Press review - page 35
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A report in the WSJ suggests President Obama is set to nominate Janet Yellen to replace Ben Bernanke as Fed Chairman, meaning the Senate will have to confirm the nomination amid intense political bickering.
2013-10-09 08:30 GMT (or 10:30 MQ MT5 time| [AUD - Employment Change]
if actual > forecast = good for currency (for AUD in our case)
==========
Australia September Unemployment Rate 5.6%
Australia's unemployment rate was a seasonally adjusted 5.6 percent in September, the Australian Bureau of Statistics said on Thursday.
That was below forecasts for 5.8 percent and down from the revised 5.7 percent in August (originally 5.8 percent).
The Australian economy added 9,100 jobs to 11,645,800 - missing expectations for an increase of 15,000 following the loss of 10,200 jobs in the previous month.
Full-time employment increased 5,000 to 8,133,700 and part-time employment increased 4,100 to 3,512,100.
Unemployment decreased 14,700 (2.1 percent) to 697,100. The number of persons looking for full-time work decreased 5,000 to 509,200 and the number of persons looking for part-time work decreased 9,800 to 187,900.
The participation rate eased to 64.9 percent - shy of forecasts for 65.0 percent, which would have been unchanged from August.
Aggregate monthly hours worked decreased 6.4 million hours to 1,641.5 million hours.
Price & Time: Cycle Turn Windows Coming Up in Several Instruments
Talking Points
Price & Time Analysis: USD/CAD
- USD/CAD touched its highest level in almost a month and
a half on Thursday before finding resistance at the 4th square root
progression of the 2Q low in the 1.0410 area
- Our near-term trend bias remains higher while above the 3rd square root progression of the year’s high near 1.0300
- The
1.0410 area is clearly and important resistance zone a daily close over
this level would setup further strength towards attractions at 1.0455
and above
- An important medium-term cycle turn window is seen Friday and Monday
- A move under 1.0300 at anytime will turn us negative on Funds
USD/CAD Strategy: Like the long side whilst over 1.0300, but will be looking to reduce into the turn window tomorrow.Obama Officially Nominates Yellen As First Female Fed Chair
If confirmed by the Senate, Yellen would be the first female chair of the Federal Reserve
============
On Wednesday afternoon, President Obama officially nominated Janet Yellen as the next chair of the Federal Reserve, and the first female chair in its 100-year history.
While news of Obama’s intentions broke late Tuesday night, this was his first public statement confirming that the current vice chair of the Fed is his choice to succeed Ben Bernanke. In his remarks on Wednesday, the president thanked Bernanke for his service — “he has truly been a stablizing force not just for our country, but to the world,” he said — and then introduced Yellen as his choice as Bernanke’s successor, highlighting her significant economic experience.
“This provides the markets some needed clarity on the outlook for monetary policy leadership at a time when dysfunction in fiscal policy resulting in the Federal government shutdown and looming debt ceiling hike dominates financial market and public concerns,” said PNC Chief Economist Stuart Hoffman in a note on Wednesday, calling Yellen an “excellent choice” with “impeccable” economic credentials.
“Initially, her main job will be to maintain the independence of the Fed and public confidence that the Fed will produce the best monetary policy possible,” said White & Case Banking Partner Ernie Patrikis, a former general counsel of the New York Federal Reserve and alternate member of the Federal Open Market Committee. Patrikis also provided an outlook for what the economy might look like under Yellen’s first days as chair, predicting, “In the short run, we will not see any major drastic changes under the new chairman. The supertanker is on course, which is to figure out how to get the economy to continue to roll and not have the Fed harm the economy in any way.”
Following President Obama’s remarks, the markets appeared unmoved, with the Dow up 0.12%, the S&P down 0.01% and the Nasdaq down 0.43%.
Trading the News: U. of Michigan Confidence
A further decline in the U. of Michigan Confidence survey may prompt a more bearish outlook for the U.S. dollar as it dampens the scope of seeing the Federal Open Market Committee (FOMC) taper the asset-purchase program at the October 29-30 meeting.
What’s Expected:
Why Is This Event Important:
Indeed, the Fed may continue to delay its exit strategy in an effort to combat the fiscal drag, and the central bank may carry its highly accommodative policy stance into 2014 as a means to further insulate the real economy.
How To Trade This Event Risk
Bearish USD Trade: U. of Michigan Confidence Weakens for Third Month
Bullish USD Trade: Consumer Sentiment Improves
Potential Price Targets For The Release
U.S. consumer confidence weakened for the second month in September, with the U. of Michigan survey narrowing to 76.8 from 82.1 the month prior, while inflation expectations advanced to an annualized 3.2% from 3.0% to mark the highest reading since March. The mixed reaction following the print was short-lived as the EURUSD worked its way back above the 1.3275 region, and the greenback continued to lose ground throughout the day as the pair closed at 1.3297.
