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06-24-2013, 02:01 PM
Date : 24 June 2013

The dollar is starting the week on a firmer footing, with the Aussie once again taking most of the strain in this move. The question markets will be asking themselves this week is whether the reaction to the Fed last week was overdone. For FX, the best way to judge this is by looking at emerging market currencies, where the reaction was most pronounced last week. India, Russia and Turkey seeing their currencies between 1.5% and 3.5% lower vs. the dollar.

If we see some signs of turn-around here, then we could be shaping up for a week when the dollar stabilises and Fed fears recede. On the majors, such as the yen and Aussie, the moves seen have served to further enhance the recent (for the Aussie) and longer-term (for the yen) trends which investors seem broadly comfortable with, so the impetus to fight the Fed on these pairs is a lot weaker.

JPY: It could be a long week for the yen, waiting for the CPI, jobs and production data scheduled for Friday. BoJ governor Kuroda was sounding bullish on the economy last week, but so far it’s been too early to start seeing the signs of adjustment in the inflation numbers that the authorities so crave.

CAD: Weaker CPI data (rising 0.7% YoY) saw a bunch of stops triggered once USDCAD had budged through the previous year’s high of 1.0421, with a high at 1.0489 reached during the European afternoon.

AUD: There were some signs of life on the Aussie during Friday, but considering the extent of the sell-off seen on Thursday, they were relatively muted. It’s clear that the prospect of lower official rates in Australia, concerns over China and the likely ‘tapering’ from the Fed is proving to be a toxic combination for the Aussie. Fresh pressure is being seen early in the European session.


07-02-2013, 09:29 AM
At its meeting today, the Board decided to leave the cash rate unchanged at 2.75 per cent. Recent information is consistent with global growth running a bit below average this year, with reasonable prospects of a pick-up next year. Commodity prices have declined further but, overall, remain at high levels by historical standards. Inflation has moderated over recent months in a number of countries. Globally, financial conditions remain very accommodative


07-02-2013, 01:44 PM
Global growth downgraded

Global economic growth has not been particularly strong, and has now been downgraded by the HSBC.Global growth was revised from 2.8% to 2.0% in 2013, and from 3.1% to 2.6% in 2014. In its report, HSBC said that it had lowered its forecast due to the US Federal Reserve decision to cut QE, as well as a sharp slowdown in China and other emerging countries such as India and Brazil. The report revised China’s GDP from 8.2% to 7.4% for 2013 and from 8.4%. to 7.4% for next year. Weaker global growth will make it even more difficult for the Eurozone economy to get back on its feet and emerge from a rough recession

07-08-2013, 10:23 AM
Germany exported goods to the value of 88.2 billion euros and imported goods to the value of 75.2 billion euros in May 2013. Based on provisional data, the Federal Statistical Office (Destatis) also reports that German exports decreased by 4.8% and imports by 2.6% in May 2013 on May 2012. The month-on-month comparison showed opposite developments of exports and imports upon calendar and seasonal adjustment. While exports decreased by 2.4% on April 2013, imports increased by 1.7%. The foreign trade balance showed a surplus of 13.1 billion euros in May 2013. In May 2012, the surplus had amounted to 15.6...


07-08-2013, 12:51 PM
Return : 8 July 2013

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Maximum Demand : US Dollar

Maximum supply : Japanese Yen

07-08-2013, 02:02 PM
Mixed U.S. Economic Data
Ahead of the government's key labor market report, mixed economic data from the U.S. on Wednesday failed to provide any solid direction for the market. Economic data released from the U.S. showed better than expected private sector jobs creation in the month of June and a surprise fall in weekly jobless claims. Meanwhile, U.S. trade deficit widened more than expected in May and an index of service sector signaled slower growth for the month of June.

According to the ADP National Employment Report, released on Wednesday, private sector employment in June increased by 188,000, up from a revised gain of 134,000 jobs in May. Economist had expected an increase of 161,000 private sector jobs, compared to a gain of 135,000 jobs (originally reported) in May. Also on Wednesday, the Labor Department reported that initial jobless claims for the week ending June 29 registered a decline of 5,000 to a seasonally adjusted 343,000 as compared to the previous week's revised figure of 348,000. Economists had expected jobless claims number to come-in at 345,000, slightly down from previous weeks original figure of 346,000.

Meanwhile, another report released by the Commerce Department on Wednesday showed U.S. trade deficit widened sharply in May to $45.0 billion from $40.1 billion in April. Reported deficit was much larger that analysts expectation of deficit to remain steady at $40.3 billion for the month of May. Also, the Institute for Supply Management (ISM) reported weaker than expected reading on the services sector. The ISM Non-manufacturing (Services) PMI slipped to 52.2% in June, compared to 53.7% registered in May. Economists had projected June reading to improve further to 54.3.

ECB, BoE Policy Meetings

Investors are now gearing up for monetary policy decisions from the European Central Bank (ECB) and Bank of England (BoE). ECB and BoE are scheduled to announce their monetary policy decisions on Thursday.

ECB is widely expected to leave its key interest rates at 0.5%. The main focus would be on ECB President Mario Draght's Press Conference, scheduled later on Thursday, after the rate decision announcement. Draghi’s comments on the state of the economy would significantly affect the Euro.

Also on Thursday, BoE is expected to keep its benchmark rates and asset purchase program, that currently stands at 375 billion pounds, unchanged. Market will look for some future guidance regarding central bank's monetary policy action from the first meeting of BoE's new Governor, Mark Carney.

U.S. jobs report to take center stage

Uncertainty as to when the Fed will begin to taper its massive $85 billion monthly bond buying program has elevated market volatility in this week, which is very important for the Forex market. Currency markets witnessed big moves as investors await for the biggest economic event of the month, monthly jobs report from the U.S. The Fed has already laid a road-map that decision to reduce the pace of its monetary stimulus would depend on labor market conditions and hence Friday's jobs report, that would provide further clarity on the conditions of the U.S. labor market, becomes the most important factor to watch.

The Labor Department is scheduled to release the Non-farm payrolls report for June on Friday. Economists anticipate a weaker non-farm payrolls number with an addition of 162,000 jobs in June as compared to 175,000 in May. The unemployment rate for June, meanwhile, is expected to show some improvement and is seen ticking down 0.1% for June to 7.5% from 7.6% in May. Although markets are pricing a relatively weaker non-farm payrolls number for June, as compared to that in May, unemployment rate is what markets will be focusing more on. A stronger than expected numbers would definitely be a positive surprise for the markets but would simultaneously support the conviction that U.S. economy is headed in the right direction and that the Fed tapering is more likely to start later this year

Draghi's comments, accompanied with prospects of tapering Fed's monetary stimulus, could act as a catalyst for the market and is likely to produce severe volatility for currency market. However, jitters over Friday's key jobs data might keep the overall investor sentiment subdued on Thursday.
Further, should Friday's jobs number beat forecasts, it would increase investors confidence that the Fed taper plan is nearing and would make other major currencies vulnerable to a sever downside risk against the U.S. Dollar.

07-15-2013, 01:46 PM
Asian stocks advanced on Monday even if only modestly, as China’s growth data met expectations. Japanese markets are closed today for a holiday keeping volumes limited.

- The MSCI Asia Pacific excluding Japan Index rose 0.2% to 439.95 as of 14:31 in Hong Kong

China expanded by 7.5% in the 2 nd quarter from a year earlier, matching estimates, yet as the industrial output numbers were weak, the downside risks to growth continue.

- China’s CSI 300 Index closed 1.40% higher at 2307.30 - Hong Kong’s Hang Seng closed 0.12% higher at 21303.31

In Australia, resource stocks led the gains as metal price climbed after China`s growth data release. The Australian dollar also rose after China’s GDP above $0.91. - The S&P/ASX 200 closed 0.15% higher at 4981.11 - New Zealand’s NZX 50 closed 0.83% higher at 4606.24

In South Korea the benchmark index reversed the early losses after China`s data, as the mainland is South Korea top export destination. - Kospi closed 0.28% higher at 1875.16

07-16-2013, 11:59 AM
Speculations increased that the Bank of Japan might announce signs for an expansion of their monetary easing measures on their statement tonight, which is in contrast to the plans of the Federal Reserve for finishing their stimulus. As a result, the JPY kept its losses against its U.S. counterpart for the second day in a row. The USD was at 99.83 JPY from 99.86 yesterday, establishing a two-day drop of 0.9 percent. Meanwhile, the EUR/JPY remained nearly unchanged at 130.46, after having declined 0.6 percent the previous day. But the USD lost slightly to 1.3068 versus the EUR from 1.3062.
Besides the BOJ, also Federal Reserve CEO Bernanke will present the semi-annual monetary policy report to the Congress this week, beginning with the House Financial Services Committee tomorrow. Furthermore, today releasing data might show that industrial production climbed 0.3 percent last month, the strongest growth since February. In addition, a separate Bloomberg survey referred that U.S. consumer prices rallied 1.6 percent in June compared to a year earlier following a 1.4 percent rise in May. This would be below the central bank’s inflation target of 2 percent.
Also the ZEW Center for European Economic Research in Mannheim will publish their latest numbers today and might probably confirm an improvement of investor sentiments in Europe’s biggest economy. According to Bloomberg polls, the index of investor and analyst expectations.

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07-17-2013, 11:56 AM
Growing rumors that the central bank of Australia might lower their key benchmark rate to a new record on their next summit in August as well as concerns of a cooling Chinese economy prevented the AUD to reach its biggest two-day surplus since November 2011. Referring to Bloomberg news, the chances for a cut of borrowing costs to 2.5 percent by Reserve Bank of Australia might rate above 50 percent among traders. Furthermore, economists explained that the latest currency jumps have influenced the inflation outlook. The nation’s statistics bureau will release their report for the second quarter on the 24th of July. But additional declines were haltered by speculations Federal Reserve’s Governor Bernanke may present signs for a continuation of an accommodative monetary policy to stabilize the U.S. business in his today’s speech. As a result, the AUD tumbled 0.3 percent to 0.9230 USD, after having advanced 2.3 percent in the previous two days. The AUD/JPY traded at 91.79 from 91.69 yesterday, while the NZD/JPY was at 78.35 from 78.22. Also the USD gained 0.2 percent against the NZD and climbed to 78.79 U.S. cents. The Bloomberg Correlation-Weighted Indexes confirmed that theAUD was the worst performer among all tracked currencies and shrank 9.2 percent in the last three months. Meanwhile, the USD fetched 0.4 percent to 99.46 JPY following a 0.8 percent drop yesterday. The EUR/USD appreciated 0.2 percent to 1.3139. In contrast, the GBP suffered from expectations that the Bank of England Governor Carney will announce a tighter connection between interest rates and the needs of the economic developments. Therefore the GBP dropped to a four-month low versus the EUR and was at 0.8692, after reaching 0.8707 the day before, the weakest since the 13th of March.

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07-17-2013, 12:51 PM
Minutes of the Bank of England Monetary Policy Committe MeetingVolatility had picked up sharply in financial markets, and there had been falls in the prices of many risky assets and marked rises in short and longer-term interest rates, as participants sought to interpret comments by policymakers about the future stance of US monetary policy and the prospects for an easing in the rate of asset purchases by the Federal Open Market Committee (FOMC). The paths implied by market instruments for policy rates in many advanced economies had moved up sharply. Rates on overnight index swaps (OIS) three years forward had risen by around three quarters of a percentage point in...


07-18-2013, 10:24 AM
Japanese yen showed lower rates against dollar and major currencies amid the renewed concerns among investors before the meeting of the G-20, which may discuss current stimulus plans in Japan and its affect on industrial economies.

From another side, Currencies markets notices hesitate moves recently after Bernanke’s speech who confirms the importance of boosting recovery cycle in the U.S. with monitoring its economic data to spur markets.

Bernanke’s speech and the awaited G-20’s meeting boosted investors to avoid risks on trades before the end of the week, which boosted major currencies to incline against Japanese yen.

USD/JPY pair inclined for the second straight day to record high of 99.86, while the EUR/JPY pair recorded high of 130.91 after yesterday’s high of 131.35.

EUR/USD pair slid for the second consecutive day to record low of 1.3106, while the GBP/USD pair traded in narrow ranges today near 1.5200 after hitting its yesterday’s high at 1.5266, the highest in more than week.

07-18-2013, 10:26 AM
The International Monetary Fund noted that risks are increasing for Chinese economic growth this year, where the China is expected to notice further downside risks amid the recent forecasted slower performance.

Moreover, IMF raised its downside risks for Chinese growth after the recent drop in manufacturing sector in June and the current lower-than-estimated expansion in the second quarter of the year of 7.5%.

From another side, Chinese Prime Minister Li Keqiang noted earlier that Chinese economy should step forward for restructuring plans as long as growth and employment stay above unspecified zones.

Meanwhile, Chinese economy still insisted that the economy is still on track to reach the 7.5% growth target this year with the support of monetary and fiscal stimulus by policy makers.

07-18-2013, 10:27 AM
National Australian Bank released Australia’s Business Confidence index reading for the second quarter of the year, where the reading came at -1, compared with the prior reading of 2.

07-18-2013, 10:29 AM
India to target 1.2 Million indirect taxes to evaders

Finance Minister of India P. Chidambaram noted yesterday that the Central Board of Excise and Customs will target 1.2 Million evaders, where he mention that he targets people who are liable to pay service tax but didn’t filed a tax return.

Moreover, India’s government collected 4.7% trillion rupees ($80 billion) of indirect taxes during the fiscal year 2012-2013, where the government expects to raise to 5.6 trillion rupees ($95 billion) of indirect taxes in fiscal 2013-14.

The RBI’s governor affirmed to tax officials that its very important to mobilize revenues and the department should achieve its tax collection target, where he expects a 19% increase from tax collections from last year.

07-18-2013, 11:18 AM
Today, the German Finance Minister Schaeuble will visit Greece and referring to information from the German Government, he will present plans for the implementation of a 100 million EUR fond to revive the nation’s economy. But the Greek administration has to develop business models for the use of these funds. Recently, a report of the “Süddeutsche Zeitung” stirred up concerns that the estimated funding shortfall until the end of 2014 will increase to more than 10billion EUR, which would require new negotiations by the European Finance Ministers after their summer break. But announcements by the officials of the EU refused this article and explained that a money gap of 4.2 billion EUR will be expected, which is no new issue.
The contradicting statements by the U.S. Federal Reserve fomented the volatility of the Forex markets, which raised the difficulties for exchange-rate hedges by companies. This was reflected by the movements of the U.S. Dollar Index, which has decreased to a four-month low, before boosting up to a 36-month peak. Expectations grew that the G-20 finance ministers will approve the easing policy by the Bank of Japan to reach their target inflation of 2 percent as well as to stimulate the domestic economy. It remains questionable whether the Russian official will call for a reduction of the current loose monetary policy by nations like Japan or the U.S. As a result, the JPY lost against nearly all of its most traded counterparts. Therefore the USD/JPY climbed 0.2 percent to 99.76, after having advanced 0.5 percent yesterday. Meanwhile, also the EUR gained against the JPY and increased 0.1 percent to 130.79 from the day before, when it reached 131.36, the highest since the 5th of June. The EUR lost 0.1 percent against the USD and traded at 1.3110.

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07-18-2013, 02:04 PM
First Reaction: "Bernanke Stays Dovish" - BofA Merrill
The following is Bank of America Merrill Lynch's first reaction to Federal Reserve Chairman Ben Bernanke's semi-annual testimony before the Congress on Wednesday:

"Fed Chairman Ben Bernanke kicked off two-days of his Semi-Annual Monetary Policy Testimony with a dovish prepared statement.

Bernanke acknowledged the FOMC is still prepared to start tapering later this year, then “continue … in measured steps” until concluding mid-2014 — provided the incoming data confirm the Fed’s current forecast. But he also strongly emphasized the data dependence of this plan. In keeping with separating QE from interest rate policy, he suggested slightly stronger conditions to start and continue rate hikes. In his testimony, he reiterated these themes...He again noted that “the jobs situation is far from satisfactory,” and suggested that while some risks have diminished — and hence the FOMC is considering scaling back QE purchases this year — there remain continued risks from US fiscal policy (including the upcoming debt limit debate) and global growth. “The economy remains vulnerable to unanticipated shocks,” he concluded.

This worry suggests the Fed will be cautious in pulling back from the current level of accommodation.

In recent weeks, market participants have coalesced around the view that the Fed will start tapering in September. Bernanke strongly pushed back, stating that the Fed’s plans for purchases “are by no means on a preset course.” He emphasized the data dependence of QE, noting several scenarios that might warrant maintaining the current purchase pace or even increasing it for a time: a “relatively less favorable” employment outlook, inflation not “moving back toward 2 percent,” or “insufficiently accommodative” financial conditions.

While we continue to see a sizable chance that data will allow the Fed to taper in September, we also expect that softer growth and inflation data for Q2 and Q3 are likely to postpone the start of tapering until the December FOMC meeting."

07-19-2013, 10:56 AM
Due to surprisingly positively figures of the U.S. economy as well as a better than estimated quarterly balance sheet of the investment bank Morgan Stanley and a promising outlook of IBM benefited the Dow Jones, which climbed to new records in succession. Also the latest statements by the Federal Reserve Chief Bernanke, which seem to support a continuation of the loose easing policy, might stimulate the investors further. Yesterday, the Dow-Jones-Index rallied to a new all-time high around 15589, before dropping to a daily low around 15465 and closing with a 0.5 percent gain at 15548.
On the 21st of June, elections for the Upper House of the Japanese Parliament are set and referring to a gauge by Bloomberg, the economists are expecting great chances for the currently ruling Liberal Democratic Party of Prime Minister Abe. In case, they can gain a majority in this elections, the Prime Minister Abe would held a majority of voices in both chambers, which might pave the way for his easing policy. Since the beginning of this year, the JPY has dropped 14 percent and is heading towards a weekly loss against nearly all of its most traded peers. Therefore the JPY declined slightly against the USD to 100.42, targeting a 1.2 percent fall this week. Also, the EUR enforced versus the JPY to 131.69 from 131.66 by briefly reaching 132.10, the highest since the 28th of May. The EUR/JPY is set to establish a weekly slide of 1.5 percent, while the EUR/USD kept its level and was at 1.3109 following two-days of gaining. The weakening of the Japanese currency is also confirmed by the Bloomberg Correlation-Weighted Indexes, which showed that the JPY tumbled 23 percent in the last 12 months, the worst performance among the tracked currencies. Meanwhile, the EUR strengthened 9.1 percent in
the same period followed by the USD with a surplus of 1.5 percent.

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07-19-2013, 11:50 AM
Japanese Coincident index came at 106 .0 in May, compared with a previous reading of 105.9, while the final reading of Leading index in Japan recorded an actual of 110.7 in May from a previous reading of 110.5.


Japanese economy released its All Industry Activity Index reading concerning the month of May, where the reading came at 1.1%, compared with a previous reading of 0.4%, while analysts’ expectations were 1.2%.

07-19-2013, 11:54 AM
Japanese yen fell against dollar and major currencies before the senatorial elections during this week end, where the ruling party led by Shinzo Abe is expected to win.

Expectations were raised that Shinzo’s party will win the elections which give him the control over Japanese parliament to add support to his easing plans to spur the nation’s recovery, where current expectations negatively affects on Japanese yen trades.

From another side, American dollar kept its previous profits versus major currencies, while markets are monitoring the U.S. economic data and the Federal Reserve Bank’s step toward easing.

USD/JPY pair inclined to its highest in week at 100.85, while EUR/JPY pair inclined also to 132.08 to be traded now near 131.48.

EUR/USD pair inclined to 1.3140 after hitting its lowest today at 1.3088. GBP/USD pair inclined to 1.5247 from low of 1.5195.

Despite the current inclines versus dollar, trading ranges are still narrowed which gave dollar the chance to profit on short and mid-term.

07-22-2013, 10:22 AM
Global finance chiefs sought to buttress the global economic recovery with pledges to avoid spooking markets as China moved to scrap a lending rule that had constrained its banks. Group of 20 nations will pursue “carefully calibrated and clearly communicated” policy moves so that the U.S. and Japan don’t cause cross-border damage when they start rolling back stimulus, they said after a two-day meeting of finance chiefs in Moscow. They will move “more rapidly” toward market-determined exchange rate systems, following China’s internal banking change, according to a July 20 statement. The G-20 heeded calls from emerging-market countries to guard against shockwaves when U.S. growth is secure enough for the Federal Reserve to cut back on its bond buying, according to the statement. It also repeated that nations should avoid competitive currency devaluations. Speculation about developed economies scaling back their unprecedented monetary easing has roiled emerging-market currencies and bonds since G-20 finance chiefs last met in April. The USD fell for a second week versus most major peers. Fed Chairman Ben S. Bernanke said the central bank wouldn’t slow its monthly bond-buying program unless warranted by economic conditions. Policy makers also sought to assure investors that the Fed will hold down the benchmark interest rate after ending bond buying. Treasury 10-year yields fell 10 basis points, or 0.10 percentage point, to 2.48 percent this week in New York, Bloomberg Bond Trader data showed. This week’s drop, combined with a 16 basis-point decline the previous five days, was the biggest back-to-back decrease since the period ended Aug. 31.
A U.S. Treasury Department official said the G-20 recognized that financial-market volatility has returned to normal. The official acknowledged a lot of interest in U.S. monetary and fiscal policy, while reiterating Washington’s call to do more to help the euro region emerge from recession.

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07-23-2013, 11:36 AM
The yen may rally to its strongest level in almost five months versus the dollar after breaking a key level of resistance, according to Bank of America Corp. The Japanese currency will face a test in the 98.30-to-98.76 area after breaching initial resistance at 99.58 today, according to MacNeil Curry, chief rates and currencies technical strategist in New York at Bank of America Merrill Lynch. If the yen increases past that resistance level, it may target 90.91, Curry said. That would be its strongest level since February. “As dollar-yen traded up towards 103, we started to see signs of topping out, with an advance in stocks starting to look a bit exhausted,” Curry said in a telephone interview. “The upside for dollar-yen is limited. We could see a run down to the 93, potentially the 91 area.” The yen increased 1.1 percent to 99.55 per dollar in New York, after
rising as much as 1.4 percent, the most since July 11. Japan’s currency has declined 10.2 percent this year, the most among 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar and the euro each advanced 4.6 percent. “We’re still bullish dollar,” Curry said. “But we’re in a medium-term range-bound trading environment before the larger yen-bear trend resumes.” In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index. Resistance refers to an area on a chart where sell orders may be clustered and support is an
area where there may be buy orders. The dollar weakened against most major counterparts as demand for higher-yielding assets rose amid speculation a reduction of monetary stimulus by the Federal Reserve is on hold. “Markets have settled down with the realization that Fed policy will remain very accommodative for a long period of time,” Vassili Serebriakov, a foreign-exchange strategist at BNP Paribas SA in New York, said in a telephone interview. “Emerging markets have seen some stabilization in sentiment. Emerging-market currencies, commodities are benefiting from more positive risk sentiment.”

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07-23-2013, 05:57 PM
Weekly Outlook of Financial Markets for July 22-26

July 21, 2013

The summer days may have pulled back the volatility in the financial markets as leading commodities such as oil, natural gas and gold didn’t do much during last week. Leading currencies including Euro, Japanese yen and Aussie dollar rallied against the USD last week. The Japanese elections (http://www.forexcrunch.com/japanese-elections-ldp-and-partner-set-to-win-majority/) started off the week as Abe’s Liberal Democratic Party is set to win. This news could affect the Japanese yen and consequently other leading currencies. This forthcoming week several reports, may affect the financial markets. These include: U.S core durable goods, EU monetary developments, U.S housing starts, Australia’s CPI for the second quarter of 2013, Canada’s retail sales, China, EU and Germany’s manufacturing PMI, GB GDP for the second quarter of 2013, U.S existing home sales, and U.S. jobless claims. Here is an economic outlook for the week of July 22nd to July 26th regarding the U.S, Euro Area, Canada, Japan, China, Australia,and Great Britain.
(All times GMT):

Monday, July 22nd
15:00 – U.S. Existing Home Sales: This report will pertain to the developments in U.S. existing home sales during June 2013; in the latest report regarding May 2013 the number of homes sold rose to a seasonally adjusted annual rate of 5.18 million houses; if this trend will continue, it might pressure up the U.S dollar;

Tuesday, July 23rd
13:30 – Canada Retails Sales (May 2013): This report will refer to the retails sales in Canada as of May. In the recent report regarding April 2013, retails sales inched down by 0.3%;
00:30 – Australia’s CPI for Q2 2013: This quarterly report will refer to the changes in the consumer price index. In the previous report regarding the first quarter of 2013, the CPI rose by 0.4% compared to the fourth quarter and by 2.5% compared to Q1 2012; this report could affect the Aussie dollar which is linked with commodities rates;
02:45 – China flash Manufacturing PMI: this index is based on a survey covering 800 companies in 20 industries in China; in the previous HSBC Manufacturing PMI survey regarding June 2013 the Manufacturing PMI declined again to 48.3; this index indicates China’s manufacturing sectors have contracted at a slightly faster pace than in May; if the index will continue to contract, this may adversely affect commodities and risk related currencies such as Aussie dollar;

Wednesday, July 24th
09:00 – Flash German, French and Euro Zone Manufacturing PMI: In the last monthly report regarding June 2013, the German PMI inched down to 48.7 i.e. the manufacturing conditions are shrinking at a slightly faster pace. This report serves as an indicator to the economic changes of the Euro Area’s leading economies’ manufacturing conditions; this news, in turn, may affect the Euro/USD currency pair and consequently commodities;
15:00 – U.S. New Home Sales: This report will refer to June 2013; in the recent report (http://www.census.gov/construction/nrs/pdf/newressales.pdf) (opens pdf; for May), the sales of new homes slightly rose to an annual rate of 476,000 – a 4.8% gain (month over month); if the number of home sales will continue to rise, it may suggest the housing market in the U.S continues to progress; this news may also affect theUS dollar;
15:30 – U.S Crude Oil Stockpiles Weekly Update: the EIA (Energy Information Administration) will come out with its weekly update on the U.S oil and petroleum stockpiles for the week ending on July 19th; in the recent report for July 12th, stockpiles slightly decreased by 0.2 ml bl to reach 1,817.9 ml bl.

Thursday, July 25th
08:00 – Spain’s unemployment Change: the rate of unemployment of the Spain rose again to 27.2%. This mean, the employment situation in Spain hasn’t improved. If in the upcoming report this trend will persist, it may adversely affect the Euro;
09:00 – German Ifo Business Climate Index: This index comprises the changes (on a monthly basis) of manufacturers, builders, wholesalers, and retailers in Germany as of July. In the recent report for June 2013, the business climate index rose from 105.7 in May to 105.9 in June; if this trend will continue, it might pull up the Euro;
09:00 – Euro Area Monetary Development: This monthly report will refer to the shifts of the M3, M1 and loans to private sector in the Euro area for June 2013. In the previous May report (http://www.ecb.int/press/pr/stats/md/html/index.en.html), the annual growth rate for M3 slipped to 2.9%; M1 decreased to 8.4%. Finally, the annual growth rate of loans to private sector reached -0.7%. This news suggests the EU inflation isn’t rising as loans continue to dwindle and the growth rate of M1 and M3 inch down. The progress of the EU monetary base is likely to affect the ECB rate decisions in the coming months;
09:30 – Flash GB GDP Q2 2013: This report will present the first estimate of the quarterly growth rate of the British economy for the second quarter of 2013; during the first quarter the GB economy expanded by 0.3% (Q-2-Q); if the growth rate will rise, it could affect the monetary policy of Bank of England and also affect GB pound;
13:30 – U.S Core Durable Goods: This report will pertain to the developments in U.S. orders of durable goods in the manufacturing sector for June 2013. This monthly report may indirectly indicate the changes in U.S. demand for commodities such as oil and gas. As of May 2013, new orders of manufactured durable goods increased to $231 billion; if this report will show another rise in new orders then it could pull up not only the USD but also commodities rates;
13:30 – U.S. Jobless Claims Weekly Report: this weekly report will pertain to the shifts in the initial jobless claims for the week ending on July 13th; in the recent report (http://www.dol.gov/opa/media/press/eta/ui/current.htm) the jobless claims declined by 24k to reach 334k; the next weekly report may affect the U.S dollar and consequently commodities markets;
15:30 – EIA U.S. Natural Gas Storage: the EIA weekly report of the U.S. natural gas market will refer to the latest shifts in natural gas production, storage, consumption and prices as of July 19th; in latest weekly report, natural gas storage increased again by 58 Bcf to 2,745 Bcf;

Friday, July 26th
14:55 – UoM Consumer Sentiment (revised): University of Michigan will come out with its revised consumer sentiment monthly update; this survey could offer an insight to recent developments in U.S consumers’ sentiment; based on the recent report, the sentiment index slipped to 84.1;

07-25-2013, 01:17 PM
European equities tumble amid earnings flurry, UK GDP in focus

European stocks kick-started Thursday session mixed as investors digest a raft of corporate earnings ahead of UK gross domestic product data later in the session. - STOXX Europe 600 lost 0.22 percent to 300.44 - Euro Stoxx 50 declined 0.24 percent to 2,712.12

Shares started the session in mixed movement with investors’ cautious ahead growth data from the United Kingdome and U.S. durable goods, jobless claims data later in the day.

Traders will be waiting for the advanced GDP report expected to rush out of the United Kingdom on Thursday. Economists said U.K. economy likely doubled its pace of growth in the second quarter with a 0.6 percent rise in GDP compared with 0.3 percent growth in the previous quarter.

Weak economic outlook might force policymakers at the Bank of England to embark upon a bolder plan to stimulate U.K. growth.

Investors in the U.S. will have fresh data to assess on Thursday after data in the previous day on reinforced worries about monetary-stimulus tapering by the Federal Reserve. Durable goods, jobless claims data are due later in the day.

- France`s CAC 40 dropped 0.20% to 3,955.00 - German DAX fell 0.65% to 8,324.86 - British FTSE 100 inched 0.29% down to 6,600.96

In a busy day for earnings, Credit Suisse Group AG, the second-biggest Swiss bank, reported today a 33 percent rise in second-quarter profit. Net income rose to 1.05 billion francs from 788 million francs a year earlier, while economists expected 1.03 billion francs.

- As of 03: 18 ET, Credit Suisse Group AG share declined 1.80% or 0.510 points to 27.890 francs

BT Group Plc, the biggest fixed-line phone company in the UK, said adjusted earnings before interest, tax, depreciation and amortization fell 0.8 percent to 1.44 billion pounds in the quarter ended in June slightly beating analysts’ forecasts of 1.41 billion pounds.

- As of 03:26, BT Group PLC share dropped 0.03% or 0.100 point to 341.900 pound

Telefonica SA, Europe’s most indebted telecommunications company, said second-quarter sales and operating profit rose unexpectedly, while net debt dropped to 49.8 billion euros.

- As of 03:28 ET, Telefonica SA share rose 1.02% or 0.1050 points to 10.3800 euro

ABB Ltd, the world’s largest maker of power transformers, said profit rose in the second quarter for the first time in six quarters, buoyed by higher U.S. construction orders and demand from Chinese customers.

Net income rose 16 percent to $763 million in the second quarter, however missing $779 million estimated by analysts. Sales rose 6 percent to $10.2 billion, meeting the analysts’ estimates.

