Blog & News

 

The USD/CAD pair faced rejection just ahead of the key 1.35 psychological mark and eroded part of previous session's strong recovery gains from over one-month lows.

With investors seemed disappointed by major oil producers’ decision to extend output cut deal, tumbling oil prices helped the pair to rebound sharply from sub-1.3300 level, the lowest level since April 19 touched on Thursday. 

Today's retracement from higher levels could be attributed to a modest recovery, with WTI crude oil recovering back above $49.00/barrel mark and benefitting the commodity-linked currency - Loonie, 

The pair has now dropped back to closer to mid-1.3400s as focus now shifts to important US macro data - preliminary GDP print, Durable Goods Orders and revised UoM Consumer Sentiment Index, for some fresh impetus ahead of an extended weekend, with the US banks closed on Monday in observance of Memorial Day.

   •  Fed poised to raise rates in June – UOB

Technical levels to watch

Immediate support is pegged near 1.3440-35 region, below which slide could get extended back towards the 1.34 handle before the pair eventually extended the near-term downward trajectory further towards its next major support near 1.3330-25 area.

On the upside, the key 1.35 psychological mark remains immediate hurdle, which if conquered could lift the pair towards 1.3535-40 strong horizontal resistance.

 

Source: https://www.fxstreet.com/news/usd-cad-fails-ahead-of-135-handle-slides-back-closer-to-mid-13400s-201705260822

 

Read More

Livesquawk reports comments from the US President Trump delivered during the G7 meeting, citing that he discussed North Korea with the Japanese PM Abe.

Trump added that North Korea is a big issue and the US is focusing on a solution.

 

Source: https://www.fxstreet.com/news/trump-at-g7-discussed-north-korea-with-the-japanese-pm-abe-201705260901

 

 
 

Read More

The USD/JPY pair remained under intense selling pressure through early European session on Friday and is now flirting with session lows near the 111.00 handle.

A weaker opening in the European equity markets intensified demand for traditional safe-haven assets and helped the Japanese Yen to build on early gains led by today's release of Japanese inflation numbers. 

Adding to this, a sharp greenback retracement, with the key US Dollar Index dropping to session lows near the 97.00 handle, further aggravated the selling pressure.

The pair has now surrendered majority of its weekly gains and hence, a follow through selling pressure below the 111.00 handle might pave way for extension of the pair's reversal move from nearly two-month highs touched during early half of May. 

Important macro data from the US - GDP print, Durable Goods Orders and revised UoM Consumer Sentiment Index are due for release on Friday and should provide fresh impetus for the pair's next leg of directional move.

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet writes: “The loss of bullish momentum as indicated by the MACD and the breach of the rising trend line on the RSI suggests the spot is likely to see a downside break from the inverted flag pattern. Inverted flag is a bearish continuation pattern, thus a downside break would indicate the sell-off from the high of 114.36 has resumed. The pair could revisit the recent low of 110.23. On the higher side, only a break above 112.32 (falling trend line on 4-hour + flag resistance + 50% Fib R of June 2015 high – June 2016 low) would revive the bullish view and open doors for a revisit to 114.36 levels. Also note, the daily RSI is struggling to rise above 50.00 (neutral level).”

 

Source: https://www.fxstreet.com/news/usd-jpy-tumbles-to-lows-near-11100-handle-201705260859

Read More

EU Commission president Juncker is on the wires now, making a speech at the G7 meeting in Brussels.

Key Headlines:

Trump talked about German trade surplus but not true he took aggressive stance

Did not say German was misbehaving

Reports of Trump concern over German trade surplus exaggerated

 

Source: https://www.fxstreet.com/news/ecs-juncker-at-g7-trump-talked-about-german-trade-surplus-201705260849

Read More

The USD/JPY pair remained under intense selling pressure through early European session on Friday and is now flirting with session lows near the 111.00 handle.

A weaker opening in the European equity markets intensified demand for traditional safe-haven assets and helped the Japanese Yen to build on early gains led by today's release of Japanese inflation numbers. 

Adding to this, a sharp greenback retracement, with the key US Dollar Index dropping to session lows near the 97.00 handle, further aggravated the selling pressure.

The pair has now surrendered majority of its weekly gains and hence, a follow through selling pressure below the 111.00 handle might pave way for extension of the pair's reversal move from nearly two-month highs touched during early half of May. 

Important macro data from the US - GDP print, Durable Goods Orders and revised UoM Consumer Sentiment Index are due for release on Friday and should provide fresh impetus for the pair's next leg of directional move.

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet writes: “The loss of bullish momentum as indicated by the MACD and the breach of the rising trend line on the RSI suggests the spot is likely to see a downside break from the inverted flag pattern. Inverted flag is a bearish continuation pattern, thus a downside break would indicate the sell-off from the high of 114.36 has resumed. The pair could revisit the recent low of 110.23. On the higher side, only a break above 112.32 (falling trend line on 4-hour + flag resistance + 50% Fib R of June 2015 high – June 2016 low) would revive the bullish view and open doors for a revisit to 114.36 levels. Also note, the daily RSI is struggling to rise above 50.00 (neutral level).”

 

Source: https://www.fxstreet.com/news/usd-jpy-tumbles-to-lows-near-11100-handle-201705260859

 

Read More

The USD/CAD pair faced rejection just ahead of the key 1.35 psychological mark and eroded part of previous session's strong recovery gains from over one-month lows.

With investors seemed disappointed by major oil producers’ decision to extend output cut deal, tumbling oil prices helped the pair to rebound sharply from sub-1.3300 level, the lowest level since April 19 touched on Thursday. 

Today's retracement from higher levels could be attributed to a modest recovery, with WTI crude oil recovering back above $49.00/barrel mark and benefitting the commodity-linked currency - Loonie, 

 

Read More

EU Commission president Juncker is on the wires now, making a speech at the G7 meeting in Brussels.

Key Headlines:

Trump talked about German trade surplus but not true he took aggressive stance

Did not say German was misbehaving

Reports of Trump concern over German trade surplus exaggerated

 

Source: https://www.fxstreet.com/news/ecs-juncker-at-g7-trump-talked-about-german-trade-surplus-201705260849

 

Read More

A bout of selling pressure around the greenback is helping EUR/USD to retake not only the positive ground but also record fresh daily highs around 1.1220.

EUR/USD attention on US docket

In terms of the US Dollar Index, the buck has retreated to the 97.00 neighbourhood early in the European session, fading the initial optimism and allowing the current bounce in the risk-associated space.

In the meantime, risk appetite trends and USD-dynamics should remain the exclusive drivers for the pair’s price action amidst an empty docket in Euroland and ahead of key releases across the pond.

That said, the bulk of the attention should shift to the second revision of US Q1 GDP, seconded by April’s durable goods orders and the final print of the Reuters/Michigan index for the month of May.

EUR/USD levels to watch

At the moment, the pair is gaining 0.06% at 1.1217 and a breakout of 1.1250 (high May 25) would open the door to 1.1267 (2017 high May 23) and then 1.1300 (high Nov.9 2016). On the flip side, the immediate support aligns at 1.1167 (low May 24) seconded by 1.1073 (76.4% Fibo of 1.1300-1.0339) and finally 1.1036 (20-day sma).

 

Source: https://www.fxstreet.com/news/eur-usd-turns-positive-near-11220-session-tops-201705260743

 

Read More

In view of Emmanuel Ng, Research Analyst at OCBC Bank, GBP has been additionally weighed by an opinion poll showing PM May’s Conservatives dropping another one percentage point on the week (down 5% from two weeks ago) to 43%-35% (Labor) ahead of the national election.

Key Quotes

“Short term implied valuations are at risk of topping out further at this juncture with the GBP-USD likely to continue to inhabit the lower end of its confidence intervals. Risk to probe towards 1.2850 cannot be discounted at this juncture after repeated failures to overcome 1.3000 on a sustained basis.”

 

Source: https://www.fxstreet.com/news/gbpusd-guided-by-politics-may-probe-towards-12850-ocbc-bank-201705260801

 

Read More

The USD/CAD pair faced rejection just ahead of the key 1.35 psychological mark and eroded part of previous session's strong recovery gains from over one-month lows.

With investors seemed disappointed by major oil producers’ decision to extend output cut deal, tumbling oil prices helped the pair to rebound sharply from sub-1.3300 level, the lowest level since April 19 touched on Thursday. 

Today's retracement from higher levels could be attributed to a modest recovery, with WTI crude oil recovering back above $49.00/barrel mark and benefitting the commodity-linked currency - Loonie, 

The pair has now dropped back to closer to mid-1.3400s as focus now shifts to important US macro data - preliminary GDP print, Durable Goods Orders and revised UoM Consumer Sentiment Index, for some fresh impetus ahead of an extended weekend, with the US banks closed on Monday in observance of Memorial Day.

   •  Fed poised to raise rates in June – UOB

Technical levels to watch

Immediate support is pegged near 1.3440-35 region, below which slide could get extended back towards the 1.34 handle before the pair eventually extended the near-term downward trajectory further towards its next major support near 1.3330-25 area.

On the upside, the key 1.35 psychological mark remains immediate hurdle, which if conquered could lift the pair towards 1.3535-40 strong horizontal resistance.

 

Source: https://www.fxstreet.com/news/usd-cad-fails-ahead-of-135-handle-slides-back-closer-to-mid-13400s-201705260822

 

Read More

EUR/USD: Bullish: Increasing risk of a short-term top.

We have been holding the same view that the outlook for EUR is “still bullish but odds for extension to 1.1300 are not high” since Monday, 22 May. While the price action since then has been confined to a relatively narrow range, upward momentum is showing signs of waning and the risk of break below 1.1130 has grown considerably. From here, unless EUR can move above the 1.1265/70 high seen earlier this week within these 1 to 2 days, it is getting increasing likely that the bullish phase that started last Wednesday, 17 May is nearing an end. That said, a break below the 1.1130 would signal the start of a consolidation phase and not a major bearish reversal.

GBP/USD: Shift from neutral to bearish: Immediate target of 1.2830.

We have warned over the past couple of days that GBP is topping out and “a clear break below 1.2920 would greatly increase the odds for a move towards 1.2830”. The 1.2920 support was just taken out at the time of writing and based on the rapid pace of decline, a break below 1.2830 would not be surprising. The next support is at 1.2775. Stop-loss is placed at 1.2975. 
 

Read More

The price action in the financial markets during the past couple of sessions has been a bit nervous. The US stock market has managed to rally to new record highs, but the European stock indices have not managed to follow as high. Perhaps Dax or Eurostoxx 50 could be prettier next week? 

Investors are likely to begin bracing for next week’s US payrolls and then the June central bank meetings. The previous drivers from US President Donald Trump to European headline risk have had very little market impact, and this is likely to continue. This would mean the next week should be quiet, as there will be no important drivers before Friday, but do watch the ADP jobs report before that.
 
;;;
 Today's second estimate of US GDP growth for Q1 is expected to show a slight increase 
from 0.7% to 0.8%. Photo: Shutterstock

Today’s data releases are relatively unimportant, but they might help to alleviate some ongoing uncertainties. The key question is whether the first quarter’s economic weakness was transitory. The Federal Reserve’s reaction function is believed to be relatively inflexible at the moment. 

The Fed might not be willing to easily deviate from the planned interest rate hikes and balance sheet reduction. The fear is that both the Fed and the European Central Bank would be tightening monetary policy too much.

Next week, the US May purchasing manager indices and latest payroll report will be published. The Federal Reserve’s quiet period begins on June 3, ahead of the Fed’s June 13-14 meeting.

Next week will be the last opportunity for the Fed officials to provide some guidance, and those comments will likely be followed closely. The market-implied odds for a rate hike in June are now a bit above 80%, and the odds for another rate hike in September are 60%.

The odds are in my opinion correct. The June rate hike will almost certainly happen, unless the Fed decides to put more weight on the mediocre inflation outlook. The low unemployment rate, stocks at record highs and sentiment indices still high provide an opportunity to hike. The Fed still prefers to increase rates so it would have more room to ease when the next recession finally comes. 

US April Durable Goods Orders (1230 GMT). Seasonally-adjusted orders are expected to have decreased by 1.8% in April – not a good start for the second-quarter’s data flow. The core durable goods are similarly expected to have decreased by 0.2%. 
 

