Today we had no tier one datas over London session and in NY session came with the ECB Monetary Policy Meeting minute. The minutes didn’t really provide too much insight but we do have divergence among ECB members in terms of the length and size of QE.
We also had divergence among European countries and many frustration for the easing from ECB. The core problem is that Eurozone is simply too different economically for rich countries like Germany and poor countries like Greece. Lower rate certainty help one but not the other.
In conclusion, the uncertainty remains high and no one knows for sure about the future policy from ECB.
The USD unemployment claims came as positive number while FOMC member Evan & Harker both spoke today. The expected rate hike from Fed for 2017 is still around 2 or 3 times and inflation target is still 2%.
We wil have Yellen speaks later on 7pm EST.
Equity markets all closed down today while WTI went up again. This is a sort of mix sentiment now since yesterday’s press conference. Fundamentally speaking, everything stays the same with USD taking the lead while EUR, GBP, CHF, JPY all suffer from negative sentiment and fundamentals.
However, we have no fresh reason to continue buying USD and only had negative sentiment now. Again, everything is largely political & event driven rather than data driven.
For EUR, we continued to have mix view as economy from stronger nations such as Germany has picked up but meanwhile Eurozone still suffers from polictal unstableness and unstable recovery from weaker nations such as Greece and Italy.
For USD, it continues to lose strength sentimentally. If you’re trading short-term, then you can short USD but if you’re trading mid to long-term, you can dip buying USD. Both strategies have its own risk but i’m leaning toward buying at dips.
For CAD, it continues to be benefited from lower USD and stronger oil market. Positive news for oil market came from Saudis as their output falls and plans to make further cuts in Feb. $65 per barrel is still the target for major OPEC producers.
Meanwhile, China also reports that their crude import will rise 5% in 2017, so both lower supply and higher demand will expected to further boost the oil price and CAD.
For GBP, PM May is reported to speak next week on her plans for Brexit, and this alone sparked another fear that she will give a talk of hard Brexit. As mentioned, the negative sentiment has shadowed the GBP greatly. Our view toward GBP continues to be negative, however, there are 2 factors that could lift GBP and as mentioned that GBP will have a Roller Coaster year because of the uncertainty - both positive and negative. The first factor is the High Court decision on whether government needs Parliament approval before triggering Article 50. The decision will come out anytime and if it’s in favour for the Parliament, we will see a large rebound in GBP as this is positive. Another factor is the delay of Brexit talks because of a potential suspension of Northern Ireland’s regional assembly. This could be viewed as positive sentiment for GBP as well.
The general view is that if we can stop the negotiation from happening, then Brexit essentially is not happening - for as long as possible.
For AUD & NZD, both are benefited from the weak USD and continue to surge. Fundamentally there aren’t really any risk events to direct both currencies this week, so it really acted as counter trade for USD and both are very strong now.
However, once USD regains its strength, we will expect to see both currencies losing ground quickly.
For JPY & CHF, both benefited from the risk off sentiment and the dollar weakness.
Today we had no tier one datas over London session and in NY session came with the ECB Monetary Policy Meeting minute. The minutes didn’t really provide too much insight but we do have divergence among ECB members in terms of the length and size of QE.
We also had divergence among European countries and many frustration for the easing from ECB. The core problem is that Eurozone is simply too different economically for rich countries like Germany and poor countries like Greece. Lower rate certainty help one but not the other.
In conclusion, the uncertainty remains high and no one knows for sure about the future policy from ECB.
The USD unemployment claims came as positive number while FOMC member Evan & Harker both spoke today. The expected rate hike from Fed for 2017 is still around 2 or 3 times and inflation target is still 2%.
We wil have Yellen speaks later on 7pm EST.
Equity markets all closed down today while WTI went up again. This is a sort of mix sentiment now since yesterday’s press conference. Fundamentally speaking, everything stays the same with USD taking the lead while EUR, GBP, CHF, JPY all suffer from negative sentiment and fundamentals.
However, we have no fresh reason to continue buying USD and only had negative sentiment now. Again, everything is largely political & event driven rather than data driven.
For EUR, we continued to have mix view as economy from stronger nations such as Germany has picked up but meanwhile Eurozone still suffers from polictal unstableness and unstable recovery from weaker nations such as Greece and Italy.
For USD, it continues to lose strength sentimentally. If you’re trading short-term, then you can short USD but if you’re trading mid to long-term, you can dip buying USD. Both strategies have its own risk but i’m leaning toward buying at dips.
For CAD, it continues to be benefited from lower USD and stronger oil market. Positive news for oil market came from Saudis as their output falls and plans to make further cuts in Feb. $65 per barrel is still the target for major OPEC producers.
Meanwhile, China also reports that their crude import will rise 5% in 2017, so both lower supply and higher demand will expected to further boost the oil price and CAD.
For GBP, PM May is reported to speak next week on her plans for Brexit, and this alone sparked another fear that she will give a talk of hard Brexit. As mentioned, the negative sentiment has shadowed the GBP greatly. Our view toward GBP continues to be negative, however, there are 2 factors that could lift GBP and as mentioned that GBP will have a Roller Coaster year because of the uncertainty - both positive and negative. The first factor is the High Court decision on whether government needs Parliament approval before triggering Article 50. The decision will come out anytime and if it’s in favour for the Parliament, we will see a large rebound in GBP as this is positive. Another factor is the delay of Brexit talks because of a potential suspension of Northern Ireland’s regional assembly. This could be viewed as positive sentiment for GBP as well.
The general view is that if we can stop the negotiation from happening, then Brexit essentially is not happening - for as long as possible.
For AUD & NZD, both are benefited from the weak USD and continue to surge. Fundamentally there aren’t really any risk events to direct both currencies this week, so it really acted as counter trade for USD and both are very strong now.
However, once USD regains its strength, we will expect to see both currencies losing ground quickly.
For JPY & CHF, both benefited from the risk off sentiment and the dollar weakness.