Market News

Japanese government bonds slipped on Tuesday, pressured by U.S. Treasuries and weaker-than-expected demand at a 10-year JGB sale.

Today’s Asian session trading turned out pretty well for the Aussie and Kiwi, which took advantage of positive reports, not-so-dovish central bank insights, and a positive Chinese PMI release.

Net short positions on USD increased further. And the latest COT report shows that net bearish bias on USD increased mainly because of another influx of GBP longs and more JPY shorts getting squeezed out.

Asian shares were subdued on Tuesday as investors’ rotation out of technology shares took a toll on some of the region’s tech heavyweights although hopes of a major tax cut in the United States underpinned risk sentiment.

Oil markets rose in early Asian trade on Tuesday, buoyed by expectations of a drop in U.S. crude stockpiles and after last week’s deal between OPEC and other crude producers to extend output curbs.

Dollar bulls were in a pretty good mood during the New York session on stronger hopes that tax reform could see more positive developments in the days ahead.

British Prime Minister Theresa May failed to strike a Brexit divorce deal with EU negotiators in Brussels on Monday despite earlier reports of a breakthrough agreement that would have kept British-ruled Northern Ireland aligned with EU regulations.

The leader of Germany’s Social Democrats (SPD) said on Monday he would launch talks with Chancellor Angela Merkel’s conservatives on forming a government next week if members of his center-left party gave him the green light at a congress this weekend.

New orders for U.S.-made goods fell less than expected in October and shipments of core capital goods were much stronger than previously reported, pointing to sustained strength in manufacturing that should buoy the economy.

Britain agreed on Monday to keep Northern Ireland in “regulatory alignment” with the European Union after Brexit, Irish government sources said, raising hopes Prime Minister Theresa May can strike a deal in Brussels to start free trade talks.

GBP got a major bullish infusion near the end when comments from MEPS boosted hopes that Brexit talks will progress. Meanwhile, CHF was feeling a bit under the weather because of the risk-on vibes.

Oil fell on Monday after U.S. shale drillers last week added more rigs but prices still held close to their highest since mid-2015, supported by an extension to output cuts agreed last week by OPEC and other producers.

Sterling jumped to a one-month high against the euro on Monday after a member of the European Parliament’s Brexit group said there was a “very good chance” of a deal on an initial divorce package between Britain and the European Union.

European stocks rallied strongly on Monday after the U.S. Senate passed a tax package delivering significant fiscal stimulus, which investors had anticipated would give extra legs to the bull run in equity markets.

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The Bank of Japan does not plan to change its massive stimulus program and will “immediately act” if risks to the economy undermines the momentum toward achieving its inflation target, central bank Governor Haruhiko Kuroda said on Monday.

There were a couple of economic reports printed during the Asian session, but traders mostly focused on headlines over the weekend.

The U.S. dollar bounced to a two-week top on Monday and S&P futures rallied as traders marked the passage of a Senate tax bill over the weekend, a move that raises the risk of more aggressive rate hikes in the world’s largest economy.

It is not yet clear if Britain and the European Union can agree on written assurances to avoid a hard Northern Ireland border by a Monday deadline, Irish Foreign Minister Simon Coveney said on Sunday.

Pound domination was easily the main theme this week. So, what drove the pound higher this week? And what about the other currencies, what drove their price action? Time to find out!