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2013-01-24 12:05 GMT (or 13:05 MQ MT5 time) | [GBP - BOE Gov Carney Speaks]
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GBP/USD drops below 1.6500 after Carney's speech
The GBP/USD came under strong pressure and slumped during the European session after BoE Carney's speech.
The Bank of England Governor Carney said in a speech at the World Economic Forum in Davos, that the MPC will update its forward guidance strategy in February after acknowledging that unemployment has fallen faster than anticipated. However, Carney stressed that now is not the time to raise rates. The GBP/USD fell over 100 pips in a matter of minutes and hit a 2-day low sub 1.6500.
Major Central Banks To Stop US Dollar Liquidity Operations
World's leading central banks are in the process of stopping their US dollar liquidity provisions for lenders, which were put in place during the financial crisis that started in 2008.
The European Central Bank, in cooperation with the Bank of England, the Bank of Japan and the Swiss National Bank, has decided to end the conduct of US dollar liquidity-providing operations, the Frankfurt-based ECB said on Friday.
"In view of the considerable improvement in US dollar funding conditions and the low demand for US dollar liquidity-providing operations,... central banks will gradually reduce their offering of US dollar liquidity-providing operations," the ECB said.
EUR/JPY Weekly Fundamental Analysis January 27 – 31, 2014 Forecast (based on fxempire.com article)
The EUR/JPY ended up lower for the week as the yen once again became a safe haven after traders abandoned equities are lackluster earnings data. The pair closed at 139.88 easing from the weekly high of 142.41 after the Bank of Japan held rates and stimulus at their monthly meeting. “There’s definitely some nervousness. The world is suffering from the emerging markets’ flu,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. Worries over China’s growth surfaced after a disappointing manufacturing number spurred the S&P 500′s 0.9 percent drop on Thursday.
China’s efforts to contain a “financial excesses” won’t be positive for growth, Gibbs said. The next major psychological level for Aussie is the 2010 low near 80 cents, he said.
The China Banking Regulatory Commission’s order did not mention concerns that a 3 billion yuan (US$496 million) trust product distributed by Industrial & Commercial Bank of China may default after a coal miner that borrowed the funds collapsed, said the people, who asked not to be identified. Regional CBRC offices were told to also closely monitor risks from trust and wealth management products, they said.
The German IFO business climate for industry and trade will likely increase further in January as suggested by both the PMI composite and the ZEW economic sentiment. We expect the IFO business climate index to increase for the third consecutive month, to 110.2 after 109.5 in December. Our expectation is based on a continuous improvement in business expectations in the manufacturing industry since April 2013. Traders expect both the current conditions index and the expectations index to have increased (from 111.6 to 111.9 and from 107.4 to 108.1 respectively). Similarly, the European Commission’s Economic Sentiment Indices should post a further broad-based improvement in January as the recovery gathers momentum in several countries, including Germany or Spain.
EUR/USD weekly outlook: January 27 - 31
Monday, January 27
In the euro zone, Germany is to release the Ifo report on business climate.
The U.S. is to produce data on new home sales, a leading indicator of demand in the housing sector.
Tuesday, January 28
In the euro zone, Italy is to hold an auction of 10-year government bonds.
The U.S. is to release data on durable goods orders, a leading indicator of production, as well as what will be a closely watch report on consumer confidence.
Wednesday, January 29
The Federal Reserve is to announce its federal funds rate and publish its rate statement.
Thursday, January 30
Germany is to produce preliminary data on consumer price inflation, which accounts for the majority of overall inflation, as well as a report on the change in the number of people unemployed. Elsewhere in the euro zone, Spain is to release preliminary data on fourth quarter growth.
The U.S. is to publish preliminary data on fourth quarter economic growth. The nation is also to release the weekly report on initial jobless claims and data on pending home sales.
Friday, January 31
The euro zone is to release preliminary data on consumer inflation and a separate report on the unemployment rate across the currency bloc
The U.S. is to round up the week with a report on manufacturing activity in the Chicago region, revised data on consumer sentiment and a report on personal spending.
USD/CHF weekly outlook: January 27 - 31
Monday, January 27
The U.S. is to produce data on new home sales, a leading indicator of demand in the housing sector.
Tuesday, January 28
The U.S. is to release data on durable goods orders, a leading indicator of production, as well as what will be a closely watch report on consumer confidence.
Wednesday, January 29
The Federal Reserve is to announce its federal funds rate and publish its rate statement.
Thursday, January 30
Switzerland is to publish its KOF economic barometer.
The U.S. is to publish preliminary data on fourth quarter economic growth. The nation is also to release the weekly report on initial jobless claims and data on pending home sales.
