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Data Is Dead, All Hail The Fed! (based on seekingalpha article)
All the market cares about is what a few words dictated from the Fed meeting, not what the data tells investors. That's what we saw with the results of a two-day Fed meeting culminating in an announcement about the future of interest rates. Traders jumped on the trend, and anyone with a pulse should have made money on Wednesday.
It just so happens I have spent the last month accumulating data, both good and bad, in deciphering for myself what is really going on in the economy. It is so much data I had to create a separate area where it can be posted, and you can find the link to the data by clicking here: What Does this Economic Data Tell Us?
As you can see from the data it is mostly negative. But how does the Fed view this data? We actually heard Janet Yellen say the Fed won't raise rates in April, but could shortly thereafter. I wrote recently that the Fed isn't thinking about raising rates any time soon, but may do so just to save credibility. This is the "talk the talk" I speak about. Yellen followed up her comment about raising interest rates with; "depending on how the economy evolves." HELLO? Why do people believe what comes out of the Fed? Do they not have a clue or is the Fed really good at keeping the truth from us with neuro-linguistic presuppositions?
The Fed talks about when they will raise rates (strong economy), but the economy has "moderated" (weak economy) and they have lowered their growth forecasts (weak economy) and are still battling deflation (weak economy).
The dollar took a hit today falling to 97.68 as I type, and gold rose from a low of $1,144.90 to a high of $1,175.80 and is presently sitting at $1,167.90. Silver fared a little better going from $15.36 at its low to a high of $16.20 and is sitting at $15.99 presently. Oil also shot up and natural gas had a 4% plus lift too.
The gold standard in spreading your risk is glistening (based on independent article)
In China, Chairman Mao banned gold ownership in 1950 - and the ban continued until 2003 when the Chinese gold market was liberalised. The per capita gold buying and ownership of 1.3 billion Chinese people is increasing from near zero levels.
Only this week, a report by ANZ Bank said that gold prices would double to over $2,400/oz in the coming years due to a doubling in Asian demand and global investment. "Greater demand from investors and central banks will see gold prices rise materially over the long term."
"Most of the time, you don't want to pay for it. But if you need it, you're glad you have it," ANZ said of physical gold.
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Gold is an asset class that attracts a lot of heated debate and very wide-ranging opinions in Ireland and internationally.
Some hate gold and see it as a useless "chunk of metal" with no value at all. Others see it as a finite and rare currency, and the best form of money throughout history and indeed today.
As is often the case in such debate, the truth is somewhere in between.
Gold, like stocks, euros or any form of wealth, is neither good nor bad, per se. However, there is a growing body of academic and other independent research that shows that gold has value as a hedging instrument and a safe-haven asset.
"Gold can serve as a hedge against declining values of key fiat currencies."
These are not the words of some so-called 'gold bug', warning that paper currencies are set to collapse in value. Rather, they are part of the recent findings of the UK's influential and respected Chatham House, or the Royal Institute of International Affairs.
"Holding gold - the world's only independent currency - gives you some protection against the incompetence and idiocy of Europe's bickering politicians. So keep it."
The second quotation is from Merryn Somerset-Webb, one of the leading finance columnists at the Financial Times and one of the most respected financial experts in the UK.
Chatham House and Ms Somerset- Webb are part of a growing consensus about the importance of having an allocation to gold as part of diversified investment and pension portfolios.
The key to successful long-term investing is diversification and owning a range of different assets.
Euro to US Dollar (EUR/USD) Forecast for Next Week: Greece to Deliver Acceptable Reforms? (based on euroexchangeratenews article)
The Euro to US Dollar (EUR/USD) exchange rate rallied strongly at the end of the week as concerns over the situation in Greece eased after Athens promised its European creditors that it would deliver new and improved reform measures by the end of next week.
