Open trading account 
Sterling, Canadian Dollar and Euro surged broadly last week on hawkish comments from central bankers. The turn in BoE Governor Mark Carney was the most drastic as just a week a go, he said it's not the time of rate hike yet. But then, he indciated the BoE MPC will start debating raising interest rate in the coming months. BoC Governor Stephen Poloz repeated his comments that prior rate cuts in 2015 have already done their job. But this time, Poloz hinted that BoC is approaching a new interest rate decision. That tremendously raised the odds of a July hike by BoC. There were some jitters on Euro on report that markets misinterpreted ECB President Mario Draghi's comments. But after all, it's generally convinced that, with improvements in Eurozone inflation and growth, ECB is transiting into a phase of stimulus withdrawal. And there would likely be tapering announcement in September or by latest October.
On the other hand, Yen ended the week as the weakest one as BoJ is generally expected to maintain its stimulus as inflation at 0.4% yoy is still far off it's 2% target. Also, global bond yields jumped sharply, giving additional pressure to the Yen. Dollar followed as the second weakest one as markets continued to doubt if Fed, or the US economy, is ready for another rate hike in September. In particular, investors are very dissatisifed with the pace of US President Donald Trump's work on pushing through his economic policies. Trump's administration is still stuck with healthcare reform for the moment. And the US President himeself is continuously engaging in things that distract him from working on the economy. IMF's downgrade of US economic forecast, citing the removal of assumed fiscal stimulus, is a clear sign that economists are giving up.
Yen decoupling from risk aversion
One of the developments in the financial markets caught most of our attention. That is the decoupling of Yen and stocks. Global equities tumbled sharply on expectation of monetary policy tightening ahead. But this time, there was no risk aversion boost to the Yen seen, nor on Swiss Franc. This could be a sign that widening yield spread and their attraction on carry trades is finally back after the years. And yield spread could be starting to have a much stronger impact on the Yen than risk sentiments.
On the other hand, Yen ended the week as the weakest one as BoJ is generally expected to maintain its stimulus as inflation at 0.4% yoy is still far off it's 2% target. Also, global bond yields jumped sharply, giving additional pressure to the Yen. Dollar followed as the second weakest one as markets continued to doubt if Fed, or the US economy, is ready for another rate hike in September. In particular, investors are very dissatisifed with the pace of US President Donald Trump's work on pushing through his economic policies. Trump's administration is still stuck with healthcare reform for the moment. And the US President himeself is continuously engaging in things that distract him from working on the economy. IMF's downgrade of US economic forecast, citing the removal of assumed fiscal stimulus, is a clear sign that economists are giving up.
Yen decoupling from risk aversion
One of the developments in the financial markets caught most of our attention. That is the decoupling of Yen and stocks. Global equities tumbled sharply on expectation of monetary policy tightening ahead. But this time, there was no risk aversion boost to the Yen seen, nor on Swiss Franc. This could be a sign that widening yield spread and their attraction on carry trades is finally back after the years. And yield spread could be starting to have a much stronger impact on the Yen than risk sentiments.