- As of 03:30 ET, ABB Ltd share fell 3.73% or 0.800 points to 20.640 francs

The Ludwigshafen, Germany-based company, BASF SE, said second quarter profit came short of analysts’ expectations as meeting annual targets looks more difficult than at the start of the year. Earnings before interest, tax and one-time items fell 5.4 percent to 1.83 billion euro, while analysts called for 1.99 billion euro.

- As of 03:34 ET, BASF SE share dropped 3.80% or 2.650 points to 67.120 euros

Roche Holding AG’s said first-half profit rose 10 percent above analysts’ estimates, where net income, climbed to 6.65 billion Swiss francs, while earnings per share were 7.58 francs beating the 7.45 francs estimated.

- As of 3:40 ET, Roche Holding AG share rose 1.41% or 3.300 points to 236.700 francs

07-25-2013, 01:20 PM
Eurozone M3 money supply falls in June

The European Central Bank on Thursday released the Eurozone M3 money supply index for June where the three-month average M3 for the month ended June dropped to 2.8 percent from 2.9 percent, missing the median estimate of 3.0 percent.

The annual M3 seasonally adjusted for June showed a decline of 2.3 percent compared with 2.9 percent, missing analyst’s median estimates of 3.0 percent.

07-25-2013, 01:21 PM
German business confidence rises for third straight month

German Ifo business climate index was at 106.2 in July, up from June`s 105.9, and slightly above analysts` median estimate of 106.1.

This is third monthly rise in German business sentiment since May. The Ifo current assessment index jumped to 110.1 from 109.4 in June, above 109.7 forecast as well, while Ifo expectations index eased slightly to 102.4 from 102.5 and June and expected.

The euro held against the dollar abov

07-26-2013, 12:15 PM
CPI in Japan

Japanese Consumer Price Index showed more-than-estimated incline during the month of June, where the reading inclined to 0.2%, compared with a previous reading of -0.3% a year earlier, while analysts’ expectations were 0.1%.

Meanwhile, Japanese Consumer Price Index excluding fresh food inclined also to 0.4% in June, compared with analysts’ expectations of 0.3%, while the prior reading recorded 0.0% a year earlier.

CPI excluding food, energy came at -0.2% in June, up from previous -0.4% a year earlier, while the estimated reading was -0.3%.

07-26-2013, 12:18 PM
European shares advance on US stimulus hopes, earnings

European stocks edged higher Friday, taking cues from overnight gains on Wall Street after disappointing jobs data sparked hopes that the Federal Reserve will maintain stimulus measures to spur economic growth, ahead of a Federal Open Market Committee meeting next week. - STOXX Europe 600 edged up 0.11 percent to 299.95
- Euro Stoxx 50 rose 0.31 percent to 2,748.70

Disappointing data released on Thursday, weakened the dollar by keeping expectations alive the Federal Reserve will maintain stimulus measures to spur economic growth. Investors have been scrutinizing economic data after the Fed said economic data will determine the timing and pace of any reduction in its $85 billion in monthly bond-buying.

The report from the U.S. Labor Department showed jobless claims for the week ended July 20 came in slightly above what economists expected where initial jobless claims rose to 343,000, an increase of 7,000 while analysts expected 341,000.

Meanwhile, the U.S. Commerce Department said durable goods orders surged 4.2 percent in June following an upwardly revised 5.2 percent jump in May above the expected 1.5 percent.

Meanwhile, the Federal Open Market Committee, at its meeting next week, is likely to discuss whether to refine or revise its "forward guidance," following the steps of the Bank of England and the European Central Bank.
- France`s CAC 40 gained 0.67% to 3,982.57 - German DAX fell 0.02% to 8,297.21
- British FTSE 100 was flat at 0.0% trading at 6,588.04

In a busy day for earnings, Franco-Dutch airline Air France- KLM said its operating profit at Europe’s biggest airline was 79 million euros, lower compared with 89-million-euro expected by analysts. Net debt fell to 5.3 billion euros from 5.97 billion euros at the end of December.
- As of 03:24 ET, Air France-KLM share rose 2.43% to 6.5210 euro
French luxury-goods maker, LVMH Moet Hennessy Louis Vuitton SA and and Gucci owner Kering SA, said sales growth accelerated in the second-quarter as the industry rebounded from a weak start to the year.

LVMH reported first-half profit growth that slightly trailed analysts’ estimates and said it’s confident for the second six months of the year. - As of 03:29 ET, LVMH SA share gained 4.03% to 135.6500 euro

Renault SA (RNO), France’s second-biggest carmaker, said Earnings before interest, taxes and one-time items climbed 15 percent to 583 million euros in the first-half from 508 million euros a year earlier, while earnings were projected to fall to 397 million euro. - As of 03:33 ET, Renault SA share jumped 3.90% to 62.0100 euro

07-26-2013, 12:26 PM
Dollar extends losses before next week’s U.S. data

American dollar extends its series of drops ahead of next week’s expected heavy weighted data, where the U.S. economy is scheduled to issue its second quarter’s GDP data, while the dollar fell also amid the recent speculation that Federal Reserve will keep the accommodative policy at next week’s meeting.

Moreover, Dollar’s demand halted amid the recent unclear outlook for the U.S.’s economy, where investors are expecting a slower expansion pace to be showed next week concerning the second quarter of the year, which negatively affected on dollar’s demand.

From another side, Japanese yen take the benefit from dollar’s fall to incline today versus major currencies, knowing that Japanese economy recorded higher-than-estimated rebound in the nation’s consumer prices, the highest since 2008.

Japanese yen inclined versus dollar during today’s Asian session and after Japan’s data, where the USD/JPY pair recorded low of 99.064 after hitting its high of 99.354, as the pair started today’s session at 99.246.

Euro inclined versus American dollar, where the EUR/USD pair recorded high of 1.32791 after hitting low of 1.32679. EUR/JPY pair also inclined after yesterday’s fall to record high of 131.731 from low of 131.656.

Aussie and Kiwi record noticeable gains versus their counterpart American dollar, starting with the AUD/USD pair which recorded its highest at 0.92679 after reaching low of 0.92333, while the NZD/USD pair inclined to high of 0.80851 from low of 0.80581.

07-29-2013, 02:13 PM
Danone revenue beats estimates on baby-products demand

Danone, France`s largest food-products group, reported stronger-than-estimated sales growth in the second quarter, boosted by revenues of baby-nutrition products in China and stronger diary sales.

"With sales up 6 percent in the first half, Danone is off to a strong start in an economic and consumption context that remains difficult in Europe and in some cases volatile in emerging countries," Danone Chairman Frank Riboud commented on Monday.

The Paris-based group said total like-for-like sales rose 6.5 percent to 5.7 billion euros from a year-ago quarter, and reported consolidated sales up 6.7 percent, with volumes registering its strongest quarter in eight.

Strong demand for baby-nutrition products in China and slight improvement in home region helped Danone post better-than-expected growth in the second quarter. Sales at Danone`s diary unit grew 2.6 percent, boosted by stronger demand for Greek yogurt in the U.S. and Prostokvashino products in Russia. In Europe, demand for diary remains a difficult challenge.

Danone rose more than 3.5 percent in early trading hours in Paris amid optimism about the Chinese demand for baby foods, although investors were somehow concerned about the recently introduced price cuts in Europe across the industry.

07-29-2013, 02:14 PM
UK M4 money supply rebounds in June

UK M4 Money Supply Index rose 0.1% in June from revised 0.0% a month earlier, but missing average forecast of 0.2% rise. From a year ago, M4 Money Supply rose to strong 1.5% compared with 0.1% in the year through May.

08-02-2013, 01:07 PM
Gold tumbles as Draghi comments, US data lift dollar ahead of NFP report

Gold extended losses on Friday trading session, ahead of U.S. nonfarm payrolls later in the session, while the lack of monetary easing from major central banks slashed buying interest in gold.

- As of 03:30 ET, gold dropped 1.76 percent or 23.09 points to $ 1,289.03

- Silver for immediate delivery fell 1.95 percent or 0.38 points to $ 19.30

Gold extended losses set in the previous session as bullion was weighed down by the Bank of England and European Central Bank meetings where both banks refrained from adding stimulus on signs of economic improvement.

The European Central Bank chief, Mario Draghi said euro-zone key interest rates will remain at a record low 0.5 percent or lower levels for "an extended period of time." Draghi`s comments came a day after the US central bank ended a policy meeting without any sign that its bond-buying program would end soon.

The Bank of England also decided in its policy meeting on Thursday to keep both interest rate and asset purchases on hold on signs of progress from the economy.

Accommodative policy is generally seen as supportive for gold, because printing money tends to be inflationary.

- Spot platinum declined 1.14 percent to $ 1,424.85

- Spot palladium lost 0.80 percent to $ 726.00 Gold tumbled Thursday as U.S.

dollar climbed further following news that the Institute for Supply Management’s July manufacturing index jumped to the highest in two years, and initial jobless claims dropped to the lowest level in over 5 years.

Dollar benefited from expectations the Federal Reserve will curb ultra-loose monetary policy before other central banks, given strong U.S. manufacturing data and dovish comments from the European Central Bank.

The latest economic data from the U.S were cheerful as it showed progress in the manufacturing sector, besides a decline in jobless claims, fueled optimism about the coming nonfarm payrolls report.

Upbeat data on the economy often draws attention away from the perceived safety of precious metals. U.S. Labor Department said on Thursday that initial jobless claims fell to a five-year low last week, while a reading on manufacturing activity expanded in July at the fastest pace in 13 months.

Investors will be waiting for U.S. jobs data for more clues on the health of the world`s largest economy, where strong data could prompt the U.S. Federal Reserve to end its bullion-friendly bond-buying program earlier than expected. As of (10:32 GMT+3), the dollar index traded around 82.40 after opening at 81.39; USDIX hit a high of 82.53 and a low of 81.39.

08-02-2013, 01:15 PM
Gold and Silver Prices – Daily Outlook for August 2
August 2, 2013

Gold and silver prices didn’t do much in the past couple of days and only slowly slid down after the publication of the FOMC statement following its meeting. The ECB left its policy unchanged as Draghi reiterated his pledge for low interest rates. In the U.S several reports came out: manufacturing PMI rallied again and reached 55.4 in July – this means the manufacturing sectors are growing at a faster pace; jobless claims fell by 19k to reach 326k – this is another improved. These news items could pressure down bullion prices. Moreover, if the upcoming labor report will be better than expected it could push further down gold and silver. On today’s agenda: U.S. Non-Farm Payroll Report, U.S Factory Orders, Spain’s unemployment Change, Australia’s PPI, GB Construction PMI.

Here is a short outlay for precious metals for Friday, August 2nd:

Gold and Silver Prices Review – August Update

On Thursday, gold inched down by 0.13% to $1,310.70; Silver also remained virtually unchanged as it slipped by 0.02% to $19.62. During July, gold rose by 7.24%; silver, by 0.91%.

The ratio between the two precious metals rose on Thursday to 66.79. During August, the ratio slipped by 0.12% as silver slightly out-performed gold.

On Today’s Agenda
U.S. Non-Farm Payroll Report: in the latest employment report for June 2013, the labor market sharply rose again: the number of non-farm payroll employment rose by 195k; the U.S unemployment rate remained flat at 7.6%; the current expectation are that the number of jobs added will reach 200k in July; if the numbers in the jobs report will exceed this number or revolve around it, this may pressure down the prices of gold and silver;

Spain‘s unemployment Change: the number of people unemployed in Spain dropped in June by 127.2k. This mean, the employment situation in Spain has improved;

Australia’s PPI: This quarterly update will pertain to second quarter of 2013. During the first quarter of 2013, the producer price index rose by 1.6% compared to the first quarter of 2012 and by 0.3% compared to Q4 2012; this index may affect the Aussie dollar.

GB Construction PMI:Great Britain’s construction sector in June 2013 slightly improved as the PMI increased to 51 – the construction sector is growing at a slightly faster rate;

U.S Factory Orders: In the last report factory orders rose by 2.1%; this report will offer some insight regarding the progress of the U.S economy;

Currencies / Bullion Market – August Update
The Euro/ USD currency pair changed direction and fell on Thursday by 0.71% to 1.3207. During the week, the Euro/USD fell by 0.54%. Moreover, other currencies such as the Aussie dollar also depreciated again yesterday against the U.S dollar by 0.63%. The correlations among gold, Euro and Aussie dollar remained strong, e.g. the correlation between the Euro/USD and gold price is 0.53 during July.

Current Gold and Silver Rates as of August 2nd
Gold (short term delivery) is traded at $1,287.10 per t oz. a $24.1 or 1.84% decrease as of 09:18*.
Silver (short term delivery) is at $19.27 per t oz – a 1.80% decrease as of 09:18*.

Here is a reminder of the top events and reports that are scheduled for today (all times GMT):

08:00 – Spain’s unemployment Change
15:00 – Australia’s PPI
09:30 – GB Construction PMI
13:30 – U.S. Non-Farm Payroll Report
15:00 – U.S Factory Orders

08-05-2013, 12:41 AM
U.S Employment Increased by Only 162k in July
The Bureau of Labor Statistics published it monthly update: U.S. employment increased again but by a lower than expected pace – according to the ADP (http://www.adpemploymentreport.com/) estimate, the non-farm payroll rose by 200k during May: The recent U.S. employment report (http://www.bls.gov/news.release/empsit.nr0.htm), which was published today, August 2nd, the number of non-farm employees increased by 162,000. The main sectors that grew during July were in retail trade, food services and drinking places, financial activities, and wholesale trade. The rate of unemployment slipped to 7.4%. Gold and silver prices are currently slightly falling while other commodities prices and the major stock markets are declining.

The chart below shows the revised figures of the number of non-farm employees grew in the labor market in recent years (up to July 2013). The non-farm payroll was revised up for May from +195k to +176k; For June it was revised from +195k to +188k. The combined added jobs in those months were 364k – 26k fewer jobs than previously estimated. The revised figures for May and June suggest the employment situation in the U.S hasn’t improved.

As I have analyzed in the past, the minimum number of non-farm payroll employment needed to maintain the rate of unemployment hasn’t changed (to compensate with the growth of the U.S. civilian work force) – roughly more than 100k. So the recent increase in number of jobs was higher than this threshold. But since the expectations were higher than that, this news is slightly less positive.

http://pcmbrokers.org/pcmfileupload/uploads/1375648512791.jpg (http://pcmbrokers.org/pcmfileupload/)

The rate of U.S. unemployment slipped in July at 7.4%. The rate of unemployment is at its lowest since mid-2008 but hasn’t changed much since November 2012. The current unemployment rate is 0.9 percent points lower than its rate in July 2012.

Moreover, the number of unemployed persons (11.5 million) was also lower in July compared to last month.

Following this news, currently, the Euro/USD exchange rate is rising; crude oil price is falling; the U.S stock market indexes are also slightly declining; gold and silver prices are slightly decreasing.

Now let’s breakdown how this news might affect the direction of commodities prices, including the prices of gold and crude oil:

Gold Market

if the non-farm payrolls rise by more than the population growth rate (roughly 107k), gold and silver prices tended to slide;

this correlation was mostly due to the effect this news has had on the speculation of the Fed may taper its QE3 program as the U.S economy is slowly recovering.

The table below shows the correlation between the news of the U.S. non-farm payroll employment shifts and the daily changes in gold and silver prices on the day of the U.S. labor report publication.

The table below shows the negative correlations between the U.S employment and daily shifts of bullion prices.

http://pcmbrokers.org/pcmfileupload/uploads/1375648512852.jpg (http://pcmbrokers.org/pcmfileupload/)

Crude Oil Market

The recent rally in the non-farm employment is lower than many had expected; conversely, the employment grew by well above the 100k mark, which is raises the changes of the Fed tapering its asset purchase program in the coming months. Nonetheless, the disappointing numbers compared to the expectations may have dragged down oil prices.

08-06-2013, 02:16 PM
Aussie rebounds versus dollar on RBA’s decision

Australian dollar rallied today after the Reserve Bank of Australia (RBA) moved in support of growth and cut rates as expected. Aussie noticeably gained versus dollar after the decision in line with similar gains for New Zealand dollar.

So called Aussie noticeably gained, where the AUD/USD pair turned higher to set 0.89846 rebounding from earlier lows of 0.89057, extending gains from opening hours at 0.89112.

At the same time US dollar fell versus major currencies today, where the EUR/USD also traded with a bullish bias to record high of 1.32707 from the low of 1.32548.

Greenback is currently trying to cut some of the losses versus Japanese yen following losses in the past three sessions; USD/JPY recorded a high of 98.366 from lows of 97.829.

As for Kiwi, New Zealand dollar also recorded noticeable gains today alongside Aussie’s rebound, where the NZD/USD pair rose to a high of 0.78619, after setting the low of 0.78254, the pair started today’s session at 0.78352

08-08-2013, 12:12 PM
Crude reverses some of the losses on robust Chinese trade data

Crude oil rose for the first time in five days on improved demand outlook following the robust trade numbers from the China, the world’s second largest oil consumer, while crude inventories fell yet lower than expected. China’s exports and imports rebounded in July more than expected, signaling the economy is stabilizing.

Exports rose 5.1% compared with the expected rise of 2%, while crude oil imports hit a record 6.15 million barrels per day.

The EIA showed yesterday that crude inventories fell by 1.3 million barrels to 363.3 million, less than the 1.5 million projected decline. Gasoline inventories rose 135,000 barrels last week although they were projected to fall, while distillates increased by 469,000 barrels.

- Crude is trading around $104.53 a barrel after rising $0.16
- Brent is trading around $107.51 a barrel after rising $0.06 However,

gains were capped as some investors remained cautious as the US Federal Reserve could roll back its monetary stimulus probably starting next month, and move that could boost the dollar, weighing on commodities such as oil.

Oil price gains were also limited by easing geopolitical tensions between Iran and the United States after Iran`s new president Hassan Rouhani signaled willingness to negotiate with the West over Tehran`s disputed nuclear program.

While Libya’s oil crisis due to workers` protests remains a key concern, crude exports from the North Sea are scheduled to rise in September after maintenance.

In Yemen, authorities said they stopped a plot by al-Qaeda to seize two major oil and gas export terminals.

- Natural gas is trading at $3.233 per cubic feet after falling 0.43%
- Gasoline is trading at $2.8797 per cubic feet after rising 0.36%
- Heating oil is trading at $2.9683 a gallon after rising 0.14%

08-08-2013, 12:16 PM
BOK kept Interest rates unchanged :The Bank of Korea kept the nation`s 7-day repo rate steady at 2.50% for the third month meeting analysts` expectations.


Japan Eco Watchers Survey :The Japanese economy released its Eco watchers survey reading , and it came at 52.3 in July, compared with a previous 53.0, while analysts’ expectations were 53.5. Meanwhile, Eco Watchers Survey - Outlook - came at 53.6 in July, compared with a previous 53.6, while analysts’ expectations were 54.1.


The Bank of Japan kept rates unchanged :The Bank of Japan decided Thursday to keep interest rates between 0.00% and 0.10% to support the world`s third largest economy. The bank kept its plan to increase the monetary base from 60 to 70 trillion yen yearly, and it added that changes will be added to monetary policy when needed.
Monetary policy makers said the economy is still facing risks, adding that it is showing steady growth at the current stage.

08-08-2013, 03:53 PM
ECB bulletin: data show tentative stabilization in euro-area economy

The European Central Bank (ECB) Governing Council`s decision to leave key interest rates unchanaged followed recent data showing tentative signs of stabilization in euro-area economic activity.

"Recent confidence indicators based on survey data have shown some further improvement fromlow levels and tentatively confirm the expectation of astabilisation in economic activity," the ECB said in its August monthly bulletin today.

The ECB sees a gradual recovery in economic activity in the rest of 2014. Meanwhile, annaul inflation inflation rates are expected to temporarily fall over the coming months.

Furhtermore, the bulletin said that the ECB`s policy rhetoric " continues to be geared towards maintaining the degree of monetary accommodation warranted by the outlook for price stability and promoting stable money market conditions."

08-08-2013, 03:54 PM
Gold extends gains as dollar wanes

Gold rose for the second day in Europe as the dollar lost grounds versus majors on concerns the Federal Reserve would scale down its bond purchases next month. The precious metal reversed earlier losses on Thursday adding nearly 0.90 percent to print a session high of $1,279.69 an ounce as of 01:49 EST. The tide has apparently turned against the U.S.

currency once again this week in favor of other currencies and gold. - Spot Gold rose 0.36% to $1,290.37 Fed Chairman Ben S. Bernanke is widley expected to start exiting its monetary stimulus program, dubbed as quantitative easing (QE). The Fed purchases $85 billion in bonds each month in a bid to stimualte growth in the world`s largest economy.

Gold is expected to pick up towards the $1,300 areas. Earlier this week, a slide in gold prices proplled traders to cover thier long positions in China.

- Spot Silver rose 0.90% to $19.73
- Spot Platinum rose 0.81% to $1,449.35
- Spot Palladium rose 0.62% to $728.30

08-08-2013, 04:03 PM
Morgan Stanley Sold EUR/USD From 1.3300 Targeting 1.2700

Morgan Stanley entered into a macro tactical short EUR/USD trade from 1.3300 with a stop at 1.3440, and a target at 1.2700. Interestingly, MS is almost replicating the same levels of its last profitable short EUR/USD trade from July (opened 1.3310, with a stop at 1.3440, and a target at 1.2800).

On the USD front, MS' bullish view revolves mainly on expecting the Fed QE tapering to start in September.

"We believe that this presents a bullish environment for the USD over the medium term, as the Fed continues to provide a supportive policy for the domestic economy, but slowing the growth of USD liquidity which has been used to fund broader global risk markets. We expect the US to increase its attractiveness as a longer term investment destination, as has become evident with the cross-border M&A activity, where net announced deals now show a net inflow to the US," MS clarifies.

On the EUR front, MS' bearish view revolves around the ECB policy and the risk of the German elections and Constitutional Court ruling on OMT.

"The ECB has reaffirmed its downward basis to rates, which given the recent robustness of data, including the rebound in the PMIs and the resilience of inflation, is probably as bold a step as can be expected at this point, especially when viewed within the broader context of political and constitutional constraints... Our EUR bearish view also goes beyond the current ECB policy setting process, with German politics also likely to come back into focus as the German elections approach, adding to uncertainty. Also the German constitutional court ruling on the OMT could prove to be less flexible than previous rulings, in our view, with a tougher stance potentially leaving the perception that this particular policy tool is likely to prove ineffective," MS adds.

08-08-2013, 04:08 PM
The Case For Additional EUR/USD Upside Intact S/T - Credit Agricole
Focus of the day:

"The EUR has been stable of late, mainly on the back of improving growth prospects. The most recent release of German industrial production & orders data is confirming a trend of strengthening business activity.

Even if the data only covers the June period it still acts as a confirmation for this month’s better than expected manufacturing PMI release.

This in combination with scope for further rebounding business activity in peripheral Eurozone member states such as Italy may support the notion for further rising growth expectations to the benefit of rates and the single currency.

This is especially true as improving growth conditions in core member states such Germany suggest that there is little scope for inflation expectations to fall considerably anytime soon. As a result of the above outlined conditions the ECB’s version of forward guidance’s sustainable impact on markets remains questionable.

Elsewhere, uncertainty regarding the Fed’s monetary policy stance remains intact. Although it appears to be consensus that the central bank will start to taper QE in September, the latest labour data release as well as several Fed members’ inexplicit comments regarding the timing of tapering may increasingly support the notion that there is a rising risk for them to become active later than currently expected. Under such conditions there is little scope for US yields to support the greenback strongly anytime soon.

As a result to the above outlined conditions we expect pairs such as EUR/USD to continue to trend higher."

Manuel Oliveri, FX Strategist - Crédit Agricole

08-09-2013, 02:18 AM
Jobless claims fell last month to the lowest in nearly 6 years, up 5,000 for the week

The number of Americans who filed for unemployment benefits increased by 5,000 last week, however decreased to the lowest level since November 2007 in the past month, further adding to the idea the labor market is accelerating.

Initial jobless claims rose 5,000 in the week-ended July 27 to 333,000, roughly meeting estimates that called for a rise to 335,000, from 328,000 the prior week. Data from the Labor Department showed Thursday.

In the four-weeks ended August 3, the number of jobless claims declined to 335,500 on Average, the smallest figure since November 2007.

A spokesperson for the Labor Department said there were no anomalies in last week’s data, and no statements were issued with the report.

Auto plants shutdowns for retooling for the new model year, often causes claims data to become more volatile in July.

Federal Reserve policy makers are watching the job market to determine when to begin scaling back the central bank’s $85 billion in monthly bond purchases. Officials have said they will continue the program until the labor market has improved substantially.”

Non-farm payrolls rose by 162,000 workers last Month, following an 188,000 increase in June, while the jobless rate dropped to more than a four-year low of 7.4 percent, data showed last week.

Following the release of jobless data, the U.S. dollar edged slightly lower, while Stock market futures pared some gains.

08-09-2013, 02:25 AM
Natural Gas Inventories increased above estimates last week, EIA says

The Energy Information Administration (EIA) published its weekly update for the change in natural gas inventories, showing a gain of 96 billion cubic feet in the week-ended August 2, beating estimates at 79 BCF after a rise of 59 BCF the week before.

08-09-2013, 02:37 AM
Crude futures slide to multi-week lower, gold edges higher

Crude oil futures fell the fifth-straight day Thursday, the longest decline since December 2012, after solid jobless claims data from the U.S. raised concerns about the Federal Reserve’s stimulus program, while Gold held its gains after the release.

Light, sweet crude oil futures for September delivery fell to $102.76 a barrel, its lowest level for nearly a month, compared with $104.18 a barrel late Wednesday and earlier reached a low of $102.23 per barrel. Data as of 01:05 p.m. ET Earlier today, data showed claims for U.S. unemployment insurance benefits for the four weeks-ended August 3 dropped to 335,500 on average, the smallest reading since November 2007.

Weekly initial jobless claims rose 5,000 last week to 333,000. The Fed may begin curbing bond purchases in September, Fed Bank of Chicago President Charles Evans said Aug. 6. U.S. crude output jumped last week to the highest level since 1989 and gasoline supplies are the highest seasonally since 1990, government data showed yesterday.

Evans, who has been among the most vocal proponents of record monetary accommodation, said the central bank is likely to end the bond-buying program in mid-2014. He is a voting member of the Federal Open Market Committee this year and has consistently supported increased stimulus.

Investors have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Federal Reserve to reduce its bond purchases. A broadly weaker U.S. dollar also supported some gains, as dollar-priced commodities become cheaper to investors holding other currencies when the greenback weakens.

The Dollar index, which tracks the performance of the U.S. dollar against a basket of major currencies, fell to 80.94, the lowest since June 19, after closing at 81.30 Wednesday. A drop in the U.S. dollar helped ease some of the losses for crude oil, while gold was the biggest benefactor of the two.

Gold prices edged higher for a second day Thursday . Spot gold last traded at $1310.79 an ounce, up from $1287.16 per ounce late Wednesday. The precious metal is on track to post a loss of 24% on the year amid concerns the Fed will start to unwind its stimulus program by the year`s end. Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its quantitative easing program sooner-than-expected.

08-09-2013, 02:42 AM
JPMorgan Chase reveals its under civil investigations on sub-prime mortgages

JPMorgan Chase revealed Wednesday it face a criminal and civil investigation into whether it was involved in selling inferior mortgage securities to investors during the period which lead to the financial crisis, which would be the latest legal threat for the U.S. largest bank.

This is the first time JPMorgan acknowledges the existence of the investigation, which is one of many mortgage-related issues looming for the bank, and the bank declared it in its quarterly regulatory filing.

JPMorgan said the civil division of the U.S. attorney’s offices for the Eastern District of California, which covers the land that includes Sacramento and Yosemite, has “preliminary concluded” that JPMorgan Chase flouted federal laws with the sale of sub-prime mortgage securities from 2005 to 2007.

The prosecutors are investigating whether JPMorgan churned out the mortgage-backed securities without ensuring that the investments met underwriting standards, people familiar with the matter said.

However, Representatives for the bank and the federal prosecutors declined to comment.

JPMorgan Chase has become a magnet for criticism in recent years and has drawn attention from at least eight regulators in investigating the bank in connection with the pre-financial-crisis era mortgage business and a $6 billion trading loss in London in 2012, among other issues.

JPMorgan is hardly the only Wall Street firm taking heat in Washington. On Tuesday, Bank of America found itself in the government’s cross hairs when the Justice Department and the Securities and Exchange Commission accused the bank of defrauding investors by greatly overstating the quality of mortgages backing roughly $850 million in securities. The bank contested the accusations.

08-09-2013, 01:05 PM
Tertiary Index in Japan

The Japanese economy released the Tertiary Index for June, where the actual reading showed a drop of 0.3% compare to the previous reading of 1.2% which revised to 1.3%, as for the expectations it refer to – 0.4%.

08-09-2013, 01:07 PM
China CPI rose 2.7% in July

The Chinese economy released today its CPI reading that came in at 2.7% in July mirroring the previous reading, while consumer prices missed analysts` estimates of 2.8%.

As for yearly producer prices, PPI fell 2.3% in July, more than the forecasted 2.1%, noting that PPI declined 2.7% in the same period last year.

08-09-2013, 01:08 PM
French industrial, manufacturing output tumble in June

French industrial sector narrowed unexpectedly in June, figures by the French Statistics Office in Paris showed on Friday.

Industrial production dropped 1.4 percent in June from a revised 0.3 percent drop, initially reported at 0.4 percent drop in May, missing analysts` median estimate of a 0.3 percent.

From a year ago, production declined 0.2 percent, beating expectations of 1.6 percent growth. Industrial Production was 0.4 percent revised higher to of 0.9 percent in May.

Manufacturing output also decelerated to 0.4 percent, from 1.1 percent drop revised to a drop of 0.9 percent. Analysts called for 0.5 percent growth.

Annual production of France`s manufacturing sector dropped 0.6 percent in the year ended June from a revised drop of 0.3 percent. Analysts had expected 0.3 percent.

08-09-2013, 01:12 PM
Japan consumer confidence index

Japan consumer confidence index came in at 43.6 in July compared with 44.3 in June, while analysts` estimates referred to 45.0.


China industrial production and retail sales

China industrial production inclined 9.7% in July from a year earlier, higher than the expected 8.9% that was also the previous reading. Production output rebounded along with healing global demand, besides an increase in domestic demand as the government is working to enhance domestic spending.

Retail sales rose 13.2% in July from a year earlier compared with a previous 13.3%, and it missed analysts` estimates of 13.5%.


UK trade balance deficit narrows in June

The United Kingdom`s visible trade balance was at -8082 million pounds in June, down from a revised -8668 million pound a month ago, yet beating analysts` median estimate of -8350 million pounds.

The Non-EU balance deficit narrowed to -2646 million pounds from a revised -4019 million pounds in May, topping forecast of -3800 million pounds.

Total trade balance was at -1548 million pounds, down from a revised -2612 million pounds and forecast of -2200 million pounds.

08-13-2013, 10:07 AM
Consumer prices in July 2013: +1.9% on July 2012

Consumer prices in Germany rose by 1.9% in July 2013 compared with July 2012. The inflation rate as measured by the consumer price index had been 1.8% in June 2013 and 1.5% in May 2013. Inflation thus increased In July 2013. A higher rate of price increase was last measured in December 2012 (+2.0%). Compared with June 2013, the consumer price index rose by 0.5% in July 2013. The Federal Statistical Office (Destatis) thus confirms its provisional overall results of 30 July 2013. The overall inflation rate in July 2013 on July 2012 was again characterised by marked rises in food prices.