Read More

The deadly terror attack in the U.K. has catapulted security to the top of the agenda for the world’s most powerful leaders meeting in Sicily. Italy, the Group of Seven host, said the summit aimed to “deliver the strongest possible message of extraordinary and common commitment against terrorism.” Still, the nations gathered do not see eye to eye on trade, immigration and climate change.

Here is where these geopolitical players stand on flash points that could erupt in the shadow of the (active) Etna volcano.

 

Read More

The Cyprus Securities and Exchange Commission (CySEC) considers banning binary options trading altogether, reported Finance Magnets. The online media cited CySEC Head, Demetra Kalogerou, who delivers a speech at the iFX Expo International 2017 on Thursday.

 

The Cypriot financial watchdog is still conducting consultations on the matter, but highlighted the main problems with binary options: non-transparent pricing and conflict of interest. That is why the commission considers that probably “It will be more appropriate to suggest binary options only to professional traders,” as stated by Demetra Kalogerou.

 

Miss Kalogerou further explained that these measures are considered as a part of CySEC’s mission to ensure high-quality and transparent investments. Recently the regulator has imposed the largest set of fines on CIFs, amounting to $4 million, and obviously intends to keep it up. What is more, in December 2016 the Commission issued some circulars, aimed at tightening the control on forex and binary options brokers. CySEC then urged CIFs to set the default leverage levels at 1:50, to allow same-day withdrawals, and to avoid the practice of trading bonuses, in line with ESMA’s guidelines.

 

Read More

A sharp decline in the oil price has seen risk appetite retreat overnight and markets are looking cautious this morning. OPEC decided to extend their production cuts of 1.8m barrels per day by nine months but the perception is that this is merely papering over the cracks as US shale oil continues to pick up production. The market was clearly looking for more from OPEC. A 5% decline in oil is enough to push traders into more safe haven plays such as gold and the yen which are outperforming today. Comments from Fed member Brainard also helped to stabilise Treasury yields and the dollar overnight. Lael Brainard (a voting member of the FOMC) believes that the global risks pose fewer threats to the US economy, notable as the Fed has previously pointed to global imbalances as a reason not to hike. Sterling has been hit overnight by the latest poll in front of the election on 8th June which has Labour just 5% behind the ruling Conservatives

Read More

The FTSE 100 is ten points higher in early trading, with investors around the globe keeping a nervous eye on the OPEC meeting.

  • Happy OPEC Day

  • Fed minutes fail to unnerve markets

  • UK GDP takes a knock

Welcome to a day dominated by OPEC headlines. Compared to the tedium of the past few days, it will actually be nice to see some movement across markets, something we have already had with the Saudi oil minister airing his quaint view that no more production cuts are needed. This caused a swift dive in oil prices, unsurprisingly, but we can expect more of the same throughout the day. Traders arrived at their desks this morning having seen the Fed minutes warn of overvaluations in asset prices, and hint at further policy tightening later in the year, and yet were confronted with new record highs in the S&P 500 and the MSCI world index, while the US dollar is under pressure again. What an odd
 world we live in.

A downward revision to UK growth estimates may be just the thing to finally halt the snail-like grind higher in GBPUSD that has taken place over the past six weeks. Spikes above $1.30 have been firmly sold over the past week, so it looks like the sterling bears have just been handed some more reasons to keep selling. Ahead of the open, we expect the Dow to start at 21,082, up 70 points from last night’s close.

 

Source: https://www.fxstreet.com/analysis/opec-keeps-traders-on-edge-201705250931

Read More

Most recent candlesticks pattern   : N/A

Trend                                 : Near term up

Tenkan-Sen level                 : 1.2961

Kijun-Sen level                    : 1.2963

Ichimoku cloud top              : 1.2998

Ichimoku cloud bottom        : 1.2980

New strategy :

Buy at 1.2960, Target: 1.3060, Stop: 1.2925

Position : -

Target :  -

Stop : -

As cable found good support at 1.2926 yesterday and has staged a rebound, suggesting the retreat from 1.3043 has ended there and consolidation with upside bias is seen for gain towards resistance at 1.3043-48, however, break there is needed to confirm early upmove has resumed and extend headway to 1.3075-80 and possibly towards 1.3100-10 later.

In view of this, we are looking to buy cable on dips. Below said support at 1.2926 would abort and risk weakness to 1.2900 but break of indicated support at 1.2889 is needed to signal top has been formed at 1.3048 earlier, bring retracement of recent upmove to 1.2850-55 first.

For trade ideas on other pairs, visit the trade idea section.

GBPUSD

 

Interested in GBPUSD technicals? Check out the key levels

    1. R31.3079
    2. R21.3039
    3. R11.3007
  1. PP1.2967
    1. S11.2935
    2. S21.2895
    3. S31.2862

Source: https://www.fxstreet.com/analysis/trade-idea-gbp-usd-buy-at-12960-201705250945

Read More

The latest data on the UK economy has come in on the soft side with the second estimate of UK GDP for the first quarter expanding at a slower pace than expected. The FTSE 100 came within a whisker of posting an all-time high this morning after a strong open following the release of the FOMC minutes last night, but has faded back as the morning has drawn on and recently turned red on the day.

Sterling remains in narrow range

The pound is still higher on balance as the reaction to the 0.2% rise in GDP quarter-on-quarter has been fairly muted as is typical with lagging data. The data refers to the first quarter of 2017 and whilst a downward revision to the first forecast is obviously a negative development, there has not been a strong reaction in the markets. The trading range of the pound has tightened up in recent sessions and it appears that market participants are looking for further signals before the next move will occur. Month end flows may start to be seen in the coming days and with another batch of PMI data and the general election both due in the next fortnight this lull in volatility is unlikely to last for too long. Employment levels and business investment both remain robust, meaning this slowdown is likely attributed to a drop in consumer spending which has remained unexpectedly strong since the Brexit vote.

 

Read More

The FOMC released its May meeting minutes last evening stating that the overall economic assessment was little changed. The Fed sees to raise rates once again is ‘soon be appropriate’. Markets assume that it signals a rate hike in June. The minutes also signals further tightening is expected if the incoming economic data shows improved economy. The Fed sees the weak economic performance in Q1 as transitory, caused by soft consumer spending and inventory investment.

Fed members considered it prudent to wait for further evidence that recent economic weakness was transitory before hiking rates again. The tone of the comments was less hawkish than expected with an increased potential for the Fed to hike rates again in June and then pause to consider developments. After the release of the minutes, per CME FedWatch tool, the probability for a June rate hike remains unchanged at 83.1%.

The minutes also signals shrinking the Fed’s $4.5 trillion balance sheet in holdings of Treasury and mortgage securities later this year, by allowing a gradual maturity, setting a cap and reducing reinvestments.

 

Read More

Cable bounced back from 1.3015, as the UK revised its 1Q growth estimate a touch lower than expected. According to the second GDP estimate, the British economy may have expanded by 0.2% quarter-on-quarter versus 0.3% expected previously. This would mean a yearly growth at 2.0% versus 2.1% printed earlier.

The biggest highlight of the GDP revision has certainly been the unexpected 1.6% decline in 1Q exports, versus a sharp reversal in imports to 2.7% from -1.0%. Larger government spending and improved business investment couldn’t compensate the import-export gap.

The FTSE 100 stagnates near the 7500p level, as all eyes are on the OPEC meeting, in Vienna.

WTI tumbles as Saudi says 'no need for deeper cuts'

A group of twenty-four OPEC and non-OPEC nations meet in Vienna today and are expected to prolong their production cuts by nine more months to sustain the oil prices

The barrel traded just shy of $52 before tumbling toward the $50 level as Saudi said there is no need for deeper cuts.

Provided that the prices already include nine-month extension and perhaps the possibility of a positive surprise, a nine-month extension per se will likely not be sufficient to push the prices higher.  Support to the downside correction stand at $50.01 (minor 23.6% retracement on May rise triggered by OPEC speculations), $49.85 (200-day moving average) and $48.85 (major 38.2% retrace, which should distinguish between the continuation of the OPEC-based positive trend and a short-term bearish reversal due to an eventual disappointment).

Since November, the OPEC and eleven non-OPEC nations agreed to cut up to 1.8 million barrels per day. The WTI crude gained 30% past $55 after the announcement. Yet the decline in exports has been much less due to large stockpiles and the global supply glut has not drained in the first quarter. The price of a barrel of WTI retreated down to $43 in the first days of May. The inefficiency in the first six months bring the OPEC countries and their global allies to extend the production cuts. The nine-month extension has already been priced in and the oil price continue climbing on speculation of eventually longer or deeper cuts. In the dirt of a positive surprise from Vienna, it could be hard to fight back the $53/55 offers.

The Loonie could be an interesting proxy for OPEC trades. The USDCAD recently broke the critical 1.3477-support (major 38.2% retrace on Jan – May rise) as the Bank of Canada (BoC) maintained the status quo. Today's decline in oil prices activated dip buyers into the 1.3380 (50% retrace) as expected. The USDCAD could regain the 1.3477/1.3500, if oil prices cheapen below the $50 level.

S&P500 tempted to renew record

The Federal Reserve (Fed) minutes from the May 2 – 3 meeting revived speculations in favour of the June rate hike, as officials believed that the first quarter weakness in the economy would be temporary and it would ‘soon be appropriate’ to raise rates.

The US dollar weakened across the board, the US 10-year yields eased to 2.25%. Given that the June rate hike was broadly priced in, the US markets were rather driven by expectations that the balance sheet reduction would only be gradual. According to analysts, if the Fed let its balance sheet shrink at the pace of the maturing bonds, its holdings would be back to ‘normal’ levels by 2020.

The Dow Jones (+0.36%), the S&P500 (+0.25%) and the NASDAQ (+0.40%) extended gains in New York. Financials (+0.88%) advanced for a second day. Goldman Sachs (+1.91%) has been the biggest gainer of the session, while JP Morgan (-0.06%) closed slightly negative.

The US futures traded higher in Asia. The Dow Jones is called 48 points firmer at $21’060 at the US market open. The S&P500 could be tempted to renew record.

Are euro-bulls too greedy?

EURUSD recovered to 1.1250 on broad based USD weakness. The daily MACD (Moving Average Convergence Divergence) is positive and the relative strength index is just below the overbought area. Positive trend and momentum indicators suggest that the EURUSD could make another attempt to the 1.1300, the Trump Election Day high. Top sellers could step in by 1.1300, as the European Central Bank (ECB) maintains its supportive tone unchanged, versus the Fed, preparing to raise rates in June for the third time since the Trump election.

The US-German yield spread stands near six month highs. The widening yield spread could be partially explained by higher capital flows into the German bonds amid failed Greek bailout talks.

On the other hand, the US, French, Italian, Spanish, Portuguese and Greek 10-year yields stand below their three month average, only the German 10-year is above. A normalisation toward the three month average could temper the euro appetite against the greenback.

Chinese stocks swing between hope and despair

The improved risk appetite kept most of the Asian shares in demand. Moody’s rating cuts on Chinese and Hong Kong debt weighed on the sentiment in the morning, yet buyers joined in during the afternoon session.

Shanghai’s Composite swung between gains and losses as investors first seemed undecided on China’s mainland stocks after Moody’s cut the Chinese debt rating to A1 from Aa3. Shanghai stocks rallied 1.43% into the session close

Hang Seng gained up to 1.00%, although Moody’s downgraded Hong Kong’s local and foreign currency rating by a notch to Aa2 from Aa1. The downgrade was justified by Hong Kong’s rising debt, slow economic reforms and high Chinese exposure.

Nikkei (+0.36%) and Topix (+0.21%) traded in the positive territory, as the USDJPY traded above the 200-day moving average (111.32) in Tokyo. Softer US yields could encourage minor selling pressures in the USDJPY. Light option barriers are eyed at 112.00 at today’s expiry. Dip-buyers are expected to deliver support pre-111.15/111.00 (50-day moving average / optionality) and 110.52/110.23 (major 61.8% retrace on April – May rise / May 17 dip).

Australia’s ASX advanced 0.36% on the back of gains in energy and mining stocks. The AUDUSD failed to fight back the 200-day moving average (0.7522) and has been aggressively sold off to 0.7465 in Europe.