A string of weaker than forecast economic data releases in the USA and dovish comments by the Federal Reserve softened the ‘Greenback’ against a number of major peers. Policy makers revised down both their inflation and growth forecasts. Also weighing, were comments made by Fed chair Janet Yellen that suggested that the Fed might delay hiking interest rates until September.
At the start of the week, the EUR/USD exchange rate is forecast to soften as economists predict that US homes sales and a national activity index will show signs of improvement. Harsh winter weather had weighed upon activity in the housing sector but as the weather turns warmer activity is likely to have improved. A consumer confidence report out of the Eurozone meanwhile is forecast to have fallen from -6.7 to -7.69.
Tuesday, will see volatility due to the release of a number of Markit PMI reports for the Eurozone. Manufacturing activity is forecast to rise whilst activity in the service sector is expected to soften. The main event of the session will be the latest inflation data out of the USA. Also due for publication is Markit Manufacturing PMI and a Richmond Fed Manufacturing Index.
Midweek sees the publication of IFO data for Germany and durable goods orders out of the USA. The IFO data is forecast to show improvement. Also of interest for the US Dollar will be the publication of the latest weekly mortgage applications data which is forecast to show a sharp rally from the -3.9% decline seen previously.
Forex - Weekly outlook: March 23 - 27 (based on investing.com article)
The dollar was sharply lower against the other major currencies on Friday, capping its worst weekly performance against the euro in three years and posting the largest weekly decline against the yen and the Swiss franc in two months amid doubts over how quickly U.S. interest rates will rise.
The sharp drop in the dollar came about amid uncertainty over the path of U.S. monetary policy after the Federal Reserve downgraded its forecasts for growth and inflation and lowered its interest rate projections on Wednesday.
The Fed statement dampened expectations for a mid-year rate hike, prompting investors to exit positions which would benefit from a strong dollar.
EUR/USD was up 1.52% to 1.0820 late Friday. For the week, the common currency gained 3.2%, the largest increase since October 2011.
USD/JPY was down 0.64% to 120.03 in late trade, ending the week with losses of 1.06%. USD/CHF dropped 1.54% to 0.9747, for a weekly loss of 3.16%.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, ended the week down 2.53%, posting the biggest weekly loss since October 2011.
The commodity-exposed currencies also strengthened against the greenback on Friday. AUD/USD surged 1.63% to 0.7774, NZD/USD jumped 2.04% to 0.7565 and USD/CAD lost 1.3% to trade at 1.2551.
Despite the past week’s reversal the dollar looks likely to continue to strengthen, with the Fed still expected to raise interest rates ahead of other central banks.
The euro has fallen around 10% against the dollar so far this year and the European Central Bank’s trillion-euro quantitative easing program, which launched earlier this month, is set to continue to act as a drag on the single currency.
In the week ahead, investors will be focusing on Tuesday’s U.S. inflation report after Fed Chair Janet Yellen warned last week that the stronger dollar was pushing down inflation.
Survey data on euro zone private sector activity, due for release on Tuesday, will also be closely watched.
Monday, March 23
Tuesday, March 24
Wednesday, March 25
Thursday, March 26
Friday, March 27
USD/JPY weekly outlook: March 23 - 27 (based on investing.com article)
The dollar fell on Friday, to post its largest weekly loss against the yen in two months amid a selloff sparked by uncertainty over the future path of U.S. monetary policy.
USD/JPY was down 0.64% to 120.03 in late trade, to end the week with losses of 1.06%.
The sharp drop in the dollar came about amid doubts over how soon quickly U.S. interest rates will rise after the Federal Reserve downgraded its forecasts for growth and inflation and lowered its interest rate projections on Wednesday.
The Fed statement dampened expectations for a mid-year rate hike, prompting investors to exit positions which would benefit from a strong dollar.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, ended the week down 2.53%, posting the biggest weekly decline since October 2011.
Despite the past week’s reversal the dollar looks likely to continue to strengthen, with the Fed still expected to raise interest rates ahead of other central banks.
