 Major global central bankers sang a chorus of dovishness last week. Most importantly, both ECB and Fed signaled the possibility of rate cuts ahead. Comparatively, RBA's indication of more rate cut was not much a surprise. In the background, it appeared US and China were back on track to restart trade negotiations. Hope of more monetary easing and trade optimism lifted S&P 500 to record intraday high. On the other hand, treasury yields tumbled with US 10-year yield breaching 2% handle while German 10-year yield hit record low. Gold surged on Dollar's selloff and breached 1400 handle. WTI crude oil extended recent rebound and closed above 57 on middle east tensions. Dollar ended the week as the worst performing currency, followed by Australian Dollar, on expectations of rate cuts by respective central banks. Yen ended as the third weakest, reacting more to rising stocks than falling yields. Swiss Franc was the strongest one, on geopolitical tension safe haven flow, followed by Kiwi. Surprisingly, Euro was the third strongest as markets pushed back rate cut expectations after Eurozone PMI data. It's not impossible for Dollar to stage similar comeback if there would be some positive developments. |
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