08-13-2013, 10:12 AM
Australia business confidence dropped

Australian business confidence dropped to the lowest in eight months, after Treasury confirmed widening fiscal deficit, making Prime Minister`s Kevin Rudd`s situation much harder in the coming elections.

Australian confidence index came in at -3 in July, along with poor confidence in the nation`s mining sector, as the last interest rate cut couldn`t encourage companies to have a better outlook for economic performance.

Australia is expected to see a deficit of A$24 billion in the 2014-15 fiscal year, while the shortfall on 2015-16 fiscal year is expected to be A$4.7 billion, which is signaling tough economic conditions in Australia.

08-13-2013, 10:17 AM
U.S Worse Monthly Budget Statement

The U.S Monthly Budget Statement for July came in worse at -97.6 Billion; worse than the projected -96.0 Billion and the prior reading of -69.6 Billion.

08-13-2013, 12:02 PM
Spain inflation CPI drops 0.5% in July

Spain released the inflation-linked CPI index for July, where the monthly index declined 0.5 percent as expected from the previous expansion of 0.1 percent. The annual index was steady at 1.8 percent.

The harmonised monthly index shrank 1.1 percent in July in line with expectations, while the annual index remained unchanged at 1.9 percent.

08-13-2013, 12:03 PM
U.K. house price gauge climbs to the highest in seven years in July

The Royal Institution of Chartered Surveyors said U.K. house price climbed to the highest level since nearly seven years last month.

The index surged to 36 from 21 in June while a gauge of inquiries from new buyers rose to 53 from 38, the most in four years, reflecting the improvement in the property market on the back of the rise in demand by new buyers.

The property market is also taking advantage of the boost from the BOE’s Funding for Lending Scheme.

A measure of outlook for prices edged up to 35 in July from 24 a month earlier, while supply dropped to 15 in July from 13 in June, RICS said.

“The challenge presented by the short supply of stock is particularly pronounced in the capital,” RICS said.

08-13-2013, 02:08 PM
UK PPI inflation advances in July

The Office for National Statistics reported on Tuesday UK producer price index (PPI) was at 0.2 percent as expected in July, from 0.1 percent in June.

U.K. PPI output for the year ending July rose to 2.1 percent from 2.0 percent in the year ended June, also in line with analysts’ expectations.

Core PPI output rose to 0.1 percent as expected, following a revised drop of 0.1 percent originally reported flat at 0.0 percent. Annual core PPI output rose to 1.1 percent yet below expectations of 1.2 percent.

Producer price index input for the same month rose as expected to 1.1 percent from 0.2 in June. On a yearly basis, PPI input advanced to 5.0 percent compared with previous revised reading of 4.0 percent missing analysts’ median estimate of 5.5 percent.


UK CPI falls more than forecast in July

UK Consumer Price Index (CPI) eased in July to 2.8% year-on-year, down from 2.9% in month ago, meeting analysts` median estimate. Month-on-month, CPI fell to -0.2% from 0.0%, as expected.

CPI Core fell to 2.0% from 2.3 percent, trailing forecast of 2.2%.

A separate report showed that UK Retail Price Index (RPI) fell to -0.1% from 0.0%, as expected. From a year earlier, RPI eased to 3.1% from 3.3% , missing average forecast of 3.2%.

RPI excluding Mortgage interest payment fell to an annual rate of 3.2% from 3.3%, beating expectations of 3.2%.


Eurozone industrial production slump in June

Eurozone’s industrial sector expanded in June at a slower rate than expected, according to Eurostat report on Tuesday.

Industrial production expanded at a seasonally adjusted rate of 0.7 percent in June, after shrinking 0.3 percent revised to 0.2 in May, beating estimates of 0.1 percent growth.

Without seasonal adjustment, industrial output expanded at an annual rate of 3.0 percent from a previous reading of 1.3 percent decline a month ago, meeting analyst’s expectations.


Eurozone ZEW on expectations jumps in August

The Center for European Economic Research (ZEW) said on Tuesday that economic expectations for the Eurozone rose sharply in august. The ZEW economic sentiment gauge surprisingly rose to 44.0 from 32.8 in July.


German ZEW investors expectations rise more than forecast

German ZEw Current situation jumped top 18.3 in August, compared the previous reading of 10.6, beating analysts` median estimate of 12.0.

The Zew Expectations Index advanced to 42.0 from 36.3, topping forecast of 39.9.

The euro reversed morning losses against the dollar, moving softly to the upsdie where the EUR/USD returned above 1.3000 to hold in the low range of these areas.

08-13-2013, 08:33 PM
Retail sales rose in July for a fourth consecutive month, showing the U.S. economy is breaking free of the effects of higher taxes and federal budget cuts.

The 0.2% increase followed a 0.6% gain in June that was larger than previously reported, according to Commerce Department figures issued today in Washington. The median forecast of 81 economists surveyed by Bloomberg called for a 0.3% advance. The measure of demand that feeds into gross domestic product climbed by the most this year.

Employment gains and rising household wealth tied to higher home values and stock prices are giving Americans the confidence to spend, triggering improving sales at companies such as Michael Kors Holdings Ltd. The pickup in household purchases would help counter the fiscal headwinds of taxes and government cutbacks that have held back the world’s largest economy.

“Consumers are still able to go out there and spend despite headwinds from tax increases and the sequester,” said Omair Sharif, a U.S. economist at RBS Securities Inc. in Stamford, Connecticut, which accurately forecast the growth in retail sales. “Job growth is continuing at a moderate clip and we’re making gradual headway.”

U.S. stocks were little changed, after the Standard & Poor’s 500 Index recorded two days of losses. The S&P 500 added 0.02% to 1,689.84 at 9:42 a.m. in New York. Treasury securities fell, sending the yield on the benchmark 10-year note up to 2.7% from 2.62% late yesterday.

Survey Results

Estimates in the Bloomberg survey ranged from a drop of 0.1% to a 0.8% gain. The reading for June was revised from an initially reported 0.4% increase.

Nine of 13 major categories showed gains last month, led by clothing and general merchandise stores.

Purchases excluding autos, gasoline and building materials, which render the figures used to calculate GDP, advanced 0.5% last month, the most since December, after increases of 0.1% in each of the previous two months.

Spending advanced 0.9% at clothing chains and 0.4% at general merchandise stores, today’s report showed.

08-13-2013, 08:36 PM
Data today showed retail sales rose 0.2% in July, following a 0.6% gain in June that was larger than previously reported. Apple added 1.1% to $472.61. Fed Bank of Atlanta President Dennis Lockhart will give a speech at 12:45 p.m. on the outlook for the U.S. economy.

Equities: The SEP13 E-mini S&P 500 futures traveled higher overnight to 1694, but came down after the retail sales data number was released. Now, this market is trading down 4.5 points to 1682.50. We have a key pivot level in the short term at 1681.50. We have our next downside target at 1669.50, which we would not be surprised to see if the market starts to more actively price in a September tapering announcement. This market has been trading in a fairly small range with 1690 as the midpoint, and we believe we could be in for a breakout to the downside, approaching our key target of 1669.50. 1644 would be our next target below that.

Bonds: The SEP13 U.S. 30-year bond futures are down a somewhat significant amount of 1’19 points to 132’16. This is likely due to the higher revisions to last month’s retail sales number, causing the bond market to be more concerned with a Fed tapering that could be announced next month. We have our next downside target at 131’24. To us, the fact that the bonds are well below our key pivot level of 133’18 tells us this market seems to be in a bearish environment.

Currencies: The SEP13 U.S. Dollar Index futures jumped on the retail sales data, as strong economic data could portend a September tapering announcement, which would likely be a very bullish event for the USD. The USD futures are trading up 48.5 ticks to 81.86. We have our next important resistance level at 82.50, and we believe the USD could potentially head to that level. We still have a big week of data coming up such as PPI, CPI, and manufacturing data. The SEP13 Swiss Franc is down 108 ticks, the SEP13 Yen is down 152 ticks, while the Euro, Pound, and Aussie are all down today as well.

Commodities: OCT13 cotton futures continue their rally, this time on bullish USDA report of lower stocks. The 92 high of June could very well be approached in the near future for cotton. SEP13 natural gas futures are trading right around unchanged levels, and look to be turning to the bullish side, if they can stay above the key pivot of $3.32. DEC gold futures are down $12 to $1322 on strong US economic data. We believe $1300 could be a magnet level for gold.

http://pcmbrokers.org/pcmfileupload/uploads/1376411407931.png (http://pcmbrokers.org/pcmfileupload/)

08-19-2013, 01:57 PM
Merkel dismisses the option of forming `grand coalition`

German Chancellor Angela Merkel that she is not looking for forming a grand coalition with her main opposing Social Democratic Party.

In an interview with broadcaster ZDF on Sunday, Merkel stressed no one wants a coalition as she aims to put more pressure on her main rival Peer Steinbrueck ahead of Parliamentary election on September 22, where they both prepare to step their campaigns this week.

The latest polls published by Bild newspaper on Monday showed that Merkel’s Christian Democratic and its current ally Free democratic could form a majority.

"I want to continue the Christian-liberal coalition because we’ve done a good job,” Merkel told ZDF.

She refused to reply to the berating by Steinbrueck, commenting “I worked very well with him for four years as finance minister and have only the best memories of it.”

08-19-2013, 02:04 PM
CBI lifts UK growth outlook as recovery adds steam

The Confederation of British Industry (CBI) raised its growth forecasts for UK economic growth in 2013 and 2014 as business investment, exports and consumer confidence are picking up gradually.

“… The recovery begins to gather some short-term momentum. But the rebalancing away from consumption towards investment and trade is taking longer than expected,” the UK’s leading business group said in its quarterly forecast published today.

The CBI said 2013 GDP growth will likely pick up to 1.2 percent from 1.0 percent in its May forecast, citing upbeat signs of confidence across key sectors through the second quarter of the year.

Next year, the CBI forecast the economy to add steam, expanding 2.3 percent from 2.0 percent growth in May.

Signs of broader global recovery have boosted the CBI’s latest expectations for UK economic growth. The economic lobby praised the Euro area’s return-to-growth, after dismal 18 months in recession

Eurozone GDP expanded 0.3 percent in the second quarter. The pickup was led by Germany, whose GDP rose 0.7 percent. France did surprisingly well, with output higher by 0.5 percent. However, Italy and Spain remained on a slide, with output falling 0.2 and 0.1 percent, respectively.

The prospects for economic growth in the UK are still lackluster on the medium-term, as long as bloc’s banking mess persists.

The CBI also said the Bank of England’s forward guidance on monetary policy “should add to the recovery in business and consumer confidence.”

08-19-2013, 02:07 PM
Japan`s leading index

Japan`s leading index CI final reading came in at 107.2 in June compared with a previous 107.0 in May. Moreover, the Coincident index final reading recorded 105.5 in June compared with 105.2 in May

08-19-2013, 02:10 PM
China plans to ease foreign investment rules

Chinese government plans to suspend some laws on Foreign Direct Investment (FDI) in proposed new free trade zones including Shanghai. This step comes as part of Prime Minister`s Li Keqiang plan to open up the world`s second largest economy to sustain growth.

According to the State Council statement, the changes will provide creative ways of opening up the economy and get rid of unneeded administration to boost foreign investments.

FDI in China declined 3.7% last year to record $111.7 billion compared with a record $116 billion in 2011, but foreign investments gained 4.9% in the first six months of 2013 to record $62 billion.

08-19-2013, 02:33 PM
US bond yields in focus ahead of Fed minutes

Yields on US 10-year bonds rose for a third day hitting a two-year high on speculation the Federal Reserve will phase out its massive monetary stimulus plan in the wake of a strengthening economy.

Treasuries slumped, driving yields more than 4.5% higher through the past three days, before the Fed publishes the minutes of last month`s meeting on August 21. The benchmark yielded nearly 3 basis points reaching 2.86 percent – the highest since June 2010.

Markets continue to worry about how the policy vote went at the Fed`s last meeting. Some analysts suggest Chairman Ben S. Bernanke is going to reverse course as soon as September, while others expect the tapering move to come by the end of this year.

Therefore, traders will be closely tracing any leads over interest rates, and Wednesday’s minutes from the last Fed meeting could offer so when the US central bank will wind down its bond-buying program.

The dollar was little changed against a six-currency basket today, after having reversed course during New York trading Friday to rise against the euro and yen following a report that showed US consumers were less optimistic in August.

08-19-2013, 05:18 PM
ECB may raise interest rate if inflation pressure increases, Bundesbank says

German Bundesbank said today in its monthly report that the European Central Bank’s vow to keep interest rate at its current low level for an extended period may be subject to a change should inflationary pressure increases.

“Forward guidance doesn’t rule out an increase in the benchmark rate if greater inflation pressure emerges,” the Bundesbank said.

The bank revealed further that the forward guidance is “conditional upon the unchanged obligation to guarantee price stability,’’ and “therefore, the euro system’s forward guidance doesn’t represent an unconditional promise about the future path of the benchmark rate.”

This month, ECB President Mario Draghi repeated that the bank will keep borrowing cost for an extended period of time, but last month some of the governing council members had different point of views regarding the ECB’s guidance.

08-20-2013, 10:13 AM
RBA policy August minutes

The Reserve Bank of Australia released its August meeting minutes, signaling the possibility to see further interest rate cuts but not in the near future. The bank added it doesn’t expect the Chinese economy to recover in the near future.

Moreover, Australian monetary policy makers expect mining exports to incline, while they still see employment conditions deteriorating at the current stage.

09-03-2013, 10:50 AM
Yen gained after losses, Aussie fell ahead of RBA rate decision

The Japanese yen inclined today versus major peers after the recently seen series of losses, noting that it began to regain its power as a safe heaven currency. The Australian dollar slightly declined ahead of the RBA rate decision; however, expectations say the reserve bank will keep rates unchanged.

The yen inclined versus the dollar today, following two-days of losses, where the USD/JPY pair recorded a low of 99.311 from a high of 99.693, and the pair started today’s session at 99.558.

Meanwhile, GBP/JPY pair gained to a high of 154.691 from a low of 154.590, while the EUR/JPY pair rose today after a series of losses to record a high of 131.190 from a low of 131.109.

On the other hand, The Australian dollar fell against its American counterpart, as investors are awaiting the interest rate decision to be announced by the Reserve Bank of Australia, which is expected to add further stimulus measures to support the economy and keep rates steady at 2.50%.

AUD/USD pair fell to a low of 0.89712 after hitting its highest at 0.90242, while the pair started today’s session at 0.89964.

09-03-2013, 10:52 AM
Swiss second-quarter GDP beats forecast at 0.5%

The Swiss economy expanded unexpectedly in the second quarter by 0.5 percent, according to figures released by the State Secretariat for Economic affairs in Berlin on Tuesday. The year-on-year increase was 2.5 percent.

Figures from Federal Department for Economic Affairs showed that the Swiss Gross Domestic Product (GDP) fell to 0.5 percent growth in three months ended July from 0.6 percent in the first quarter, yet beating analysts’ forecasts of 0.3 percent.

Annual GDP growth accelerated to 2.5 percent from a revised 1.2 percent, sharply beating analysts’ expectations of 1.7 percent growth, as domestic demand, which constitutes a large share of the economy, grew 0.5 percent in the three months through June.

The stronger Swiss Franc continues to weigh on the national output and exports volumes in particular, however, the stable exchange rate due to the nation’s central bank helped exports sector. Exports grew 0.9 percent in the second quarter.

The Swiss National bank keep the target range for the three-month Libor rate unchanged at 0.00-0.25 percent and the 1.20 Franc floor intact in a tough bid to counter risks of recession and deflation.

The Swiss Franc extended gains against its U.S. counterpart Tuesday following the news. The USDCHF rose to 0.3617 as of (09:03 GMT+2) after recording an intraday high of 0.93677 and low of 0.93390 compared with the opening today at 0.93404.

09-03-2013, 10:55 AM
RBA kept rates at 2.50%

The Reserve Bank of Australia decided to keep the nation`s benchmark unchanged at 2.50%, hoping for more support for the economy. The bank expects inflation to remain within safe limits, despite the drop seen in Australian dollar`s value.

Monetary policy makers said low growth rates may remain in the short term, and the economy already suffered from slowing growth during the last year.

09-03-2013, 10:57 AM
New Zealand commodity prices rose

New Zealand commodity prices rose 0.7% in August compared with a 0.6% increase in July.

09-03-2013, 10:58 AM
China Premier confident about reaching goals

China Premier Li Keqiang said he is confident that the Chinese economy will achieve the goals set for this year, ensuring that the nation will meet its growth target of 7.5%. Li added that recent data showed stability in prices and employment.

Moreover, China`s GDP growth slowed in the second quarter of this year, as the economy grew 7.5% down from 7.7% expansion recorded in the first three months; however, Mr. Li said the economy maintained stable development since the first half and confidence is increasing.

09-13-2013, 10:25 AM
Industrial Production in Japan

Japanese economy released its Industrial Production index final reading for the month of July, where the reading jumped to 3.4% compared with a previous reading of 3.2%.

At the same time, annualized Industrial Production reading came 1.8% in July, compared with a previous reading of 1.6%%.

Capacity Utilization also expanded in July to 3.7% from a previous reading of -2.3%.

09-13-2013, 10:26 AM
BOJ board member: no additional stimulus is required before tax hike

Mr. Koji Ishida, the Bank of Japan board member, said that monetary policy makers should not overreact to any fall in the economy from the anticipated sales tax increase next year. Ishida added that no additional stimulus measures are required as long as the downturn is short lived.

Moreover, Prime Minister Shinzo Abe ordered his government Tuesday to craft measures to avoid the impact of the expected sales tax increase, keeping in mind that Mr. Abe`s decision should be announced early next month.

Mr. Ishida expected a rush in consumer spending ahead of the tax increase, followed by a drop, which is going to be neutral for the economy.

09-13-2013, 01:16 PM
Swiss producer & import prices rise in August

Switzerland`s producer and import prices rose to 0.2 percent in August, figures from the Federal Statistics Office showed on Friday.

The prices of domestically-produced and imported goods rose to 0.2 percent last month from 0.0 percent in July, in line with market expectations.

From a year earlier, prices fell to 0.2 percent compared with 0.5 percent in the year ended July, missing forecast of a 0.4 percent.

09-13-2013, 01:20 PM
Italy general government debt narrows in July

Italy`s general government debt fell to 2072.9 billion euro at the end of July from 2075.1 billion euro, Bank of Italy reported on Friday.

09-13-2013, 01:20 PM
UK construction output climbs in July

Construction output in the United Kingdom rose sharply 2.2 percent in July following a revised 1.1 percent decline originally reported at 0.8 percent drop, beating analysts’ median estimates of 2.1 percent.

On the yearly basis, construction output fell to 2.0 percent in the year ending July from a revised 2.2 percent originally reported at 1.2 percent, yet beating estimates of 1.3

09-17-2013, 12:49 PM
To Taper or Not to Taper – That’s Not the Question
The highly anticipated FOMC meeting will take place this week. The main issue that many expect is whether the FOMC will start tapering QE3 soon. Many expect the FOMC could start tapering by roughly $10 to $25 billion a month of its asset purchase program.

According to Google Trends, the sharp increase in search results for the term “tapering” suggest people more suspect the Fed may taper QE3 in the upcoming FOMC meeting. Keep in mind, however, market expectations were wrong in the past. But for now tapering seems to be high probability scenario.

If this is the case, the Fed’s decision is likely to strengthen the USD and even pull back down gold and silver prices. But since the Fed’s long term treasury purchase program seems to have had little positive effect at best on the labor market and progress of the U.S economy, this decision to taper QE3 is reasonable.

Some hold the progress of the U.S labor market as sufficient evidence for its improvement: The rate of unemployment tumbled down from 9.7% in early 2010 to 7.3% as of August 2013 – a 2.4 percentage point drop. This decline, however, is less impressive when we take into account the 1.5 percentage point decline in labor force participation rate – as indicated in the chart below.

http://pcmbrokers.org/pcmfileupload/uploads/1379407524331.jpg (http://pcmbrokers.org/pcmfileupload/)

In times of economic slowdown, this trend is expected, in which people give up of looking for jobs and go out of the labor force. If we were to assume today’s participation rate similar as at the beginning of 2010 – at 64.7%, then the rate of unemployment would be around 9%.

Therefore, the Fed couldn’t be too happy with the current progress of the U.S economy. Moreover, the little contribution from U.S policymakers to improve the economy means the Fed may need to step up its game and introduce new stimulus programs. These could be pegging the U.S long term treasuries yields, raising the inflation target, etc. On the other hand, Bernanke is already a lame duck in office and this could reduce the chances of him imitating new policy.

The tapering is likely to progress and could mean that by the beginning of middle of 2014 the purchase program will end. The more interesting question will be the Fed’s next move. Will Bernanke’s final days in office hold him back from putting new plans on the table? Will he wait for policymakers in Congress and Senate to make their move in jumpstarting the economy? Will the Fed take the risk of implementing new plans that could shake the financial markets and might even raise concerns? These questions are likely to keep the uncertainty high in the markets.

09-17-2013, 01:03 PM
UK sells off 6% stake in bailed-out Lloyds Banking Group

Britain sold about 6 percent, worth about 3.2 billion pound of its part-nationalized Lloyds Banking Group, in a first step of the British government`s long slog to returning its bailed-out banks to private hands.

UK Financial Investments (UKFI), the body that manages the government`s stake in its bailed out banks, said Tuesday the treasury sold 4.28 billion shares, or about 6 percent of the company’s issued stock at 75 pence a share, generating 3.21 billion pound for UK Treasury.

UK Chancellor of the Exchequer George Osborne has pledged that taxpayers would get value for money from their investment, while he added in a statement that the profits on the sale would also be used to cut the national debt by around 500 million pound.

As of 03:28 ET, Lloyds Banking Group PLC dropped 1.760 points or 2.28 percent to trade at 75.600 pounds.

09-17-2013, 01:30 PM
Eurozone current account widens in July

The European Central Bank said today that ECB`s current account seasonally adjusted remained unchanged at 19.6 from last month’s reading of 16.9 billion euro revised later to 19.8 billion euro in June.

In non-seasonally adjusted terms, the surplus widened to 26.6 billion euro in July from 26.1 billion euro revised higher to 27.8 billion euro.

09-17-2013, 01:31 PM
BOJ monitoring the Feds ending stimulus

The Bank of Japan, the pioneer of quantitative easing, needs years before cutting its extraordinary stimulus program, so it has the advantage of watching the U.S Federal Reserve Bank doing it first. Conditions in the world`s largest economy improved, so expectations say the Fed will cut the bonds buying stimulus program by $10 billion.

Moreover, the BOJ needs to push inflation towards the targeted 2 percent from the current less than 1 percent, in order to end years of deflation. It is said that BOJ started discussions about exiting stimulus measures; and policymakers are willing to learn from the U.S as much as they can.

It is expected that BOJ exit strategy will start through slowing its 7 trillion yen-per month ($70 billion) bond purchases program to minimize the impact on markets and then the bond purchase will stop at some point. The next step will be raising interest rate from 0.1% along with higher inflation.

09-17-2013, 01:35 PM
UK CPI inflation misses forecasts in August, , RPI rises

UK Consumer Price Index (CPI) rose in August to 0.4 percent from 0.0 percent a month ago, missing estimates of 0.5 percent, while annual CPI declined to 2.7 percent as expected. CPI Core remained unchanged at 2.0 percent.

A separate report showed that UK Retail Price Index (RPI) rose to 0.5 percent from 0.0 percent, beating expectations of 0.4 percent. Annual RPI gained to 3.3 percent from 3.1 percent, beating expectations for 3.2 percent.

RPI excluding Mortgage interest payment rose to an annual rate of 3.3 percent from 3.2 percent, beating expectations of 3.2 percent.

09-17-2013, 01:37 PM
UK PPI inflation falls in August

The Office for National Statistics reported on Tuesday UK producer price index (PPI) dropped 0.2 percent in August from a revised 1.2 percent originally reported at 1.1, missing median estimates for 0.2 percent.

Annual PPI input fell to 2.8 percent in the year ended August from a revised 5.1 percent originally reported at 5.0 percent a year ago, trailing analysts estimates of 3.0 percent.

IK PPI output declined to 0.1 percent in August from 0.2 percent in July, missing estimates of a no change 0.2 percent. Annual PPI output for the year ending August fell to 1.6 percent from 2.1 percent, missing calls for 1.8 percent.

Core PPI output was flat at 0.0 percent, while annual core PPI output fell to 1.0 percent from the previous and expected 1.1 percent.

09-24-2013, 01:23 PM
Dollar remains weak after Dudley comments

So far throughout the US session the green Benjamin remains weak as its appeal was corroded today after that New York Federal Reserve President William Dudley said the U.S. economic recovery is still not solid enough for a scale-back on the central bank’s stimulus program.
Not forgetting that last week’s FOMC meeting showed that the Federal Reserve revealed unexpectedly that it decided to refrain from cutting monetary stimulus.
In fact the Federal Open Market Committee (FOMC) agreed to keep its benchmark interest rate unchanged at a record low between 0.0% and 0.25%, and refrained from the highly expected tapering for its quantitative easing program.

09-24-2013, 01:25 PM
British BBA loans for house purchase drops in August

The British Bankers` Association (BBA) released Augusts’ Loans for House Purchase report on Tuesday, where the headline index fell to 32228 last month, from a revised 37248 originally reported 37200 in July, missing analysts median estimate of 38950.

09-24-2013, 01:31 PM
German IFO business climate index falls in September

The sentiment among businesses in Germany decelerated in September, the IFO Institute said on Tuesday.

- IFO business Climate gauge rose to 107.7 from 107.5, below forecasts of 108.0.
- IFO current Assessment fell to 111.4 from 112.0, missing forecast of 112.5.
- IFO expectations rose to 104.2 from 103.3, above the

09-24-2013, 01:32 PM
Draghi hints at another round of LTRO if needed

European Central Bank President Mario Draghi opened the door Monday for another round of cheap loans to banks if needed to keep short-term borrowing rates low and support the bloc`s fragile recovery.

Speaking at the European Parliament, Draghi said the ECB is ready to offer another round long-term refinancing operation (LTRO) as an option to push down money market interest rates only if needed.

The LTRO program provided struggling banks that had trouble borrowing money through traditional interbank funding markets with access to cheap funds.

The previous two LTROs, issued in 2011-2012, helped push lower interest rates, ease Europe`s debt crisis, and reduce fears that banks might collapse and bring down the public finances of weak states like Spain or Italy by giving banks almost €1 trillion in three-year loans.

Also, Draghi welcomed that banks are now increasingly paying back these LTRO loans ahead of schedule, yet warned that might also result in higher market rates. Draghi added the ECB is watching the impact of having interest rates very low for a long time.

09-24-2013, 03:32 PM
Gold inches up, uncertainty over Fed stimulus remains predominant

Precious-Gold inched up on Tuesday trading, following its over the previous three sessions, on expected demand on bullions ahead of the Golden Week break in the world’s second-biggest consumer.

Gold is currently trading around $1322.95 an ounce after hitting a high of $1328.99 and a low of $1321.13, where the key support remain at $1300.

The Golden weak break in China due on October 1 is expected to bring some demand from consumer before its beginning, yet the metal remains under pressure after announcements from Fed members regarding stimulus.

New York Fed President William Dudley said on Monday that the Fed still could cut its non-standard measures later this year.

Last week, St Louis Federal Reserve President James Bullard said the Fed could begin to withdraw its monthly bond purchases in October if data showed progress.

Gold has dropped around 3.20 percent over the previous three sessions, after marking its longest losing streak since April when it plummeted for a fourth straight week last week.

The yellow metal remains under pressure amid uncertainty about the Fed’s economic stimulus program which helped the metal to climb to its all-time high in 2011 as it enhanced its appeal as an inflation hedge.

Still, there are hopes that further progress in coming U.S. figures would prompt policymakers to start withdrawing its monthly bond purchases.

Therefore, in the coming period the main focus will remain on U.S. data, most notably September’s non-farm payrolls that will provide an update about the status of the labor market. Later in the day, eyes will focus on U.S. housing report for July and consumer confidence data for September.

The dollar index, which tracks the dollar’s movements versus a basket of major currencies, advanced to 80.55 from the session’s opening of 80.19. Among other precious metals, sliver slipped to $21.60 from the session`s opening of $21.79, platinum edged down to $1422.75 from $1426.16, and palladium retreated to $711.85 from $713.90.

09-24-2013, 03:35 PM
Egypt court bans Muslim Brotherhood, confiscates assets

An Egyptian court banned on Monday the Muslim Brotherhood and its affiliates and ordered a seizure of the movement’s assets.

The Brotherhood’s all activities were banned, including the activities of any “organization derived from it”.

This would escalate a broad crackdown on the group less than three months since the military ousted Islamist President Mohamed Morsi.

Leadership of the Muslim Brotherhood and thousands of its supporters are already behind bars.

The Muslim Brotherhood lawyers said the decision was politically motivated and they will appeal it.

This ruling could cripple the Brotherhood’s extensive network of social service provision across the country.

Experts believe that this could also drive more Brotherhood members underground and it may encourage young Islamists to take up arms against the state.

The Egyptian court did not reveal the grounds for the ruling, yet there is a lawsuit accusing the Brotherhood of terrorism and “exploiting religion” for political purposes.

Under former President Hosni Mubarak the Muslim Brotherhood was banned, yet it was allowed to operate as a charity.

The Brotherhood, which has a million members, won parliamentary and presidential elections after Hosni Mubarak was overthrown in 2011.

09-26-2013, 03:56 PM
Pound slides after growth data, US GDP eyed

Pound slipped lower against the U.S. dollar on Thursday, after data showed that the UK economy expanded in line with expectations in the last quarter, while annual growth figure were downwardly revised.

The final data from the Office for National Statistics showed today UK economy expanded 0.7 percent sequentially in the second quarter as estimated in August. The GDP expanded 1.3 percent in the second quarter from a year ago, which was revised down from the previously estimated 1.5 percent.

The pound is currently trading lower against the dollar at 1.60495. The GBPUSD pair has so far recorded a session high of 1.60949, and a low of 1.60348.

The yen dropped for the first time in five days against the dollar amid speculation the Japanese government will consider a corporate tax cut, and ahead of Prime Minister Shinzo Abe’s stimulus package announcement on October.

Yen declined against the dollar after Kyodo News reported, said that Prime Minister Shinzo Abe’s government will probably raise the country’s sales tax at the same time as he announces economic stimulus package due on October 1 st , ruling Liberal Democratic Party tax panel Chief Takeshi Noda told reporters today.

The yen fell against the dollar with the USDJPY pair coming in at a high of ¥98.528 from a low of ¥98.264, after kick starting Tuesday’s session at ¥98.415.

Euro dropped on Thursday as investors awaited talks between Chancellor Angela Merkel’s victorious party bloc and possible coalition candidates after Finance Minister Wolfgang Schaeuble signaled that Merkel`s party may compromise on the tax raises demanded in order to form a coalition government with the defeated center-left Social Democrats (SPD).

On data front, Eurozone broad money supply growth accelerated in August, , the European Central Bank report showed today. Monetary aggregate M3 grew 2.3 percent from a year ago, in line with forecast, after rising 2.2 percent in July.

The EURUSD pair is currently trading at $1.34981, after starting the trading at $1.35253, while hitting a high of $1.35454 and a low of $1.35007.

Finally, investors will shift focus to the final reading of U.S. second quarter GDP due later in the day. The U.S. weekly jobless claims for the week ended Sep. 21 along with pending home sales for August are also set for release during the U.S. session.