2013-10-11 12:30 GMT (or 14:30 MQ MT5 time) | [CAD - Unemployment Rate]
if actual < forecast = good for currency (for CAD in our case)
==========
Canadian unemployment rate drops to 6.9% – USD/CAD falls
Canada gained 11.9K jobs in October, a small disappointment. It was expected to show a gain of 15.3K jobs after the huge jump of 59.2K last month. The unemployment rate was expected to remain unchanged at 7.1%, but this surprised with a drop to 6.9% – an unemployment rate unseen in a long time. In recent months, employment data was quite volatile.
USD/CAD traded just under 1.04 towards the publication. It is now under 1.0380.
The participation rate dropped from 66.6% to 66.4% and this explains the drop in the unemployment rate. However, the report is good not only because of the unemployment rate but also due to the composition of jobs: Canada gained no less than 23.4K full time jobs and actually lost 11.5K part time jobs. These are signs of a healthy economy.
The Canadian dollar suffers from the political deadlock in the US: the Canadian economy depends on the strength of the US economy and a weaker economy due to the government shutdown and the fear of a default due to the debt ceiling certainly weigh on the loonie, even if oil prices are doing well.
1.0360 provides some support and 1.0446 is the line to watch on the topside.Dow Jones Industrial Average
-After a dip under the August low (the index was actually overlapping with mid-April levels). The DJIA rallied 2.93% in 2 days. This is the largest 2 day rally since 12/31/12-1/2/13.
-Sideways action since May is either a topping formation or consolidation before a fantastic ‘blowoff’ that ultimately ends in tears.
-While in the range however, be aware of the following levels: 15250 and 15382 as near term resistance as well as the line that originates at the November low and 14945 and 14795 as supports.
Trading Strategy: Know these levels in order to time risk trends.
What happened during the week (source)
The Dow Jones broke a five-week bear trend while the benchmark S&P 500 leveraged a massive 3.5 percent intra-week rally this past week
The Euro had a mixed week as US fiscal headlines were the main focus of price action across asset classes around the globe.
The British Pound struggled to maintain the bullish trend dating back to July even as the Bank of England (BoE) retained its current policy at the October meeting, but the sterling may trade on a firmer footing next week should the fundamental developments coming out of the U.K. encourage the central bank to implement its exit strategy ahead of scheduled.
Gold prices plummeted 3.21% this week with the precious metal trading at $1268 ahead of the New York close on Friday.
The Australian Dollar’s recovery faces an important challenge from key Chinese economic data while the budget impasse in the US threatens to unleash risk aversion.
Weekly outlook: October 14 - 18
The dollar was higher against the yen on Friday, amid hopes for a breakthrough on an agreement to end the U.S. government shutdown and raise the debt ceiling in time to avert a sovereign debt default.
Investor confidence was boosted as House Republicans and the Obama administration began a second day of negotiations on a deal to reopen the government and raise the U.S. debt ceiling for six weeks.
The U.S. risks running out of cash if the government borrowing limit is not raised by 17 October.
USD/JPY ended Friday’s session at 98.56, up 0.40% for the day. For the week, the pair gained 1.93%.
The euro moved higher against the dollar as market sentiment improved, with EUR/USD up 0.14% to settle at 1.3540, and ending the week 0.30% lower.
Concerns over economic impact of the U.S budget and debt ceiling impasse fuelled expectations that the Federal Reserve will further delay plans to start phasing out its USD85 billion a month asset purchase program.
Wednesday’s minutes of the Fed’s September meeting said the decision not to begin tapering stimulus was a "close call," with all but one voting member opting to leave the program unchanged.
Data released on Friday showed that U.S. consumer sentiment fell to the lowest level in nine months in October, as concerns over the impact of the government shutdown weighed.
The University of Michigan’s consumer sentiment index declined to 75.2 from a final reading of 77.5 in September, and below expectations for a reading of 76.0.
Elsewhere, the pound was lower against the dollar on Friday, following the release of data showing that U.K. construction sector output unexpectedly fell by 0.1% in August. Earlier in the week, data showed that industrial and manufacturing output also dropped unexpectedly in August.
GBP/USD slipped 0.13% to settle at 1.5946, and ended the week with losses of 0.94%.