Friday, January 31
The U.S. is to round up the week with a report on manufacturing activity in the Chicago region, revised data on consumer sentiment and a report on personal spending.
Weekly outlook: January 27 - 31 (all majors)
Monday, January 27
The Bank of Japan is to publish the minutes of its latest policy meeting, which contain valuable insights into economic conditions from the bank’s perspective. Japan is also to release data on the trade balance, the difference in value between imports and exports.
In the euro zone, Germany is to release the Ifo report on business climate.
The U.S. is to produce data on new home sales, a leading indicator of demand in the housing sector.
Tuesday, January 28
Australia is to publish private sector data on business confidence, a leading indicator of economic health.
The U.K. is to release preliminary data on fourth quarter gross domestic product, the broadest indicator of economic activity and the leading measure of the economy’s health.
In the euro zone, Italy is to hold an auction of 10-year government bonds.
The U.S. is to release data on durable goods orders, a leading indicator of production, as well as what will be a closely watch report on consumer confidence.
Wednesday, January 29
The Federal Reserve is to announce its federal funds rate and publish its rate statement.
The Reserve Bank of New Zealand is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision.
New Zealand is also to publish data on building consents.
Thursday, January 30
Japan is to produce official data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.
Australia is to release data on import prices, while China is to publish the revised reading of the HSBC manufacturing PMI.
Germany is to produce preliminary data on consumer price inflation, which accounts for the majority of overall inflation, as well as a report on the change in the number of people unemployed. Elsewhere in the euro zone, Spain is to release preliminary data on fourth quarter growth.
Switzerland is to publish its KOF economic barometer.
The U.K. is to release data on net lending to individuals.
The U.S. is to publish preliminary data on fourth quarter economic growth. The nation is also to release the weekly report on initial jobless claims and data on pending home sales.
Later Thursday, New Zealand is to produce data on the trade balance.
Friday, January 31
Japan is to release a series of data, including reports on household spending, inflation, and industrial production.
Australia is to produce reports on producer price inflation and private sector credit.
The euro zone is to release preliminary data on consumer inflation and a separate report on the unemployment rate across the currency bloc
Canada is to publish the monthly report on GDP growth.
The U.S. is to round up the week with a report on manufacturing activity in the Chicago region, revised data on consumer sentiment and a report on personal spending.
AUDUSD Analysis for coming week (based on dailyfx article)
Fundamental Forecast for Australian Dollar: Neutral
The Australian Dollar continued to sink last week, dropping 1.1 percent against its US namesake to settle at the weakest level in three and a half years. The currency veered away from its relationship with US Treasury yields – a reflection of sensitivity to the Fed monetary policy outlook – to take cues from risk sentiment trends. Indeed, last week’s selloff tracked a sharp downward reversal in the MSCI World Stock Index while the rate on the benchmark US 10-year note fell to the lowest in two months (2.715 percent).
EURUSD Analysis (based on dailyfx article)
Fundamental Forecast for Euro: Bullish
The Euro proved resilient the past week, gaining one percent or more against four of the other seven major currencies, while holding its own against the top two performers, the Japanese Yen and the Swiss Franc. The EURJPY (-0.94%) and EURCHF (-0.72%) tumbles can largely be attributed to a global shift to safer assets, with equity markets sliding and high-rated sovereign debt rallying (German Bunds, US Treasuries).
Yet as concerns cropped up elsewhere, in emerging markets and the Asian-Australasian theatre (EURAUD +2.12%, EURNZD +1.51%) as well as North America (EURCAD +2.12%, EURUSD +1.00%), the Euro’s fundamental backdrop strengthened. The January PMI figures, coming off of a mixed batch in December – which prompted the Euro’s early-January tumble – came in well above expectations, further supporting our core theme for 2014: faster rates of growth return to the European continent.
2013-01-26 23:50 GMT (or 00:50 MQ MT5 time) | [JPY - Trade Balance]
if actual > forecast = good for currency (for JPY in our case)
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Japan Has Y1,302.11 Billion Trade Deficit In December
Japan posted a merchandise trade deficit of 1,302.11 billion yen in December, the Ministry of Finance said on Monday - sliding into the red for the 17th consecutive month.
The headline figure missed expectations for a shortfall of 1,280.0 billion yen after showing a downwardly revised 1,294.1 billion yen deficit in November (originally 1,292.9 billion yen).
These Key Levels Will Determine The Markets' Next Major Move (based on Forbes article)
Two important "lines in the sand" must hold to avoid a sharp decline in U.S. and Japanese stocks.
Global financial markets have experienced tremors in the past week thanks to a confluence of confidence-shaking news, from expectations of a major bank default in China, a surprisingly weak Chinese manufacturing report, a sharp decline in emerging market currencies, and overall jitters related to the Fed’s QE taper plan.