The Bank of Japan expanded it stimulus program in late October amid concerns that falling oil prices could lower the inflation outlook.
The euro has fallen around 10% against the dollar so far this year and the European Central Bank’s trillion-euro quantitative easing program, which launched earlier this month, is set to continue to act as a drag on the single currency.
In the week ahead, investors will be focusing on Tuesday’s U.S. inflation report after Fed Chair Janet Yellen warned last week that the stronger dollar was pushing down inflation. Wednesday’s data on durable goods orders will also be closely watched.
Monday, March 23
Tuesday, March 24
Wednesday, March 25
Friday, March 27
Gold / Silver / Copper futures - weekly outlook: March 23 - 27 (based on investing.com article)
Gold rallied to a two-week high on Friday, as the U.S. dollar sold off after the Federal Reserve projected a slower pace of rate hikes following its policy meeting earlier in the week.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery hit a daily peak of $1,187.40 a troy ounce, the most since March 6, before ending at $1,184.60 by close of trade, up $15.60, or 1.33% for the day.
On the week, gold jumped $26.70, or 2.79%, the biggest weekly gain since early January. Futures were likely to find support at $1,141.60, the low from March 17, and resistance at $1,200.00, the high from March 6.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, tumbled 1.4% on Friday to end at 98.05, moving further away from a 12-year high of 100.78 hit on March 13.
Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
The dollar's losses came after the Federal Reserve downgraded its forecasts for growth and inflation and lowered its interest rate projections, prompting investors to push back expectations on the timing and pace of future rate increases.
A delay in raising interest rates would be seen as bullish for gold, as it decreases the relative cost of holding on to the metal, which doesn't offer investors any similar guaranteed payout.
Gold fell to a four-month low of $1,141.60 on Wednesday amid concerns that the Fed will start raising rates as early as in June.
Elsewhere on the Comex, silver futures for May delivery surged 76.9 cents, or 4.77%, on Friday to settle at $16.88 a troy ounce by close of trade, the highest level since February 26.
For the week, the May silver futures contract soared $1.25, or 8.96%, the first weekly gain in three weeks.
Also in metals trading, copper for May delivery rallied 10.1 cents, or 3.8%, on Friday to end at $2.761 a pound. Prices touched an intraday high of $2.774, the most since January 9.
Comex copper rose 9.8 cents, or 3.68%, on the week, amid speculation demand for the industrial metal will increase due to accommodative central bank policies in the U.S., Europe and China.
Meanwhile, the euro rallied above the $1.08-level against the greenback, supported by fresh hopes Greece will secure the additional bailout funds needed to avoid bankruptcy.
German Chancellor Angela Merkel said on Friday that financial aid payments to Greece could begin in tranches if the country's list of reforms was approved by its international lenders.
In the week ahead, investors will be focusing on Tuesday’s U.S. inflation report after Fed Chair Janet Yellen warned last week that the stronger dollar was pushing down consumer prices.
Monday, March 23
Tuesday, March 24
Wednesday, March 25
Thursday, March 26
Friday, March 27
EUR/USD weekly outlook: March 23 - 27 (based on investing.com article)
The euro was sharply higher against the dollar on Friday, notching up its largest weekly gain against the greenback in almost three years as doubts over the path of U.S. monetary policy pressured the dollar lower.
EUR/USD was up 1.52% to 1.0820 late Friday. For the week, the common currency gained 3.2%, the largest increase since October 2011.
The sharp drop in the dollar came about amid uncertainty over the path of U.S. monetary policy after the Federal Reserve downgraded its forecasts for growth and inflation and lowered its interest rate projections on Wednesday.
The Fed statement dampened expectations for a mid-year rate hike, prompting investors to exit positions which would benefit from a strong dollar, sparking volatility in the foreign exchange market.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, ended the week down 2.53%, posting the biggest weekly decline since October 2011.