Source: https://www.fxstreet.com/analysis/uk-growth-slows-oil-tumbles-on-saudi-comments-201705250940

Read More

The recovery in USD/JPY from 111.50 levels appear to have regained traction last minutes, driving the pair back towards daily tops posted at 111.88 in early Europe.

USD/JPY eyes OPEC decision for clarity on risk trend

The spot is on a steady recovery after having tumbled in the overnight trades, following the release of cautious FOMC minutes, which suggested gradual pace of tightening in the year ahead.

The US dollar caught a fresh bid-wave against its major peers in Europe, despite weaker treasury yields, offering the buyers some support around 111.70 levels.

However, it remains to be seen if the major can conquer 112 handle amid cautious tone seen in the European equities ahead of the OPEC outcome, which keeps the investors on the edge.

The USD/JPY pair will also get influenced by the upcoming US macro data, including the jobless claims and goods trade balance data, due later in the NA session.

USD/JPY Technical levels                 

Jim Langlands at FX Charts noted: “While the dailies remain rather negative, the 4 hour charts look positive and further short term gains could see another move towards 112.00/10 and then to 112.30, albeit possibly not today, and then to 112.75, which might be a decent sell area if we get there. On the downside, below the 111.47 session low, minor support will be seen at 111.45/50, a break of which could lead to a run towards 111.00 and then to 110.70 ahead of last Thursday’s low of 110.23.”

Source: https://www.fxstreet.com/news/usd-jpy-makes-another-run-towards-11200-amid-notable-usd-demand-201705250939

Read More

The Russian Ruble is posting strong gains vs. its American peer on Thursday, dragging USD/RUB to the area of daily lows in the 56.00 neighbourhood.

USD/RUB all eyes on the OPEC meeting

The pair is testing fresh 4-week lows on the back of the rally in crude oil prices, which volatility has increased as of late amidst rising rumours and counter-rumours regarding an extension of the current OPEC/non-OPEC output cut deal, all ahead of the imminent OPEC meeting in Vienna (13GMT).

RUB has been deriving extra support from the upside in the barrel of Brent crude, up nearly 17% since 2017 lows seen earlier in the month in the $46.60 region to peaks in the $54.60/65 band recorded yesterday.

Adding to the pair’s decline, the greenback continues to slide today after the bullish attempt of the US Dollar Index lost vigour in the 97.30 area on Wednesday.

In the Russian data space, the usual weekly report on the FX reserves held by the CBR is due later while earlier in the week Retail Sales came in flat on an annualized basis in April and the unemployment rate ticked lower to 5.3% during the same period.

Back to the US, Initial Claims are due seconded by Wholesale Inventories and the speech by FOMC’s L.Brainard (permanent voter, centrist).

USD/RUB levels to watch

At the moment the pair is losing 0.42% at 56.17 facing the next support at 56.00 (low May 25) followed by 55.67 (2017 low Apr.25) and then 53.03 (low Jun.18 2015). On the other hand, a break above 56.57 (high May 24) would aim for 56.98 (20-day sma) and finally 57.06 (55-day sma).

 
 

Read More

Kuwait’s oil minister Essam al-Marzouq came out on the wires earlier today, speaking to Reuters ahead of the OPEC meeting.

 Key Headlines:

Does not expect OPEC meeting to discuss deeper cut to oil output

Oil market has already absorbed rise in shale oil output

 

Source: https://www.fxstreet.com/news/kuwait-oilmin-does-not-expect-opec-meeting-to-discuss-deeper-cut-to-oil-output-201705250956

 
 

Read More

 

In view of Richard Franulovich, Research Analyst at Westpac, a major multi-month drag on CAD has eased with the BoC adopting a more constructive tone on the economy.

Key Quotes

“The Bank has finally embraced the firmer tone to the data after long downplaying it, noting that the adjustment to the oil price decline is “largely complete” and that recent data have been “encouraging”. The Bank appears to have adjusted their assessment of spare capacity too, simply noting, “ongoing excess capacity” instead of “material excess capacity”. Tellingly, the Bank has also dropped the implicit open ended promise to maintain stimulus, the Bank now noting that the current degree of stimulus is appropriate “at present”.”

“With OPEC/non-OPEC redoubling efforts to address excess oil supply and the BoC pivoting in a hawkish direction CAD appears to have put in a major multi month low on multiple crosses. USD/CAD on course to test 1.32/1.33.”

 

Source: https://www.fxstreet.com/news/cad-multi-month-drag-has-eased-westpac-201705250958

 

Read More

The USD/CAD pair dipped below 1.34 in Asia as the Canadian dollar remains well bid, tracking the uptick in the oil prices.

Nears rising trend line support

The trend line sloping upwards from the Feb 16 low and April 13 low is seen offering support near 1.3382 levels. The Canadian dollar spiked in the overnight trade after the Bank of Canada kept rates unchanged as expected, but downplayed the recent miss in the inflation data. The policy statement sounded slightly hawkish and tilting towards rate hike.

The USD/CAD pair fell to 1.3404 in the overnight trade and extended losses to a 1.3397 levels in Asia. The strength in the oil benchmarks seen ahead of the OPEC also keeps the bid tone around CAD intact.

The CAD lost its charm in the first quarter of 2017, given the widening US-Canada rate differential. The bears could make a comeback if the OPEC fails to boost prices above $60 levels.

USD/CAD Technical Levels

A break below 1.3382 (rising trend line support) would open up downside towards 1.3345 (100-DMA) and 1.3294 (200-DMA). The daily RSI is sloping downwards and is yet to hit the oversold territory.

On the higher side, breach of resistance at 1.3465 (5-DMA) could yield a rally to 1.35 (zero figure) and 1.3547 (10-DMA). Only a daily close above the 10-DMA would signal short-term bearish invalidation.

  TREND INDEX OB/OS INDEX VOLATILY INDEX
15M Bearish Neutral High
1H Bearish Oversold High
4H Bullish Oversold High
1D Bearish Oversold Expanding
1W Bearish Neutral Expanding

 

Read More

EUR/USD: Bullish: Still bullish but odds for extension to 1.1300 are not high.

There is not much to add as EUR traded in a relatively calm manner yesterday. The recovery from the 1.1167 low yesterday is lacking in momentum and the odds for extension to 1.1300 are still not high. That said, only a break below 1.1130 would indicate that the bullish phase that started last Wednesday, 17 May has ended. We have suggested taking partial profit at 1.1170 last Friday and those who are still long should look to exit their position if there is another push towards 1.1300. 

GBP/USD: Neutral: Likely in a topping process. [No change in view]

While there is no change to the current neutral outlook for GBP, the price action over the past few days is beginning to look increasingly like a topping process. The current neutral phase has been intact for about 3 weeks now and from here, a clear break below 1.2920 would greatly increase the odds for a move towards the 1.2830 low seen earlier this month. Overall, the current mild downward pressure would continue to increase over the next several days as long GBP holds below the strong 1.3050 resistance. 

Read More

SINGAPORE – Asia has been the world champion of economic growth for decades, and this year will be no exception. According to the latest International Monetary Fund Regional Economic Outlook (REO), the Asia-Pacific region’s GDP is projected to increase by 5.5% in 2017 and 5.4% in 2018.

Despite escalating geopolitical tensions, most countries in the region have maintained their economic momentum. They have benefited from policies supporting strong domestic demand in China and Japan, and from favorable global conditions. Growth is picking up across many advanced and emerging market economies, and financial markets have, for the most part, proven to be resilient.

Read More

Today marks the culmination of two years' effort to develop the FX Global Code and the associated adherence mechanisms. It has involved considerable input from many foreign exchange market participants, both public and private. Today I will reiterate the motivation for the work, highlight the main features of the Code and adherence, summarise how we have developed the Code and outline the way forward.

Firstly, why is the work going on? The foreign exchange (FX) industry has been suffering from a lack of trust. This lack of trust is evident both between participants in the market and, at least as importantly, between the public and the market. The market needs to move toward a more favourable and desirable location, and allow participants to have much greater confidence that the market is functioning appropriately.

The Code sets out global principles of good practice in the FX market to provide a common set of guidance to the market. This will help to restore confidence and promote the effective functioning of the wholesale FX market.

A well-functioning FX market is very much in the interest of all market participants. This clearly includes central banks, both in their own role as market participants but also as the exchange rate is an important channel of monetary policy transmission. In a globalised world, the foreign exchange market is one of the most vital parts of the financial plumbing.

One of the guiding principles underpinning our work is that the Code should promote a robust, fair, liquid, open and transparent market. A diverse set of buyers and sellers, supported by resilient infrastructure, should be able to confidently and effectively transact at competitive prices that reflect available market information and in a manner that conforms to acceptable standards of behaviour.

The work to develop the Code began two years ago, in May 2015, when the BIS Governors commissioned a working group of the Markets Committee of the BIS (which I chaired until early January this year) to do two things: first, establish a single global code of conduct for the wholesale FX market and second, to come up with mechanisms to promote greater adherence to the Code.[1]

This work is very much a public sector–private sector partnership. We have been ably and vigorously supported by a group of market participants, chaired by David Puth, CEO of CLS. David's group contains people from all around the world on the buy side, including corporates and asset managers, and the sell side, along with trading platforms, ECNs and non-bank participants, drawing from the various Foreign Exchange Committees (FXCs) and beyond. All parts of the market have been involved in the drafting of the Code to make sure all perspectives are heard and appropriately reflected.

There are two important points worth highlighting: first, it's a single code for the whole industry and second, it's a global code.

On the first point, the Code is supplanting the existing codes that have been present in the FX market. Importantly, the Code covers all of the wholesale FX industry. This is not a code for just the sell side. It is there for the sell side, the buy side, non-bank participants and the platforms; it reaches around the globe and across the whole industry. The way it is relevant will depend on the nature of the engagement with the FX market. What this means in practice is that the steps different market participants take to align their activities with the principles of the Code will differ, reflecting the size, complexity, type and extent of their engagement with the FX market.

On the second point, our group contained representatives from the central bank and private sector from all the 16 largest FX centres, including both developed and emerging markets.

 

Read More

1.Main points

  • Gross fixed capital formation (GFCF), in volume terms, was estimated to have increased by 1.2% to £79.0 billion in Quarter 1 (Jan to Mar) 2017 from £78.1 billion in Quarter 4 (Oct to Dec) 2016.

  • Business investment was estimated to have increased by 0.6%, to £43.8 billion between Quarter 4 2016 and Quarter 1 2017.

  • Between Quarter 1 2016 and Quarter 1 2017, GFCF was estimated to have increased by 2.2%, from £77.3 billion and business investment was estimated to have increased by 0.8% from £43.4 billion.

  • The sectors contributing most to GFCF growth between Quarter 4 2016 and Quarter 1 2017 were public corporations and private sector dwellings, and business investment. Dwellings and other buildings and structures were the assets which contributed most to the increase in GFCF for the same period.

  • The 0.6% increase in business investment in Quarter 1 2017 was due to increase in machinery and equipment, and intellectual property products (IPP), particularly software data.

2.Things you need to know about this release

The estimates in this release are short-term indicators of investment in non-financial assets in the UK, such as dwellings, transport equipment, machinery, buildings and intellectual property products. This release covers not only business investment, but asset and sector breakdowns of total gross fixed capital formation (GFCF), of which business investment is one component.

Business investment is net investment by private and public corporations. These include investments in transport, information and communication technology (ICT) equipment, other machinery and equipment, cultivated assets, intellectual property products (IPP, which includes investment in software, research and development, artistic originals and mineral exploration), and other buildings and structures.

Business investment does not include investment by central or local government, investment in dwellings, or the costs associated with the transfer of non-produced assets (such as land). Business investment is not an internationally recognised concept and it should not be used to make international comparisons, however GFCF is an internationally recognised standard and is therefore internationally comparable. Please see a short guide to GFCF and business investment for more detailed information, including asset and sector hierarchies.

All investment data referred to in this bulletin are estimates of seasonally adjusted chained volume measures. To see a time series of the data please use our time series datasets.

Bias Adjustment

As normal, for the provisional business investment release, a bias adjustment has been applied to the GFCF estimates to reflect the fact that large capital expenditure tends to be reported later in the reporting cycle by businesses. More information on this adjustment can be found in section 11 of this bulletin.

