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International financial news 28/08

• [API report: US crude oil inventories fell by 11.1 million barrels to 428.7 million barrels last week] US crude oil imports increased by 1.2 million barrels per day to 6.2 million barrels per day last week.

• [European Central Bank Deputy Governor : Must look at market expectations with a questioning eye] European Central Bank Deputy Governor said in a speech in the UK that due to the echogenic effect of market signals and its inherent noise, we need  There are doubts about financial market expectations; this means that we also need to rely on other sources of information to ensure that we implement a prudent monetary policy.  Subsequent macroeconomic data is one of the sources.  Our monetary policy relies on data rather than on the market: the signals that the market expects to convey cannot replace our policy judgments.

• [Downing Street: British Prime Minister Johnson told the European Commission Chairman that unless the EU restarts the negotiations on the Brexit agreement and abolishes the guarantee agreement, it is not expected to reach a Brexit agreement]

• [Stock Dividend Yields Over 30 Years of US Treasury Bonds for the First Time in 10 Years] Since the financial crisis, investors have earned more than the key long-term government bonds from the US stock market for the first time.  US 30-year Treasury yields fell below the dividend yield on the S&P 500 on Tuesday.  According to data from the Bespok Investment Group, this is the first time since the global economy fell into a deep recession in March 2009.

GMT time

Country

News and data

01:30 am

AUD

Construction Work Done q/q

02:30 pm

USD

Crude Oil Inventories

Tentative

EUR

German 10-y Bond Auction



Summary of investment bank views



USD/JPY

Tokyo Mitsubishi UFJ Bank Analysis pointed out that the yen has become the best performing currency in the global currency market this year, and continues to benefit from the construction of the downside risks of global economic growth and escalating trade tensions.

The director of foreign exchange business of Societe Generale said that the performance of the US dollar against the yen was relatively surprised. It is not clear where the fundamentals will go, but the dollar is expected to fluctuate within a certain period of time.

Analysts at Commerzbank said that the dollar fell against the yen and reversed from the January low of 104.51/10 and the 2013-2019 uptrend line. The 200-month moving average was at 104.44, which also strengthened the support of the region.  The short-term resistance is at the low of 107.21 on July 18, and the exchange rate is still blocked. If it breaks, it will ease the downward pressure.  If broken, it will point to the recent high of 108.99/109.32.

Goldman Sachs recommends shorting the Canadian dollar before the Bank of Canada changes its policy




Investors should short the Canadian dollar against the US dollar and against the yen, as the Bank of Canada may soon turn to the dovish position like other central banks; this is the view of Goldman Sachs strategists Zach Pandl and Karen Fishman.  In their report on Tuesday, they said that despite the good performance of Canada's economy, it also faces the risk of slowing US economic growth and rising trade conflicts.

The Bank of Canada will announce its latest policy decision on September 4.  Goldman Sachs analysts said that by then, the Bank of Canada needs to add to the recent economic friction outlook to consider the recent tariff friction, and may lay the foundation for the next month's interest rate cut, which is the second highest in the G-10 currency this year.  In terms of the yuan, the prospects are not good.

Unlike most G-10 countries, the Bank of Canada has not hinted at a policy of relaxation – but we believe that this transition will soon come; as an open economy with an important commodity sector, global economic growth is further  The weakness will eventually put pressure on Canada's economic output; at the same time, there are other banks that believe that the Canadian dollar still has room to rise.  For example, Citi technical analysis shows that the Canadian dollar is at a critical level and should rise against the dollar.

In the escalating trade dispute, the market expects the Bank of Canada to cut interest rates by 68% in October, and more and more economists support this forecast.  The strategist writes that our trading target is set at 1.360, 1.305 stop loss; shorting the Canadian dollar may also be accompanied by long yen, in part because it is more directly responding to the global economic weakness risk.

ING: The overall trend of the Australian dollar remains bearish and it is recommended to go through the US and Japan short positions.




AUD/USD: The long-term trend is empty. After the close of the weekly market, the sell signal has been released. It has fallen below the 0.6840 level support; the trend in the short-term trend has not been effectively boosted.

AUD/JPY: The long-term trend is empty, and the weekly line closes below 72.15 to release a short signal; the short-term trend tends to be: still consolidating above the bottom of the downtrend channel at 70.50.。


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