21/ 06/ 2018

SNB and BoE to Direct the Market Through the Day

The greenback pared initial gains in Asia and ended mixed against majority of its peers on Wednesday as trade tension between U.S. and China continued to linger. Sterling rebounded from 7-month lows ahead of Bank of England monetary policy on Thursday and as UK PM May won a meaningful Brexit vote in Parliament. 

Looking ahead of the day, the focus is Europe on BoE and SNB decisions, with both central banks expected to keep rates on hold. For the BoE at least, there is still some risk of a near term rate hike, which leaves the focus on signals in the minutes and statement with jobs report coming from US.

20/ 06/ 2018

FED Chair Powell and Trump to Direct the Dollar Through the Day

The dollar fell against the yen in early Asian trade on Tuesday after U.S. President Donald Trump's threats of more tariffs on China raised worries about an escalating trade war between the world's two largest economies. The ongoing trade dispute between the United States and China knocked the yuan to 6.4660 per dollar, its weakest in more than five months in the offshore market.

Meanwhile, the euro remained under pressure due to a dispute in Germany's governing coalition and expectations the European Central Bank will hold interest rates steady into 2019.Chancellor Angela Merkel's Bavarian allies may defy her by implementing a plan to limit immigration at the German border and risk destabilizing her three-month-old coalition.

Still, trade was generally subdued with focus turning to a three-day ECB forum in Sintra, Portugal, through later today. From US, FED Chair Powell scheduled to speak in the early afternoon and noise from the Oval Office on trade to consider, the stats are unlikely to have a material impact.

19/ 06/ 2018

ECB Forum Gets Underway, All Eyes on Draghi

The greenback ended mixed against majority of its peers on Monday due to renewed trade war tension between United States and China. Sterling remained under pressure as investors look ahead to Bank of England's monetary policy meeting on Thursday. 

Meanwhile, the euro remained under pressure due to a dispute in Germany's governing coalition and expectations the European Central Bank will hold interest rates steady into 2019. In a quiet trading session, the dollar was supported by some safe-haven demand and signals from the Federal Reserve that it would increase overnight borrowing costs due to a tightening labor market and rising inflation.

Looking ahead, a quiet offering on the economic data front is likely to keep trade tensions in the spotlight. Markets will keep an eye at comments from the ECB conference in Sintra with, Fed and ECB speakers will probably confirm indications from last week’s meetings.

18/ 06/ 2018

Week Ahead | Trade Wars and BoE in Focus with Draghi on the Spotlight

Dollar surged broadly last week as Fed policymakers finally made up their mind on hiking a total of four times this year, as reflected in the new projections. The greenback was also helped by ECB monetary policy decision, with traders disappointed on the rate path. The headlines were then dominated by trade war toward the end of the week, as the US abandoned negotiation and fired another shot towards China. But judging from the reactions in the currency as well as stock markets, investors were not too bothered by this US triggered trade war yet.

There will be more central bank activities this week, just ahead of half-year end. SNB and BoE are unlikely to give any surprise. RBA minutes will also continue to sing the same old tune.

Looking ahead of the day, ECB President Draghi will speak later today which could provide the EUR a boost should he flip flop from last week’s ECB press conference. From US, FOMC Members Dudley, Duke, Bostic and Williams are scheduled to speak through the day, with Williams and Dudley of greater influence from a policy perspective.