3.GFCF and business investment main figures

 

4.Which sectors and assets are contributing to growth in GFCF in Quarter 1 2017?

Between Quarter 4 (Oct to Dec) 2016 and Quarter 1 (Jan to Mar) 2017, gross fixed capital formation (GFCF) increased by 1.2%. On a sector basis, business investment contributed 0.3 percentage points to overall GFCF growth, and public and private sector dwellings contributed 0.3 and 0.4 percentage points respectively (Figure 1).

Between Quarter 1 2016 and Quarter 1 2017, GFCF increased by 2.2%. The general government sector was the biggest factor in this increase, having contributed 1.0 percentage points to growth. Private sector dwellings also increased, contributing 0.6 percentage points to growth. The largest fall quarter on same quarter a year ago was in private sector transfer costs, which contributed negative 0.2 percentage points to growth over the same time period. Quarter 1 2016 represented the highest level of private sector transfer costs since Quarter 2 (Apr to June) 2008. The Bank of England’s Summary of Business Conditions from May 2016 suggested that this was due to an increase in Stamp Duty from April 2016. Private sector transfer costs was the only sector to have decreased when compared with the same quarter a year earlier.

 

Read More

The BBA’s latest high street banking data shows that consumer credit growth was 6.4% in April, compared with 6.1% in the previous month.

Gross mortgage borrowing totalled £13.4 billion in April.* Net mortgage borrowing was 2.4% higher than a year ago.

Eric Leenders, BBA Managing Director for Retail Banking said:

“As the Spring sunshine picked up in April, so did consumer spending. Annual growth in consumer borrowing from the main high street banks** grew due to increased customer use of credit cards. This was also reflected by an uplift in retail sales volumes, particularly among food retailers over the Easter period.

House purchase approvals were largely in line with last year’s average, though remortgaging approvals have dipped slightly in recent months despite historically low interest rates.

 

Read More

British gamblers lost a record £13.8bn in the year ending September 2016, including an all-time high of £1.8bn on controversial fixed-odds betting terminals(FOBTs).

The figures, released by industry regulator the Gambling Commission, come just weeks before a long-awaited government review of the industry is due to be published.

The review has seen FOBTs, which allow gamblers to stake up to £100 every 20 seconds, become a focal point for campaigners supporting tighter regulation, with both the Liberal Democrat and Labour promising to cut the maximum bet to £2 if they win the general election.

Read More

OPEC and non-OPEC ministers meet for informal consultations in Vienna on Wednesday in a last-ditch bid to agree the duration of oil output cuts as they seek to clear a global stocks overhang that has pulled down the price of crude.

The top oil producer in OPEC, Saudi Arabia, favors extending the output curbs by nine months rather than the initially planned six months, to speed up market rebalancing and prevent crude prices from sliding back below $50 per barrel.

OPEC members Iraq and Algeria as well as top non-OPEC producer Russia also support a nine-month extension but some Gulf OPEC members including Kuwait and the United Arab Emirates have pointed to a need for further analysis.

The Organization of the Petroleum Exporting Countries meets formally in Vienna on Thursday to consider whether to prolong the deal reached in December in which OPEC and 11 non-members agreed to cut output by about 1.8 million barrels per day in the first half of 2017.

On Wednesday, a ministerial monitoring committee consisting of OPEC members Kuwait, Venezuela, Algeria and non-OPEC Russia and Oman meets in the Austrian capital to discuss the progress of cuts and their impact on global oil supply. Saudi Arabia, which holds the current OPEC presidency, will also attend.

Several OPEC delegates said they expected the meetings on Wednesday and Thursday to be relatively painless, resulting in an output cut extension by nine months.

"I think the meeting will go smoothly," an OPEC delegate said, referring to signs of consensus in the group including Iran, which has fought Saudi Arabia in many recent OPEC meetings.

Several delegates and ministers said they did not believe cuts could be extended to a full year.

Possible surprises could include a deepening of the cuts, but this would likely be minor because the non-OPEC producers that are expected to join the accord for the first time on Thursday, such as Turkmenistan and Egypt, are fairly small

Read More

The Trump administration has presented its 2018 budget plan to Congress last evening. The budget plan calls to slash $3.6 trillion in government spending over the next decade, mainly reducing the funding for healthcare and social benefits (such as Medicaid, SNAP, pensions for government officials) and Environmental Protection Agency funds.

The cuts are to be used for funding to boost economic growth and to reduce the US deficit. Nevertheless, it will result in numerous needy American citizens losing vital benefits.

The plan forecasts economic growth will be increased to 3% after passing the budget cuts, tax reform, regulation reform and infrastructure plans. However, following the performance of Trump’s administration since taking office, it seems difficult for any of Trump’s plans to be passed smoothly.

Average US annual economic growth is ranging between 1.9% – 2.2%, a 3% target seems to be a big challenge to achieve. The scale of the 2018 budget cut is substantial with a distinct possibility that Congress will reject the plan in its entirety or pass only portions of it.

The dollar index has fallen approximately 2.67% since May 12th, hitting its lowest level of 96.68, post the US presidential election, on May 22. On Tuesday May 23rd, following the announcement of the budget cuts, the dollar index moved higher breaking the resistance level at 97.00 and touching a 3-day high of 97.35 early on Wednesday morning.

On Tuesday, EUR/USD retreated from a 6-and-a-half-month high of 1.1267, breaking the psychological level at 1.1200 as corrective pressures intensified with consolidation around 1.1180 on early Wednesday trading. USD/JPY rebounded around 0.68% from the support at 111.00, hitting a 1-week high of 112.04 on Wednesday morning. USD/JPY is currently consolidating below the psychological resistance level at 112.00.

FOMC May Meeting Minutes will be released at 19:00 BST this evening. Per the CME Fed Watch tool, the probability for a rate hike in June rose to 83.1% after the release of the 2018 budget plan. That said, markets are assuming the Fed will stick to its rate hike pace regardless of Trump’s Russia leak scandal and soft economic data. Keep an eye on the Minutes, we will likely get further clues about a June rate hike and updated economic outlook. Be aware that it will likely cause volatility for USD and USD crosses.

Moody cut China’s sovereign credit rating from Aa3 to A1 due to fears over rising debt levels. The new rating is same as the ratings of Czech Republic, Estonia, Israel, Japan and Saudi Arabia. The adjustment has weighed on the Chinese stock markets.

 

Source: https://www.fxstreet.com/analysis/usd-bounces-from-6-1-2-month-low-eyes-on-fomc-minutes-201705240925

 

Read More

Hours after Moody’s Investors Service downgraded China’s credit rating, the nation’s finance ministry hit back with a statement on its website saying the rating agency overestimated the economic difficulties the country faces while underestimating Beijing’s capability in reforms.

The Chinese government’s quick response marked a sharp contrast to a year earlier. At a conference in March 2016, China’s former finance minister Lou Jiwei said Beijing didn’t “care too much” about ratings from international agencies when asked about a previous Moody’s change of China’s credit rating outlook.

Moody’s surprised the market on Wednesday morning by downgrading China’s credit rating by one notch to A1 from Aa3, expecting further fragility in financial strength and increases in debt. It also changed the outlook for China to stable from negative.

 

Read More

Raoul Leering, Head of International Trade Analysis at ING, explains that despite Donald Trump’s attacks on free trade, world trade has been on a roll since his election.

Key Quotes

“A favourable phase in the global economic cycle has been driving the recovery. This is likely to continue as the outlook for the world economy in 2017 remains positive.”

“World trade in volume terms has recovered from the setback in February (-0.8% MoM), with monthly growth in March at 1.5%, according to today’s data release from The Netherlands Bureau for Economic Policy Analysis (CPB). During the first three months of 2017 trade increased 1.4% QoQ.”

“World trade is currently being pushed up by a favourable phase in the economic cycle in most of the world’s largest economies. This is likely to continue as the outlook for the world economy in the remainder of 2017 is positive. The US economy suffered a setback in 1Q, making it the odd one out with a 1% decline in import demand in March. ING expects this to be a blip and forecasts the US to return to trade growth in the remainder of the year, on the back of accelerating economic growth.”

“The recovery in the Eurozone is, although not spectacular, firm footed and resulting in steady import growth. Given the over representation of the euro area in world trade, it will remain a driver for trade recovery during the rest of the year. The improved outlook for China over the last couple of months is also contributing to the current positive flow for trade. The large setback for Japanese imports in February  (-5.2%) turned out to be a blip and no structural setback, with growth of 4.3% in March.”

“The broad-based nature of this economic upswing is the reason for world trade witnessing its fastest growth since 2010.”

“The current revival will not lead to a return to growth rates world trade enjoyed prior to the crisis. Economic momentum is favourable but has its limits. Both in the US and the Eurozone, potential growth is held back by sluggish productivity growth and a return to the Chinese growth rates in the years running up to the financial crisis is unlikely with the maturing of the economy.”

Source: https://www.fxstreet.com/news/world-trade-on-a-roll-since-trumps-election-ing-201705240937

 

Read More

 The Asian recovery seen in GBP/USD gained extra traction in the European session, sending the rate sharply higher in a bid to reclaim 1.30 handle.

GBP/USD trades just below 5-DMA at 1.2999

The spot extends its reversal from a drop-led by the overnight comments from the UK PM Theresa May and now looks to regain 1.3000 barrier amid a broadly subdued greenback as well as treasury yields. 

The latest leg higher in GBP/USD can be also seen as a result of positive London stocks and a renewed rally in oil prices, which underpin the risk-currency GBP. WTI refreshed fresh five-week tops at $ 51.88 levels, while Brent also hovers near multi-month highs of $ 54.62.

Focus now remains on the US existing home sales data due on the cards in the NA session, which is expected to provide impetus to the buck, eventually impacting the major. However, the reaction may remain limited ahead of the Fed minutes that will be published in the American afternoon.

 

Read More

The USD/CAD pair reversed all of its early gains to session highs near 1.3540 region and is now inching back closer to the key 1.35 psychological mark.

The pair's latest leg of downslide could be attributed to a lack of follow through greenback buying interest. In fact, the key US Dollar Index has now drifted into negative territory and failed to assist the pair to extend overnight recovery move from one-month lows. 

Adding to this, optimism over extension of the OPEC-led output cut agreement continues to boost oil prices, with WTI crude oil now moving within striking distance of reclaiming $52.00/barrel mark and provided an additional boost to the commodity-linked currency - Loonie, eventually collaborating to the pair's retracement from higher levels. 

 

Read More

Kuwaiti oil minister crossed the wires last minutes, via Reuters, adding to the recent comments on the OPEC output cut deal.

Key Headlines:

It’s all still in the mix regarding oil output deal

Everything on the table still including deeper cuts and 1 year extension

Separately, Algerian oil minister was also on the wires, noting that oil prices may go above $55 a barrel before year-end

Source: https://www.fxstreet.com/news/kuwait-oimin-everything-on-the-table-still-including-deeper-cuts-and-1-year-extension-201705240910

Read More

In view of Christian Lawrence, Senior Market Strategist at Rabobank, the Bank of Canada is set to leave its policy rate unchanged at 0.50% on 24th May 2017 and they maintain the view that the BoC is unlikely to change the policy rate this year.

Key Quotes

“This week’s meeting will not be accompanied by a new Monetary Policy Report.”

“The BoC had been looking through stronger data but this month there is less to look through with domestic data generally disappointing expectations.”

“Oil will remain key for USD/CAD and in this respect, it can be argued that this week’s main event for CAD will be Thursday’s OPEC meeting rather than Wednesday’s BoC meeting.”

 

Source: https://www.fxstreet.com/news/boc-preview-less-to-look-through-rabobank-201705240923

 

Read More

In view of Christian Lawrence, Senior Market Strategist at Rabobank, the Bank of Canada is set to leave its policy rate unchanged at 0.50% on 24th May 2017 and they maintain the view that the BoC is unlikely to change the policy rate this year.

Key Quotes

“This week’s meeting will not be accompanied by a new Monetary Policy Report.”

“The BoC had been looking through stronger data but this month there is less to look through with domestic data generally disappointing expectations.”