Stronger-than-expected GDP data would likely fuel speculation that the Federal Reserve could announce a stimulus reduction before the year end.

The USDIX index is currently trading around 80.54 from the session’s opening of 80.46 after hitting a high of 80.61 and a low of 80.39.

09-26-2013, 04:01 PM
Italy retail sales fall in July

Italy’s statistics office said Thursday that Italy’s retail sales index for July dropped 0.3 percent from 0.2 percent drop in June, missing expectations of 0.1 percent decline.

Meanwhile, the annual retail sales index eased to 0.9 percent decline from a previous drop of 3.0. Analysts expected a drop of 2.8 percent.

09-26-2013, 04:02 PM
Eurozone annual M3 money supply advances in August

The European Central Bank said on Thursday the Eurozone three-month average M3 money supply for the month ended August dropped to 2.3 percent as expected, from 2.5 percent.

The annual M3 seasonally adjusted for August srose to 2.3 percent the year ended August from 2.2 percent a year ago.

10-21-2013, 03:26 PM
Yen fell versus US dollar on widened trade deficit in Japan

Japanese yen fell today against its counterpart American dollar after today’s trade deficit reading in Japan, where the nation’s trade balance recorded more-than-estimated deficit in September which pushed investors to avoid the yen.

Moreover, USD/JPY pair inclined to record its highest at 98.092 from low of 97.946, while the pair started today’s session at 97.947.

Meanwhile, American dollar advanced against the euro after the recent speculation that the Federal Reserve Bank will cut stimulus, where the EUR/USD pair fell to low of 1.36698 from high of 1.36803, as the pair started today’s session at 1.36803.

AUD/USD pair fell also to noticeable levels recorded low of 0.96415 after hitting its highest at 0.96626 today, as the pair started today’s session at 0.965693. NZD/USD pair also fell to low of 0.84737 from high of 0.84927.

10-21-2013, 03:28 PM
BOE to raise interest rate only when recovery is on a “secure footing,” Broadbent says

Bank of England MPC member Ben Broadbent said policymakers will hike interest rate if and only if recovery trajectory is moving on the right path, noting that inflation also should move in line with the bank’s forecast.

“We want to ensure that this recovery, which is only just beginning in a way, continues and is not choked off by a premature rise in interest rates,” Broadbent told Sky News on Sunday.

He added that a breach to one of the inflation knockouts stated in August is unlikely to occur, yet “it’s more likely that we would only consider raising interest rates once unemployment falls below 7 percent.”

Broadbent revealed that the main aim of the forward guidance is to ensure investors that the BOE will not raise borrowing cost on the short term, or, in other words, only when the recovery is on a “secure footing.”

Later in the week, an economic report may show that Britain expanded 0.8 percent in the quarter through September, following a robust 0.7 percent growth in the second quarter.

10-21-2013, 03:29 PM
Eurozone Government debt to GDP steadies in 2012

The Eurostate said Monday that Eurozone government debt to GDP ratio remained unchanged in 2012 at 90.6.

10-22-2013, 04:54 PM
UK public finances decline in September

UK public finances recorded a deficit of 0.6 billion pounds in September compared with Augusts’ revised deficit of 2.7 billion pounds, beating analysts` median forecasts of 8.2 billion pounds surplus.

Public sector net borrowing (PSNB) excluding interventions recorded surplus of 11.1 billion pounds last month, up from a revised surplus of 12.5 billion. Analysts called for an average surplus of 11.3 billion.

PSNB recorded a surplus of 9.4 billion pounds, from a revised 10.8 billion in August, beating forecast of 10.0 billion.

11-11-2013, 06:57 PM
Italy industrial production rises in September

Italy’s industrial production rose 0.2 percent in September as expected, compared with 0.3 percent decline in the previous month, revised later to 0.2 percent drop.

On the annual basis for the year-ended September, the sector’s widened 0.1 percent, from a 7.6 percent contraction in August.

11-14-2013, 06:50 PM
Lower Nonfarm Productivity

The US third quarter preliminary reading of its nonfarm productivity came in worse than the projected market reading of 2.2% at 1.9% from a prior revised reading of 1.8% from 2.3% while that the preliminary reading of the Unit Labor Costs for the same period fell gloomily to -0.6%; below the prior revised reading of 0.5% from 0.0% and the predicted reading of -0.1%.

11-14-2013, 06:51 PM
Higher than projected jobless claims

Unfortunately the initial jobless claims for November 09 came in higher at 339 thousand; above the projected reading of 330 thousand from a prior revised reading of 341 thousand from 336 thousand while that the continuing claims for November 02 came in higher than the forecasted reading of 2870 thousand at 2874 thousand from a prior revised reading of 2874 thousand from 2868 thousand.

11-14-2013, 06:52 PM
U.S worse trade deficit

US’s trade deficit expanded in September to -41.8 B from a prior revised reading of -38.7 B from -38.8 Billion; worse than the projected deficit of -39.0 Billion

11-14-2013, 06:53 PM
Canada better trade deficit

Canada’s trade deficit narrowed in September to -0.44 B from a prior revised reading of -1.09 B from -1.31 Billion; better than the projected deficit of -1.00 Billion

11-14-2013, 06:56 PM
Eurozone Q2 GDP expands 0.1%, annual GDP contracts 0.4%

Euro area expanded in the third quarter at 0.1 percent rate as expected, well below the 0.3 percent gain in the second quarter, the Eurostate said on Thursday.

On year, the euro area economy shrank at a faster pace than expected to an annual rate of 0.4 percent, from 0.5 percent contraction revised to 0.6 percent contraction in the year ended second quarter. Analysts called for 0.3%

11-14-2013, 06:57 PM
UK retail sales decline in October

The United Kingdom’s retail sales decelerated in October, falling 0.6 percent after 0.7 percent gain revised higher to 0.8 percent a month ago, missing analyst’s forecasts of 0.1 percent decline.

Annual retail sales without auto fuel for the month of October showed 2.3 percent growth, compared to prior 2.8 percent revised lower to 2.5 percent, missing forecasts for 3.3 percent.

The reading including auto fuel declined 0.7 percent from 0.6 percent, while annual reading fell to 1.8 percent from a previous revised 2.0 percent originally reported at 2.2 percent, missing 3.1 percent estimated.

11-14-2013, 06:58 PM
Italy economy contracts by 1.9 percent in the third quarter

Italy’s economy contracted by 0.1 percent in the third quarter, in line with estimates, and a slightly better than the 0.3 percent recorded in the second quarter, preliminary data showed Thursday.

On an annual basis, the Italian economy contracted by 1.9 percent in the year through the third quarter, also in line with the median estimated, after a contraction of 2.2 percent recorded in the prior year-through-second quarter.

11-14-2013, 07:00 PM
Swiss import and producer prices decline in October

Switzerland`s producer and import prices rose to 0.2 percent in October, figures from the Federal Statistics Office showed on Thursday.

The prices of domestically-produced and imported goods dropped 0.4 percent last month from 0.1 percent in September, while analysts had seen a drop of 0.2 percent.

From a year earlier, prices fell to -0.2 percent compared with 0.0 percent in the year ended September, while analysts called for -0.2 percent.

11-14-2013, 07:00 PM
France CPI inflation rises in October

The National Statistics Office of France reported on Thursday a rise in inflation levels in October as the overall Consumer Price Index (CPI) fell 0.1 percent from a drop of 0.2 percent, in line with analysts’ expectations. From a year earlier, inflation fell to 0.7 percent as expected from 1.0 percent.

In EU-harmonized terms the index also eased to 0.1 percent decline as expected in October from a drop of 0.2 percent in September. On the yearly basis, CPI EU-Harmonized fell to 0.6 percent, lower compared with 0.9 percent in the year ended September.

11-20-2013, 05:05 PM
BoE minutes show unanimous vote on policy

Minutes from the Bank of England`s Nov. 6-7 policy meeting showed a unanimous vote to holding both interest rate and stimulus.

BOE governor Mark Carney and the other eight MPC members voted to keep both interest rate at its current low level of 0.50% and amount of asset purchases at 375 billion pounds as the economy shows strengthening recovery and inflation hovers near the BOE’s upper limit.

The pound reversed its early gains against its U.S. counterpart following the release of the minutes, where the GBPUSD traded around 1.6122 down from the opening mark at 1.6134. The day`s range is so far between 1.3104 and 1.6153.

11-20-2013, 05:06 PM
German coalition talks stumble, minimum wage to secure coalition

After more than three weeks of negotiations on policy details, German coalition talks entered the "hot phase" this week. The deadlock must be resolved in a final session on November 26 for the chancellor Angela Merkel to have a new government by Christmas.

Angela Merkel`s conservatives and Germany`s Social Democrats have resumed political talks, but as the big day approaches, they have to work hard on their deadlocked on labor issues, including setting a national minimum wage.

More than eight weeks after Merkel`s Christian Democrats (CDU) and Bavarian allies were announced as the clear winners in September`s election, taking 41.5 percent of the vote. However, Merkel’s liberal partners in government lost all their seats, so the center-right still needs to form a coalition with the humiliated center-left.

The SPD had its second-worst result of the post-war era, appealing to just 25.7 percent of voters.

Both sides are making big concessions, yet the two parties collided over a nationwide minimum wage. Merkel has signaled a readiness to accept the minimum wage while the SPD has said a failure to get this would be a deal-breaker.

The SPD have dropped one of their main election positions, higher taxes on the rich, but fought for a blanket minimum legal wage of 8.50 euro an hour. Merkel said she would prefer to have wage floors established sector by sector, by employers and workers rather than the government.

11-20-2013, 05:06 PM
All Industry Activity in Japan

Japanese All Industry Activity index came at 0.4% in September, from a previous reading of 0.3% a month earlier, while analysts’ estimates were 0.4%

11-20-2013, 05:07 PM
PBOC will end the Yuan’s intervention

The People’s Bank of China governor, Zhou Xiaochuan, noted that the bank will basically end normal intervention in the currencies market and broaden its Yuan’s daily trading limit.

Moreover, this step came amid the recent working reforms plan in the world’s second largest economy and to boost investments capitals for both domestic and foreign investors, where China currently seeks to enhance the Yuan’s two-way flexibility.

11-22-2013, 01:50 PM
Goldman Sachs boost China and India’s growth

Goldman Sachs rates China’s real GDP growth for 2014 to 7.8% from previous forecasts of 7.7%, while India’s growth forecast rose to 5.5% from 5.4% for the fiscal year 2015.

At the same time, Thailand’s growth estimates decline to 4.2% from 4.3%, while South Korea’s GDP estimates kept at 3.7%

11-22-2013, 01:50 PM
Kuroda’s speech on Japanese parliament

The Bank of Japan Governor Kuroda spoke on Japanese Parliament and affirmed that government is seeking for quick measures to support the world’s third largest economy’s growth.

Moreover, Kuroda added that he will not seek for further monetary easing at the current stage, where he expects higher wages during the upcoming period.

11-22-2013, 01:52 PM
German Business Confidence Increases as Recovery on TrackGerman business confidence rose in November, signaling that the economic recovery in Europe’s largest economy remains on track even after growth slowed in the third quarter. The Ifo institute’s business climate index, based on a survey of 7,000 executives, increased to 109.3 from 107.4 in October. Economists forecast a gain to 107.7, according to the median of 43 estimates in a Bloomberg News survey. The Bundesbank said this week that the German economy remains on a “solid growth path.”

RBNZ Assistant Governor Dr John McDermott: Says NZD is overvalued
policies to encourage private sector savings, and to increase flexibility in the economy are the way to sustainably lower New Zealand’s real interest rates and take pressure off the exchange rate says “Would like to see a lower exchange rate” Says high terms of trade is aiding NZD strength High exchnage rate causes economic imbalances RBNZ Assistant Governor Dr John McDermott speaking in Wellington, about influences on the exchange rate.

11-26-2013, 10:13 AM
Corporate Service Price in Japan

Japanese Corporate Service Price rose during the month of October to 0.8%, from a previous reading of 0.7% a year earlier.

Moreover, The Corporate Service Price Index (CSPI) released by the Bank of Japan measures the prices of services traded among companies.

11-26-2013, 10:14 AM
BOJ members expects 2% inflation in second half of projection period

The Bank of Japan’s board members sees during their policy meeting on Oct.31 st that targeted 2% inflation is likely to be noticed during the latter half of the projection period.

Moreover, most of board members sees that previous risks and threats to Japanese economy began to ease, where the previous global instability and foggy outlook hindered Abe’s 2% inflation timeframe.

Furthermore, member Sayuri Shirai added that more attention should be paid to the downside risks that may face the bank during its reports, where he sees a high degree of uncertainty towards global overseas economies.

While other members added that the Bank of Japan should seek for quantitative and qualitative monetary easing as intensive measures with a time frame of about two years.

11-26-2013, 10:15 AM
China’s Money rate drops for third day

China’s benchmark money rate dropped for the third day as the People’s Bank of China pumped cash into the nation’s financial system.

Moreover, the People’s Bank of China added 32 billion yuan ($5.3 billion) into the nation’s financial system by issuing seven-day reverse-repurchase agreements at 4.1%, compared with a similar injection of 35 billion yuan through the same operation last week.

The net injected funds of 59 billion yuan last week considered the most since early September. The seven-day repurchase rate dropped by 18 basis points or to 4.67% in Shanghai.

12-24-2013, 08:25 PM
US durable goods orders jump in November, Autos orders jump 3.3%

Durable goods orders in the U.S. climbed more than expected in November on broad based gains after a surprising drop the month before.

Bookings for durable goods that are expected live at least three years, rose 3.5 percent from a revised drop of 0.7 percent in October, the Commerce Department in Washington said on Wednesday. Analysts had expected a 2.0 percent rise.

Orders excluding transportation equipment rose 1.2 percent after a 0.7 percent rise in October.

Non-defense capital goods orders excluding aircraft jumped by 4.5 percent.

Demand for automobiles also paid in a good contribution, with orders climbing 3.3 percent, the biggest rise since February.

Auto sales jumped to 16.3 million annualized pace in November, the highest level since May 2007, according to data from Ward’s Automotive Group.

Demand on commercial aircraft soared by 21.8 percent last month after dropping by 15.9 percent the prior month.

12-24-2013, 08:53 PM
Better than projected U.S New Home Sales

Today another report reveals better than projected data but this time from the housing sector to once again add to signs that the U.S economy is strengthening and accordingly justify further last week’s Fed decision of cutting back on its asset purchases program.

In fact the US Department of Commerce`s Census Bureau showed us today that the nation’s new home sales for the month of November came in at 464 thousand; above the projected reading of 440 thousand yet below the prior revised reading of 474 thousand or 17.6% from 444 thousand or 25.4%.

Keeping in mind that last June the new home sales surged to the highest in 5 years; rose to 497,000 annual rate in June, compared with a revised 459,000 in May, from 476,000 while analysts had expected a rise to 484,000.

While that earlier the day durable goods orders in the U.S. climbed more than expected in November on broad based gains after a surprising drop the month before.

02-05-2014, 05:37 PM
European shares rise amid worries, ADP employment eyed

European shares surged on Wednesday mid-day trading after a report showing a widening expansion in Europe’s key sectors in January.

A composite of manufacturing and services climbed to 52.9 in January from 52.1 the previous month in the euro area, adding to signs recovery is gaining traction.

However, there are still some worries from Emerging markets capital outfight and slowdown in U.S. growth.

Eyes will focus on ADP employment which may the private sector added 190,000 jobs in January after adding 238,000 in December.

The figures will be watched carefully as they mainly give an indication about the jobs report due on Friday.

Another report due on Wednesday may signal that U.S. services sector expanded at a faster pace last month.

Regarding earnings by companies, results released so far are considered mixed and therefore has failed to give clear indications to investors.

As of 07:11 EST, STOXX EUROPE 600 soared 0.32% to record 318.60 points. Health Care led the advance with a rise of 1.08%, followed by Consumer Services which recorded 0.46% rise.

The highest shares were for Vestas Wind Syst, as it advanced 6.23% to 180.70 DKK, while the biggest drop was recorded by Hargreaves Lands as its shares plummeted 6.41% to 1401.00 pounds.

Looking at other the major European indices, the French CAC index rose 0.23% to 4126.72 levels and Britain`s FTSE 100 index recorded 0.31% rise to 6467.18 points. Germany`s DAX index inched down 0.05% to 9123.41 points.

02-05-2014, 05:38 PM
Eurozone retail sales fall sharply in December

Euro-area retail sales dropped 1.6 percent in December, down from November’s revised 0.9 percent originally reported at 1.4 percent, beating 0.4 percent decline expected.

Year-on-year, sales slumped 1.0 percent in December, from a revised 1.3 percent, trailing median forecast for 1.5 percent gain.

02-05-2014, 05:39 PM
UK PMI services decelerates in January

UK PMI Services deccelerated in January to 58.3, down compared with a preior reading of 58.8 in December, missing 59.0 expected by analysts.

02-08-2014, 09:52 AM
U.S Employment Rose by Only 113k in January | Gold & Silver Bounce Back
According to the recent Bureau of Labor Statistics monthly report, total U.S. employment didn’t rise as many had anticipated: Based on the ADP (http://www.adpemploymentreport.com/) update, private non-farm payroll rose by 175k during January: The recent U.S. employment report (http://www.bls.gov/news.release/empsit.nr0.htm), which was published today, February 7th, the total number of non-farm employees increased by only 113,000. The main sectors that grew during January were in construction, manufacturing, wholesale trade, and mining. The rate of unemployment, however, slipped again to 6.6%. The growth in employment was inline with the natural growth of workforce. Despite the slight fall in unemployment, the markets reaction to the low employment numbers was enough to pull up the prices of gold and silver. Other commodities prices and the major stock markets also rally.

The chart below shows the revised figures of the added number of non-farm employees in the labor market in recent years (up to January 2014). The non-farm payroll was little changed up for December from +74k to +75k. For November, the employment was revised up from +241k to +274k. The combined added jobs in those months were 349k – roughly 34k more jobs than previously estimated. The revised figures for November and December suggest the employment situation in the U.S was close to the numbers previously estimated.

As I have showed in the past, the minimum number of non-farm payroll employment needed to maintain the employment unchanged (to compensate with the growth of the U.S. civilian work force) – is roughly more than 100k. So the recent increase in number of jobs was close to this threshold.

http://pcm-fx.com/pcmupload/uploads/1391838652841.jpg (http://pcm-fx.com/pcmupload/)

In January, the rate of U.S. unemployment inched down to 6.6%. The rate of unemployment is at its lowest since mid-2008. The current unemployment rate is 1.3 percent points lower than its rate in January 2012.

Further, the number of unemployed persons (10.2 million) slipped in January compared to the previous month. A closer look reveals that the number of unemployment dropped (http://www.bls.gov/news.release/empsit.a.htm) by 115k, while the civilian labor force rose by 523k. This could suggest that the drop in unemployment was despite the higher number of people participating in the labor force. After all, the participation rate inched up to 63%.

Following this news, the USD/Yen exchange rate slightly rises; crude oil price also increasing; the U.S stock market indexes are also recovering; gold and silver prices are currently trading slightly up.

As I have already stated in the last gold and silver monthly outlook, historically, if the non-farm payrolls rise by less than the population growth rate (roughly 100k), gold and silver prices tended to rise. Moreover, if the number of employees rise by less than expected, this could also pull up the prices of gold and silver.

The table below presents the correlation between the news of the U.S. non-farm payroll employment changes and the daily shifts in gold and silver priceson the day of the U.S. labor report publication.

http://pcm-fx.com/pcmupload/uploads/1391838652912.jpg (http://pcm-fx.com/pcmupload/)

04-10-2014, 12:29 PM
Dollar weakens after the Fed’s minutes

The green Benjamin plummeted o the weakest level in more than five months versus a basket of peers after that the revealed minutes meeting showed that several Federal Reserve policy makers said projections for an interest-rate rise were overstated in minutes from its last meeting.

If truth be told many Federal Reserve policy makers said the Committee’s forecasts for the likely timing of interest rate hike exaggerated things in the markets, and made an effort to stress that rates would remain very low for some time.

“A number" of Fed policymakers voiced concern that the rise in the interest rate forecast "could be misconstrued as indicating" an earlier increase in rates. Several said the increase "overstated the shift in the projections."

As a result the euro is rising to the upside on the four and daily charts sending in fact the EUR/USD pair to trade up around $1.3852 while recording the highest level of $1.3858 and lowest level of $1.3780, yet the pair may continue to rise to the upside according to the four-hour momentum indicators.

As for the British Pound, it is climbing up to the upside strongly leading the GBP/USD pair to trade around $1.6794 while recording the highest level of $1.6780 and lowest of $1.6724 and is most probably going to start to fall as witnessed at several time scale within the stochastic oscialltor.

Finally, the USD/JPY pair is actually consolidating at different time charts to trade around ¥101.96 while recording the highest level of ¥102.16 and lowest levels of ¥101.72.

04-10-2014, 12:36 PM
Yen takes the lead on BOJ decision, worries from Ukraine

The Japanese currency strengthened against majors on Tuesday after the BOJ refrained from announcing stimulus over the short term and on renewed tensions from Ukraine.

The BOJ did not refer to the option of using further money printing, while Governor Haruhiko Kuroda gave an upbeat tone about the health of the economy, stating that both and inflation growth would pick up in coming months.

On the other hand, renewed tensions from Ukraine sparked haven demand on the yen.

Worries reignited in Ukraine after the region of Donetsk have proclaimed their independence from Kiev and vowed to hold a referendum in the next month.

The United States accused Russia of planning to adopt another Crimea scenario, aiming to break Ukraine’s federation.

The USDJPY dipped for a third straight session to trade around 102.22 after hitting a low of 102.11 and a high of 103.10.

Investors remained short on the dollar after the U.S. jobs report released last week failed to give confirmation whether the Fed would continue with the same pace of stimulus reduction.

The nonfarm payrolls signaled U.S. employers added 192,000 jobs last month, lower than analysts’ predictions of 200,000 job gain.

Eyes will focus tomorrow on minutes for March 18-19 FOMC meeting, which included cutting monthly bond purchases by another $10 billion to a total of $55 billion.

The dollar index, which tracks the green currency’s movements versus a basket of major currencies, fell for a third session to hit a bottom of 79.90 from the session’ peak of 80.35.

The euro rebounded for the first time in four sessions after policymaker Ewald Nowotny said yesterday there is no need for immediate ECB action.

The EURUSD climbed to hover around 1.3794 after resting upon the session’s support of 1.3736.

By the same manner, the British pound aggressively rose against the U.S. dollar after a report showing U.K. manufacturing and industrial production soared more than forecasts in February, ahead of this week’s BOE monetary decision.

The GBPUSD is currently trading around 1.6735 after touching a high of 1.6741 and a low of 1.6602.

04-10-2014, 01:18 PM
Back to the start line
The dollar has now completed a full reversal of the gains seen mid-March to early April, with the market’s interpretation of messages from the US Federal Reserve accounting for most of the climb higher and subsequent reversal. Recall that it was Yellen’s comments in the wake of the March meeting that caused the initial move higher, as she pointedly suggested rate hikes could come 6 months after the end of tapering. Perhaps not surprisingly, last night’s minutes were not as clear, which saw the dollar weaken, back to levels that were prevailing just ahead of the March meeting. The minutes stated that the rate forecasts published “could be misconstrued as indicating a move… to a less accommodative reaction function”. Interest rate futures jumped 10bp on the back of the minutes (reflecting lower rate expectations), with pricing for rates at the end of 2015 moving back to pre-Fed meeting levels. All in all, this episode has shown just how much influence one comment can have on markets.

The Aussie again catches the attention overnight, up above 0.9400 once again on the latest labour market data, which showed headline employment rising 18k and the rate falling to 5.8% (previous was 6.1%). So once again we are at new highs for the year and there is now the possibility that the RBA could be hiking rates before the year is out. For today, there will be one eye on sterling given the Bank of England rate decision, but the chances of anything significant are pretty low to say the least. Sterling has held onto the gains seen in the wake of the production numbers earlier in the week, cable just below 1.68 at the European open.

04-10-2014, 01:21 PM
French CPI falls below expectations – could impact ECB
France reported a monthly price rise of 0.5% in March, lower than 0.6% expected. Year over year, the rise is only 0.6%, significantly lower than 0.8% predicted and 1.1% seen in February. Excluding tobacco consumption, prices rose 0.5%, the same as in February.

EUR/USD is still trading on high ground after the break of the second downtrend resistance line, at 1.3840, but is off the highs of 1.3870.

While the flash CPI estimate has the strongest impact for the ECB decision and for the euro, it is not the final read. France is the euro-zone’s (and Europe’s) second largest economy and a change in prices here has an impact on the final decision and is certainly watched by central bankers.

Also French industrial production disappointed with a rise of only 0.1% m/m, instead of 0.3% expected. More euro-zone countries are due to release their CPI numbers: Portugal and Ireland. Spain publishes these numbers tomorrow and Germany is due to release the final CPI numbers. The initial read from Germany fell short of expectations.

The ECB monthly bulletin and Italian industrial production are on the agenda. In the US, jobless claims will garner attention.

06-26-2014, 05:16 PM
Yellen’s inflation figure rises to 1.5%, jobless claims at 312K
This bulk of US news came out as expected: the Core PCE Price Index rises to 1.5% y/y and jobless claims at 312K. Month over month Core PCE Price Index rose by 0.2% and continuing claims stand at 2.571 million. Personal spending rose by 0.2%.

The Core PCE Price Index was expected to rise by 0.2% in May, just like in April (before revisions). More importantly, the y/y rise was predicted to edge up from 1.4% to 1.5% this time. This figure became important after Yellen put an emphasis on this and dismissed the rise in Core CPI as “noisy”. Weekly jobless claims carried expectations for standing at 310K after 312K last week (revised to 314K). This figure has been very stable of late. Continuing claims were expected to rise to 2.57 million.

Towards the publication, EUR/USD slid towards 1.3605, GBP/USD remained on high ground around 1.7020 and USD/JPY floated above 101.70. -The dollar is slightly stronger after the release, with EUR/USD slipping under 1.36.

More data: the non-core PCE Price Index rose from 1.6% to 1.8% this time. Personal spending is the only real disappointment, but it is not the most important figure.

Yesterday, the US revised Q1 GDP down to a contraction of 2.9%. This downfall is huge. While it was blamed for bad weather, the magnitude of the squeeze makes a 2% growth rate hard to achieve in 2014.

The figures released now are predicted to affirm the stance that the US economy rebounded in the second quarter. Earlier in the week, we had positive signs from home sales and from consumer confidence.

07-03-2014, 01:49 PM
Gold pushes below 3-month high before NFP, ECB policy

Gold fell back below a three-month high on Thursday before the release of key data on US employment situation and the outcome of the European Central Bank`s policy meeting.

The bullion sentiment has eased this morning, with the price falling to the lowest level in three days as traders awaited the a slew of key data, due to be released later in the day, including June jobs numbers from the world`s largest economy.

More, the ECB will meet today to set the benchmark interest rates for the first time since unveiling negative interest last month. As of 03:40 a.m. ET:
- Spot Gold fell 0.68% to $1,320.49 an ounce
- Spot Silver fell 1.14% to $21.01 an ounce

Gold prices jumped to a three-month high of $1,332.10 an ounce this week as tension in Iraq and Ukraine boosted the metal`s safe-haven appeal. Meanwhile, investors will be closely eyeing the ECB’s policy outcome to be announced later in the day for clues about further action to boost inflation.

At its last meeting, the ECB pushed the deposit rate to -0.1% for the first time in history, while lenders were offered fresh round of cash for as long as four years to keep them afloat and make them support and economic recovery by encouraging lending

-- in a bid to tackle low inflation and growth.

The ECB, unlikely to make any changes to its policy this month, will also announce the latest staff projections for the upcoming period. Last month, the ECB offered lenders a fresh round of cash for as long as four years to keep them afloat and make them support and economic recovery by encouraging lending.

The June employment report is due to be released one day earlier than normal with Independence Day coming on July 4th this year, which happens to be a Friday.

The consensus called for the following average forecast.
- Change in Nonfarm Payrolls (JUN) 214k vs. 217k
- Unemployment Rate (JUN) 6.3% vs. 6.3%

The economic front will surely offer some catalyst for the precious metals markets, while comments from the Federal Reserve officials on the timing of a potential rate hike will maintain pressure on the dollar against a six-currency basket. As of 11:21 GMT+3, the USDIX rose slightly to 80.02 compared with the day`s open at 79.96. The index hit a five-week low of 79.75 this week

07-03-2014, 01:52 PM
Oil falls as Libya government regains control of 2 oil terminals, NFP data eyed

Oil prices slipped in Asian trading Thursday, after news reports said Libya had reassumed control of the country`s two eastern oil terminals that handles almost 50 percent of the country`s shipments.

Late Wednesday, interim Libyan Prime Minister Abdullah al-Thani announced the end to the country`s oil crisis, saying the authorities had regained control of two oil terminals that had been blocked by rebels.

According to reports the government now controls the ports of Ras Lanuf and al-Sidra, which export about half of Libya`s oil.

- On the New York Mercantile Exchange, crude oil dropped 0.33% to trade at $ 104.13 barrel
- On the ICE Futures Exchange in London, Brent oil was at $ 110.74 a barrel, down by 0.45 Oil prices were also weighed down by stronger U.S. dollar, with the index ticking higher on some upbeat private jobs data from the U.S. A report from ADP showed private-sector hiring in the U.S.

to have picked up in June, with employers adding 281,000 jobs - the biggest monthly increase in employment since November of 2012. Investors will be looking to the U.S.

nonfarm payrolls report due today for further indications on the strength of the labor market. Government data showed a bigger-than-expected fall in U.S. oil supplies. Where report from the U.S. Energy Information Administration showed U.S. crude oil inventories to have dropped 3.2 million barrels in the week ended June 27.

- NYMEX Gasoline fell 0.28% 0.84 points to trade at $ 301.56
- NYMEX Heating Oil lost 0.42%, 1.25 points to trade at $ 293.36 - ICE Gasoline

dropped 0.90, 8.25 points to trade at $ 904.50 Losses might be capped as investors were also monitoring the developments in Ukraine and Iraq, where a solution to the ongoing crisis still remains elusive.

07-03-2014, 05:06 PM
Non-Farm Payrolls 288K in June, unemployment rate 6.1% – USD stronger
The US was expected to gain around 215K jobs in June after +217K in May (revised now to 224K). The unemployment rate was predicted to remain unchanged at 6.3%. Expectations might have actually been a bit higher after the strong ADP data. At the time of the release, the ECB president is holding his press conference, making EUR/USD trading very exciting.

Data (updated)

Non-Farm Payrolls: 288K (exp. +214K, May saw +217K)
Participation Rate: 62.8% (62.8% last month )
Unemployment Rate: 6.1% , (exp. 6.3%, May: 6.3% before revisions)
Revisions: +29K(-6K last month)
Private Sector NFP: +262K (ADP showed a gain of +281K jobs).

Real Unemployment Rate (U-6): 12.1% (previous: 12.2%).
Employment to population ratio: 59% (previous: 58.9%)
Average Hourly Earnings: 0.2%- (exp. +0.2%, May: 0.2%).
Average workweek: 34.5 (last month: 34.5).

07-03-2014, 05:07 PM
ECB leaves all rates unchanged as expected
After the huge monetary blitz the ECB introduced in June (including the historic negative deposit rate), there was a consensus that the European Central Bank will refrain from action today.

