If anybody was disappointed with markets’ reactions on the outcomes of the general election in Germany, it should have enjoyed in the afternoon when North Korean foreign minister brought about heightened volatility. He accused US President Donald Trump of declaring war on his country by tweeting over the weekend that North Korea “won’t be around much longer.” Consequently, the JPY got a knee-jerk boost, gold prices spiked and the US 10Y yield took a step back. Despite a decline of the US yields, the greenback is thriving today fueled predominantly by drops seen in the euro and the NZD.
The clampdown on the Chinese cryptocurrency exchanges battered the Bitcoin price some time ago, however it looks that the crackdown won’t weed out the industry once and for all. Namely, the Chinese cryptocurrency exchange Via BTC has announced its plans to launch a trading platform outside of China. Keep in mind that each virtual currency exchange in China has to be shut down till 30 September.
The US session does not abound with crucial macroeconomic releases, hence it’s worth paying attention to some FED speakers’ comments. The first remarks from Dudley have already come out. He underlined that Federal Reserve will keep gradually removing monetary policy accommodation which is rather a hawkish one given he has been viewed as one of the major dove within the FOMC.
The latest weekend brought long-awaited results of general elections in Germany and New Zealand. However, it doesn’t mean that all themes related to politics are already done for this year. Another story came from Japan where Prime Minister Shinzo Abe chose to call a snap election earlier in the day in order to reinforce its grip over the Parliament amid opposition disarray and promising polls for his party. The election will take place 22 October, whereas the Parliament is to be dissolved this Thursday (26).
The latest CFTC came out as usual on Friday and brought some moves worth looking at. First and foremost, let’s add that the report covered transactions until 19 September, hence an impact of a string of hawkish remarks from the BoE was visible. In effect, the net short positioning on the pound was trimmed from 46k to just 10k – the lowest level since September 2015.
Finally, Brent and WTI oil prices are on the rise today mainly on the back of possible supply disruptions in Turkey. The country threatened to shut down Kurdish crude shipments through its territory to punish the Iraqi region for holding an independence referendum. Beside Turkey, Iran and the Iraqi central government stepped up their efforts to isolate the semi-autonomous Kurds as balloting began on Monday. At the time of writing WTI is soaring 2.5% while the US grade is up 2%.