“Oil will remain key for USD/CAD and in this respect, it can be argued that this week’s main event for CAD will be Thursday’s OPEC meeting rather than Wednesday’s BoC meeting.”

 

Source: https://www.fxstreet.com/news/boc-preview-less-to-look-through-rabobank-201705240923

 

Read More

Raoul Leering, Head of International Trade Analysis at ING, explains that despite Donald Trump’s attacks on free trade, world trade has been on a roll since his election.

Key Quotes

“A favourable phase in the global economic cycle has been driving the recovery. This is likely to continue as the outlook for the world economy in 2017 remains positive.”

“World trade in volume terms has recovered from the setback in February (-0.8% MoM), with monthly growth in March at 1.5%, according to today’s data release from The Netherlands Bureau for Economic Policy Analysis (CPB). During the first three months of 2017 trade increased 1.4% QoQ.”

 

Read More

Well, it looks like FXCM will have some more money to pay back its loan from Leucadia.

Pan European exchange group Euronext NV (EPA:ENX) has announced that it has reached an agreement to acquire 90% of Forex ECN FastMatch for $153 million in cash, plus a $10 million contingent earn-out. The remaining 10% of FastMatch is owned by management.

In Q1 2017 FastMatch generated $5.8 million in revenue, up 49% compared to Q1 2016, and $2.4 million of EBITDA. FastMatch volumes have been growing steadily over the past two years, topping the $19 billion ADV level for the first time over the past two months.

 

Read More

Germany’s robust economy is in the spotlight again today, with the monthly update of the Gfk Consumer Climate Index. 

Later, we’ll see the April report on US existing home sales. Meantime, keep an eye on the policy sensitive two-year yield, which has been surprisingly quiescent lately in light of expectations for a rate hike by the Fed next month. 

Germany: Gfk Consumer Climate Index (0600 GMT) Yesterday’s update on sentiment data in May for Europe’s biggest economy delivered stronger-than-expected news. Is that a sign that the outlook for German economic growth deserves to be revised up?

Read More

Michael Gordon, Acting Chief Economist at Westpac, suggests that NZ’s 2017 Budget can afford to be more generous than last year’s effort as net debt is on track with the Government’s long-term target, and the tax take is running stronger than expected.

Key Quotes

“Strong population growth means that extra spending is also a necessity. The Government has already announced some major increases in capital spending over the last year.”

“The economic forecasts underpinning the fiscal accounts are likely to be similar to our own, with solid growth in the near term, slowing by the end of the decade as building activity tops out and population growth slows.”

 

Read More

In view of analysts at ANZ, calls that global growth have peaked in Q2 look premature based on the recent ‘soft’ indicators from Europe and the US.

 Key Quotes

 “The US Composite PMI index for May rose to 53.9 as manufacturing eased slightly to 52.5 and services rose to 54.0. Manufacturing new orders slid to 53.4 and export orders also dipped to 51.3. Alongside the Richmond Fed manufacturing index for May falling to 1, it suggests manufacturing growth momentum has peaked in the US. There were sharp drops in shipments -2 (last: 25) and new orders to 0 (last 26) within the Richmond index too. In contrast, the services incoming new business index jumped 2.4 pts to 54.7 and the services employment index rose 2 pts to 52.8 (50.8). This suggests that the non-manufacturing side of the economy (85% of GDP) is reaccelerating.”

 

Read More

Credit Agricole CIB FX Strategy Research notes that the recent EUR/USD rally stands in sharp contrast with the muted widening of the EUR-USD 2Y rate spread.

In addition,  CACIB notes that EUR/USD rebound is running ahead of the gradual tightening in the OAT-Bund 10Y yield spreadthat has been evident since the French presidential elections.  

On the flows front, CACIB notes that investors have built considerable EUR-longs in anticipation of portfolio inflows into Eurozone stock markets and unwinding of EUR-funded carry trades as the ECB moves ever closer to the QE taper.

"We doubt that these inflows can boost EUR, however, so long as they are hedged," CACIB argues.

On the USD front, CACIB also notes that USD has sold off in excess of the recent correction lower in Fed rate hike expectations.

 

Read More

AUD/USD shed 20 odd pips to a session low of 0.7455 after news hit the wires that ratings agency Moody’s has downgraded China’s long-term local currency and foreign currency issuer ratings to A1 from Aa3 and changed the outlook to Stable from Negative.

The pair retreated from the previous day’s high of 0.7517 on the broad based USD recover. Marc Chandler, Head of Global Markets Strategy, Brown Brothers Harriman says, “the downside momentum in the US dollar faded it could be an early sign that the market has discounted the recent news stream,  which includes the fear that the political turmoil in the Washington will adversely impact the President's economic program.”

The USD also regained bid tone as the focus shifted to the June Fed rate hike odds, which as per Bloomberg calculations stand at 95%. The CME model puts the rate hike odds at 83%.

 

Read More

MARCH KEY FIGURES

Mar qtr 17
Dec qtr 16 to Mar qtr 17
Mar qtr 16 to Mar qtr 17
$m
% change
% change

TREND ESTIMATES(a)

Value of work done
Building
26 343.4
-1.1
-1.9
Residential
17 471.9
-1.7
-1.0
Non-residential
8 877.2
-
-3.5
Engineering
19 894.8
0.1
-12.4
Total construction
46 223.4
-0.6
-6.8

SEASONALLY ADJUSTED ESTIMATES(a)

Value of work done
Building
26 227.2
-2.8
-2.1
Residential
17 219.2
-4.7
-3.1
Non-residential
9 008.0
1.0
-0.1
Engineering
20 189.7
2.2
-13.0
Total construction
46 416.9
-0.7
-7.2

- nil or rounded to zero (including null cells)
(a) Reference year for Chain Volume Measures is 2014-15.

 

 

 

Value of construction work done, Chain Volume Measures - Trend estimates
Graph: Value of constrcution work done, Chain colume measures - Trend
Value of building work done, Chain Volume Measures - Trend estimates
Graph: Value of building work done, Chain Volume Measures—Trend estimates




MARCH KEY POINTS


VALUE OF WORK DONE, CHAIN VOLUME MEASURES

TOTAL CONSTRUCTION

  • The trend estimate for total construction work done fell 0.6% in the March quarter 2017.
  • The seasonally adjusted estimate for total construction work done fell 0.7% to $46,416.9m in the March quarter.
  •  

Read More

Former Federal Reserve Chairman Ben Bernanke said on Wednesday the Bank of Japan may need to coordinate a new fiscal spending plan with the government, allowing for inflation to accelerate above its 2 percent target without worsening the debt burden.

Making a temporary commitment to allow inflation to overshoot would help keep the ratio of debt to gross domestic product stable, and is different from directly underwriting fiscal spending, Bernanke said.

Bernanke also said the BOJ's current policy framework may be reaching its limits because short- and long-term interest rates are near zero, but the need for more easing cannot be ruled out.

"The direct approach...would be for the BOJ to commit to a temporary overshoot of its inflation target sufficient to avoid any increase in the debt-to-GDP ratio," Bernanke said.

"This commitment amounts to a monetary financing of the fiscal program without relying on exotic concepts like helicopter drops."

 

Read More

EUR/USD: Bullish: Still bullish but odds for extension to 1.1300 are not high.

EUR eked out a marginal new high of 1.1267 yesterday before easing off quickly. The price action is not surprising as we have held the view that that “while the outlook for this pair is still bullish, the odds for extension to 1.1300 are not high”. That said, only a break below 1.1130 would indicate that the bullish phase that started last Wednesday, 17 May has ended. We have suggested taking partial profit at 1.1170 last Friday and those who are still long should look to exit their position if there is another push towards 1.1300.

GBP/USD: Neutral: Likely in a topping process.

While there is no change to the current neutral outlook for GBP, the price action over the past few days is beginning to look increasingly like a topping process. The current neutral phase has been intact for about 3 weeks now and from here, a clear break below 1.2920 would greatly increase the odds for a move towards the 1.2830 low seen earlier this month. Overall, the current mild downward pressure would continue to increase over the next several days as long GBP holds below the strong 1.3050 resistance.

 

Read More

The standout technical signal on a USD/HUF 4hr chart is a plunge of the RSI below its 25% threshold.

At the same time, negatively aligned 50- and 200-period moving averages point at a continued USD/HUF depreciation, with recent declines locking the RSI below the 50% mark. Worth mention is the 70% level which hasn't been explored for a while on the 4hr time frame.

Should the USD/HUF be unable to wave any additional bearish impulses, the mentioned momentum readings raise the odds of a minor squeeze back upwards.
 
Source: https://www.fxstreet.com/news/usd-huf-is-oversold-on-several-parameters-201705231003
 
 

Read More

Although the 50- and the 200-period SMAs are positively aligned, the upside in EUR/GBP has stalled in recent trading.

A 4hr stochastic above its median line don’t necessarily favours a liquidation of long-term buy positions, but the 1-hour stochastic is increasingly pointing that it could be necessary soon.

The oscillator has been precariously perched above the 70% level for more than eight hours and has just abandoned overbought territory with the recent hourly close. We see bias for a roll back lower in the short-term.

 

Source: https://www.fxstreet.com/news/eur-gbp-is-hitting-a-ceiling-201705231006

Read More

More good news from the eurozone has sent investors running back to European stocks, while oil traders are living through a storm of new pre-OPEC headlines.

  • Vigour returns to the eurozone

  • New all-time highs on the cards for stocks?

  • Kuwait & Trump headlines hit oil price

Today it is the turn of the eurozone markets to lead global stocks higher. PMIs from the region this morning continued to paint a picture of health, with only some weakness in the French manufacturing number spoiling the overall impression of an ongoing recovery. What has been remarkable has been the speed with which indices like the FTSE, S&P 500 and Dow have rebounded to close to their all-time highs. There is, it seems, no shortage of investors across the globe willing to jump in on the slightest sign of weakness (and also an equally large, if not larger, number of those wanting to try and short the market in the teeth of one of the strongest bull runs of recent memory).

Attention turns increasingly to the oil price, as OPEC gears up for its next meeting. We have already had plenty of headlines this morning, as Kuwait lets everyone know that a big extension in cuts could be difficult to achieve. This sounds like expectation management – given the surge in crude prices in recent weeks, the cartel needs to play down hopes of a deal, so that when one arrives the market will roll over obediently and continue bidding up the oil price. There are plenty of risks to this strategy, with one appearing this morning as President Trump airs the idea of selling some of the US stockpile to raise cash. Everywhere OPEC turns, it seems, it runs into a new supply glut. Ahead of the open, we expect the Dow to start at 20,940, up 46 points from last night’s close.

 

Source: https://www.fxstreet.com/analysis/sunshine-reigns-across-eurozone-data-201705230940

Read More

USD/NOK 1H Chart: Channel Down

Comment: Despite the recent prognoses that the currency pair will rebound from the lower trend line of a dominant ascending channel, which is supported by the 50.00% Fibonacci retracement level of the 2016 high and low levels, the surge did not occur and the pair continues a downward movement within the short term descending channel. At the present moment, the USD/NOK is trying to pass through another support level provided by the 61.80% Fibonacci retracement level. Apparently, it will succeed, as the narrowing fluctuations of the rate indicate on formation of the descending triangle. Nevertheless, there is still a possibility that the pair will break through the lower low highs and meet a resistance near the monthly S2 at 8.3866.

USDNOK

 

Read More

What’s being claimed by US president Donald Trump as the “greatest witch hunt” in political history – the probe into any of his White House staff’s ties with Russia – is also being viewed as positive news for the outlook of the yuan, and other currencies.

Former FBI director Robert Mueller, widely respected for his independence in high-profile government investigations, has been named a special counsel to oversee the latest scrutiny of the new administration, “escalating the political uncertainties faced by Trump, about his ties with Russia, over his election win and his other issues”, said Jasper Lo Cho-yan, chief strategist at King International Financial.

“This will affect many of his policies, including his call for interest rate rises.

 

Read More

Volatility continued to decline as political concerns fade into the background. VIX is now at levels seen before the James Comey memo rocked equity markets. Despite the nervousness in markets we anticipate investors will become numb to the scandal plaguing President Trump's administration as investigations tend to be protracted events.