EUR/USD traded around 1.3650 towards the publication continuing the steady trade seen earlier in the day.

However, the lack of monetary policy change does not mean a lack of action: at 12:30 GMT ECB president Mario Draghi meets the press. And at the same time, the US releases the Non-Farm Payrolls, in a rare timing on Thursday.

07-11-2014, 04:45 PM
USD/CAD leaps on weak Canadian employment data
The Canadian economy lost 9.4K jobs in June and the unemployment rate in Canada rose to 7.1%. Canada was expected to report a gain of just over 20K jobs in June after 25.8K in May. The unemployment rate was expected to remain unchanged at 7%. This is clearly a disappointment on all accounts. The Bank of Canada certainly has room to leave rates at low levels.

USD/CAD traded around 1.0650 just before the publication, up from lower levels seen earlier in the day. USD/CAD is now above 1.0670– more coming.

Update: The C$ continues to tumble and the new high is 1.0690. 1.07 provides resistance. Further resistance awaits at 1.0750. Support is at 1.0620 followed by 1.0550.

The Canadian dollar enjoyed a surge in recent weeks – a move that began with the better than expected retail sales and inflation figures. Also the crisis in Iraq helped the loonie indirectly by boosting oil prices and also the improvement in the US is C$ dollar positive – more US demand for Canadian goods.

07-11-2014, 04:46 PM
This week in the markets: Euro falls as banking crisis rears its head in Portugal

It’s been a quiet week in FX markets – traders and investors seem to have summer holidays on their minds. Sterling slipped across the board on Tuesday, though, as the latest manufacturing production figure undershot expectations by some distance. With the sector to expand by 0.4%, compared to April, the release showed an unexpected fall of -1.3%.

The corresponding Manufacturing PMI released on 2nd June had shown a slight fall from 57.3 to 57.0, so this result was very much out of the blue, catching the markets off-guard. On the news, cable gapped from 1.7145 to 1.7085, its lowest level this month. The year-on-year growth, which was expected to be 3.2%, came out at just 2.3%, badly affected by the steepest drop in output since Jan 2013.

The news would have dented the hopes of those hoping for a 2014 interest rate rise – however, given the recent stream of positive UK data releases, the result was quickly forgotten and probably written off as an anomaly. GBP/USD quickly retraced the losses to get above the 1.71 level.

By Alex Edwards at UKForex, an international money transfer service

The FOMC meeting minutes on Wednesday evening failed to lift the dollar, despite some expectations in the run-up to the announcement for the Fed to strike a more hawkish tone. They said that they expected QE to end in October, but there was no talk of them lifting interest rates. The USD fell away again and GBP/USD remained well supported above 1.7100, heading in to the end of the week.

Later in the week, risk sentiment took a turn for the worse after share-trading in Espirito Santo, one of Portugal’s biggest banks, was suspended. Its share price fell by 17% because of “ongoing material difficulties” within the group. Moreover, the concerns over accounting irregularities at its parent company, which started last year, have deepened.

The sell-off dragged the Portuguese index lower and the risk-off nature of trading spread throughout European and US markets. The IBEX fell by 2.7% and the Cac and Dax fell by 1.8% respectively. The dollar firmed up on safe-haven demand as a result, but GBP/USD continued to find good support at the 1.71 figure, only falling to a low of 1.7106 on the news. As the euro dropped in line with European equity marketson Thursday, GBP/EUR made solid gains and traded to a high of 1.2602.

When it comes to data, things are set to get going a bit more next week, especially early in the week, with UK inflation data due for release on Tuesday and a speech by Bank of England Governor Carney 30 minutes later. UK employment data then falls due on Wednesday. On Monday, ECB President Draghi is speaking, and, in terms of data, the main event in Europe will be German ZEW. From the US, we have retail sales, producer price data and the Philly Fed Manufacturing Index, whilst Fed Chair Yellen is due to testify before the House Financial Services Committee. Markets will be hoping stronger signs of when the Fed intend to raise interest rates, although the chances are thin, given there was no mention of this in the FOMC minutes this week.

07-11-2014, 04:50 PM
Toxic geopolitical cocktail could rekindle gold rally
Gold appears to have bottomed out and could be the in the process of making a comeback, albeit a timid one, which could gather momentum due to the world’s increasingly unstable geopolitical environment.

There are a number of bullish factors for gold. The first is that the market has been steadily recovering from lows seen in June and December 2013. It has been doing this against a backdrop that should be negative for gold i.e. the winding down of the US Federal Reserve’s quantitative easing programme, which may be complete by October.

A second factor is that gold has largely dropped out of the headlines and is out of favour with many investors. For a market to be able to move higher, despite apathy, is often a positive sign.

But that’s not all.

Gold consolidates

http://myforexforums.com/upload/do.php?img=862 (http://myforexforums.com/upload/)
An environment made for gold

Geopolitically the world is looking increasingly unstable. Countries such as Russia, Iran and China are keen to fill any perceived power vacuum left by a US still scarred from the financial crisis and a series of very expensive overseas military adventures. Then there’s the Middle East where the ‘Arab spring’ seems to have degenerated into a perpetual cycle of violence and instability.

Add to that concerns over the potential negative impact on the world economy, the possibility of plunging stock markets and there is an emerging toxic cocktail in which gold can thrive. Some gold enthusiasts even expect the Fed to resume QE at some point due to a weakening US economy. If that did happen it would set the gold market on fire. But for now a resumption of QE seems unlikely.

Gold hit a low of around $1,180 troy/oz. in June 2013 and a slightly higher low in December 2013 after falling from all-time highs of around $1,921 in September 2011. This appeared to be the end of a 12-year rally, but in the context of that time frame the market is still bullish.

Since June 2013 the market has been in a consolidation pattern, so at the very least has stopped falling and may even be starting to work its way higher. Key resistance levels to look out for include $1,392 and it would need to clear $1,435 to break out of the current consolidation pattern.

Among the key long-term Fibonacci numbers are the 38.2% retracement level at $1,463 and the 50% at $1,550, which could prove very influential for the gold market if they are breached.

Nonetheless, traders should be aware that the gold market could easily remain in its consolidation pattern for another 6 to 12 months.

07-11-2014, 04:51 PM
Impassive effects
The remarkable thing about yesterday and also this week is just how little the single currency has reacted to a 4% correction in European stocks (Eurostoxx 50 index) over the past 5 sessions. The single currency is unchanged over this period and has held within a 60 pip range. Yesterday, there were echoes of days gone by, with concerns over the stability of the Portuguese Bank Espirito Santo. Trading in their shares was suspended after a 17% decline. Still, given the pervasive low levels of volatility in many asset classes, this is perhaps the reminder than is needed to illustrate that risk still exists in many different forms. Bond yields were higher, with the Italian 10Y now at 5 week highs just below 3%. An orderly correction in these markets should largely be welcomed, together with a reconsideration of risk across all markets.

At least in equities, there is a seasonal pattern over the past 5 years towards greater volatility during the latter half of July and August (VIX). This is less so for FX, although 2011 stands as the main exception to this. Ultimately, what is going to bring back volatility to FX will be changes in monetary policy and better still, changes in interest rates. We’ve seen the expectation of a move this year increase for the UK and also the debate surrounding the first hike in the US continue to become more vocal.

For today, eyes will remain on developments in Portugal and further potential comments from officials. On the majors, the CAD stands out, USDCAD just above the lows of the year at 1.0621, with labour market data released today. Stronger numbers could well push USDCAD through this level, but the momentum of recent weeks suggests that such a move could struggle to be sustained.

07-14-2014, 05:03 PM
Has Silver Reached A Brick Wall?
The price of silver resumed its upward trend as it reached its highest level since mid-March 2014. This week Janet Yellen will testify in Congress. This testimony could impact the price of silver.

During the previous week, silver rose by 1.5%. Moreover, other silver related stocks including iShares Silver Trust (SLV), Silver Wheaton (SLW) and Pan American Silver (PAAS) also pulled up last week. These companies’ stocks increased by1.3%, 2.6% and 1.2%, respectively.

Yellen and Silver

The minutes of the FOMC meeting, which were released last week, may have contributed to the recovery of silver. The dovish tone in the minutes may have been enough to bring back the demand for silver. After all, the prevailing low cash rates keep silver from tumbling down. Moreover, if the Federal Reserve leaves its cash rate for a longer than expected period of time, this could further pull up the price of silver.

07-15-2014, 05:46 PM
Dollar holds firm before Yellen testimony, up versus yen

The U.S. dollar was steady against most major currencies on Monday but rose against the Japanese yen as investors looked forward to the congressional testimony by Federal Reserve Chairman Janet Yellen on monetary policy.

The U.S. dollar was up 0.22% against the yen at 101.544 yen.

The U.S. dollar index, which tracks the value of the U.S. dollar against a basket of major currencies was unchanged at 80.21. 10-year Treasury yields inched up 2.9 basis points to 2.545% to give the dollar a little support, along with the rise in stock markets.

The yen tends to retreat against the dollar when the yield on the 10-year note rises, which could be considering the turns in investor appetite for risk.

U.S. Treasury yields have mostly declined in recent weeks and Fed Funds futures show investors are pushing back policy tightening expectations following Fed minutes released last week that suggested the central bank was in no rush to hike rates.

The moves occurred ahead of a meeting of the Bank of Japan policy board early Tuesday. The central bank is expected to leave interest rates unchanged, but a degree of uncertainty remained, concerning how the BOJ characterizes the health of the world`s number-three economy going forward.

n addition, Federal Reserve Chairwoman Janet Yellen begins the first of two days of testimony before Congress that will focus on monetary policy. Investors will sift through her message for any indications that the central bank is considering its first increase in interest rates.

So investors will have to wait and see what Yellen says during congressional appearances set for Tuesday and Wednesday, particularly since U.S. data in the second quarter has signaled a strengthening economy.

Meanwhile, the Australian dollar stabilized, having fallen late on Friday as the country`s central bank chief again said the currency was too strong.

The euro, which has been trading steadily against the dollar at around $1.36, was nearly unchanged at $1.3611 after European Central Bank President Mario Draghi cautioned lawmakers that a strong euro could drag on a euro zone economic recovery.

The Australian dollar last traded at $0.93944, after giving fell as low as $0.93731.

Traders said a slew of Chinese economic data on Wednesday could have a weight on the Australian dollar, given the Asian powerhouse is Australia`s largest trading partner.

07-15-2014, 05:52 PM
RBA Monetary Policy Meeting Minutes
Members opened their discussion of the world economy by noting that the available data for the June quarter had been consistent with Australia's major trading partners continuing to grow at around the average pace of the past decade. In China, indicators of economic growth had generally been holding steady of late, although growth overall still appeared to have been somewhat slower than in the previous year. Over recent months, growth of retail sales and industrial production had been steady while the more timely PMIs had picked up. Growth in real estate investment had declined recently, consistent with softer conditions in the property ...(full story (http://www.rba.gov.au/monetary-policy/rba-board-minutes/2014/01072014.html))

07-15-2014, 05:52 PM
BOJ Statement on Monetary Policy
At the Monetary Policy Meeting held today, the Policy Board of the Bank of Japan decided, by a unanimous vote, to set the following guideline for money market operations for the intermeeting period: The Bank of Japan will conduct money market operations so that the monetary base will increase at an annual pace of about 60-70 trillion yen. 2. With regard to the asset purchases, the Bank will continue with the following guidelines: a) The Bank will purchase Japanese government bonds (JGBs) so that their amount outstanding will increase at an annual pace of about 50 trillion yen, and the average remaining maturity of the Bank's JGB ... (full story (http://www.boj.or.jp/en/announcements/release_2014/k140715a.pdf))

07-15-2014, 05:53 PM
Australia Motor Vehicle Sales Increase In June
Australia's new motor vehicle sales growth accelerated in June, data from the Australian Bureau of Statistics showed Tuesday. New motor sales rose 1.7 percent month-on-month in June, which was faster than the 0.4 percent growth in May. Sales of all the categories of vehicles rose in June with sales of Passenger, Sports utility and Other vehicles increasing 1.3 percent, 0.2 percent and 4.8 percent, respectively. Among the territories, sales increased the most in the Northern Territory, by 17.7 percent in June. On a year-over-year basis, new motor sales fell 2.2 percent in June.

07-15-2014, 05:54 PM
China June Foreign Direct Investment +0.2% on Year at $14.42 Billion
China attracted $14.42 billion of foreign direct investment in June, up 0.2% from a year earlier, the Ministry of Commerce said in a statement Tuesday. The figure was up from May's $8.6 billion, which was 6.7% lower from a year earlier. FDI in the first six months rose 2.2% on year to $63.33 billion.

07-15-2014, 05:54 PM
BOJ’s Kuroda expects Japanese economy to continue exceeding its potential growth rate
BOJ’s Kuroda presser deets Who wants to guess the next 10 lines of repeated mantra ?! lol; pullback in demand after sales tax hike has been within expectation; virtuous cycle of economic activity continues to operate steadily; BOJ branch managers see that signs of pullback from sales tax hike is receding; CPI expected to move broadly in line with April forecasts; CPI likely to hit 2% target around middle of forecast period between fiscal 2014-15; Yep USDJPY still 101.57; Tankan shows that corp sentiment is buoyant despite sales tax hike; BOJ sees no need to change price forecast from before; ... (full story (http://www.forexlive.com/blog/2014/07/15/bojs-kuroda-expects-japanese-economy-to-continue-exceeding-its-potential-growth-rate/))

07-15-2014, 05:55 PM
UK Consumer Price Inflation, June 2014
•The Consumer Prices Index (CPI) grew by 1.9% in the year to June 2014, up from 1.5% in May.
•The largest contributions to the rise in the rate came from the clothing, food & non-alcoholic drinks and air transport sectors.
•CPIH grew by 1.8% in the year to June 2014, up from 1.4% in May. RPIJ grew by 2.0%, up from 1.7% in May.

07-15-2014, 05:56 PM
UK Producer Price Inflation, June 2014
•The annual rate of output producer price inflation remained low in June, while input prices continued to fall.
•The output price index for goods produced by UK manufacturers (factory gate prices) rose 0.2% in the year to June, compared with a rise of 0.5% in the year to May.
•Factory gate prices fell 0.2% between May and June, compared with a fall of 0.1% between April and May.
•Core factory gate prices, which exclude the more volatile food, beverages, tobacco & petroleum products, rose 1.0% in the year to June, unchanged from the year to May.
•The overall price of materials and fuels bought by UK manufacturers for processing ... (full story (http://www.ons.gov.uk/ons/rel/ppi2/producer-price-index/june-2014/stb-producer-price-inflation--june-2014.html))

07-15-2014, 05:56 PM
BOE Governor Carney - Financial Stability Report Hearings

07-15-2014, 05:57 PM
German ZEW Sentiment - Downward Trend Continues
The ZEW Indicator of Economic Sentiment for Germany decreased once more in July 2014. The indicator has lost 2.7 points and now stands at 27.1 points (long-term average: 24.7 points). The indicator has declined for the seventh consecutive time. "Germany has experienced a slight dent in economic activity recently – retail sales declined and industrial production as well as incoming orders dropped. The current decrease of the ZEW Indicator of Economic Sentiment reflects this sobering development. On a general note, however, the medium-term economic outlook remains favourable”, says ZEW President Professor Clemens Fuest. The ... (full story (http://www.zew.de/en/press/2685/zew-indicator-of-economic-sentiment---downward-trend-continues))

07-15-2014, 05:57 PM
Retail Sales in U.S. Showed Broad-Based Increase in June
Retail sales showed a broad-based gain in June, which probably helped the U.S. economy rebound in the second quarter. Purchases (RSTAMOM) increased 0.2 percent after a 0.5 percent advance in May that was larger than previously reported, Commerce Department figures showed today in Washington. The reading fell short of the 0.6 percent increase projected by the median estimate of 83 economists surveyed by Bloomberg, restrained by a drop among auto dealers. Demand climbed in nine of 13 major categories last month. Consumers are more comfortable opening their wallets as a strengthening labor market lifts earnings. Higher wages give American ... (full story (http://www.bloomberg.com/news/2014-07-15/retail-sales-in-u-s-showed-broad-based-increase-in-june.html))

07-23-2014, 06:02 PM
Winning the economic marathon: Carney
It is a pleasure to be in Glasgow for the opening of the 20th Commonwealth Games. For the athletes, the games represent the culmination of years of training. For fans they are a chance to witness great sporting achievements. I remember attending the 1978 games in my hometown of Edmonton and being mesmerised by one of its stars: Scotland’s Allan Wells. At just 26, Wells burst onto the scene, winning silver in the 100 metres, beating the reigning Olympic champion in the process. He spurred Scotland to gold in the 4x100 metres, won the 200 metres outright and set the stage to become the fastest man in the world two years later at ... (full story (http://www.bankofengland.co.uk/publications/Documents/speeches/2014/speech748.pdf))

07-23-2014, 06:03 PM
Bank of England Monetary Policy Meeting Minutes
There had been a noticeable increase on the month in UK short-term interest rates and a further appreciation in the exchange rate. One-year overnight index swap (OIS) rates, one year forward, had risen by around 25 basis points, to just above 1.5%, while the sterling effective exchange rate had risen by 2% on the month, to its highest level since October 2008. Both had been rising over recent months, directionally consistent with the relative performance of the UK economy, although the bulk of the increase on the month had occurred in the period immediately following the Governor’s Mansion House speech on 12 June. Since that point, ... (full story (http://www.bankofengland.co.uk/publications/minutes/Documents/mpc/pdf/2014/mpc1407.pdf))

07-23-2014, 06:03 PM
Canada Retail Trade, May2014
Retail sales rose 0.7% to $42.0 billion in May. Gains were reported in 7 of 11 subsectors, representing 56% of retail trade. In volume terms, retail sales increased 0.4%. Sales at motor vehicle and parts dealers rose 2.5% in May, accounting for the largest gain among all subsectors. Building on a 3.5% increase in April, sales at new car dealers rose 2.3% in May. According to the New Motor Vehicle Sales Survey, a record 197,740 units were sold in May, mainly as a result of higher sales of light trucks. Higher sales at other motor vehicle dealers (+4.7%) largely offset declines in March and April. Other motor vehicle dealers include ... (full story (http://www.statcan.gc.ca/daily-quotidien/140723/dq140723a-eng.htm))

07-24-2014, 04:30 PM
Aussie is the center of attention
The dollar continues to assert itself, rising for 7 of the past 10 sessions on the dollar index, but it’s by no means universal. The Aussie is the main exception, having risen nearly 0,5% vs. the dollar over the past two weeks. The overnight activity here has seen a brief push above the 0.9450 area, helped by the better than expected manufacturing PMI data in China, which rose to 52.0 from 50.7. The 0.95 level continues to act as a barrier after the comments from RBA Governor Stevens earlier in the month which sent the Aussie lower from this level.

The other point of note overnight was the kiwi in the wake of the expected rate hike from the RBNZ to 3.50%. The central bank described the current rate as being at an “unjustified and unsustainable” level.

There was a further indication that rates were likely to pause, before adjusting “toward a more neutral level”. The kiwi is currently down 1.5% vs. the dollar and to a 6 week lows. This comes on the back of the weakening already seen ahead of the meeting, as the market was largely anticipating a signal that rates were likely to pause. The comments on the currency were less expected, hence the reaction.

Focus today is with retail sales data in the UK, with mixed messages coming from the central bank over the past 24 hours leaving cable close to the 1.70 level. Claims and new home sales seen in the US later.

Further meetings are being held in Europe with regards to sanctions on Russia, which could have FX implications, especially if more aggressive moves are seen, moreso on sterling.

07-24-2014, 04:57 PM
US Unemployment Insurance Weekly Claims
In the week ending July 19, the advance fig ure for seasonally adjusted initial claims was 284,000, a decrease of 19,000 from the previous week's revised level. This is the lowest level for initial claims since February 18, 2006 when they were 283,000. The previous week's level was revised up by 1,0 00 from 302,000 to 303,000. The 4 - week moving average was 302,000, a decrease of 7,250 from the previous week's revised average. This is the lowest level for this average since May 19, 2007 when it was 302,000. The previous week's average was revised up by 250 from 309,000 to 309,250. There were no special factors impacting this ... (full story (http://www.workforcesecurity.doleta.gov/press/2014/072414.pdf))

07-25-2014, 10:52 AM
US new home sales plunge in June to 406K – USD retreats
A big disappointment from the housing sector and not for the first time: a drop to 406K. This is a drop of 8.1%, which sounds a lot but it’s actually even worse if we take into account the huge downwards revision from 485K to 442K. It’s just bad no matter how we look at it. New home sales were expected to slide to 485K in June from 504K reported in May. Sales of new homes ignite much wider economic activity and this publication has an impact on the markets.

The US dollar was somewhat stronger towards the publication, with EUR/USD sliding from the highs, GBP/USD sitting under 1.70 and USD/JPY edging higher towards 102. The initial reaction was a weaker dollar, but the moves are limited.

Markit’s flash manufacturing PMI for July slightly disappointed with 56.3 points, lower than 57.5 expected. Existing home sales climbed above 5 million (annualized) in a publication from earlier in the week.

Volatility has certainly returned to the markets. Expectations for an earlier than expected rate hike come mostly from the improvement in the US job market. Figures released earlier in the day showed the lowest levels of jobless claims since early 2006.

Geo politics have also been impacting the markets. We talked about it in the latest episode of Market Movers.

07-25-2014, 12:07 PM
IFO Business Climate falls to 108 – EUR/USD follows
Disappointing data from Germany’s IFO institute: the headline business climate figure dropped to 108, “current assessment” dips to 112.9 and the expectations component fell below expectations at 103.4 points. These are significant misses. The German IFO business climate was expected to tick down from 109.7 to 109.4 points in July. The “Current Assessment” component was predicted to slide from 114.8 to 114.5 and the “Expectations” figure was estimated to follow the same path and drop from 104.8 to 104.5 points.

EUR/USD was stable in the 1.3450 to 1.35 range, trading around 1.3465 towards the publication. The euro is now falling towards 1.3450. Update: the pair slips below 1.3450. — more coming

At the same time, Eurostat released more data: M3 Money Supply was expected to edge up from 1% to 1.1% year over year. These are low levels. Private loans were also predicted to advance: from a contraction of 2% to 1.8% now y/y. These have actually surprised to the upside: M3 money supply is 1.5% and year over year loans are down only 1%. This could be music to the ECB’s ears.

The euro was on the back foot throughout the week, grinding lower with no respite. However, after yet another dip yesterday, the pair managed to finally bounce back in a hammer pattern.

The next important event for the pair is the release of durable goods orders in the US due later on in the day.

07-25-2014, 03:43 PM
UK Gross Domestic Product Preliminary Estimate, Q2 2014
•Change in gross domestic product (GDP) is the main indicator of economic growth. GDP increased by 0.8% in Q2 2014, the second consecutive quarter on quarter increase of 0.8%.
•Output increased in two of the four main industrial groupings within the economy in Q2 2014 compared with Q1 2014. In order of their contribution, output increased by 1.0% in services and by 0.4% in production. However, output decreased by 0.5% in construction and by 0.2% in agriculture.
•In Q2 2014 GDP was estimated to be 0.2% above the peak in Q1 2008. From peak to trough in 2009, the economy shrank by 7.2%.
•GDP was 3.1% higher in Q2 2014 compared with the same ... (full story (http://www.ons.gov.uk/ons/rel/gva/gross-domestic-product--preliminary-estimate/q2-2014/stb-gdp-preliminary-estimate--q2-2014.html))

07-25-2014, 03:44 PM
German Business Climate Drops in Sign of Economic Risks
German business confidence declined for a third month in July as weaker growth and escalating tensions in Ukraine and the Middle East weigh on the outlook for Europe’s largest economy. The Ifo institute’s business climate index, based on a survey of 7,000 executives, fell to 108 from 109.7 in June. Economists predicted a drop to 109.4, according to the median of 35 estimates in a Bloomberg News survey. Today’s report follows a series of weak economic data for Germany that included industrial production dropping for a third month in May, factory orders falling more than economists expected and retail sales decreasing for a second ... (full story (http://www.bloomberg.com/news/2014-07-25/german-business-climate-drops-in-sign-of-economic-risks.html))

07-25-2014, 03:44 PM
Monetary developments in the euro area
The annual growth rate of the broad monetary aggregate M3 increased to 1.5% in June 2014, from 1.0% in May 2014.1 The three-month average of the annual growth rates of M3 in the period from April 2014 to June 2014 increased to 1.1%, from 0.9% in the period from March 2014 to May 2014. Regarding the main components of M3, the annual growth rate of M1 increased to 5.3% in June 2014, from 5.0% in May. The annual growth rate of short-term deposits other than overnight deposits (M2-M1) stood at -1.8% in June, compared with -1.9% in the previous month. The annual growth rate of marketable instruments (M3-M2) was less negative at -10.0% in ... (full story (http://www.ecb.europa.eu/press/pdf/md/md1406.pdf))

07-25-2014, 03:45 PM
Japan’s Suga says they will decide on second sales tax hike around December
will make a very careful decision on sales tax hike by looking at economic situation at the time; won’t go beyond year-end for FY15 budget compilation; Japanese chief cabinet sec Suga on the plans to raise sales tax again to 10% USDJPY 101.80

07-25-2014, 03:46 PM
German Ifo Business Climate Index Continues to Fall
The Ifo Business Climate Index for industry and trade in Germany fell to 108.0 points in July from 109.7 points last month. This marks the third decrease in succession. Assessments of the current business situation were less favourable than in June. Companies were also less optimistic about future business developments. Geopolitical tensions are taking their toll on the German economy. In manufacturing the business climate index fell considerably for the third month in succession. Assessments of the current business situation were clearly less favourable. Expectations also continued to deteriorate. The export outlook fell to its lowest ... (full story (http://www.cesifo-group.de/ifoHome/facts/Survey-Results/Business-Climate/Geschaeftsklima-Archiv/2014/Geschaeftsklima-20140725.html))

07-25-2014, 04:32 PM
US durable goods orders exceed expectations with +0.7%
Better than expected: headline orders rise by 0.7% and core orders by 0.8%. Durable goods orders were expected to to advance by 0.4% in June after a drop of 0.9% in May. Core durable goods orders were predicted to rise by 0.6% after remaining flat in May.

The US dollar was on the move before the publication, with EUR/USD recording new lows at 1.3430, GBP/USD at 1.6980 and USD/JPY edging closer to 102. — more coming –

US data has been mixed earlier in the week, but the excellent drop in jobless claims to an 8 year low of 284K took over bad news from new home sales or the mediocre inflation numbers and the US dollar emerged as a winner.

This was the last major event of the week. Next week we have a triplet of top tier events in the US, and the rise in volatility could even accelerate.

07-30-2014, 04:20 PM
ADP: Private Sector Employment Increased by 218,000 Jobs in July <br />
Private sector employment increased by 218,000 jobs from June to July according to the July ADP National Employment Report®. Broadly...

