jobs report showed an increase in the unemployment rate, mainly due to a rise in the participation rate. • An encouraging report overall, which suggests the economy is performing well. • Focus stays on the 2-year inflation expectations, due out mid-May. This may determine if […]
Main points for Today RBA cut rates: What now? • RBA cut rates by 25bps against economists’ expectations of staying on hold. (market was right, economists were wrong) • Officials judged prospects for growth would be improved by easing at this meeting. • No signs for further easing though, this could be their final move. […]
Main points for Today Dollar index continues to tumble • DXY plummeted to its lowest levels since Aug. 2015 and remains under selling pressure. • Reasons: Fed’s and BoJ’s on hold stance, sluggish overall US economic data. • In the absence of positive data surprises the index could fall further. Today: • France, Germany & […]
FOMC: No signals for June • Fed stood pat and indicated that global risks subsided lately. USD strengthened. • But USD quickly gave back the gains, as officials send no signals for a June hike. • Focus now turns to incoming US data to determine the dollar’s near-term direction. BoJ shocks by standing pat • […]
FOMC: Opening the door for June? • Fed is widely expected to stand pat. No press conference or updated forecasts, so the action will come from the meeting statement. • We expect officials to take a neutral stance, so reaction in USD may be limited. • But if they change language and sound more optimistic, […]
Abe’s adviser: BoJ should act now • Japanese PM Abe’s economic adviser Honda said the Bank should act now if it wants to be preemptive. • Honda correctly predicted the surprise BoJ rate cut in January. • The Government also announced an extra budget. Both of these amplify the case for further easing on Thursday. […]
Yen slides on expectations of fresh stimulus • JPY tumbled on Friday amid rising speculation that the BoJ will ease policy further at its upcoming meeting. • Soft data and the recent strength of JPY may indeed push officials to ease again. • This could support Japanese equities and bring the yen under selling interest, […]
ECB Draghi: Policies are working, give them time • The ECB remained on hold and Draghi signalled that Bank policies must be given time to work. • EUR/USD rose on comments that there is no need for immediate easing, but later gave back all the gains. • ECB likely to remain side-lined in coming months […]
ECB to bring further easing into light • ECB is unlikely to reveal any fresh measures and the focus will be solely on the press conference and Q&A session. • Draghi is likely to reassure investors that the Bank hasn’t used up all its tools, indicating that fresh rate cuts and other tools remain on […]
BoJ Kuroda shoots down “helicopter money” • BoJ Gov. Kuroda said that he is not considering concept of “helicopter money”. • As helicopter money is the “heavy artillery” of mon. policy, this could add to concerns the BoJ is running out of ammunition. • At the G20 meeting, Gov. Kuroda said they could take additional […]
RBA minutes: Nothing new • The RBA policy minutes showed concerns by the Board about the recent strength of AUD. • Gov. Stevens speaks today. Given the concerns, he may try to “jawbone” AUD. • The medium-term outlook of AUD/USD is positive, thus we will treat any potential tumble as renewed buying opportunity. • Focus […]