In the absence of Trump-fuelled political risks, carry trade has again become attractive. USDJPY remain the barometer for investors should President Trump’s problems escalate. USDJPY’s move off 110.24 indicates easing of political uncertainties. Sentiment around the greenback has weakened and it will take a significant upside surprise in economic data to give yields the necessary push higher to boost USD.

Dovish commentary from the Feds Evans and Brainard (both voters) has lowered expectation for the FOMC minutes being released tomorrow. Both speakers highlighted the lack of strong price pressures and a historical pattern of inflation to undershoot the 2% target. Yet strong data leading up to the June rate decision could quickly shift USD bias.

Today’s US PMI and new homes sales could provide further clarity on US economic uncertainties. In addition, Fed Kashkari (voter) will speak. We see the current balanced environment positive for EM FX - specifically MXN, INR and IDR

 

Source: https://www.fxstreet.com/analysis/carry-looks-solid-201705230902

Read More

USD/JPY—slightly bearish. We expect the pair may move towards 110.80.”

– Fullerton Markets (based on Investing.com)

  • Pair’s Outlook
    The USD/JPY pair has been trading rather calmly since last week’s sharp decline, managing to retain its positions above the 111.00 major level. The given pair now appears to be contained within a specific trading range, with the 55-day SMA and the weekly PP representing the upper border, and the monthly PP with the lower Bollinger band—the lower one. Additionally, strong demand rests around the 110.00 mark, which should limit any deeper losses should the immediate support fail. Meanwhile, technical indicators imply the Greenback is to outperform the Yen again, but due to lack of impetus the nearest resistance is likely to remain intact today.

  • Traders’ Sentiment
    There are 60% of traders holding short positions, while 55% of all pending orders are to acquire the US Dollar.

USDJPY

 

Interested in USDJPY technicals? Check out the key levels

    1. R3111.83
    2. R2111.60
    3. R1111.46
  1. PP111.23
    1. S1111.09
    2. S2110.86
    3. S3
 
 
Source: https://www.fxstreet.com/analysis/usd-jpy-analysis-stuck-between-11050-and-11175-201705230951

Read More

Analysts at ING explain that it’s no easy feat to stay on top of the spectrum of noise coming out of the White House these days and the default option for an investor might have been to turn a blind eye, were it not for the simple fact that both US and global asset prices have been – and continue to be – driven by the actions of an unpredictable US administration.

Key Quotes

“Expect more of the same, with the White House front and centre of another politically charged week:

  • ‘Trumpeachment’ talk continues to linger: Former FBI director Comey has agreed to testify to the Senate next week, meaning Trump impeachment noise is unlikely to blow over easily. Expect the $ to remain on the defensive, despite the potential positives stemming from Trump’s budget and the FOMC minutes.

Read More

The AUD/USD pair maintained its strong bid tone for the third consecutive session and jumped to near three-week highs, beyond the key 0.75 psychological mark.

The prevalent politically uncertain environment in the US continues to weigh on the greenback, with the key US Dollar Index falling to its lowest level since the US Presidential elections and helping the pair to build on to its recent recovery move from 4-month lows touched during the early half of May month. 

Adding to this, fading expectations of faster Fed rate-tightening cycle, against the backdrop of recent dismal US macro data, has been driving the US treasury bond yields lower across all maturities and is further seen benefitting higher-yielding currencies - like the Aussie.

 

Read More

The GBP/USD pair witnessed aggressive selling on the European open, as the pound was dumped to near 1.2950 levels amid a renewed risk-off wave, before recovering some ground to now re-take 1.30 handle.

The bounce in the major is mainly driven by renewed optimism seen around the European equities, as dust settles over the Manchester blast aftermath. Meanwhile, markets appear to ignore downbeat UK public sector net borrowing data, therefore, having limited impact on the spot.

United Kingdom Public Sector Net Borrowing registered at £9.648B above expectations (£8.15B) in April

However, it remains to be seen whether cable can sustain the recovery from 1.2954 lows, as investors remain on the back foot, in the wake of the Manchester terror blast, which killed 22 people and injured nearly 50.

Also, increasing uncertainty over the upcoming UK general elections scheduled on June 8, especially after the UK PM Theresa May suspended the election campaign after the unevenful terror attack.

Sterling risk: will the terror attack delay the UK elections scheduled for June 8th?

With the UK data out of the way, focus now remains on the UK inflation hearings and US datasets due on the cards in the NA session.

GBP/USD Levels to consider            

Haresh Menghani, Analyst at FXStreet noted: “Below the said (1.2965) support, the pair is likely to accelerate the slide towards a short-term ascending trend-line support, currently near 1.2920 area. A follow through selling pressure below the trend-line support seems to open room for further downslide towards 1.2850-45 horizontal support before the pair eventually breaks below the 1.2800 handle and head towards testing its next major support near 1.2770-65 region.”

“On the upside, 1.3040-50 area remains immediate strong resistance, which if cleared decisively should lift the pair beyond the 1.3100 handle towards testing 1.3125-30 resistance area, marking 38.2% Fibonacci retracement level of the post-Brexit downslide,” Haresh added.

 

Source: https://www.fxstreet.com/news/gbp-usd-off-lows-re-takes-13000-on-better-uk-data-201705230855

 

Read More

Cable is likely to navigate between a 1.2850/1.3050 range in the next weeks, according to FX Strategists at UOB Group.

Key Quotes

“In line with expectation, GBP tested the major 1.3040/50 resistance before easing off (high has been 1.3043). The positive undertone has eased and the current movement is viewed as part of a consolidation phase. In other words, sideways trading is expected for today even though the immediate bias is for a probe lower towards the bottom of the expected 1.2960/1.3035 consolidation range”.

“There is not much to add as GBP rebounded quickly last Friday to hit a high of 1.3040, holding just below the top end of our expected 1.2850/1.3050 consolidation range. While the undertone has improved, it is not enough to shift the current neutral outlook to bullish. That said, an intraday move above 1.3050 is not ruled out but GBP has to register a NY close above 1.3085 to indicate the start of a bullish phase”.

 

Source: https://www.fxstreet.com/news/gbp-usd-keeps-the-neutral-perspective-uob-201705230846

Read More

Karen Jones, Head of FICC Technical Analysis at Commerzbank, noted the pair remains bid while above 1.0944.

Key Quotes

“The Euro remains immediately bid and is approaching the 1.1300 November high. While dips lower hold over the near term uptrend at 1.0944, the market stays immediately bid”.

“The market has potential to reach the highs from mid 2016 circa 1.1400, however we believe it will struggle here from a longer term perspective. We note the 78.6% retracement lies at 1.1343”.

“Below the uptrend will signal a slide to the 200 day ma at 1.0826 and failure here is needed to negate upside pressure”.

 

Source: https://www.fxstreet.com/news/eur-usd-stays-bid-closer-to-11300-commerzbank-201705230844

 

Read More

SAURAV JALAN:
INTRADAY TRADING SIGNALS
 
AUDUSD
 
SELL LIMIT 0.7510-0.7520 TP 0.7485-0.7460 SL 0.7542
BUY STOP  0.7542 TP 0.7570 - 0.75 85 SL 0.7510
 
EURUSD
 
BUY AT CMP 1.2225 TP 1.1260-1.1280-1.1310 SL 1.1180
SELL STOP 1.1180 TP 1.1150-1.1120 SL 1.1225
 
GBPUSD
 
BUY STOP 1.2985 TP 1.3010-1.3030-1.3100 SL 1.2930
SELL STOP 1.2930 TP 1.2905 -1.2880 SL 1.2985
 
EURJPY
 
BUY STOP 124.85 TP 125.20-125.50-125.75 SL 124.30
SELL STOP 124.30 TP 124-123.80 SL 124.85
 
GBPJPY(HIGH RISK)
 
SELL STOP 143.70 TP 143.50-143.30-143 SL 144.40
BUY STOP 144.40 TP 144.70-145 SL 143.70
 
USDJPY(HIGH RISK)
 
SELL LIMIT 111.30-111.50 TP 111-110.80-110.50 SL 111.75
BUY STOP 111.75 TP 111.90-112.25 SL 111.30
 
XAUUSD
 
BUY LIMIT 1259-1257 TP 1262-1264-1268 SL 1253
SELL STOP 1253 TP 1250-1248 -1246 SL 1259
 

Read More

Goldman Sachs analysts wrote in a report published on late-Monday, increased hopes of an extension of the OPEC oil output cut deal are underpinning oil prices, but there are risks for a renewed surplus later next year, as reported by CNBC.

Key Quotes:

"A nine-month extension would normalize OECD inventories by early 2018, in our view, but we see risks for a renewed surplus later next year if OPEC and Russia's production rises to their expanding capacity and shale grows at an unbridled rate."

 

Read More

The AUD/USD pair maintained its strong bid tone for the third consecutive session and jumped to near three-week highs, beyond the key 0.75 psychological mark.

The prevalent politically uncertain environment in the US continues to weigh on the greenback, with the key US Dollar Index falling to its lowest level since the US Presidential elections and helping the pair to build on to its recent recovery move from 4-month lows touched during the early half of May month. 

 

Read More

Refinements to v20 accounts continue, with users of OANDA fxTrade mobile app to enjoy the latest ones.

When OANDA launched the v20 trading engine in October last year to mark its 20th corporate anniversary, it was obvious that this piece of technology offers a number of advantages over the company’s legacy systems to traders: these included, inter alia, improvements to pricing (depth of market) and a new type of accounts (hedging) becoming available.

 

Read More

Toward a More Resilient Financial System

A speech delivered on May 23, 2017, before the Shanghai Symposium on OTC Derivatives in Shanghai, China. 

Vice Governor Pan (PAHN), Chairman Xu, Chairman Betsill and distinguished panelists and guests, welcome to the OTC Derivatives Symposium. I am delighted to be here with such distinguished company. The organizers have brought together many of the leading authorities on systemic issues in financial markets and, in particular, on central counterparty clearing (CCP). 

We’ve hosted a number of similar events at the Federal Reserve Bank of Chicago. Our goal is to provide a forum for informed and sincere discussion among key members of the academic, regulatory, CCP, clearing member and user communities. 

We are honored to cosponsor today’s event with the People’s Bank of China. We share with the People’s Bank a vision that, together, we can develop a better understanding of the issues presented by the use of over-the-counter (OTC) derivatives and we can foster a deeper understanding of the role that clearing can play in the management of systemic risk. We hope that we can make this an annual event that will come to be viewed as the premier derivatives risk-management conference in the Asia-Pacific region. 

Read More

European stocks advanced as economic data from Germany and France signaled that the region’s recovery is on track. U.K. equities and bonds showed resilience in the wake of a suicide bomb attack, even as the pound slipped.

Technology companies helped spur the Stoxx Europe 600 Index after Nokia Oyj settled a litigation with Apple Inc. The U.K.’s FTSE 100 Index rose a third day as S&P 500 futures also climbed. South Africa’s rand led declines in emerging-nation currencies as a risk-off mood hit markets after a terrorist attack killed at least 22 people at a concert in Manchester. Oil dropped, halting a four-day rising streak that took the price of crude above $51 a barrel.

 

 

Read More

  • EUR/USD extended its advance into the new week, hitting a six month high that clears out further resistance
  • The Dollar is struggling to control its own bearings, but Fed speak Monday and Tuesday will span the extremes of policy
  • Complacency is setting back in for risk trends as we await key global meetings; Kiwi and Bitcoin top the market movers

Traders have expectations that they will ride the volatility of a high-level event risk to quick profit, but the realities are often very different. 

The run continues. EUR/USD - the most liquid currency pair in the FX market and arguably one of the most traded assets in the entire financial system - continued its climb to a fresh six-month high. This move has defied the traditional fundamental hurdles and easily cleared a range of otherwise influential technical barriers. How far this pair reaches holds far more influence than just the opportunities in a EUR/GBP wedge break or EUR/AUD trend extension, it can dictate the bearings of an otherwise passive Greenback. As the world's most used currency, that can have far-reaching implication out to the sphere of influence including systemic risk trends. That is the potential, but what are the practicalities.

 

 

Read More

EUR/USD: Bullish: Still bullish but odds for extension to 1.1300 are not high.