07-30-2014, 04:44 PM
US Gross Domestic Product, 2nd quarter 2014 (advance estimate)
Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 4.0 percent in the second quarter of 2014, according to the "advance" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 2.1 percent (revised). The Bureau emphasized that the second-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3 and "Comparisons of Revisions to GDP" on page 10). The ... (full story (http://www.bea.gov/newsreleases/national/gdp/2014/gdp2q14_adv.htm))

07-30-2014, 04:44 PM
Canada Industrial Product and Raw Materials Price Indexes, June2014The Industrial Product Price Index (IPPI) edged down 0.1% in June, mainly because of lower prices for motorized and recreational vehicles. The Raw Materials Price Index (RMPI) rose 1.1%, largely as a result of higher prices for crude energy products. The IPPI posted a third consecutive monthly decline in June (-0.1%), after decreasing 0.5% in May. Of the 21 major commodity groups, 4 were up, 11 were down and 6 were unchanged. The decrease in the IPPI was mainly due to lower prices for motorized and recreational vehicles (-0.3%). Lower prices for passenger cars and light trucks (-0.4%) were largely responsible for the decline in this ... (full story (http://www.statcan.gc.ca/daily-quotidien/140730/dq140730a-eng.htm))

07-30-2014, 04:45 PM
Economy in U.S. Expanded More Than Forecast Last Quarter
Gains in consumer spending and business investment helped the U.S. economy rebound more than forecast in the second quarter following a slump in the prior three months that was smaller than previously estimated. Gross domestic product rose at a 4 percent annualized rate after shrinking 2.1 percent from January through March, Commerce Department figures showed today in Washington. The median forecast of 80 economists surveyed by Bloomberg called for a 3 percent advance. Consumer spending, the biggest part of the economy, rose 2.5 percent, reflecting the biggest gain in purchases of durable goods such as autos in almost five years. ... (full story (http://www.bloomberg.com/news/2014-07-30/economy-in-u-s-grows-more-than-forecast-after-smaller-drop.html))

07-31-2014, 05:46 PM
US Unemployment Insurance Weekly Claims
In the week ending July 26, the advance fig ure for seasonally adjusted initial claims was 302,000, an increase of 23,000 from the previous week's revised level. The previous week's level was revised down by 5,000 from 284,000 to 279,000. The 4 - week moving average was 297,250, a decrease of 3,500 fr om the previous week's revised average. This is the lowest level for this average since April 15, 2006 when it was 296,000. The previous week's average was revised down by 1,250 from 302,000 to 300,750. There were no special factors impacting this week's initial claims. The advance seasonally adjusted insured unemployment ... (full story (http://www.workforcesecurity.doleta.gov/press/2014/073114.pdf))

07-31-2014, 05:50 PM
Canada Gross Domestic Product by Industry, May2014
Real gross domestic product rose 0.4% in May, a fifth consecutive monthly increase. The output of service industries grew 0.4% in May, as most major industrial sub-sectors posted growth. There were notable increases in wholesale and retail trade, the real estate sector, transportation and warehousing services as well as professional services. The public sector (education, health and public administration combined) was unchanged in May. In contrast, the finance and insurance sector edged down. The output of goods-producing industries rose 0.5% in May, following a 0.4% decline in April. The gain in May was mainly due to increases in ... (full story (http://www.statcan.gc.ca/daily-quotidien/140731/dq140731a-eng.htm))

07-31-2014, 06:20 PM
FOMC Statement
Information received since the Federal Open Market Committee met in June indicates that growth in economic activity rebounded in the second quarter. Labor market conditions improved, with the unemployment rate declining further. However, a range of labor market indicators suggests that there remains significant underutilization of labor resources. Household spending appears to be rising moderately and business fixed investment is advancing, while the recovery in the housing sector remains slow. Fiscal policy is restraining economic growth, although the extent of restraint is diminishing. Inflation has moved somewhat closer to the Committee's ... (full story (http://www.federalreserve.gov/newsevents/press/monetary/20140730a.htm))

08-01-2014, 06:24 PM
The US Employment Situation - July 2014
Total nonfarm payroll employment increased by 209,000 in July, and the unemployment rate was little changed at 6.2 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, manufacturing, retail trade, and construction. Household Survey Data Both the unemployment rate (6.2 percent) and the number of unemployed persons (9.7 million) changed little in July. Over the past 12 months, the unemployment rate and the number of unemployed persons have declined by 1.1 percentage points and 1.7 million, respectively. (See table A-1.) Among the major worker groups, the ... (full story (http://www.bls.gov/news.release/archives/empsit_08012014.htm))

08-01-2014, 06:25 PM
July 2014 Manufacturing ISM® Report On Business
Economic activity in the manufacturing sector expanded in July for the 14th consecutive month, and the overall economy grew for the 62nd consecutive month, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®. The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee. "The July PMI® registered 57.1 percent, an increase of 1.8 percentage points from June's reading of 55.3 percent, indicating expansion in manufacturing for the 14th consecutive month. The New Orders Index registered 63.4 percent, an ... (full story (http://www.ism.ws/news/NewsReleaseDetail.cfm?ItemNumber=24220))

08-01-2014, 06:25 PM
Kuroda: Japan's Economy: Achieving 2 Percent Inflation
It is my great honor to have the opportunity to address you today at the Naigai Josei Chosa Kai. In April last year, the Bank of Japan introduced quantitative and qualitative monetary easing (QQE) to achieve the price stability target of 2 percent at the earliest possible time, with a time horizon of about two years. The last time I addressed you here was only a year ago. At that time, I mentioned that there was a positive turnaround in three areas since the introduction of QQE: in financial conditions, expectations, and economic activity and prices. Since then, QQE has been steadily having its intended effects, and the ... (full story (http://www.boj.or.jp/en/announcements/press/koen_2014/data/ko140801a1.pdf))

08-01-2014, 06:26 PM
Markit/CIPS UK Manufacturing PMI
The UK manufacturing sector started the third quarter on a firm footing. Production and new orders both continued to rise at robust, above longrun average rates in July, encouraging further job creation. However, the pace of expansion at manufacturers cooled from the stellar growth spurt seen during the first half of the year. At 55.4 in July, down from 57.2 in June, the headline seasonally adjusted Markit/CIPS Purchasing Manager’s Index® (PMI®) posted its lowest reading in one year, but nonetheless remained well above the survey average of 51.5. The PMI has now signalled an improvement in operating conditions throughout the ... (full story (http://www.markiteconomics.com/Survey/PressRelease.mvc/fddb65e3f7734f7489a302482e5a00bf))

08-01-2014, 06:27 PM
July 2014 Manufacturing ISM® Report On Business

Economic activity in the manufacturing sector expanded in July for the 14th consecutive month, and the overall economy grew for the 62nd consecutive month, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®. The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee. "The July PMI® registered 57.1 percent, an increase of 1.8 percentage points from June's reading of 55.3 percent, indicating expansion in manufacturing for the 14th consecutive month. The New Orders Index registered 63.4 percent, an ... (full story (http://www.ism.ws/news/NewsReleaseDetail.cfm?ItemNumber=24220))

08-08-2014, 02:07 PM
RBA Statement on Monetary Policy
Growth of Australia’s major trading partners over the past year has been a little above its historical average. In the June quarter, the pace of growth looks to have eased a little with a decline in Japan’s output following the increase in the consumption tax in April. At the same time, however, growth of Chinese economic activity has picked up, driven by a rebound in exports and a pick-up in investment. This improvement in economic conditions reflects, in part, the modest stimulus provided by the Chinese authorities, which is designed to achieve their target of 7.5per cent GDP growth in 2014. The US economy grew ... (full story (http://www.rba.gov.au/publications/smp/2014/aug/pdf/0814.pdf))

08-08-2014, 02:07 PM
China's July exports surge 14.5% vs. year earlier, blowing past estimates

08-08-2014, 02:21 PM
BOJ Statement on Monetary Policy
1. At the Monetary Policy Meeting held today, the Policy Board of the Bank of Japan decided, by a unanimous vote, to set the following guideline for money market operations for the intermeeting period: The Bank of Japan will conduct money market operations so that the monetary base will increase at an annual pace of about 60-70 trillion yen. 2. With regard to the asset purchases, the Bank will continue with the following guidelines: a) The Bank will purchase Japanese government bonds (JGBs) so that their amount outstanding will increase at an annual pace of about 50 trillion yen, and the average remaining maturity of the Bank's JGB ... (full story (http://www.boj.or.jp/en/announcements/release_2014/k140808a.pdf))

08-08-2014, 02:22 PM
In June 2014, French manufacturing output increased (+1.6%)
In June 2014, manufacturing output went up susbstantially (+1.6%), after a fall in May (–2.3%). Output increased also in industrial production as a whole (+1.3%, after –1.6% in May 2014). Manufacturing output decreased by 1.2% over the last quarter… During the last quarter (q-o-q), output weakened in the manufacturing sector (–1.2%) as well as in industry as a whole (–0.5%). Output declined in other manufacturing (–0.9%), in the manufacture of electrical and electronic equipment; machine equipment (–1.8%), in the manufacture of transport equipment (–1.1%) as well as in the manufacture of food products and beverages (–1.0%). Output ... (full story (http://www.insee.fr/en/themes/info-rapide.asp?id=10&date=20140808))

08-08-2014, 02:23 PM
UK Trade, June 2014
•UK Trade shows the extent of import and export activity and is a key contributor to the overall economic growth in the UK. •Seasonally adjusted, the UK's deficit on trade in goods and services was estimated to have been £2.5 billion in June 2014, compared with £2.4 billion in May 2014. •In June 2014 there was a deficit of £9.4 billion on goods, partly offset by an estimated surplus of £7.0 billion on services. The trade in goods deficit widened by £0.3 billion compared with May 2014. •In June 2014, exports of goods decreased by £0.4 billion to £23.5 billion reflecting falls in oil and manufactured goods. Imports of goods decreased by ... (full story (http://www.ons.gov.uk/ons/rel/uktrade/uk-trade/june-2014/stb-uk-trade--june-2014.html))

08-14-2014, 09:53 AM
In Q2 2014, French GDP held steady
In Q2 2014, French growth domestic product (GDP) in volume* remained steady (0.0%). Household consumption expenditure upturned (+0.5% after –0.5%) while total gross fixed capital formation (GFCF) remained depressed (–1.1% after –1.0%). All in all, final domestic demand (excluding changes in inventories) slightly increased and contributed positively to GDP evolution in Q2 (+0.2 points after –0.4 points in Q1 2014). Imports slightly decelerated (+0.4% after +0.6%), while exports were steady (0.0% after +0.5%). Consequently, the foreign trade balance contributed negatively to activity (–0.1 points) after a neutral contribution the ... (full story (http://www.insee.fr/en/themes/info-rapide.asp?id=26&date=20140814))

08-14-2014, 09:55 AM
Retail Sales Little Changed in Slow Start to U.S. Third Quarter
Retail sales were little changed in July, the worst performance in six months, as car demand slowed and tepid wage growth restrained U.S. consumers. The slowdown in purchases followed a 0.2 percent advance in June, the Commerce Department reported today in Washington. The median forecast of 82 economists surveyed by Bloomberg called for a 0.2 percent gain. Excluding (RSTAXMOM) cars, sales rose 0.1 percent. Job growth has yet to stoke the type of wage gains needed to boost household purchases, a sign the economic expansion will probably not sustain the second-quarter pickup into the end of the year. Some retailers must rely on ... (full story (http://www.bloomberg.com/news/2014-08-13/retail-sales-little-changed-in-slow-start-to-u-s-third-quarter.html))

08-14-2014, 09:58 AM
China Industrial-Output Growth Slows in Sign Recovery at Risk
China’s industrial-output and fixed-asset investment growth unexpectedly slowed last month, putting a recovery at risk as the government copes with a property slump and rising bad loans. Factory production rose 9 percent from a year earlier, the National Bureau of Statistics said today in Beijing, compared with June’s 9.2 percent pace, which was also the median estimate of analysts surveyed by Bloomberg News. Fixed-asset investment increased 17 percent in the January-July period and retail sales gained a less-than-projected 12.2 percent last month. Earlier today, a report showed the broadest measure of new credit unexpectedly plunged ... (full story (http://www.bloomberg.com/news/2014-08-13/china-industrial-output-growth-slows.html))

08-14-2014, 10:01 AM
UK Labour Market, August 2014
•Comparing the estimates for April to June 2014 with those for January to March 2014, employment continued to rise and unemployment continued to fall. These changes continue the general direction of movement over the past two years. •There were 30.60 million people in work, 167,000 more than for January to March 2014 and 820,000 more than a year earlier. •The proportion of people aged from 16 to 64 in work (the employment rate), was 73.0%. This was higher than for January to March 2014 and for a year earlier. •There were 2.08 million unemployed people, 132,000 fewer than for January to March 2014 and 437,000 fewer than a year ... (full story (http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/august-2014/statistical-bulletin.html))

08-14-2014, 10:43 AM
German Gross domestic product down 0.2% in 2nd quarter of 2014
The German economy is losing momentum. In the second quarter of 2014, the gross domestic product (GDP) decreased 0.2% on the previous quarter after adjustment for price, seasonal and calendar variations; this is reported by the Federal Statistical Office (Destatis). However, one of the reasons probably was the extremely mild weather leading to high growth rates at the beginning of the year. According to the most recent calculations, the German economy had grown by 0.7% in the first quarter of 2014; in the last quarter of 2013, the GDP had been up 0.4% on the previous quarter. These results are based on the new ESA 2010 methodology for the ... (full story (https://www.destatis.de/EN/PressServices/Press/pr/2014/08/PE14_287_811.html))

08-14-2014, 10:44 AM
Bank of England makes emergency plans in case of Scottish independence
The Bank of England is making emergency plans in case a yes vote in Scotland's independence referendum threatens the stability of sterling, bank governor Mark Carney has disclosed. Carney refused to set out what the Bank's contingency planning involved, but admitted that the disputes between the Scottish and UK governments over the future of the pound "could raise financial stability issues" which were already being addressed. Banking experts and companies such as UBS has warned that a yes vote on 18 September could lead to currency flight, with billions of pounds being withdrawn from Scottish banks and investment houses by ... (full story (http://www.theguardian.com/business/2014/aug/13/scottish-independence-bank-england-contingency-plans))

08-20-2014, 05:18 PM
Bank of England Minutes of the Monetary Policy Committee Meeting
Financial markets had remained relatively resilient despite a number of significant events during the month. These included: heightened geopolitical tensions in Russia and Ukraine, and in the Middle East; a technical default on an Argentinian public debt payment; the announcement of public support for a large Portuguese bank; and comments by the chair of the FOMC regarding asset valuations in particular sectors. Although these events had triggered only a fairly modest market reaction, there were some tentative signs in some asset classes of a reduction in risk appetite. 3 Instantaneous twelve-month sterling forward rates derived from ... (full story (http://www.bankofengland.co.uk/publications/minutes/Documents/mpc/pdf/2014/mpc1408.pdf))

08-20-2014, 05:19 PM
New Zealand Fonterra dairy prices fall 0.6%
•Average selling price $3000 per ton
•Prior auction -8.4%
•Tonnage auctioned -4.1%

on prior auction Full details from the auction here NZD/USD falls to 0.8418 but has bounced back to 0.8440 On the whole it’s not as bad as the previous auctions have been. I know sweet Fannie Adams about New Zealand milk auctions though so don’t ask me. NZD/USD is still holding above support at 0.8400/10

08-20-2014, 05:22 PM
RBA Stevens: Opening Statement to House of Representatives Standing Committee on Economics
Since the hearing in March, the global economy has continued its expansion at a moderate pace, and Australia's trading partner group has been growing at about its long-run average rate. With the abatement of the adverse winter weather, the US economy recovered in the June quarter and the labour market has continued to strengthen. Growth in China has remained close to the target of 7.5 per cent, though Chinese residential property prices have declined in recent months. Chinese authorities at various levels are responding to these developments with the aim of maintaining stable macroeconomic and monetary conditions. In Japan, consumption ... (full story (http://www.rba.gov.au/speeches/2014/sp-gov-200814.html))

08-20-2014, 05:25 PM
Canada Wholesale Trade, June2014
Wholesale sales rose 0.6% to $53.0 billion in June, a third consecutive increase. Gains in five subsectors, which together represented 69% of wholesale sales, more than offset a decline in the motor vehicle and parts subsector. Excluding this subsector, wholesale sales rose 1.2%. In volume terms, wholesale sales were up 0.7%. The miscellaneous subsector, up $208 million or 3.1% to $6.9 billion, contributed the most in dollar terms to the gain in June. This was the sixth increase in seven months for the subsector. While all of the subsector's industries recorded higher sales, the agricultural supplies industry (+4.9%) and the other ... (full story (http://www.statcan.gc.ca/daily-quotidien/140820/dq140820a-eng.htm))

08-25-2014, 10:28 PM
US new home sales 412K, slight disappointment
A second disappointment from US economic indicators today: sales of new homes stand at 412K. The United States was expected to report a rise to 426K sales (annualized) of new households in July. June saw 406K (before revisions), a figure that was disappointing at the time. June’s number was now revised to the upside, to 422K, making July’s number a drop of 2.4%.

The US dollar was generally stronger before the publication, still enjoying some weekend gaps. This number sends EUR/USD only marginally higher to 1.3199, GBP/USD is stable around 1.6586 and USD/JPY is at 103.96. — The reactions to both misses is relatively muted for now.

The first disappointment came from Markit’s services PMI, that slid more expected. Despite these two misses, the US economy looks good and the dollar remains strong.

Last week’s existing home sales beat expectations with 515K. The majority of the market belongs to second hand (existing) homes, but sales of new homes generate more economic activity in infrastructure works, etc.

The greenback has been on a roll following stronger data, more hawkish FOMC minutes and no extreme dovishness from Janet Yellen.

08-26-2014, 05:30 PM
Orders for U.S. Durable Goods Surged in July on Aircraft Demand
Orders for U.S. durable goods jumped in July by the most on record as bookings surged for commercial aircraft. Demand for business equipment eased after the biggest gain in seven months. Bookings for goods meant to last at least three years climbed 22.6 percent after a 2.7 percent gain in June that was bigger than previously reported, data from the Commerce Department showed today in Washington. An air show in the U.K. helped drive a 318 percent jump in plane orders, the most January 2011. A 0.5 percent drop in orders for non-military capital goods excluding aircraft last month followed a June increase of 5.4 percent. Prospects that ... (full story (http://www.bloomberg.com/news/2014-08-26/orders-for-u-s-durable-goods-surged-in-july-on-aircraft-demand.html))

08-28-2014, 05:05 PM
US Gross Domestic Product, 2nd quarter 2014 (Second Estimate)
Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 4.2 percent in the second quarter of 2014, according to the "second" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 2.1 percent. The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was 4.0 percent. With this second estimate for the second quarter, the general picture of ... (full story (http://www.bea.gov/newsreleases/national/gdp/2014/gdp2q14_2nd.htm))

08-28-2014, 05:06 PM
US Unemployment Insurance Weekly Claims
In the week ending August 23, the advance figure for seasonally adjusted initial claims was 298,000, a decrease of 1,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 298,000 to 299,000. The 4 - week moving average was 299,750, a decrease of 1,250 fr om the previous week's revised average. The previous week's average was revised up by 250 from 300,750 to 301,000. There were no special factors impacting this week's initial claims. The advance seasonally adjusted insured unemployment rate was 1.9 perce nt for the week ending August 16, unchanged from the previous week's unrevised ... (full story (http://www.workforcesecurity.doleta.gov/press/2014/082814.pdf))

08-28-2014, 05:07 PM
Canada's balance of international payments, 2nd quarter2014
Canada's current account deficit (on a seasonally adjusted basis) was largely unchanged in the second quarter, edging down $0.2 billion to $11.9 billion. This reflected a slight increase in the deficit on trade in goods and services, which was more than offset by a lower investment income deficit. In the financial account (unadjusted for seasonal variation), foreign investment in Canadian corporate securities remained strong and led the inflow of funds in the economy in the second quarter. The balance on international trade in goods posted a $1.7 billion surplus in the second quarter, down $0.1 billion from the previous quarter. Both ... (full story (http://www.statcan.gc.ca/daily-quotidien/140828/dq140828b-eng.htm))

08-28-2014, 05:10 PM
Australia’s New home Sales dropped in July

Australian economy recorded a noticeable slowing in its new home sales during the month of July, adding to sings that more monetary support will be added during the upcoming stage.

Moreover, HIA new home sales dropped in July to -5.7%, from a previous reading of 1.2% a month earlier.

Australia’s home sales began to decline after its previous stage of stability, where the central bank managed to spur housing sector and mining through monetary easing to revive growth.

08-28-2014, 05:11 PM
Industrial Profits in China

Chinese industrial profits slowed in July to -5.7%, from a previous reading of 17.9% a month earlier.

09-03-2014, 05:53 PM
UK services PMI jumps to 60.5 points in August
Good news from the UK: the services sector is growing at a rapid pace: a score of 60.5 points, reflecting strong growth.

Markit’s UK services purchasing managers’ index was expected to slide to 58.6 points in August after a very strong 59.1 points in July. The services sector is the UK’s largest.

09-03-2014, 05:57 PM
AUD/USD supported by stronger than expected GDP
The Australian economy grew by 0.5% in Q2, lower than 1.1% in Q1 but better than 0.4% expected. Year over year, we had a beat as well: 3.1% instead of 3% predicted and after 3.5% in Q1. On a yearly basis, we see that growth remains solid.

AUD/USD wobbled around the publication, but is eventually clawing its way back up towards the 0.93 level.

Even if the greenback resumes its rises, the Australian dollar is a good footing to withstand the storm. We have seen greater weakness in the pound, the kiwi, the yen and also the euro to some extent.

Chinese data was OK: the official non-manufacturing PMI came out at 54.4 points, indicating OK growth in the services sector. The independent HSBC PMI for the same sector came out at a similar number: 54.1 points.

09-04-2014, 04:24 PM
ECB Monetary policy decisions
At today’s meeting the Governing Council of the ECB took the following monetary policy decisions: 1.The interest rate on the main refinancing operations of the Eurosystem will be decreased by 10 basis points to 0.05%, starting from the operation to be settled on 10 September 2014. 2.The interest rate on the marginal lending facility will be decreased by 10 basis points to 0.30%, with effect from 10 September 2014. 3.The interest rate on the deposit facility will be decreased by 10 basis points to -0.20%, with effect from 10 September 2014. The President of the ECB will comment on the considerations underlying these ... (full story (http://www.ecb.europa.eu/press/pr/date/2014/html/pr140904.en.html))

09-04-2014, 04:24 PM
Bank of England maintains Bank Rate at 0.5%
The Bank of England’s Monetary Policy Committee at its meeting today voted to maintain Bank Rate at 0.5%. The Committee also voted to maintain the stock of purchased assets financed by the issuance of central bank reserves at £375 billion, and so to reinvest the £14.4 billion of cash flows associated with the redemption of the September 2014 gilt held in the Asset Purchase Facility. The minutes of the meeting will be published at 9.30 a.m. on Wednesday 17 September. Notes to Editors The previous change in Bank Rate was a reduction of 0.5 percentage points to 0.5% on 5 March 2009. A programme of asset purchases financed by the ... (full story (http://www.bankofengland.co.uk/publications/Pages/news/2014/009.aspx))

09-04-2014, 04:25 PM
BOJ’s Kuroda says Japanese economy is recovering moderately
No prizes for guessing the rest of the statement; Kuroda’s presser underway but don’t expect any deviation from the mantra; can still effects of reaction to tax rise; expects impact of tax rise to wane gradually; CPI likely to reach 2% in middle of projection period; BOJ will check risks, make adjustments as necessary; BOJ easing is having intended impact; Japanese economy is continuing to exceed potential as a trend; expects consumer spending to remain resilient; employment and income situation recovering steadily; USDJPY not surprisngly still 104.85 on the repetition;

09-04-2014, 04:29 PM
BOJ Statement on Monetary Policy
1. At the Monetary Policy Meeting held today, the Policy Board of the Bank of Japan decided, by a unanimous vote, to set the following guideline for money market operations for the intermeeting period: The Bank of Japan will conduct money market operations so that the monetary base will increase at an annual pace of about 60-70 trillion yen. 2. With regard to the asset purchases, the Bank will continue with the following guidelines: a) The Bank will purchase Japanese government bonds (JGBs) so that their amount outstanding will increase at an annual pace of about 50 trillion yen, and the average remaining maturity of the Bank's ... (full story (http://www.boj.or.jp/en/announcements/release_2014/k140904a.pdf))

09-04-2014, 04:30 PM
Australia International Trade in Goods and Services
JULY KEY POINTS BALANCE ON GOODS AND SERVICES In trend terms, the balance on goods and services was a deficit of $1,915m in July 2014, an increase of $385m (25%) on the deficit in June 2014. In seasonally adjusted terms, the balance on goods and services was a deficit of $1,359m in July 2014, a decrease of $205m (13%) on the deficit in June 2014. CREDITS (EXPORTS OF GOODS AND SERVICES) In seasonally adjusted terms, goods and services credits rose $280m (1%) to $27,022m. Non-monetary gold rose $150m (14%), rural goods rose $75m (2%), non-rural goods rose $44m and net exports of goods under merchanting rose $1m (100%). Services ... (full story (http://www.ausstats.abs.gov.au/ausstats/meisubs.nsf/0/004C390F1A733602CA257D480011B2CB/$File/53680_jul%202014.pdf))

09-04-2014, 04:30 PM
Australia Retail Trade
JULY KEY POINTS CURRENT PRICES The trend estimate rose 0.1% in July 2014. This follows a rise of 0.2% in June 2014 and a rise of 0.1% in May 2014. The seasonally adjusted estimate rose 0.4% in July 2014. This follows a rise of 0.6% in June 2014 and a fall of 0.3% in May 2014. In trend terms, Australian turnover rose 5.2% in July 2014 compared with July 2013. The following industries rose in trend terms in July 2014: Food retailing (0.3%), Household goods retailing (0.2%) and Cafes, restaurants and takeaway food services (0.1%). Clothing, footwear and personal accessory retailing (-0.4%), Department stores (-0.2%) and Other retailing ... (full story (http://www.ausstats.abs.gov.au/ausstats/meisubs.nsf/0/8C9F3B0A628455DACA257D480011F2C5/$File/85010_jul%202014.pdf))

09-04-2014, 04:31 PM
Beige Book - September 3, 2014
Reports from the twelve Federal Reserve Districts indicated that economic activity has expanded since the previous Beige Book report; however, none of the Districts pointed to a distinct shift in the overall pace of growth. The New York, Cleveland, Chicago, Minneapolis, Dallas, and San Francisco Districts characterized their growth rates as moderate; Philadelphia, Atlanta, St. Louis, and Kansas City reported modest growth. Boston reported that business activity appeared to be improving, and Richmond reported further strengthening. Philadelphia, Atlanta, Chicago, Kansas City, and Dallas explicitly reported that contacts in their ... (full story (http://www.federalreserve.gov/monetarypolicy/beigebook/files/BeigeBook_20140903.pdf))

09-04-2014, 04:31 PM
Bank of Canada maintains overnight rate target at 1 per cent
The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent. Inflation is close to the 2 per cent target and is evolving as the Bank anticipated in its July Monetary Policy Report (MPR). Recent data reinforce the Bank’s view that the earlier pickup in inflation was attributable to the temporary effects of higher energy prices, exchange rate pass-through, and other sector-specific factors rather than to any change in domestic economic fundamentals. The global economy is performing largely as expected. The ... (full story (http://www.bankofcanada.ca/2014/09/fad-press-release-2014-09-03/))

09-04-2014, 04:55 PM
Bank of England maintains Bank Rate at 0.5%
The Bank of England’s Monetary Policy Committee at its meeting today voted to maintain Bank Rate at 0.5%. The Committee also voted to maintain the stock of purchased assets financed by the issuance of central bank reserves at £375 billion, and so to reinvest the £14.4 billion of cash flows associated with the redemption of the September 2014 gilt held in the Asset Purchase Facility. The minutes of the meeting will be published at 9.30 a.m. on Wednesday 17 September. Notes to Editors The previous change in Bank Rate was a reduction of 0.5 percentage points to 0.5% on 5 March 2009. A programme of asset purchases financed by the ... (full story (http://www.bankofengland.co.uk/publications/Pages/news/2014/009.aspx))

09-04-2014, 04:56 PM
ADP: Private Sector Employment Increased By 204,000 Jobs i n August <br />
Private sector employment increased by 204,000 jobs from July to August according to the August ADP National Employment Report....

09-04-2014, 04:56 PM
US Unemployment Insurance Weekly Claims
In the week ending August 30, the advan ce figure for seasonally adjusted initial claims was 302,000, an increase of 4,000 from the previous week's unrevised level of 298,000. The 4 - week moving average was 302,750, an increase of 3,000 from the previous week's unrevised average of 299,750. Ther e were no special factors impacting this week's initial claims. The advance seasonally adjusted insured unemployment rate was 1.9 percent for the week ending August 23, unchanged from the previous week's unrevised rate. The advance number for seasonally a djusted insured unemployment during the week ending August 23 was 2,464,000, a ... (full story (http://www.workforcesecurity.doleta.gov/press/2014/090414.pdf))

09-04-2014, 04:57 PM
US Productivity and Costs, Second Quarter 2014, Revised
Nonfarm business sector labor productivity increased at a 2.3 percent annual rate during the second quarter of 2014, the U.S. Bureau of Labor Statistics reported today, as hours increased 2.6 percent and output increased 5.0 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the second quarter of 2013 to the second quarter of 2014, productivity increased 1.1 percent as output and hours worked rose 3.2 percent and 2.0 percent, respectively. (See table A.) Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked of ... (full story (http://www.bls.gov/news.release/archives/prod2_09042014.htm))

09-04-2014, 04:58 PM
U.S. International Trade in Goods and Services July 2014The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that total June exports of $195.9 billion and imports of $237.4 billion resulted in a goods and services deficit of $41.5 billion, down from $44.7 billion in May, revised. June exports were $0.3 billion more than May exports of $195.6 billion. June imports were $2.9 billion less than May imports of $240.3 billion. In June, the goods deficit decreased $3.0 billion from May to $60.3 billion, and the services surplus increased $0.1 billion from May to $18.7 billion. Exports of goods increased $0.1 billion to $136.9 ... (full story (http://bea.gov/newsreleases/international/trade/tradnewsrelease.htm))

09-04-2014, 04:58 PM
Canadian international merchandise trade, July2014

Canada's merchandise exports increased 1.4% in July, while imports edged down 0.3%. As a result, Canada's trade surplus with the world widened from $1.8 billion in June to $2.6 billion in July. Exports rose to $45.5 billion, led by motor vehicles and parts. Overall, volumes increased 1.1% and prices 0.3%. Imports edged down to $43.0 billion, as prices declined 0.6% while volumes increased 0.4%. Lower imports of aircraft and other transportation equipment and parts, consumer goods as well as metal and non-metallic mineral products were partially offset by higher imports of motor vehicles and parts. Exports to the United States ...

09-04-2014, 04:59 PM
Jobless Claims in U.S. Little Changed as Firings Dwindle

Applications (INJCJC) for unemployment benefits in the U.S. were little changed last week as an improving economy prompted businesses to retain staff. Jobless claims rose by 4,000 to 302,000 in the week ended Aug. 30, a Labor Department report showed today in Washington. The median forecast of 49 economists surveyed by Bloomberg called for 300,000. The total number of people on benefit rolls fell to the lowest level in more than seven years. A stronger pace of hiring is helping brighten Americans’ moods about the labor market and limiting filings for unemployment pay. Businesses holding the line on firings also will continue to add ...

09-08-2014, 08:19 PM
Latest Referendum Poll Pounds Sterling <br />
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While most asset classes have begun the new trading week confined to relatively tight ranges, currency markets have been whipped into a frenzy, with the...

09-09-2014, 08:50 PM
Big Dollar Continues to Shine
Taking a breather from its parabolic rise since July, the USD is consolidating this morning, with the sharp declines in the Yen, Euro, and Sterling all managing to find a slight reprieve. Price action across the G7 currency space is still choppy, with volatility seeping back into the market as a number of economic and political event risks loom on the horizon. A gradual shift in currency markets is underway, with economic stability in America increasing the likelihood of a rate hike in the first half of 2015, thus flipping the script on traditional carry trades which use the USD as a funding currency. Instead, an abundance of Euro and Yen supply has flooded the financial markets, as traders and investors take advantage of accommodative monetary policy regimes in those respective markets, looking to borrow cheaply in order to invest in more attractive yielding environments. While from an economic perspective the debate on whether another round of QE from the Bank of Japan is likely will come after the effects of the sales tax on third quarter GDP numbers is assessed, the Yen has continued its downward spiral against the big dollar, with USDJPY breaching the 106 level as the yield on the 10-year US treasury inches back into the 2.5% area.

While the declines in the Yen and Euro have been economically correlated from a fundamental perspective, the Pound’s cliff dive is political in nature. The risk of a ‘Yes’ vote for Scottish independence continues to loom on the horizon, leaving investors nervous as to the future of the Union and what will transpire on September 18th. While there may be short-term relief for the Pound should the ‘No’ side retake the majority by the time ballots are cast, anything less than a decisive victory for the Unionists will likely just shuffle the underlying separatists issues and risks continued efforts from the Scots for independence. With the referendum risk hanging like a dark cloud over Sterling, GBPUSD is having a tough time making any headway. Industrial production and manufacturing output over the month of July for the UK economy came in better than forecast this morning, also up from the y/o/y numbers registered in June, yet the pair has been unable to build constructively on the economic numbers. In addition, Governor Carney at the Bank of England said in a speech that his baseline forecasts were to increase the lending rate in the spring of next year if the recovery continues on the same path. Though, this is in-line with when market participants had been pricing the first rate hike from the BoE, confirmation from the chief of the BoE did little to influence any upward momentum for the Pound, continuing to struggle with the 1.61 handle.

As we head into the North American open, S&P futures are pivoting around the unchanged figure, with little in the way of economic data to move the needle until the JOLTS numbers at 10:00EST. The Loonie is struggling to stem its bleeding from yesterday, though broad-based USD demand is causing hot money to push USDCAD for a test of the 1.10 handle. Not helping matter this morning was a small miss for housing starts in Canada during the month of August, and though not usually a big driver of price action, isn’t helping the Loonie elicit a bid tone to detract from the sharp drop seen yesterday. The JOLTS number due out in the next hour will likely influence price action in an otherwise quiet data day, though another strong print around expectations of 4.7M in job openings will likely continue to fuel dollar buying.

09-09-2014, 08:50 PM
US JOLTS Job Openings stand at 4.67 million – below expectations
A slight miss from another jobs figure in the US: JOLTS remained around previous levels and now stands at 4.673 million. The Fed eyes this release as it provides a wider view of the labor market.

US JOLTS job openings were expected to rise to 4.72 in July, after 4.671 million in June (before revisions). This was now revised to 4.675 million – a very minor revision.

The dollar was looking good before the release and seems unexcited from the small miss. EUR/USD remains under 1.29, USD/JPY above 106 and GBP/USD playing around 1.61.

On Friday, we got news that the US economy gained only 142K jobs in August. The disappointment hit the dollar, but not for too long.

09-09-2014, 08:52 PM
Fresh lows in AUD/USD as pair closes in on stops
The US dollar is at the top of the mountain once again. Other currencies trying to climb back up after falling over the past week can’t even get a toe-hold. AUD/USD has spilled down to 0.9246 from 0.9287 since New York traders rolled in. A strong layer of bids to 0.9250 gave way and there’s a rise of stops below 0.9230. That will be buffered by a layer of bids in the 0.9220 to 0.9200 including corporate buyers and a barrier.

09-16-2014, 07:42 PM
Fed Quick Preview: Considerable chance of dollar slide

The Fed is expected to taper its bond buys for the 7th time to $15 billion, in the last taper before QE end in October. Without a change in rate hike expectations, Yellen is expected to maintain the dovish approach and to disappoint USD bulls.