Despite the past week’s reversal the dollar looks likely to continue to strengthen, with the Fed still expected to raise interest rates ahead of other central banks.
The euro has fallen around 10% against the dollar so far this year and the European Central Bank’s trillion-euro quantitative easing program, which launched earlier this month, is set to continue to act as a drag on the single currency.
In the week ahead, investors will be focusing on Tuesday’s U.S. inflation report after Fed Chair Janet Yellen warned last week that the stronger dollar was pushing down inflation.
Survey data on euro zone private sector activity, due for release on Tuesday, will also be closely watched.
Monday, March 23
Tuesday, March 24
Wednesday, March 25
Thursday, March 26
Friday, March 27
EUR/USD Technical Analysis: Resistance Near 1.10 in Focus (based on dailyfx article)
The Euro rallied against the US Dollar as expected after putting in a bullish Piercing Line candlestick pattern. A daily close above the intersection of a falling trend line and the 23.6% Fibonacci retracement at 1.0955 exposes the 38.2% level at 1.1263. Alternatively, a move below the 1.0456-541 area (March 16 low, the 23.6% Fib expansion) clears the way for a test of the 38.2% threshold at 1.0233.
Our long-term outlook calls for broad-based Euro weakness. With that in mind, we will treat any on-coming gains as corrective, looking to enter short at a more attractive level rather than a seeing the move higher as a buying opportunity. In the meantime, we remain flat.
if actual > forecast (or previous data) = good for currency (for EUR in our case)
[EUR - Greece Current Account] = The current account, released by the Bank of Greece is a net flow of current transactions, including goods, services and interest payments into and out of Greece. A current account surplus indicates that the flow of capital into Greece exceeds the capital reduction. A high reading is seen as positive (or bullish) for the Euro, whereas a low reading is seen as negative (or bearish).
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Greek current account deficit widens in January
Greece's current account deficit widened in January compared to the same month a year earlier while tourism receipts rose slightly, according to central bank data published on Monday.
The deficit stood at 0.85 billion euros ($917 million) versus a deficit of 0.34 billion euros in January 2014, mainly due to a drop in the export of goods.
Tourism revenues rose slightly to 170 million euros in January from 156 million euros in the same month in 2014.
KEY FIGURES (bln euros) 2015 2014
January -0.847 -0.336
if actual > forecast (or previous data) = good for currency (for USD in our case)
[USD - Existing Home Sales] = Annualized number of residential buildings that were sold during the previous month, excluding new construction. It's a leading indicator of economic health because the sale of a home triggers a wide-reaching ripple effect. For example, renovations are done by the new owners, a mortgage is sold by the financing bank, and brokers are paid to execute the transaction.
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U.S. Existing Home Sales Climb 1.2% In February
After reporting a steep drop in existing home sales in the U.S. in the previous, the National Association of Realtors released a report on Monday showing a rebound in existing home sales in the month of February.
NAR said existing home sales rose 1.2 percent to an annual rate of 4.88 million in February after tumbling 4.9 percent to a rate of 4.82 million in January. Economists had expected existing home sales to climb to a rate of 4.90 million.
With the monthly increase, existing home sales are up by 4.7 percent compared to a rate of 4.66 million in the same month a year ago.
Lawrence Yun, NAR chief economist, said, "Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsuitable levels."
"Stronger price growth is a boon for homeowners looking to build additional equity, but it continues to be an obstacle for current buyers looking to close before rates rise," he added.
The report said housing inventory climbed 1.6 percent to 1.89 million existing homes available for sale at the end of February but were down 0.5 percent year-over-year.
The homes for sale at the end of the month represent 4.6 months of supply at the current sales pace, unchanged from the previous month.
Tuesday morning, the Commerce Department is scheduled to release a separate report on new home sales in the month of February.
Economists expect new home sales to drop to a rate of 462,000 in the month of February from a rate of 481,000 in January.