Merkel’s ‘EUR is too weak’ comment boosted EUR to a high of 1.1263. While this has improved the upward momentum, the bullish phase that started last Wednesday, 17 May still appears to be over-extended and the extension target of 1.1300 may not be seen so soon. We have suggested taking partial profit at 1.1170 last Friday and those remaining longs should adjust the stop-loss higher to 1.1130 from 1.1095 yesterday. Looking further ahead, any break above 1.1300 would shift the focus to 1.1365. 

GBP/USD: Neutral: In a 1.2850/1.3050 range [No change in view]

There is not much to add as GBP rebounded quickly last Friday to hit a high of 1.3040, holding just below the top end of our expected 1.2850/1.3050 consolidation range. While the undertone has improved, it is not enough to shift the current neutral outlook to bullish. That said, an intraday move above 1.3050 is not ruled out but GBP has to register a NY close above 1.3085 to indicate the start of a bullish phase.

 

Read More

  • German Ifo survey data to dip slightly for May’s current conditions index
  • Softer growth for retail sales via the UK CBI Distributive Trades Survey for May
  • Economists see new US home sales backtracking in April
 
By James Picerno
 

Expectations for Germany’s economy are in focus today with the monthly update of the Ifo Business Climate Index for May. We’ll also see a fresh release of UK survey data for the retailing industry for May via CBI numbers. Later, the government will publish data on new US home sales for April.

 

Read More

The German economy is firing on all cylinders, and sentiment suggests it has a long way to go.

Business confidence as measured by the Ifo institute rose to 114.6 in May -- the highest level since 1991 -- from 113 in April. Earlier on Tuesday, a report showed that from consumer spending to investment to exports, all parts of the economy helped to push growth to 0.6 percent in the first quarter, the fastest in a year.

 

Read More

In the early days of the Trump administration, when the world was still worried - unnecessarily - that Trump would single out Europe, and especially Germany, as an unfair trading partner, slamming the Euro as too weak, Germany's fallback response was to say the currency is where it is due to the ECB's monetary policy, oh and that the Euro wasn't weak, but merely reflecting fundamentals. Well, moments ago the conventional narrative appears to have shifted once again after Angela Merkel herself took on the role of chief Euro critic, saying the common currency is "too weak" and blaming the ECB for the record German trade surplus, accusing Draghi's policies for the weak euro.

Headlines from Reuters and Bloomberg as they cross:

  • MERKEL SAYS EURO IS `TOO WEAK,' MAKES GERMAN PRODUCTS CHEAPER
  • MERKEL ON CAUSES OF GERMAN TRADE SURPLUS SAYS  EURO IS THAT WEAK BECAUSE OF THE ECB'S MONETARY POLICY:
  •  

Read More

Asking prices for UK homes hit a new record high over the past month as families in search of bigger properties brushed aside uncertainty caused by Brexit and June’s general election.

Prices sought by sellers rose 1.2% in the four weeks to 13 May, pushing the average asking price to a fresh peak of £317,281, according to the property website Right Move.

Families with children under the age of 11 were twice as likely as the average person to be moving home, as they looked for bigger properties in school catchment areas. Asking prices for typical family homes – with three or four bedrooms but excluding detached properties – rose by 5.4% year-on-year over the last month, to £270,953.

Read More

Staff from the European Commission, in liaison with staff from the European Central Bank, visited Dublin from 16 to 19 May to conduct the seventh post-programme surveillance (PPS) review mission for Ireland. Staff from the European Stability Mechanism also participated in the meetings on aspects related to its Early Warning System. The main objective of PPS is to assess the country’s capacity to repay loans granted under the former EU-IMF financial assistance programme and, if necessary, to recommend corrective actions.

While the outlook for the Irish economy remains bright, external risks are significant. Ireland has made substantial progress in addressing crisis legacies, including by repairing private sector balance sheets, reducing public debt and creating employment. Growth of the domestic economy remains robust, driven by positive developments in the labour market, consumption and core investment. However, some of the striking headline figures are heavily distorted by activities of multinational enterprises, including highly variable investment in intangible assets and aircraft. In this context, recent efforts to develop complementary economic indicators are welcome as they could improve the data available to policymakers. Risks to the economic outlook remain tilted to the downside. Uncertainty surrounds the final outcome of the negotiations between the UK and the EU under Article 50 of the Treaty on European Union. Moreover, possible future changes to international tax and trade policies are another potential source of asymmetric shocks.

 

Read More

International trade and investment lifts living standards. The evidence for this is irrefutable. And modern economic development is not possible without opening up to international markets, competition and capital.

 

But the world is re-learning the hard way, through Brexit and the rise of Donald Trump, that institutions and policies that protect the immediate losers from trade are needed to realise and sustain the benefits of open markets. Having a healthy and a well-functioning macroeconomic environment — one that delivers what economists call full employment — and a flexible labour market are crucial. So is having an effective social protection system.

When economic growth slows it is harder for the winners from globalisation to compensate the losers. The United States’ slow recovery from the global financial crisis, which hit close to 10 years ago, has brought these underlying structural problems into sharp focus. The social safety net is in tatters with the healthcare system, education system and redistributive policies exacerbating inequality — inequality in both opportunity and outcome — and bringing into question the American dream.

 

 

Read More

Lucid Markets is being “actively marketed for sale in 2017” but there is no information on a particular deal, whereas the company continues to provide liquidity to the FX market.

Last week, FXCM UK published its annual report for 2016, with all eyes being on any consequences on the UK business of FXCM Group following the February settlements with US regulators. While FXCM UK provided somewhat of a bullish stance saying that it faces no action from the UK Financial Conduct Authority (FCA) over its business practices, other companies belonging to the FXCM Group were less upbeat in their reports.

 

Read More

  • Above-trend growth feted for April update on Chicago Fed Nat'l Activity Index
  • US political uncertainty and Eurozone growth continue to support EURUSD
  • The oil market is rallying on expectations that Opec will extend production cuts


By James Picerno

The week begins with a slow day for scheduled economic news. For the US, the main event for macro reports is the April release of the Chicago Fed National Activity Index. 

Meantime, keep an eye on two markets that rallied last week: EURUSD and WTI crude oil.

Read More

* Euro net long positioning rises to highest in over 3 years-IMM

* Asian investors monitor N Korean situation after missile launch

TOKYO, May 22 (Reuters) - The dollar inched higher on Monday, but remained close to six-month lows against a basket of currencies as investors assessed the impact of the latest bout of U.S. political turmoil and a resurgent euro.

The dollar index, which tracks the greenback against a basket of six major rivals, steadied 0.2 percent from Friday's late U.S. levels to 97.292 .DXY . But it was hovering not far from the previous session's low of 97.080, which was its deepest trough since Nov. 9.

U.S. President Donald Trump, now on a trip to the Middle East, left behind political drama in Washington that some fear could derail his administration's promises of tax reform and fiscal stimulus, if not his presidency.

Those fears threaten to offset much of the dollar-positive sentiment genmerated by expectations for a U.S intrest rate rise next month.

 

Read More

* Euro net long positioning rises to highest in over 3 years-IMM

* Asian investors monitor N Korean situation after missile launch

TOKYO, May 22 (Reuters) - The dollar struggled to push ahead on Monday, holding near six-month lows against a basket of currencies as investors assessed the impact of U.S. political turmoil and a resurgent euro.

The dollar index, which tracks the greenback against a basket of six major rivals, inched up 0.1 percent from Friday's late U.S. levels to 97.235 .DXY . But it was hovering not far from the previous session's 97.080, which was its lowest since Nov. 9.

Read More

EUR/USD: Bullish: Still bullish but odds for extension to 1.1300 are not high.

The 1.1200 target that was first indicated last Wednesday, 17 May was exceeded as EUR staged a surprisingly strong push higher last Friday to touch a high of 1.1211. Technically, the next target is at 1.1300, the high in November last year but the current rally appears to be running ahead of itself and the odds for such a move are not high. Minor resistance is at 1.1240. We have suggested taking partial profit at 1.1170 last Friday and those who are still holding long position should adjust their stop-loss to 1.1095.

GBP/USD: Neutral: In a 1.2850/1.3050 range.

There is not much to add as GBP rebounded quickly last Friday to hit a high of 1.3040, holding just below the top end of our expected 1.2850/1.3050 consolidation range. While the undertone has improved, it is not enough to shift the current neutral outlook to bullish. That said, an intraday move above 1.3050 is not ruled out but GBP has to register a NY close above 1.3085 to indicate the start of a bullish phase.

 

Read More

OPEC and other oil producers are on course to agree an extension of supply cuts at a meeting on Thursday, with Saudi Arabia saying most participants are on board with the plan to rein in a global supply glut.

Saudi Arabia's energy minister said on Sunday that extending the supply cuts by a further nine months until next March, and adding one or two small producers to the pact, should reduce oil inventories to their five-year average, a key gauge for OPEC to monitor the success of the initiative.

"Everybody I talked to... expressed support and enthusiasm to join in this direction, but of course it doesn’t preempt any creative suggestions that may come about," Khalid al-Falih told a news conference in Riyadh.

 

Read More

During Monday's Sydney session, we noticed a second EUR GBP Ichimoku signal confirmation on the daily time frame. Is this good enough to develop a trading strategy around it? Let's conduct an IDDA to find out!

1- Technical Points: EUR GBP Ichimoku Signal Confirmation

Daily Time Frame:  After hitting a support at 0.8350 back in April, the EUR/GBP pair forming higher lows at 0.84 and 0.8525. While the pair opened above the daily Ichimoku cloud on May 18th, due to high fundamental volatility it reversed during the trading day.

However on Monday's Sydney session we had a definite EUR GBP Ichimoku signal confirmation as the pair opened with a gap above the daily cloud. Now it is important to note that the future cloud is flat and in red territory. The Tenkan line crossed above the Kijun line beginning of May. We do not have the 3rd Ichimoku Kinko Hyo confirmation at the time of writing. Based on our Ichimoku Secrets strategy, the correction could be an interesting time to open a long position for traders with medium to high risk tolerance.

 

Read More

Dollar has been biggest casualty of White House Russia scandal, buoying the euro more than 5.5pc since mid-April, while the yuan has proved remarkably stable

 

Whoever said volatility had died a death?

Over the past year or so, and particularly in the last several months, much has been made of the dramatic decline in volatility in financial markets. The Vix index, a popular gauge of anticipated volatility in the benchmark S&P 500 Index, fell to a 23-year low earlier this month and currently stands at just 12 points – significantly below its long-term average of nearly 20.

Vi
 
 

Read More

"Leveraged funds were net buyers of USD for the second straight week, adding USD2.9bn to take their overall net long position to USD16.5bn. This was despite weak DXY price action during the week, caused by weaker than expected US economic data and negative political headlines. Given the weakness in the DXY into last week’s close, we could see an unwinding of recent long dollar positions.

For the second week running, dollar buying was concentrated against the yen. Funds were net sellers of JPY to the tune of USD2.5bn, taking their overall net short position to USD2.7bn, the highest in eight weeks. Funds also added to their net short CHF positions by USD0.6bn after two consecutive weeks of net buying·         

Commodity currencies continued to struggle for the fourth straight week with a combined net selling of USD2.1bn. With USD1.1bn of net selling, CAD led the pack (see attached pdf Figure 9). Meanwhile, funds cut their net long AUD positions by USD0.9bn, bringing it down to USD0.1bn (see attached pdf Figure 10). The strong Australian jobs report after the cut-off date could see some consolidation in AUD longs in the week ahead. Meanwhile, the NZD continued to see marginal selling of USD0.1bn in the week.

 

Read More

  • The People's Bank of China (PBOC) sets the Yuan reference rate at 6.8673 vs.Friday’s fix of 6.8786.

Read More

Following yesterday's technical correction, the US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, is staying under pressure on Wednesday, testing the 97 handle for the first time since Trump's election victory. As of writing, the index is trading at 98.02, losing 0.77% on the day.

 

Read More

EUR/USD finally broke above 1.1200 and climbed to 1.1211, hitting a fresh 6-month high. The pair remains near the highs holding a bullish tone as the US dollar drops across the board. 

The euro is about to end the week with a gain of almost 300 pips, the best performance in months, even larger that those that followed the French Presidential election. The main driver appears to be dollar weakness. 