Some are expecting Yellen and her colleagues to alter the statement regarding the interest rates, removing the word “considerable” from the expected time frame. However, given the recent unexciting NFP, JOLTS and jobless claims numbers, there is a better chance that this critical word will remain intact.

The economic forecasts could be upgraded and the general message could be somewhat more upbeat, but Yellen might want to keep the hints about the rates to another opportunity.
This is a key event for the dollar. Every word in the statement and every word in the press conference will be scrutinized, and the full impact might take time be seen: it might await the European session on Thursday.

A surprising removal of the word “considerable” will have a considerable positive effect on USD, while no change in the statement will shift the focus to the general tone and view of the economy by Chair Yellen. Her dovish tone could weigh on the dollar.

Don’t get me wrong: I still believe a rate hike is coming to the US in the spring of 2015 rather than the summer, but the Fed is not likely to hint that right now. Not yet.

09-16-2014, 07:45 PM
Jitters Materialize on Chinese Data
A soggy macroeconomic environment courtesy of mediocre overnight data releases has equity markets on the defensive this morning, with global growth concerns leading investors to rotate away from high-beta asset classes. Additional worries surrounding a hard landing in China cropped up again after Foreign Direct Investment fell by 14% from a year earlier, and the central bank said it sold a net 31.15bn yuan of foreign currency in August, sending jitters through an already shaky market. The suspicions surrounding capital flight from the worlds’ second largest economy after a dramatically disappointing month of August has investors shedding exposure to equities in the region, with the Shanghai Comp down by 1.82% on the day.

The Euro is struggling to make any meaningful headway after the initial sell-off on the heels of further interest rate cuts from the ECB, though the common-currency has managed to halt any further leakage for the time being. The reading on economic prospects in Germany as surveyed by the ZEW institute continues to slide, marking the ninth consecutive monthly decline in optimism and the lowest since 2012. Though a weaker Euro will be a benefit to the export intensive economy of Germany, the political uncertainty surrounding Ukraine and Scotland is too great at the moment, overpowering any hopes of quick acceleration in growth before the political risks dissipate.

Turing our attention to North America, the Loonie has managed to build on yesterday’s relief rally, getting a helpful boost from Manufacturing Sales over the month of July that came in much better than expected, with a 2.5% m/o/m increase. Also aiding downward pressure on USDCAD was the fact that producer prices in the US remained unchanged during the month of August, potentially a precursor to tomorrow’s consumer price figures coming in towards the soft side of expectations. Headline CPI in the US is expected to ease lower to a 1.9% increase on a y/o/y basis, and though the data is probably unlikely to shape the Fed’s discussion that is due out later that day, a print sub 2% would take some of the wind from the DXY’s sails as the urgency surrounding the first rate hike is lessened.

Heading into the opening bell, USDCAD is drifting into the low 1.10s, S&P futures are seeing the bears with a slight upper hand, while WTI sees some give back from yesterday’s rally, currently trading in the mid-$92/barrel range.

09-18-2014, 08:57 PM
GBP/USD shifts higher as No vote gains traction in poll, bookies
A poll published while voting is underway shows a slightly wider majority for the No Thanks campaign on Scotland: 53% against 47% for Yes. This is an IPSOS-Mori poll for the Evening Standard. A previous poll for the same company showed a narrow majority of only 51% against 51%. It is important to note that this poll excludes the undecideds.

GBP/USD is trading higher, around 1.6330, totally erasing the FOMC related slide. 1.6335 is resistance – it twas the previous high. 1.6250 is support.

When results are in, the pair is likely to trade at even wider ranges.

Looking at the odds at the bookies, we also see here a bigger chance for a No vote: a Yes vote pays out 17/4 (5.25 decimal) while No pays out 1/5 (1.2 decimal).

09-18-2014, 09:00 PM
Philly Fed Manufacturing Index at 22.5 within expectations
No surprises from the Philly Fed Index: it came out at 22.5 points, within predictions for 22.8 points.

The dollar is slightly lower on the result, but nothing extraordinary.

The Philly Fed Index was expected to slide back down to 22.8 points in September after an excellent 28 points back in August.

The dollar was generally strong, still enjoying the post FOMC rally. USD/JPY traded around 108.75, EUR/USD around 1.2890 and GBP/USD moved higher to 1.6377.

Earlier data was mixed, jobless claims beat expectations with a big 36K fall to 280K. On the other hand, both housing starts and building permits fell short of expectations.

The Fed did not alter its language regarding the “considerable time” between the end of QE and the rate hike, but made some minor tweaks that the dollar-hungry market was very happy to buy.

09-18-2014, 09:02 PM
US jobless claims fall to 280K, housing data disappoints – USD ticks up
Good news for the US jobs market: jobless claims fell back to the early 2006 levels of 280K, much better than expected. This is a drop of 36K. On the other hand, housing figures disappoint: building permits are at 1 million (annualized) and housing starts at 0.96 million, both below expectations.

The US dollar is reacting positively, with USD/JPY getting closer to 109. EUR/USD is sliding within the lower range, getting closer to support at 1.2860. GBP/USD slides from the poll-inspired highs and is now around 1.6357.

More on jobless claims: last week’s claims were revised up to 316K. The 4 week moving average is once again under 300K with 299.5K. Continuing claims are down to 2.429 million, continuing the gradual slide. All in all, this is a sigh of relief, after it had already seemed that claims were turning back up.

More on housing: in short, the data is wild: housing starts for July were revised up to 1.12 million, making the fall to 0.96 million now quite huge and the previous rise quite large. Building permits also saw an upwards revision to 1.06 million, making the fall to 1 million larger.

09-18-2014, 09:03 PM
TLTRO only €82.6 billion – EUR/USD eventually slides – higher chance of big ABS, QEWhile the estimate certainly differed, an uptake of only 82.6 billion euros is quite low. This means that banks were somewhat shy to take money, and that the ECB balance sheet is expanding only slowly and that there is a better chance of a bigger ABS and full blown QE.

The initial reaction was a higher euro, but the is now sliding.

Mario Draghi can be disappointed by the outcome: the banks don’t want his money.

But, if the outcome of this poor auction means a lower value of the euro, he may be smiling quietly inside, as this pushes inflation higher without having to do too much.

More details:

Perhaps one bank takes 14% of the total
However, the number of bidders is high, and this is a positive. There were 255 bidders.

More points to ponder about.

There is more pressure on the December TLTRO. No big take up will then mean a much higher chance of QE.
It’s important to note that in Spanish banks are already much more willing to lend to the real economy, something that began with the announcements. So, perhaps there was no real need for these loans?

Estimates of around €150 billion were thrown into the air towards the event, but the ranges were quite wild.

09-18-2014, 09:04 PM
UK retail sales +0.4% as expected – back to Scotland now
No surprises in UK retail sales for August: +0.4%, bang on expectations. Year over year, we have a rise of 3.9%, slightly below 4.1% expected. UK store prices fall 1.2% y/y, the most since 2009. This isn’t good news. The general picture of the UK economy is good, but the lack of inflationary pressures seen in both this week’s CPI data as well as in prices in stores, is quite discouraging for the central bank.

The pound is marginally lower.

UK retail sales were expected to rise by 0.4% in August after 0.1% in July. This release usually has a significant impact on the pound, but today is a very special and historic day: the day of the Scottish referendum.

GBP/USD traded around 1.63 in quite a choppy fashion.

09-19-2014, 01:02 PM
New Zealand`s GDP growth accelerate in Q2

New Zealand`s Growth Domestic Product (GDP) grew 0.7% in the second quarter of this year compared with 1.0% in the previous three months, and the reading topped analysts` estimates of 0.6%.

On the yearly record, GDP grew 3.9% in the quarter ended June compared with a growth by 3.8% in the same period last year, noting that analysts expected growth to remain at the same level.

09-19-2014, 01:03 PM
Japan merchandise trade balance deficit narrowed in August

Japan`s adjusted merchandise trade balance deficit narrowed in August; however, instability in exports` performance remains obvious along with a drop in global demand for Japanese products.

The adjusted merchandise trade balance recorded a deficit of 924.2 billion yen in August compared with a previous deficit of 1023.8 billion yen, while median estimates referred to a deficit of 998.0 billion yen.

The merchandise trade balance total came with a deficit of 948.5 billion yen compared with a deficit of 964.0 billion yen in July that was revised to 962.1 billion yen, and the reading came better than the forecasted deficit of 1028.9 billion yen.

Furthermore, the merchandise trade exports slid 1.3% in August compared with a previous incline by 3.9% in the same period last year, and the drop was much better than the estimated drop by 2.8%.

As for merchandise trade imports, it fell 1.5% last month, following an incline by 2.3%, noting that median estimates referred to a drop by 1.2%.

10-08-2014, 11:44 AM
JOLTS Job Openings rises to 4.84 million – better than expected
The Fed got another sign that the labor market continues marching forward: JOLTS job openings for August rose to 4.84 million, a new post crisis high and actually the highest since 2001.

The dollar is advancing, but only very gradually and very slowly in the response to this release.

JOLTS job openings were expected to stand at 4.71 million in August after 4.67 million in July (before revisions). This was now revised down to 4.605 million.

The US dollar was on the retreat before the publication: EUR/USD traded around 1.2630, GBP/USD at 1.6115 and USD/JPY around 108.20.

The JOLTS figure gets its importance from the Fed focus, especially from Bernanke’s era and despite being a late figure: the Non-Farm Payrolls report for September is already out, and this figure relates to August.

At the same time, the IBD/TIPP Economic Optimism was released and it was expected to rise from 45.2 to 46.3 points. We have a disappointment here with no change at 45.2 points.

The big event of the week is also Fed related: we will get the FOMC meeting minutes tomorrow and they could provide more hints about the next moves of the central bank.

Later today, two FOMC members will make public appearances. Bill Dudley, that already commented on the strong dollar, is set to make headlines.

10-08-2014, 11:45 AM
RBA and BOJ keep rates unchanged

The dollar’s recent strength looks to be being tested as major levels show some reluctance in breaking. The 110.00 level in USDJPY is a stand out as it was rejected again yesterday for the second time in under a week and this on the back of no major news flow. GBPUSD also recouped the 1.6000 level and EURUSD also benefitted from the broad based dollar sell off. But many are likely to see this move as temporary and a possible buying opportunity. This does not mean that further dollar weakness isn’t possible as the trade is a well touted one and a further squeeze of the bulls cannot be ruled out. The question is what would trigger it as the US data continues to indicate an economy that will be easily able to stomach rate rises in 2015.

The focus yesterday however wasn’t entirely on the dollar, but rather Russia’s rouble which suffered from further selling over fears of possible capital controls being imposed. USDRUB briefly broke the 40.00 level before retreating as the wider dollar weakness also affected this currency pair, but the move remains significant as we’ve seen the rouble suffer its biggest quarterly drop since Russia’s economic crisis back in 1999.

Overnight we saw the RBA and BOJ unsurprisingly keep rates on hold and both the Aussie and Yen have seen some buying with AUDUSD pushing higher and looking to test 0.8800 at the time of writing. Later this morning we see UK industrial and manufacturing production which will be interesting to watch following the recent weaker PMI manufacturing survey and the Scottish referendum might have had a knock effect.

10-15-2014, 05:14 PM
All US indicators disappoint – USD free-falls
It’s all red: retail sales dropped, PPI is poor and the Empire State Manufacturing Index is down. US retail sales fell 0.3%, and core sales by 0.2%. While the headline number was expected to slide, the fall is bigger than expected and the disappointment is bigger in the core number which was expected to rise. Producer prices were expected to advance by 1.8% in both headline and core numbers. They both stand at 1.6%, showing very poor inflation in PPI. The Empire State Manufacturing Index plunged to 6.17 points, a third of expectations.

And so is the dollar: EUR/USD is above 1.27, GBP/USD rises to 1.5940 and USD/JPY is at a new multi-month low. More coming.
Retail sales were expected to tick down 0.1% m/m and core sales carried expectations for a rise of 0.2% in the month of September. Consumption is a very significant part of the US economy. PPI and core PPI were both expected to rise 0.1% m/m. The Empire State Manufacturing Index was estimated to drop from 27.5 to 20.3 points.
Towards the publication, the dollar was retreating a bit against some currencies, but didn’t go very far.

EUR/USD was trading heavily due to worries about Germany, but towards the event, it topped 1.2660 and now breaks above 1.27.
GBP/USD had mixed employment data, was flirting with 1.5950 and is now around 1.5960.
USD/JPY is down below 1.0640 – a new cycle low.
USD/CAD was rising without a pause on the collapse of oil prices. After reaching 1.1384 it began sliding and it is now at 1.1322.
AUD/USD is now climbing from support at 0.87, recovering from the weak Chinese CPI.
NZD/USD is shooting up towards 0.79.

10-27-2014, 08:34 PM
US pending home sales +0.3% – USD falls
A slight disappointment: US pending home sales rose 0.3% in September, less than expected. The number is for September.

The dollar is marginally lower in the immediate aftermath.

US pending home sales were expected to rise by 1.1% in September after a slide of 1% in October (before revisions).

Before the publication, EUR/UDS traded around 1.2680, GBP/USD around 1.6110 and USD/JPY around 107.80.

Last week’s existing home sales came out above expectations, while new home sales were within estimations. However, revisions to previous figures of new home sales were to downside and hurt the greenback.

Earlier, Markit’s preliminary services PMI hit 57.3 points, a bit below 58 points expected. It stood on 58.9 points last time This puts the composite flash at 57.4 points. Final data is expected next week. The ISM Non-Manufacturing PMI carries more weight in measuring the health of the services sector.

10-27-2014, 08:35 PM
Stressed Out
The results of the European Central Bank’s bank stress tests are in, and investors are heaving a sigh of relief. In line with expectations, none of Europe’s largest banks were found lacking, and no French, German or Spanish institutions were told to raise more capital. Twenty-five smaller regional institutions failed the asset quality test performed at the end of last year – but almost 75% of the shortfall has been raised in the period since, bolstering confidence that the sector is positioned to withstand turmoil.

That being said, the reality is that many of the economic zone’s biggest banks only barely cleared the hurdle. Balance sheets are still incredibly fragile, weighed down with non-performing and poor-quality assets – and this is far more important in the euro area than in countries like the United States. Because credit markets are dominated by sovereign funding vehicles, and commercial lending is overwhelmingly done by banks, the flow of money remains tightly restricted – meaning that loosening monetary policy is having little effect on the real economy.

The euro is trading modestly higher, bolstered by an overall improvement in risk sentiment, but held back by another decline in German commercial confidence. The Ifo business climate index hit a two-year low in early October, compounding concerns that Europe’s largest economy will lead the continent into a weak fourth quarter.

Globally however, markets are poised to start the week on a more relaxing note, with most majors settling into the ranges that were established in the tumult earlier in the month. The dollar continues to benefit from strong tailwinds, with rising employment numbers, improving commercial lending, and commodity price deflation combining to support growth expectations. With the Federal Reserve expected to end its bond buying programme this Wednesday, monetary dilution has given way to tightening in driving the currency forward.

The Canadian dollar remains incredibly well-contained, with bulls fenced in by flat crude prices, while the bears are tethered by expectations of rising export growth as the US economy rebounds. Traders are positioned for a slight decline from 2.5% annualized, to 2.4% when the August gross domestic product number is released on Friday, leaving little in the way of obvious volatility catalysts this week. In other words, it’s quiet…too quiet….

Noise is coming from the emerging markets however, where the Brazilian real is the latest victim of an extreme selloff. After President Dilma Rousseff saw off her business-friendly challenger in a weekend election, the exchange rate fell to a nine-year low. Rousseff’s deeply interventionist government is seen as ill-equipped to deal with the consequences of a decade-long binge on foreign capital, with global investors increasingly skeptical of the country’s ability to grow its way out of trouble.

We’re depressingly reminded of French President Charles de Gaulle’s warning – “Brazil is the country of the future…and always will be”. But there is cause for optimism – once the saccharine sugar boost provided by international investors has worn off, growth should be far more balanced and sustainable.

11-25-2014, 06:38 PM
US GDP revised up to 3.9% – a beat – USD up
The US growth engine is at full speed: Q3 GDP growth was revised to the upside, to 3.9% annualized. Consumer spending was revised up to 2.2%. Core PCE os 1.4%. The PCE is up from 1.2% to 1.3%. This is a good figure. There is still one more revision awaiting us in a month or so.

The USD is stronger: EUR/USD is sliding to 1.24, GBP/USD at 1.5650, USD/JPY to 118.25, AUD/USD is below 0.8520 and USD/CAD at 1.1287.

US Gross Domestic Product growth for the third quarter was expected to be revised down to 3.3% from 3.5% originally reported.

Currencies traded in range before the release: EUR/USD was around 1.2425, GBP/USD at around 1.5660, USD/JPY flirted with 118, USD/CAD was around 112.67 and AUD/USD stood out with a fall to new multi-year low

While Q3 is getting further away, this is the most comprehensive view of the economy, making it important. This

11-27-2014, 03:51 PM
Monetary developments in the euro areaThe annual growth rate of the broad monetary aggregate M3 stood at 2.5% in October 2014, unchanged from the previous month.1 The three-month average of the annual growth rates of M3 in the period from August 2014 to October 2014 increased to 2.3%, from 2.1% in the period from July 2014 to September 2014. Regarding the main components of M3, the annual growth rate of M1 stood at 6.2% in October 2014, unchanged from the previous month. The annual growth rate of short-term deposits other than overnight deposits (M2-M1) was more negative at -2.1% in October, from -1.6% in the previous month. The annual growth rate of marketable ... (full story (http://www.ecb.europa.eu/press/pdf/md/md1410.pdf))

11-27-2014, 03:53 PM
German Jobless Rate at Record Low as Confidence Improves
German unemployment fell and the jobless rate reached a record low as businesses and investors become more confident that Europe’s largest economy will keep growing.
The number of people out of work fell a seasonally adjusted 14,000 to 2.87 million in November, the Federal Labor Agency in Nuremberg said today. Economists forecast a decline of 1,000, according to the median of 34 estimates in a Bloomberg News survey. The adjusted jobless rate was 6.6 percent, matching the revised number for the previous month and marking the lowest level in records going back more than two decades.
Germany’s economy returned to growth in the third quarter and business confidence and investor sentiment both improved in November as the European Central Bank added stimulus to the euro area. Even so, the Bundesbank says momentum will be lacking until at least the end of the year.
“The German labor market is running very close to full employment and shows no signs of significant slowdown in spite of slower growth,” said Evelyn Herrmann, European economist at BNP Paribas SA in London.
Unemployment fell by 9,000 in western Germany and 5,000 in the eastern part of the country, today’s report showed.
The euro fell after the report and traded at $1.2468 at 11:03 a.m. in Frankfurt, down 0.3 percent today. Germany’s DAX Index (DAX) of 30 biggest stocks climbed 0.7 percent to 9987.34.
Time Needed “Demand for workers remains on a good level,” the labor agency said. “The fields of transport, logistics and sales are particularly sought-after currently because of Christmas-related business.”
Private consumption climbed 0.7 percent in the three months through September and exports gained 1.9 percent, contributing to a 0.1 percent expansion in gross domestic product, the Federal statistics office said on Nov. 25.
At the same time, capital investment sank 0.9 percent amid tepid growth in the euro area and sanctions against Russia that disrupt trade flows. Russia’s actions in Ukraine threaten “the peaceful international order and breach international law,” German Chancellor Angela Merkel said yesterday, signaling she’s ready for a long confrontation with Russian President Vladimir Putin.
The 18-nation euro-area economy grew just 0.2 percent last quarter and ECB President Mario Draghi said in a speech in Helsinki today that “time is needed” for the positive effects of the latest stimulus measures to fully materialize. Since June, the Frankfurt-based central bank has cut interest rates, offered long-term loans to banks and bought covered bonds and asset-backed securities.
Inflation probably slowed to 0.3 percent this month, matching the lowest rate since 2009, according to a separate survey before the data is published tomorrow. Joblessness in the euro region probably held at 11.5 percent in October.

11-27-2014, 03:58 PM
27 November 2014 - Weak economic prospects exacerbate financial system risks - Financial Stability Review

Euro area systemic stress at lowest level since the onset of the financial crisis in 2007 despite intermittent financial market turbulence

Progress continues in balance sheet repair following the euro area crisis, boosted by the successful completion of the ECB’s comprehensive assessment of significant banks

The economic recovery nonetheless remains weak, fragile and uneven – and could potentially reinforce financial stability risks, against a backdrop of a global search for yield

Systemic stress among euro area banks and sovereigns declined further to levels last seen before the onset of the global financial crisis in 2007, according to the latest Financial Stability Review of the European Central Bank (ECB) released today.
Generally ebullient financial market sentiment contrasts with a weak, fragile and uneven economic recovery – despite progress in addressing banking and sovereign vulnerabilities. In particular, the provision of bank credit remains weak, despite exceptional ECB support, given a combination of weak demand and credit terms in some pockets of the economy that may discourage borrowing and investment.
In the meantime, balance sheet repair in the euro area continues. Banks have strengthened their balance sheets – at least in part as a result of the ECB’s comprehensive assessment. However, the work of restoring public finances remains uneven and unfinished.
Combining these legacy issues that require balance sheet repair with emerging risks in the form of continued global search for yield leads to three key risks to financial stability over the next 1½ years that could reinforce each other, if triggered:

Abrupt reversal of the global search for yield, amplified by pockets of illiquidity, with signs of a growing use of leverage in the non-bank financial sector. This calls for continued efforts to improve the oversight of and the tools to deal with risks from shadow banking activities.

Persistently sluggish bank profitability in a weak, fragile and uneven macroeconomic recovery

Re-emergence of debt sustainability concerns, set against low nominal growth and wavering policy determination for fiscal and structural reform

In addition to a thorough review of the main developments relevant for euro area financial stability, this Review also contains three special feature articles. The special feature articles study the effects of spillovers from fire-sales in the euro area financial system, work on characterising the financial cycle in euro area countries and the net stable funding ratio in the context of the new macro-prudential policy toolkit.