In the week ahead, investors will continued to closely monitor political developments in Washington. On Monday, markets in the U.S. and Canada are to remain closed for the Thanksgiving holiday.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, October 14
Markets in Japan are to be closed for a national holiday.
Australia is to release data on home loans, an important indicator of demand in the housing sector.
China is to publish data on consumer inflation, which accounts for the majority of overall inflation.
Switzerland is to release data on producer price inflation, a leading indicator of consumer inflation.
The euro zone is to release data on industrial production.
Markets in the U.S. and Canada are to remain closed for the Thanksgiving holiday.
Tuesday, October 15
The Reserve Bank of Australia is to publish its monetary policy meeting minutes, which contain valuable insights into economic conditions from the bank’s perspective.
The U.K. is to produce official data on consumer price inflation and producer price inflation.
The ZEW Institute is to release its closely watched report on German economic sentiment, a leading indicator of economic health, as well as data on economic sentiment in the wider euro zone. The euro zone is to release official data on industrial production.
The U.S. is to release a report on manufacturing activity in the Empire state.
Wednesday, October 16
New Zealand is to release data on consumer price inflation.
The U.K. is to release official data on the change in the number of people unemployed and the unemployment rate, as well as data on average earnings.
The ZEW Institute is to publish a report on economic expectations in Switzerland, a leading indicator of economic health.
The euro zone is to release data on consumer price inflation.
Canada is to produce data on manufacturing sales, a leading economic indicator.
Thursday, October 17
Australia is to publish a private sector report on business confidence, an important economic indicator.
The U.K. is to produce data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.
The U.S. is to publish the weekly government report on initial jobless claims, as well as data on manufacturing activity from the Philly Fed.
Friday, October 18
China is to release data on third quarter gross domestic product, the broadest indicator of economic activity and the leading measure of the economy’s health, in addition to data on industrial production.
Canada is to publish data on consumer price inflation.
GBP/USD weekly outlook: October 14 - 18
The pound was lower against the dollar on Friday as hopes for a breakthrough on the U.S. budget and debt ceiling deadlock in Washington supported the greenback, while disappointing U.K. economic data weighed on sterling.
GBP/USD ended Friday’s session at 1.5944, 0.13% lower for the day, after falling as low as 1.5912 on Thursday. For the week, the pair was down 0.94%.
Cable is likely to find short-term support at 1.5885 and resistance at 1.6120.
Sentiment on the dollar was boosted as House Republicans and the Obama administration began a second day of negotiations on a deal to reopen the government and raise the U.S. government borrowing limit for six weeks.
The U.S. risks running out of cash if the debt ceiling is not raised by 17 October.
Meanwhile, concerns over economic impact of the political deadlock in Washington fuelled expectations that the Federal Reserve will further delay plans to start phasing out its USD85 billion a month asset purchase program.
Wednesday’s minutes of the Fed’s September meeting said the decision not to begin tapering stimulus was a "close call," with all but one voting member opting to leave the program unchanged.
Data released on Friday showed that U.S. consumer sentiment fell to the lowest level in nine months in October, as concerns over the impact of the government shutdown weighed.
The University of Michigan’s consumer sentiment index declined to 75.2 from a final reading of 77.5 in September, and below expectations for a reading of 76.0.
Sterling came under pressure after data released on Friday showed that U.K. construction sector output slipped 0.1% in August, a sharp slowdown after a 2.8% increase in July.
Earlier in the week, data showed that U.K. industrial production fell at the fastest rate in nearly a year in August, rising doubts over the outlook for third quarter growth.
The Office for National Statistics said U.K. industrial production fell 1.1% in August, defying expectations for a 0.4% increase, after inching up 0.1% in July.
The ONS said manufacturing production fell by a seasonally adjusted 1.2% in August, confounding expectations for a 0.4% increase.
In the week ahead, investors will continued to closely monitor political developments in Washington. Trade volumes are likely to remain light on Monday, with U.S. markets closed for a holiday. U.K data on employment and retail sales will be in focus as markets attempt to gauge the strength of the economic recovery.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Friday as there are no relevant events on this day.
Monday, October 14
Markets in the U.S. are to remain closed for the Colombus Day holiday.
Tuesday, October 15
The U.K. is to produce official data on consumer price inflation and producer price inflation.
The U.S. is to release a report on manufacturing activity in the Empire state.
Wednesday, October 16
The U.K. is to release official data on the change in the number of people unemployed and the unemployment rate, as well as data on average earnings.
Thursday, October 17
The U.K. is to produce data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.
The U.S. is to publish the weekly government report on initial jobless claims, as well as data on manufacturing activity from the Philly Fed.