 

Read More

U.S. equities pared gains and gold added to an advance as media reports on the U.S. investigation into the Trump campaign raised new questions about the political turmoil that’s gripped Washington for weeks. The S&P 500 Index pulled back after the New York Times reported President Donald Trump said that firing FBI Director James Comey relieved a “great pressure,” while a near simultaneous report from the Washington Post cited people familiar with the situation saying the investigation had reached a current White House official. The 10-year Treasury note yield pared advances, while the dollar’s drop extended.

 

 

Read More

The Trump administration is exploring whether it can use an obscure ethics rule to undermine the special counsel investigation into ties between President Donald Trump's campaign team and Russia, two people familiar with White House thinking said on Friday.

Trump has said that Deputy Attorney General Rod Rosenstein's hiring of former FBI Director Robert Mueller as special counsel to lead the investigation "hurts our country terribly."

Within hours of Mueller's appointment on Wednesday, the White House began reviewing the Code of Federal Regulations, which restricts newly hired government lawyers from investigating their prior law firm’s clients for one year after their hiring, the sources said.

An executive order signed by Trump in January extended that period to two years.

Mueller's former law firm, WilmerHale, represents Trump's son-in-law Jared Kushner, who met with a Russian bank executive in December, and the president's former campaign manager Paul Manafort, who is a subject of a federal investigation.

Legal experts said the ethics rule can be waived by the Justice Department, which appointed Mueller. He did not represent Kushner or Manafort directly at his former law firm.

 

Read More

 
  • In March 2017 the current account of the euro area recorded a surplus of €34.1 billion.[1]
  • In the financial account, combined direct and portfolio investment recorded net acquisitions of assets of €75 billion and net incurrences of liabilities of €32 billion.

Read More

  • Bitcoin rose more than 3.5 percent to hit a record of $1,875.08, according to CoinDesk.
  • Analysts attributed part of the move to investors looking for safety from global political turmoil.
  • Separate reports of potential scandal in the U.S. and Brazilian presidencies rattled global stock markets.

The digital currency bitcoin jumped to a fresh all-time high Thursday as global investors looked for safe haven trades. Increased interest from Asia also helped boost the digital currency.

Bitcoin rose more than 3.5 percent to hit a record of $1,875.08, according to CoinDesk.

One of the reasons for the move was "buying as a hedge against political chaos," said Brian Kelly, CEO of BKCM, which runs a digital assets strategy.

 
 

Read More

Judging from investors' reactions, the only thing worse that than the low volatility environment is when volatility spikes higher, as it did yesterday. Higher volatility is associated with weakening equity markets, falling interest rates, pressure on emerging markets, a strengthening yen and, sometimes, as was the case yesterday, heavier gold prices. 
 
A fragile stability has enveloped the markets after US equities markets stabilized yesterday and the dollar recovered from earlier losses.  Those dollar gains have been pared and sterling recovered from what many are calling a mini-flash crash, during which sterling fell nearly 3/4 of a cent in a matter of minutes with no apparent trigger.   A combination of algorithmic trading, market fragmentation, and less liquid conditions often in the US afternoon are seen as the main culprit.  
 

Read More

Friday May 19: Five things the markets are talking about

Global equities have inched higher overnight, while the ‘big’ dollar has held most of its gains on strong U.S economic data as some market risk appetite returns despite caution over political turbulence in the U.S.

Despite the rebound, investors remain on ‘high’ alert as they have become more sensitive to White House headlines and accusations as concerns grow over the strength of the global economy at a time when some Fed policy members are suggesting further tightening.

With no U.S data on the docket for today, the market will be preparing itself for a multiple event-risks in the week ahead. These events include the testimony by former FBI director James Comey at a Senate hearing and an OPEC meeting in Vienna, May 25

Read More

After the dramatic exit of FXCM from the US market in February, there have been concerns in the forex industry whether other regulators, and most notably, UK’s FCA, are going to undertake similar measures against the brokerage. However, FXCM UK stated in a regulatory filing it is not facing any enforcement action from the Financial Conduct Authority (FCA) over it business practices in the country.

 

Read More

EUR/USD: Bullish: Strong rally has scope to extend to 1.1200.

While the ‘bearish outside day’ registered yesterday does not bode well for our current bullish view, the price action is deemed as part of a short-term consolidation phase and not the start of a reversal. That said, upward momentum has clearly been dented and it may take a few days before we see the next push higher to 1.1200. On the downside, an unexpected break below the stop-loss at 1.1045 would indicate the start of a deeper pull-back (likely to below 1.1000). In the meanwhile, those who are long may likely to consider reducing their position on any move to 1.1170.

Read More

There was very little volatility in the dollar this week. It rose the most against the Norwegian krone and fell the most against the Swiss franc but the movements were contained to less than 1%. This suggests that for now the market remains in a general state of equilibrium, although the near universal decline against the majors may be a hint that some profit taking in the greenback may be due

Read More

Global foreign exchange traders have placed huge bets that the New Zealand dollar will fall, pushing it to an 11-month low on Friday below US68.5c.

What is happening to the New Zealand dollar?

Currency traders and market analysts say a trader's report, published by the US Commodity Futures Trading Commission, points to close to a record "short" position in the New Zealand dollar against the US dollar.

Read More

INTRADAY TRADING SIGNALS

EURUSD

SELL LIMIT 1.0630-1.0640 TP 1.0605-1.0680 SL 1.0682
BUY STOP 1.0682 TP 1.0722-1.0750 SL 1.0630

AUDUSD

SELL LIMIT 0.7520-0.7540  TP 0.7485-0.7465 SL 0.7570
BUY STOP 0.7570 TP 0.7595 - 0.7620 SL 0.7520

GBPUSD

SELL LIMIT 1.2510-1.2540 TP 1.2480-1.2460-1.2430 SL 1.2565
BUY STOP 1.2565 TP 1.2585-1.2620 SL 1.2510

EURJPY

SELL STOP 116.30  TP 116.05-115.70-115.20 SL 117.05
BUY STOP 117.05 TP 117.40-117.65 SL 116.30

GBPJPY

SELL STOP 136.90 TP 136.50-136.20 SL 137.45
BUY STOP 137.45 TP 137.70-138 SL 136.90

 

Read More

AUDUSD

SELL LIMIT 0.7505-0.7515 TP 0.7490- 0.7470 SL 7527
BUY STOP 7527 TP 7540 - 7560 SL 7505

EURUSD

SELL LIMIT 1.0595-1.0605 TP 1.0580-1.0565 SL 1.0620
BUY STOP 1.0620 TP 1.0645-1.0660 SL 1.0595

GBPUSD

SELL LIMIT 1.2435-1.2440 TP 1.2410-1.2390 SL 1.2465
BUY STOP 1.2465 TP 1.2480-1.2500 SL 1.2435

EURJPY

SELL LIMIT 117.35 TP 117-116.70 SL 117.80
BUY STOP 117.80 TP 118-118.20 SL 117.35

GBPJPY

SELL STOP 136.80 TP 136.60-136.30 SL 137.40
BUY STOP 137.40 TP 137.70-137.90 SL 136.80

 

Read More

  • March minutes signal balance sheet reductions to start in 2017
  • Investors unsure whether Fed can hold three-hike plan for 2018

Read More

  • Wages rise 2.7% from year earlier following 2.8% increase
  • Construction jobs slow amid weather; retailers pare positions

Read More

EURUSD
 
SELL LIMIT 1.0880-1.0900 TP 1.0850-1.0825 SL 1.0920
BUY STOP 1.0920 TP 1.0940-1.0960 SL 1.0880
 
GBPUSD
 
SELL LIMIT 1.2590-1.2620 TP 1.2550-1.2520-1.2470 SL 1.2640
BUY STOP 1.2640 TP 1.2675-1.2700 SL 1.2590
 
EURJPY
 
SELL LIMIT 120.30-120.60 TP 120-119.70-119.40 SL 120.90
BUY STOP 120.90 TP 121.44-121.90 SL 120.30
 
USDJPY
 
BUY LIMIT 110.40-110.10 TP 110.70-111-111.30 SL 109.90
SELL STOP 109.90 TP 109.50-109 SL 110.40
 
XAUUSD
 
BUY LIMIT 1252 -1250 TP 1255-1258 - 1262 SL 1248
SELL STOP 1248 TP 1245-1240 SL 1252
 

Read More

The US dollar is having its worst start to a year in decades...  by Tyler Durden of zerohedge

Read More

The Fed is not expected to take any action, but it could turn sentiment Wednesday.

Strategists say while the Fed is not expected to raise interest rates, it could talk the talk of a confident-sounding central bank, set on hiking rates three times, as it has forecast for this year. That could be negative for bonds, and interest rates could rise as a result since many expect just two hikes.

Stocks could also see some positive spillover Wednesday from Apple'slate Tuesday earnings. Apple jumped more than 3 percent after its report.

 

"I don't think it's hawkish, I think it's going to be positive. They have to acknowledge the fact that the economy is doing well and better than it was in December. You'll have to see an upgrade of the economy in their statement," said David Woo, Bank of America Merrill Lynch, head of global rates and currencies research.

Jim Caron, fixed income portfolio manager at Morgan Stanley Investment Management, said the risk for markets is the Fed sounds more hawkish in its 2 p.m. ET statement. Caron said he doesn't expect to get much out of the statement, but he's waiting for Fed Chair Janet Yellen's Feb. 15 congressional testimony on the economy. According to Fed funds futures, traders see about a 20 percent chance of a rate hike for March.

"If she's thinking about doing something, she'll probably tip her hand [in February's testimony] and set us up for what she's going to do in the March meeting," he said. "The March meeting is a lot closer than we all probably think … that's particularly something to look at and focus on. CPI has been higher. Inflation seems to be stabilizing and moving higher. Economic activity and growth and a lot of those confidence measures, like consumer confidence, are looking good. Broadly speaking, the data has been good as well."

 
 

Read More

Currencies are important to most people around the world, whether they realize it or not, because currencies need to be exchanged in order to conduct foreign trade and business.
 
The need to exchange currencies is the primary reason why the forex market is the largest, most liquid financial market in the world. Currency trading is conducted electronically over the counter (OTC), which means that all transactions occur via computer networks between traders around the world, rather than on one centralized exchange.
 
Below are the top trading mistakes to avoid while trading. 




 

Read More

Forex trading courses are classes that help traders in understanding Forex and what it takes to be a successful trading. You may have basic knowledge of what a trading is or you may even have consulted the best broker for yourself, but without skills and in-depth idea of Forex, you will still have a chance to lose in every trade you make.

  

                                         

If you would enroll with a trading course, you can be assured that you can stop or minimize your risks but also maximize your profits, as a trading course provides you with complete knowledge of foreign exchange trading.

 

 

Read More

If you are new to online forex trading, it is suggested to have an online forex trading class. The online courses and tutorials will help you get the basics of forex and its trading secrets. Now once you get the basics of online forex trading, you should be ready for the next big leap i.e., trading in forex directly through your computer. Online way of trading in forex has many benefits in store. Read the article to access the benefits.

 

Foreign exchange refers to exchanging of money in one currency for another which is traded on foreign exchange market or forex. Having an average daily trade of US$ 7 trillion and above, forex is the largest trading market in the world.  Everyday new investors are jumping in forex to earning substantial profits. It’s good till they garner high return on investment but what if they tumbled down in the very first effort? Well, it may happen; especially when one is not at all exposed to the odds and calculated risks of foreign exchange. Therefore, it is suggested to move with a broker of forex, who knows foreign exchange more than him. Now how to hire an honest broker of forex? You may get the answer below:

 

Read More

Online forex trading allows you to take advantage of market fluctuations – even small – in various currency rates.  Once you have acquired the skills to trade, use our wide range of tools and indicators to make wise and informed decisions for successful online forex trading.  One of the great advantages of forex trading is that you can benefit from Leverage for increased profits.  When trading with Finotec, you can never lose more than you have deposited in your forex trading account.

 

                                               

 

Automated forex trading systems have resulted in this type of trading becoming commonplace. What was once the sole domain of banks and other such large investors, financial and otherwise, is now luring small and mid level investors. For inter-country currency trading, this is the place to invest. This is one of the biggest and most alive financial markets with trillions of dollars being traded round the clock, every day of the week.

 

Read More