11-27-2014, 04:01 PM
Stability and Prosperity in Monetary Union Speech by Mario Draghi, President of the European Central Bank,
at the University of Helsinki,
Helsinki, 27 November 2014
ECB President Mario Draghi outlined the minimum requirements needed to complete monetary union in a way that offers stability and prosperity for all its members in a speech to students of the University of Helsinki.
Acknowledging that, “for all its resilience, our union is still incomplete”, Mr Draghi argued that, ultimately, Member States “have to be better off inside than they would be outside.”
“If there are parts of the euro area that are worse off inside the Union, doubts may grow about whether they might ultimately have to leave”.
“The euro is – and has to be – irrevocable in all its member states, not just because the Treaties say so, but because without this there cannot be a truly single money”, he said.
In the absence of permanent fiscal transfers among Member States, there are two minimum requirements to achieve these objectives: the first is that all euro area countries need to be able to thrive independently, the second is that euro area countries need to invest more in other mechanisms to share the cost of shocks.
In a monetary union, the economic performance of any single country cannot be seen as a purely national concern. “There is a strong case for sovereignty over relevant economic policies to be exercised jointly. That means above all structural reforms”, the President remarked.
But even so, economic adjustments can have short term costs.
To ensure that countries are better off being in the Union when a shock hits than they would be outside, “we need other ways to help spread those costs…there is a particular onus on private risk-sharing to play this role”. In this context Mr Draghi said barriers to capital markets integration needed to be addressed with urgency.
Sovereign debt needs also to act as a safe haven in times of economic stress. It can do so first of all through a strong fiscal governance framework. Secondly, by having some form of backstop for sovereign debt in place. “Over the longer-term”, the President concluded, “it would be natural to reflect further on whether we have done enough in the euro area to preserve at all times the ability to use fiscal policy counter-cyclically. But it is also clear that… this could only take place in the context of a decisive step towards closer Fiscal Union”.
Ladies and gentlemen,
A common misconception about the European Union – and the euro area – is that they are economic unions without an underlying political union. This reflects a deep misunderstanding of what economic union means: it is by nature political.
The Single Market is itself a political construct that could not operate without adequate political structures. A strong competition authority requires an executive to enforce competition policy, a legislative to write the law that it enforces, and a judiciary to resolve conflicts under the Law. The Commission, EU Council, European Parliament and European Court of Justice all play these roles. [1 (http://www.ecb.europa.eu/press/key/date/2014/html/sp141127_1.en.html#footnote.1)]
Likewise, fiat money is a political construct, and monetary union could not operate without adequate political structures. In this case, an independent central bank has to ground its legitimacy in a precisely defined mandate that is embedded in a democratically agreed constitutional framework – which the ECB finds in the EU Treaties. [2 (http://www.ecb.europa.eu/press/key/date/2014/html/sp141127_1.en.html#footnote.2)]
If our union has proved more resilient over the past years than many thought, it is only because those who doubted it misjudged this political dimension. They underestimated the political underpinnings of our union, the ties between its members, and the amount of political capital that has been invested in it.
Yet it is clear that, for all its resilience, our union is still incomplete. This is the diagnosis that was made two years ago by the Presidents of the European Council, the European Commission, the Eurogroup and myself, in the so-called “Four Presidents Report”. And though progress has been achieved in some areas, it remains unfinished in others.
So until we have completed EMU, which means achieving the minimum requirements in all areas for our union to be truly sustainable, doubts about its future will never entirely fade away. And this is true no matter how much political commitment is voiced.
What I would like to discuss today is what those minimum requirements are to complete our Union in a way that brings stability and prosperity for all its members.
The minimum requirements for monetary union When countries join a monetary union, they share monetary policy and no longer have individual exchange rates. This offers significant benefits, but it also creates costs.
On the one hand, especially for smaller countries, sharing sovereignty over monetary policy is a way to regain sovereignty. Rather than having their monetary policy effectively determined by a larger neighbour, they can participate on equal terms in decision-making for the entire euro area. The removal of exchange rate uncertainty also yields immediate benefits in terms of reduced risk premia.
On the other hand, sharing monetary policy and in particular an exchange rate deprives national economies of some adjustment tools in the face of local shocks.
This means that such shocks have to be preempted to the extent possible through sound economic policies. It also means that when shocks do occur – as they inevitably will – adjustment has to take place through other channels. And crucially, those channels have to be at least as effective as if countries were not part of monetary union. Members have to be better off inside than they would be outside.
The reason for this is as follows: if there are parts of the euro area that are worse off inside the Union, doubts may grow about whether they might ultimately have to leave. And if one country can potentially leave the monetary union, then this creates a replicable precedent for all countries. This in turn would undermine the fungibility of money, as bank deposits and other financial contracts in any country would bear a redenomination risk.
This is not theory: we all have seen first-hand, and at considerable costs in terms of welfare and employment, how fears about euro exit and redenomination have fragmented our economies.
So it should be clear that the success of monetary union anywhere depends on its success everywhere. The euro is – and has to be – irrevocable in all its member states, not just because the Treaties say so, but because without this there cannot be a truly single money.
What I am saying of the euro area could apply to most currency areas. But participation in our monetary union has different characteristics to participation in other political unions. This is particularly because we operate in an environment where there are no permanent fiscal transfers between countries. [3 (http://www.ecb.europa.eu/press/key/date/2014/html/sp141127_1.en.html#footnote.3)] And this has important consequences.
In all national economies, permanent transfers take place from richer to poorer regions; from more densely populated to more sparsely populated areas; and from those better endowed with natural resources to those less endowed. This is true in the United States, where those transfers occur through the federal budget. It is true within Germany, within Italy, within Finland. Fiscal transfers, so long as they remain fair, often help cement social cohesion and protect against the temptation of secession.
But as such transfers are not foreseen within the euro area, this model does not apply for us. We need a different approach to ensure that each country is permanently better off within the Union than outside – and it entails two minimum requirements.
The first is that all euro area countries need to be able to thrive independently. This means that every economy has to be flexible enough to find and exploit their comparative advantages, so as to benefit from the Single Market. They have to be able to allocate resources efficiently and create a dynamic business environment, so that their economies can attract capital and generate enough jobs.
And they also have to be flexible enough to respond quickly to short-term shocks, including through adjustment of wages or reallocating resources across sectors.
This is particularly important because, due to cultural barriers, labour mobility offers only a limited escape valve from high local unemployment in the euro area – at least compared with more homogenous unions like the US. Certainly, greater cross-country mobility would be welcome, and we should encourage measures that facilitate it. But research suggests that it is unlikely that cross-country migration flows will ever become a key driver of labour market adjustment after large shocks [4 (http://www.ecb.europa.eu/press/key/date/2014/html/sp141127_1.en.html#footnote.4)]. And no country will thrive anyway if its population deserts it.
The second implication that follows from not having fiscal transfers is that EMU countries need to invest more in other mechanisms to share the cost of shocks.
Many shocks can be preempted by the right policies. But for those that cannot, internal adjustment will generally be slower than if countries were able to adjust relative prices instantly through their own exchange rate. In these circumstances, some form of cross-country risk-sharing is essential to help reduce adjustment costs for those countries and prevent recessions from leaving deep and permanent scars.
In our case this means deepening financial integration in ways that improve private risk-sharing – that is, through having more diversified financial portfolios that can spread risk and reward across regions, and more integrated credit markets that can smooth consumption patterns. And it means ensuring that the conditions are in place so that all countries can retain full use of national fiscal policy as a counter-cyclical buffer.
Let me explain these various points, and their implications, in some more detail.
Economies that can adjust quickly to shocks and grow Building economies that are resilient and flexible entails that wages and prices can adjust to economic conditions, and that resources can reallocate swiftly across firms and sectors.
We know from economic theory that this is crucial in a monetary union to ensure that adjustment happens through prices, not quantities – that is, unemployment. And we have also seen this play out in our direct experience: during the crisis countries with more flexible economies have on the whole adjusted faster and with a lower employment cost. This is evident, for example, if one compares the experience of Ireland and Latvia with that of Spain, Portugal and Greece. [5 (http://www.ecb.europa.eu/press/key/date/2014/html/sp141127_1.en.html#footnote.5)]
We know as well that economies that are flexible and can allocate resources efficiently benefit most from the Single Market by exploiting their comparative advantages. And where populations are ageing, they also have the best chance of raising potential growth. This is again true in theory, but also visible in practice. To give just one example, the World Economic Forum ranks Finland fourth in the world in terms of global competitiveness, whereas Greece is ranked 81st. [6 (http://www.ecb.europa.eu/press/key/date/2014/html/sp141127_1.en.html#footnote.6)]
Until now, such differences in the structures and institutions of our economies have largely been seen as a national concern. Countries that reformed their economies and improved their business environments were seen as the chief beneficiaries of their efforts. And if some countries did not reform, it was largely believed that they would be the only ones to suffer as a consequence.
This understanding was reflected in the fact that, while monetary policy became European, important parts of economic policy remained at the national level – and with relatively loose common governance. This seemed natural as many of these policies – such as labour market institutions or social protection schemes – are deeply rooted in a country’s social model and national traditions.
But with the benefit of experience, I am sceptical as to whether this view is still valid. That economies can adjust and grow is in fact very much a concern for others.
If some countries in monetary union perpetually adjust more slowly than others, they are likely to have consistently higher unemployment. And if they also have lower growth potential, then that unemployment is more likely to become entrenched and structural. In other words, lack of structural reforms raises the spectre of permanent economic divergence between members. And insofar as this threatens the essential cohesion of the Union, this has potentially damaging consequences for all EMU members.
Seen from this perspective, euro area countries cannot be agnostic about whether and how others address their reform challenges. Their own prosperity ultimately depends on each country putting itself in a position to thrive within the Union. And for this reason, there is a strong case for sovereignty over relevant economic policies to be exercised jointly. That means above all structural reforms.
This was the starting point for the reflection that began with the Four Presidents’ Report in 2012 on building a genuine Economic Union for the euro area. And to my mind, deepening Economic Union would mean two things.
First, in the short-term, using more effectively the rules and procedures we already have, such as the European Semester. This means making all parties more accountable for ensuring that recommendations are well-targeted, closely monitored and followed up. And it means actively using the corrective tools that are there to tackle large imbalances, such as the Excessive Imbalances Procedure.
Second, over the longer-term, acknowledging the community of interest and the reality of spillovers in the form of a real sharing of sovereignty in the governance of structural reforms. That is, shifting from coordination to common decision-making, and from rules to institutions.
Private risk-sharing through integrated financial markets As I said, however, economies will never be so flexible that adjustment happens as quickly as if they had their own exchange rate. There will always be short-term costs. And so to ensure that countries are better off being in the Union when a shock hits than they would be outside, we need other ways to help spread those costs.
In a monetary union like ours, there is a particular onus on private risk-sharing to play this role. Indeed, the less public risk-sharing we want, the more private risk-sharing we need.
Private risk-sharing chiefly comes through a well-integrated financial system. Diversified portfolios make balance sheets more resilient to local shocks and allow the effects of those shocks to be dispersed across countries. And integrated credit markets allow firms and households to smooth any negative effects on income by bringing forward future consumption – which in the euro area essentially means borrowing from countries that are less affected. In other words, financial union is an integral part of monetary union.
The US provides an example of how effective private risk-sharing can be in a monetary union. A well-known study found that around two-thirds of economic shocks are absorbed via integrated financial markets in the US. By contrast, studies on the euro area suggest that credit and capital markets are much less effective in smoothing income. [7 (http://www.ecb.europa.eu/press/key/date/2014/html/sp141127_1.en.html#footnote.7)]
The explanation for the limited degree of risk-sharing in the euro area can be found in the relatively shallow type of financial integration that evolved before the crisis.
In the banking sector, integration of interbank markets proceeded much faster than integration of retail markets. Thus, most banks’ assets remained concentrated in their local markets, while their liabilities were mainly comprised of short-term debt. This meant that when a large local shock hit, they were exposed to heavy and concentrated losses. And rather than sharing those losses, their creditors were able to “cut and run”. [8 (http://www.ecb.europa.eu/press/key/date/2014/html/sp141127_1.en.html#footnote.8)] The resulting financial fragmentation also meant that cross-border credit markets could not do their job.
In this context, Banking Union represents a vital step forward in creating the conditions for a higher quality of financial integration. Single supervision and resolution should be catalytic in lowering the hurdles to cross-border activity and encouraging deeper retail banking integration. In the process, this will create more private risk-sharing within the sector. [9 (http://www.ecb.europa.eu/press/key/date/2014/html/sp141127_1.en.html#footnote.9)]
Banking Union is now well underway: the Single Supervisory Mechanism (SSM) took over supervision of euro area banks earlier this month. Its founding act, the Comprehensive Assessment of banks’ balance sheets, was successfully completed the month previously. And the Single Resolution Mechanism will begin on 1 January next year.
But limited risk-sharing within the euro area is not just about banks; it also reflects our relatively incomplete capital markets, and in particular equity markets. Those markets are the most effective for absorbing losses. Yet only 44% of equity issued in the euro area is held by other euro area residents. [10 (http://www.ecb.europa.eu/press/key/date/2014/html/sp141127_1.en.html#footnote.10)]
So, if we are to deepen private sector risk-sharing in the euro area, we urgently need to address the barriers to capital market integration. This is no doubt a complex issue as it extends into multiple aspects of national law. [11 (http://www.ecb.europa.eu/press/key/date/2014/html/sp141127_1.en.html#footnote.11)] But if we do not want a transfer union, then we have to be consistent and establish an environment where other mechanisms can work.
This means, first, advancing with the agenda of the new Commission President to establish a genuine Capital Markets Union in Europe. And second, establishing a genuine Economic Union in parallel. If countries are to attract capital and benefit from financial risk-sharing, then it has to be attractive to invest there. And this can only be achieved if, over the medium-term, all countries have sufficient adjustment capacity and growth prospects.
Yet even with full implementation of these Unions, we could still not call EMU complete. We also have to acknowledge the crucial role that accrues to fiscal policies in a monetary union.
National fiscal policies that can act counter-cyclically A single monetary policy focused on achieving euro area price stability cannot react to shocks that affect only one country or one region. And we do not have a federal budget that can respond instead, as in the US for example. So, for as long as this situation persists, it is absolutely essential that national fiscal policies can perform their macroeconomic stabilisation role alongside monetary policy, and react whenever a local shock occurs.
Fiscal policies are in fact particularly relevant for us, as a recent study demonstrates that 47% of an unemployment shock is absorbed by the automatic stabilisers in the EU, compared with only 34% in the US. [12 (http://www.ecb.europa.eu/press/key/date/2014/html/sp141127_1.en.html#footnote.12)]
For national fiscal stabilisers to be able to play out in full, sovereign debt has to act as a safe haven in times of economic stress. If it instead acts like private debt, and borrowing costs rise under stress, governments’ market access becomes constrained at precisely the moment they most need it. Then, fiscal policy risks becoming pro-cyclical.
There are in principle two ways to protect the safe haven status of sovereign debt: the first is a strong fiscal governance framework that is implemented in a credible manner. This means having sufficient buffers over the cycle to absorb exceptional shocks, and having public debt levels that are sufficiently low in good times that they can rise in bad times without disrupting market confidence.
The second way is some form of backstop for sovereign debt.
In the euro area, due to various aspects of our institutional framework, we have very much pursued the first approach, strong fiscal rules. And this provides an essential anchor for confidence, not only for investors but also among firms and households, and crucially, between countries. The importance of each country sticking to its commitments under the Stability and Growth Pact should therefore be beyond debate.
Indeed, that a sound fiscal framework is necessary in a monetary union goes without saying. Whether it is sufficient to safeguard fiscal policy as a stabilisation tool, however, has been challenged by our experience during the crisis.
The EMU framework was grounded on the assumption that keeping one’s fiscal house in order would be enough to ensure market access and ward off contagion. And to be sure, countries with more robust fiscal positions have on the whole enjoyed easier financing conditions and have been more protected from spillovers. But we have also seen that this protection is not absolute.
Ireland and Spain, for instance, had low public debts and deficits on entering the crisis yet suffered serious contagion from Greece. And during the phase of the crisis where contagion within the euro area was at its worst, almost all countries saw their credit default swap spreads rise.
In other words, as panics can happen in financial markets, even abiding fully with the fiscal rules cannot provide a cast-iron guarantee of affordable market access.
So what can governments do in these circumstances to safeguard fiscal policy as a stabilisation tool?
First, this is precisely the kind of situation I mentioned earlier where we can and should aim to better preempt economic shocks. The SSM is particularly important in this context, as it should help prevent the kind of large financial imbalances we saw in countries like Ireland and Spain, which subsequently spilled over to the public sector.
Second, markets are less likely to react negatively to temporarily higher deficits if government debt is clearly sustainable over the medium-term. This can in part be achieved through credible fiscal plans, which act on the numerator of the debt-to-GDP ratio. But it also has to involve raising potential growth through structural reforms, which act on the denominator.
And for this reason, governments in fact have a further incentive to enter into closer Economic Union. Insofar as this acts as a commitment device that reforms will indeed by implemented, it will help to raise future government income and improve debt sustainability. And in doing so, it can even help create fiscal space today.
Moreover, using EU funds more effectively to boost both current demand and future potential – which means raising investment – would have a similar effect on growth and debt sustainability. I therefore welcome the Commission’s new proposal to stimulate investment spending in Europe. What matters is that its size complements the fiscal stance of national governments, that it is deployed quickly so that it can support demand, and that it is targeted towards those sectors where its impact on potential growth will be largest.
Still, a third conclusion seems unavoidable: that no form of stronger governance can entirely remove the risk of self-fulfilling liquidity crises.
I do not think this is a controversial statement. It has already been acknowledged with the creation of the European Stability Mechanism. And it is also what motivates the ongoing discussion on establishing a backstop for the Single Resolution Fund: the idea is to prevent sovereigns from losing market access based on self-fulfilling expectations of future bailouts. [13 (http://www.ecb.europa.eu/press/key/date/2014/html/sp141127_1.en.html#footnote.13)]
So over the longer-term, it would be natural to reflect further on whether we have done enough in the euro area to preserve at all times the ability to use fiscal policy counter-cyclically. But it is also clear that such a reflection would have to be part of a larger discussion on how to reinforce common decision-making over fiscal policies and strengthen accountability arrangements.
In other words, this could only take place in the context of a decisive step towards closer Fiscal Union. And to make that step we would need to first see a process of convergence in economic and financial policies in the ways I have described.
Conclusion This brings me to my conclusion.
What I have argued today is that doubts over the viability of EMU will only be fully removed when we have completed it in all relevant areas. This means Banking and Capital Markets Union; it means Economic and Fiscal Union. In a monetary union no policy area can be seen in isolation. Each interacts with and affects the other. And as such, completing EMU in all areas strengthens and underpins the others.
Monetary union is more effective in securing the fundamental interests of citizens when common interests are recognised as such; and when the responsibilities that come with participating in a community are assumed in full. In other words, its ultimate success depends on the acknowledgment that sharing a single currency is political union, and following through with the consequences. And that requires commensurate accountability and transparency arrangements.
All countries must benefit permanently from participation in monetary union. And this means that the requirements I have laid out cannot be met only at the time when a country joins the union, or for some of the time. They have to be met all the time. They have to be irrevocable features of participation in monetary union.
And for that reason, the institutional arrangements that ensure those requirements are met must ultimately be binding in nature, and permanent in form.

12-01-2014, 06:36 PM
Weak commodity prices pressure the Australian economy
The Australian dollar touched its lowest level since July 2010 as tumbling commodity prices including oil put severe pressure on the commodity currency and left analysts to wonder when the rout will stop

At 9.12pm (AEDT) the Aussie dollar was trading at US84.93 US cents after falling as low as US84.17 cents and down fromUS85.02 cents at Friday’s close.

The problems began last week as OPEC, the oil cartel decided to resist pressure and leave output unchanged at 30 million barrels per day, at least 1 million above OPEC’s own estimates of demand for its oil next year, sending the oil price plummeting below the US$70 a barrel mark and dragging down commodity currencies with it such as the Aussie dollar.

Commonwealth Bank chief currency strategist Richard Grace said the announcement sent commodity currencies tumbling.
“Increased supply of oil and mining produce, combined with slowing economic growth in China, Brazil, Russia and India as well as Japan’s recession will put oil prices and commodity currencies under further pressure” he mentioned

Another commodity pressuring the Australian dollar was gold after Swiss voters overwhelmingly rejected a proposal to increase the central bank’s gold reserves sparking a selloff in the precious metal

Australia is one of the world’s biggest gold producers coming in just behind China

Earlier in the year most Analysts were pricing in an Interest rate rise from the Reserve Bank of Australia in the second half of next year with a reduction in rates certainly not at the top of anyone’s agenda.

In a surprise move last week RBA deputy governor Philip Lowe said the cash rate could be “cut again if necessary”, a move that was previously believed to be highly unlikely and caught Investors completely off guard.

House prices are rising at the slowest pace in a year with only Sydney, Brisbane, Perth and Hobart posting an increase in November in a sign that Australia’s booming property market may be starting to cool off .

Prices in Melbourne were down 2.6% for the month while in in Adelaide, Canberra and Darwin the average drop was 0.3 per cent with Sydney bucking the trend as prices rose by 1%,

Australia’s median capital city house price stands at $559,000 with Sydney homes selling for $705,000 and Melbourne dwellings going for $568,500.

In a surprise move last week the People’s Bank of China decided to cut the one-year benchmark lending rate by 40 basis points, marking the first reduction in two years. The bank also reduced the benchmark one-year deposit rate by 25 basis points.

The central bank’s cut in Interest rates is seen as a move to reduce borrowing costs and boost confidence amongst businesses in order for them to invest. From the outside it seems there are growing fears about a slowdown in the Chinese economy which could really pressure the Australian economy as Australia is China’s largest export partner with two way trade trade reaching $150 billion a year.

12-01-2014, 07:19 PM
Gold prices plummet after Swiss referendum

Gold prices edged lower on Monday, after Swiss voters voted against the Swiss central bank to boost its gold reserves. The Swiss refused to lift gold reserves at the Swiss National Bank to 20%, according to the results of the referendum on Sunday. 78% voted “no” to lift the reserve to 20% from the current 8%. Results of the Swiss vote led to a price gap at the beginning of the trading session today, but Gold seeks to fill this gap. Gold traders continued to fill the gap caused by the referendum vote, as the yellow metal awaits the U.S. jobs report later this week that will show signs of how the U.S. economy is improving, which could spark speculation over the Federal Reserve’s monetary policy direction. The yellow metal started Monday trading at $1159 an ounce, compared with last Friday’s closing at $1166 an ounce. Spot gold traded around $1162 an ounce, gaining 0.25% from the opening levels.

12-01-2014, 07:20 PM
Oil extends decline on OPEC decision

Oil prices extended its sharp losses from the previous session on Monday in response to the Organization of the Petroleum Exporting Countries (OPEC)’s decision. WTI Crude oil dropped below $65 a barrel, a level not seen since 2008, at 08:23 GMT. WTI Crude oil for delivery in January fell by 3.19% around $63.97 a barrel. Brent oil prices declined 3.28% around $67.85 a barrel. Crude oil prices are still under the influence of Saudi Arabian Oil Minister Ali al-Naimi`s and OPEC members comments after the meeting in Vienna on Thursday that it is imperative to leave financial markets achieve the balance in crude oil prices without interference. OPEC said last Thursday that it would keep its production target unchanged at 30 million barrels a day, disappointing hopes of reducing production to support prices, which have fallen below acceptable levels. Reports on Chinese and Japanese manufacturing for November showing a slowdown worse than last month and market expectations weighed on prices. The negative pressure is expected to extend due to the negative impact of OPEC’s decision not to cut production to support prices that fell below $70 a barrel. The U.S. and Europe will be releasing economic data later in the day, which is expected to show a slowdown that will negatively influence crude oil prices.

12-08-2014, 05:29 PM
EUR In Focus As TLTRO Impact Could Be Mixed; Staying Short - BNPP
The ECB TLTRO will be in focus as the bank announces the allotment of the 2nd TLTRO operation on Thursday, notes BNP Paribas.
"The first operation saw a low uptake of just €85 bn and another low uptake could put some upside pressure on EUR front-end rates. However, low demand at the TLTRO would also increase the chances of an increase in asset purchases early next year, which would be viewed as EUR-negative. Conversely, a large draw at the operation could reduce QE hopes, squeezing EUR shorts even if it kept EUR front-end rates heavy," BNPP projects.
BNPP remains short EUR/USD and short EUR/GBP heading into this week, with targets of 1.18 and 0.7757 respectively.

01-05-2015, 06:54 PM
Grexit Worries Wallop Euro
The first full trading week of 2015 has started off with a bang, as volatility takes center stage in currency markets and risk adverse behavior has traders continuing to bail out of commodities. Global equities have been trading heavy to start the New Year, and this looks set to continue with the showdown in Greece intensifying as the parliamentary elections at the end of the month draw closer.

The euro has been a big mover overnight, with the common-currency battered on developments over the weekend that caused a barrage of sell-orders to hit the market at the Asian open and drive EURUSD to the lowest level seen since March of 2006. Particular attention was paid to a news article crossing the wires in which a source within the German government cited Merkel as now considering Greece’s exit from the Eurozone manageable, given the progress made in other periphery regions like Portugal and Ireland. This comes on the back of Merkel’s chief advisor saying that Greece is no longer in a position to “blackmail” the Eurozone as they are no longer of systematic importance to the euro; appearing as if the German government is gearing up for a potential stand-off should Syriza secure a majority government if elected into parliament at the end of the month. While the majority of Greek voters still wish to remain in the EMU, and a vote for Syriza isn’t a vote to exit the union, investor concern around another battle over Greek debt restructuring will do little to instill confidence in financial markets.

The “Grexit” fears combined with Draghi’s comments on Friday that the ECB was preparing to alter the size and composition of their balance sheet expansion in early 2015 has reignited the downdraft in EURUSD, with the pair collapsing to pivot around the 1.19 handle. Not helping the pronounced offer tone in the euro was the fact that German inflation data came in on the soft side of expectations, with the harmonized annualized reading dropping to only a 0.1% increase compared to the 0.5% increase registered in November. The weak inflation numbers in Germany both increase the likelihood that Bundesbank’s opposition to sovereign bond purchases eases because of their regional disinflationary pressures, while at the same time amassing greater confidence thatWednesday’s flash print for the overall zone comes in a -0.1%, levying further pressure on Draghi to stabilize falling consumer prices. January will be an important month for the euro with the ECB meeting and Greek elections both taking place at the tail end, and it’s likely the associated volatility with market posturing is far from over.

Heading into the North American open, there is little economic data to digest for the first trading session of the week, though US auto sales will be filtering through the market over the course of the day. Consensus expectations from economists are for pace of 16.9M units in December, though lower gas prices and a stronger labour market could be the catalysts for a surprise to the upside. Speaking of lower energy prices, the bloodbath in crude looks set to kick-off the New Year right where 2014 left off, with front-month WTI under selling pressure as Texas Tea crumbles to the $51/barrel handle. The renewed slide in hydrocarbons combined with the broad-based DXY strength has put the Loonie on the defensive, though for the time being it has managed to thwart new weakness afterFriday’s melt-down. USDCAD heads into the North American session flirting with the 1.18 handle, and after the price action seen at the end of last week, still looks like the bulls remain in control.

01-05-2015, 06:57 PM
German inflation falls to 0.1% – lowest since 2009
German HICP inflation falls to the lowest level of 2009 at 0.1%. This is hardly a positive number and below 0.2% expected. The dramatic drop from 0.6% in November is easily attributed to oil prices, but they are not really alone.

EUR/USD is below 1.19. Can it confirm the break below the 2010 low?

Update: after the initial dip, EURUSD is back above 1.19, but isn’t going too far.

National CPI stands at 0.2%, also below 0.3% expected. Month over month, HICP rose by 0.1% and national CPI was unchanged – both also below predictions.

These low levels mean that a scenario of deflation in the euro-zone for 2014 cannot be ruled out. The data is set for release on Wednesday. It pressures the ECB to act.

For the month of December, Germany was expected to report a significant drop in the already low HICP seen in November. Predictions stood on a national CPI level of 0.3% and the European standard HICP level of 0.2%. However, early data from the various German states seemed extremely low.

EUR/USD was trading at extremely low levels of just around 1.19. The 2010 low of 1.1867 was briefly breached in the early hours of the week, on very thin trading. The break to levels last seen in 2006 was still not confirmed.

01-13-2015, 02:00 PM
UK inflation plunges
A relatively subdued overnight session, the main exceptions being the yen and oil. Crude is now touching the USD 45 level on the front month Brent contract, whilst the yen has net-net softened on mild speculation that further stimulus measures are in the pipeline. Focusing on the oil price, we are likely to see further signs of the impact of this on the UK inflation data. The positive impact from reducing the burden on consumers and freeing up income to spend elsewhere has received less attention so far, but it is worth watching the activity numbers more closely in coming weeks to see what impact It has. In the end, it becomes a balancing act between the deflationary and income effects.

The main focus today will be with the latest UK inflation data, where the headline rate is seen falling to 0.7% and potentially even lower. Perhaps even more important is what happens to the core rate, which is not pulled around try the volatility in energy prices. This has fallen from 2% a year ago to 1.2% in November, with a small increase to 1.3% anticipated for today’s release. If this is steady or lower, then sterling is more likely to move lower on a sustained basis.

01-14-2015, 07:50 PM
AUD selling as Copper crashes
Copper is crashing in Asia, down over 6.5%, building up on recent losses, with some AUD selling now noted. The 61.8 fibo of the post GFC upleg in copper is now being threatened, with plenty of stops reported right underneath. AUD/USD is currently trading down at 0.8155 after printing a session high of 0.8187 earlier on the day.

01-14-2015, 08:35 PM
French Consumer Prices Index increased by 0.1% in December 2014
Here are published the monthly and year-on-year rates of change of the Consumer Price indexes in December 2014. The annual average rates of change of the CPI will also be published on 14th January. The annual averages and the year-on-year rates of change are different: the annual averages refer to the whole set of prices oberved during one year compared to those observed during the previous year. The year-on-year price changes refer to the prices observed during a particular month compared to those observed during the same month of the previous year.

01-14-2015, 08:48 PM
Cable pops 1.5200 to trigger stops
1.5224 high so far in a rush after stops that we’ve highlighted were triggered; currently 1.5208; Not sure of the prime mover here but general USD selling and the failure to hold previous highs at 1.5195 obviously gave someone a green light for a crack through the figure; Time for me to re-assess after a good run and trading 1.5145-95 quite merrily for a while; Let’s see what happens from here but the offers into 1.5225 are holding so far and demand around 0.7750 on EURGBP should also provide some GBP sellers still;

01-14-2015, 09:21 PM
Draghi says ECB unanimous in determination to meet mandate
but views differ on how to achieve that; to achieve price stability needs expansive monetary policy; ECB ready to buy govt bonds; ECB not there to give advantages to one country or another; options to fight deflation are limited; Germany should understand that ECB has pan-European mandate; ECB president quoted on Rtrs from interview with Die Zeit and seemingly still trying to clear the way for QE next week; will continue in his present job, not a candidate for Italian presidency; EURUSD lower again at 1.1791; Update: ECB’s Visco says they should counter deflation risk with major asset purchases;

01-14-2015, 09:23 PM
UK house purchase lending down 12% in November
New CML data on the characteristics of lending in November 2014 show a decline in lending trends to first-time buyers, home movers and remortgaging, from the heights of November 2013; but a year-on-year increase in buy-to-let lending.
Monthly highlights:

First-time buyers saw a month-on-month lending decline, with 25,900 first-time buyer loans in November - down 11% on October, and 3% down on November 2013. By value, there was £3.8 billion advanced to first-time buyers in November - 12% down on October but 6% up on November last year.
Lending to home movers also declined month-on-month. The number of loans advanced to movers was 29,700, a 13% fall on the previous month and down 10% on November last year. By value, lending to movers totalled £5.4 billion, down 14% on October and 5% on November last year.
Remortgage lending activity saw a decline month-on-month in November, with the number of remortgage loans totalling 24,000. This was 8% down on October and 16% down on November last year. The value of these loans (£3.6 billion) was down 10% on the previous month and down 14% on November last year.
There were 17,700 buy-to-let loans in November, representing lending of £2.4bn. This was a decrease on the previous month with loan volumes down 10% and the value of these loans down 11%. Compared to November 2013, the number of loans increased 9% and the value of these loans went up 14%.

As previously reported, gross mortgage lending reached £16.5 billion in November. This is 11% lower than October (£18.6 billion), and 3% lower than November last year.
Lending for home-owner house purchase House purchase lending to home-buyers decreased month-on-month in November totalling 55,600 loans. This was down 12% compared to October with the value of these loans totalling £9.2bn, a fall of 13%. Compared to November 2013, the number of loans decreased by 7% and the value of lending by 1%.

01-14-2015, 09:24 PM
ECB takes note of Advocate General's opinion, OMT is ready and available
ECB takes note of Advocate General's opinion. This is an important milestone in request for preliminary ruling. OMT is ready and available.

01-14-2015, 09:25 PM
Industrial production up by 0.2% in euro area
In November 2014 compared with October 2014, seasonally adjusted industrial production1 rose by 0.2% in both the euro area2 (EA18) and the EU282, according to estimates from Eurostat, the statistical office of the European Union. In October 20143 industrial production grew by 0.3% in the both zones. In November 2014 compared with November 20134, industrial production decreased by 0.4% in the euro area and by 0.1% in the EU28. The increase of 0.2% in industrial production in the euro area in November 2014, compared with October 2014, is due to production of durable consumer goods rising by 1.9%, non-durable consumer goods by 0.5% ... (full story (http://ec.europa.eu/eurostat/documents/2995521/6480580/4-14012015-AP-EN.pdf/75c81cc7-1b52-4206-947e-950b4ebb1486))

01-14-2015, 09:31 PM
The conference board leading economic index for the UK
The Conference Board Leading Economic Index® (LEI) for the U.K. declined 0.3 percent, and The Conference Board Coincident Economic Index® (CEI) increased 0.2 percent in November.  The Conference Board LEI for the U.K. continued to decrease in November, with volume of expected output, order book volume and consumer confidence making large negative contributions. Between May and November 2014, the leading economic index improved 0.3 percent (about a 0.5 percent annual rate), down from its 2.2 percent growth (about a 3.1 percent annual rate) in the previous six months.

01-15-2015, 06:16 PM
SNB governor: Cap end was not a panic move but needed to be a surprise
Thomas Jordan, the governor of the SNB, explains the dramatic decision to end the floor of 1.20 under EUR/CHF.

He mentions the divergence in global monetary policy (which is set to continue) and explains that the lower negative deposit rate is supposed to mitigate the decision to end the cap. — More coming —

Important: Jordan refuses to comment on communication with other central banks

The move was made due to international developments. It just did not make sense to keep the cap. The Bank to took its time with the decision. Jordan stresses it was not a panic move, but had be a surprise. He acknowledges that markets were not expecting it and that a big market movement was predicted by his institution.

The Swiss economy has adapted to forex levels, says Jordan. Well, it has to adapt to new ones as well. Swiss stocks are plunging.

Jordan expects the franc’s strength to ease from current levels and the situation to correct itself over time.

Intervention in markets is set to continue if necessary but he refuses to comment on specific market transactions.

EUR/USD is battling 1.17, the launch rate, but is currently below this level.

EUR/CHF is trading below 1.03 and USD/CHF around 0.8750.

01-15-2015, 06:19 PM
SNB also breaks the brokers – MT4 providers removing CHF quotes – slowly recovering

EUR/CHF broke the 1.20 floor after the SNB removed the floor, and the move also breaks some brokers.

On one of the charting systems used here, the price of EUR/CHF froze at 1.1757, while other systems shows deeper falls.

In addition, Ryan Littlestone at Forex Live reports that MT4 providers have pulled out CHF quotes.

Update: Trading View has updated quotes on the franc once again. EUR/CHF is trading under 1.04 and USD/CHF under 0.89. Moves are erratic, to say the least.

Update 2: Ryan now reports that Swiss pairs are slowly coming back online.

At the moment, Netdania offers quotes, but spreads are absolutely huge.

01-15-2015, 06:21 PM
What does the SNB know about ECB QE?
Nobody expects the Spanish Inquisition or the Swiss National Bank. The removal of the 1.20 floor under EUR/CHF was a huge shock that sent EUR/USD temporarily below 1.16, the franc surging across the bonds and even sent Swiss crosses off brokers’ systems.

We are one week away from the all-important ECB decision that will probably introduce QE as Draghi’s determined words have shown. Markets expect a 500 billion euro program and that has already weakened the euro. Does the SNB know about an even bigger program? There is something interesting in the SNB’s statement.

The SNB already introduced negative rates to battle the inflow of Russian money into Switzerland. It has now set even lower rates and it’s safe to assume Russian money continues flowing.

But the euro-zone is much bigger than Russia and its impact is probably bigger.

We can certainly imagine the case that the SNB is anticipating a huge program that would weaken the euro so much that it could make defending the cap beyond impossible.

What can the ECB do? It can skip the initial QE programs from the US and the ones from the UK and the BOJ and head directly to a QE3 style program – a program to buy bonds on a monthly basis without a pre-determined price limit.

This is merely a speculation, but after the EUR/CHF has been seen as long lasting since 2011 has been removed, anything is possible.

The SNB expects the divergences between monetary policies to become even more pronounced.

Here is a quote from the SNB’s statement that refers to the divergence of monetary policies. Bolding mine:

Recently, divergences between the monetary policies of the major currency areas have increased significantly – a trend that is likely to become even more pronounced. The euro has depreciated considerably against the US dollar and this, in turn, has caused the Swiss franc to weaken against the US dollar.

More: 5 Most Predictable Currency Pairs- Q1 2015

Here is a quote from the SNB’s statement that refers to the divergence of monetary policies:

Recently, divergences between the monetary policies of the major currency areas have increased significantly – a trend that is likely to become even more pronounced. The euro has depreciated considerably against the US dollar and this, in turn, has caused the Swiss franc to weaken against the US dollar.

02-02-2015, 08:51 PM
CAD: Battered Loonie; GBP: Pounding Down Rate Hike Expectations – CIBC
The Canadian dollar certainly suffered from the negative GDP and the downward revision to job numbers. Can it recover? Probably not, says the team at CIBC think not.
And what about the British pound? The fall in rate hike expectations could also weigh.
Here is their view, courtesy of eFXnews:
The following are the weekly outlooks for the CAD, and GBP as provided by CIBC World Markets.
CAD: Battered Loonie. In cutting rates, the Bank of Canada is eyeing what will be a dramatic decline in energy investment. The Canadian Association of Petroleum Producers estimates that spending plans in Western Canada’s energy sector are likely to fall by a third.
In addition to hamstringing capital expenditure and hiring, and in the process encouraging the Bank of Canada to cut rates, lower crude prices will also severely damage Canada’s external position. The goods trade balance is moving deeper into the red; oil’s move will likely create around a $1 bn hit in December alone. With more pain ahead, look for the loonie to continue taking it on the chin.

http://pcm-fx.com/pcmupload/uploads/1422895834231.png (http://pcm-fx.com/pcmupload/)

GBP: Pounding Down Rate Hike Expectations. The fall in inflation recently has led the two dissenting MPC members to drop their earlier call for a rate hike, and seen financial markets dramatically push back expectations for BoE policy normalization. However, unlike in the US, wages, which can often be an indicator of future acceleration, are starting to firm again following a soft patch from late 2013 to mid-2014.
So don’t be surprised if the BoE do still start raising rates this year, albeit later than the Fed, which would see sterling claw back some lost ground against the US$ in the second half of the year.

http://pcm-fx.com/pcmupload/uploads/1422895834382.png (http://pcm-fx.com/pcmupload/)

02-02-2015, 08:57 PM
US Core PCE Price Index slips to 1.3%
The Fed’s favorite inflation figure is not going in the right direction: it slipped from 1.4% to 1.3% y/y. Other figures are mixed: personal income beat with a rise of 0.3% while personal spending dropped by 0.3%.
The US dollar is ticking down on the releases.
The US released some figures regarding income and consumption. The most important figure for the Fed is the Core PCE price index – probably the central bank’s favorite measure of inflation.
The US dollar opened the trading week on a somewhat weaker note.
The data for December 2014:

Personal income: exp. 0.2%. Actual: +0.3%.
Core Personal Consumption Expenditures: exp. +0.1% m/m, last time we had 1.4% y/y. Actual 1.3% y/y.
PCE Price Index: last was =0.2% m/m, +1.2% y/y. Actual: only 0.7% y/y.
Personal Spending: exp. -0.2%. Actual -0.3%.

Later we have the ISM Manufacturing PMI – the first hint towards Friday’s Non-Farm Payrolls. Later in the week we have the services PMI and the ADP NFP.