FTSE Declines as HSBC Pulls Bank Stocks Lower
Leading UK shares dropped for the second day as HSBC Holdings Plc pulled
an index of banks lower after posting reduced earnings, while the US
insisted it would impose additional sanctions on Russia for its role in
the tensions in Ukraine.
HSBC lost 1.5% after the biggest bank in Europe said its profit for the
first three months of 2014 dropped 20%. Barclays Plc declined 1.4% after
Citigroup Inc announced the bank may postpone a profitability target by
J Sainsbury Plc slid 3.2% after Kantar Worldpanel said the supermarket
operator lost market share in the past 12 weeks. Legal & General
Group Plc gained 3% after posting earnings.
The FTSE 100 index reversed 11.16 points or 0.2% down to 6,787.4 as of
2:37 pm in London. The blue-chip gauge has soared for the past three
weeks fueled by increased mergers-and-acquisitions activity, Bloomberg said.
The broader FTSE All-Share Index plunged 2%. ISEQ Index of Ireland lost 0.7%.
“Banks played a big role in the U.K.’s decline today, with HSBC and
Barclays falling. “It only adds to the persistent fears about the
situation in Ukraine, which could bring more volatility to the markets,”
said John Plassard of Geneva-based Mirabaud Securities LLP.
US Secretary of State John Kerry reiterated late Tuesday America’s
intention to slap Russia with further measures if it stands in the way
of Ukraine’s presidential elections scheduled for May 25.
Experian took away 5% after reporting its full-year results. The
company’s full-year earnings were above expectations, but investors paid
more attention to comments from Chief Executive Don Robert, according
He said that the company’s growth in the first half would be hindered by
the soccer’s World Cup in Brazil and alterations to its North American
consumer venture. The soccer tournament would take away attention from
Experian’s consumer services, the CEO added.
2014-05-08 01:30 GMT (or 03:30 MQ MT5 time) | [AUD - Employment Change]
if actual > forecast = good for currency (for AUD in our case)
Australia April Unemployment Rate 5.8%
The unemployment rate in Australia was a seasonally adjusted 5.8
percent in April, the Australian Bureau of Statistics said on Thursday.
That was unchanged from the previous month and beating forecasts for 5.9 percent.
The Australian economy added 14,200 jobs to 11,572,900 in April. That topped expectations for 8,750 following the addition of 18,146 a month earlier.
Full-time employment increased 14,200 to 8,045,100 following the downwardly revised loss of 22,700 jobs in March.
Part-time employment was roughly unchanged following the upwardly revised gain of 44,600 jobs in the month prior.
decreased 400 to 713,400. The number of unemployed persons looking for
full-time work increased 8,700 to 519,500, while the number of
unemployed persons looking for part-time work decreased 9,000 to
The participation rate was 64.7 percent, unchanged and in line with expectations.
Aggregate monthly hours worked decreased 39.9 million hours (2.5 percent) to 1,572.6 million hours.
the release of the data, the Australian dollar advanced against other
major currencies, trading near 0.9356 against the greenback, 95.28
against the yen, 1.4865 against the euro and 1.0811 against the kiwi.
2014-05-08 02:19 GMT (or 04:19 MQ MT5 time) | [CNY - Trade Balance]
if actual > forecast = good for currency (for CNY in our case)
China Has $18.5 Billion Trade Surplus In April
China saw a merchandise trade surplus of $18.5 billion in April, the Customs Office said on Thursday.
That topped forecasts for a surplus of $13.9 billion following the $7.7 billion surplus in March.
were up 0.9 percent on year - also beating expectations for a decline
of 1.7 percent following the 6.6 percent fall in the previous month.
added an annual 0.8 percent versus expectations for a contraction of
2.3 percent after tumbling 11.3 percent a month earlier.
Trading the News: European Central Bank Interest Rate Decision (based on dailyfx article)
According to a Bloomberg News survey, 56 of the 58 economists polled
anticipate the European Central Bank (ECB) to retain its current policy
in May, but the EUR/USD may struggle to hold its ground should President
Mario Draghi show a greater willingness to further embark on the easing
Why Is This Event Important:Indeed, the ECB is coming under increased
pressure to implement more non-standard measures amid the persistent
threat for deflation, and we may see the central bank lay the groundwork
to ease policy further in the coming months as the Governing Council
struggles to achieve its one and only mandate to preserve price
Subdued price growth paired with the ongoing contraction in private
sector lending may prompt the ECB to adopt a more dovish outlook for
monetary policy, and we may see the EUR/USD give back the advance from
the beginning of the month should the fresh batch of central bank
rhetoric drag on interest rate expectations.
However, the ECB may stick to the sidelines amid the positive
developments coming out of the monetary union, and the EUR/USD may
continue to carve higher highs & higher lows in May should the
central bank remain reluctant to implement more non-standard measures.
How To Trade This Event Risk
Trading the ECB interest rate decision may not be as clear cut as some
of our other trade setups as the press conference with President Draghi
ends with a Q&A session
Bearish EUR Trade: ECB Ramps Up Dovish Tone/Sets Expectations for More Easing
April 2014 European Central Bank Interest Rate Decision
EURUSD M5 : 32 pips price movement by EUR - Interest Rate news event
The ECB kept rates on hold once more in April and stated that the
central bank was not excluding the use of unconventional tools if
needed. Although the rate decision sent the Euro higher, when Draghi
took the stage and said that the use of unconventional tools was a
possibility, we saw Euro weakness across the board. Volatility was
relatively weak as has been the case over the last few weeks. Market
participants will note Draghi’s language in regards to the Euro as he
has become more comfortable in using his position to talk down the Euro.
U.S. Dollar Ends Losing Streak on Yellen Comments, Colombian Peso Rallies
The U.S. dollar advanced against its peers after Federal Reserve Chair
Janet Yellen expressed confidence that the U.S. economy is set to grow.
The euro plunged 0.1 percent to trade at $1.3914, after earlier touching
$1.3951, its strongest level since March 13. The 18-nation currency
remained slightly unchanged at 141.61 yen. The U.S. dollar rose 0.1
percent to trade at 101.78 yen, a strong showing after earlier tumbling
to its lowest level in three weeks.
The Bloomberg Dollar Spot Index, which tracks the dollar against 10
major counterparts, advanced 0.1 percent to 1,002.02, its weakest mark
since October 29. The euro tumbled from its strongest level in seven
weeks over speculation that the European Central Bank will not announce
any additional monetary stimulus in its Thursday meeting.
“Although the dollar is marginally stronger, I do still think the
downtrend for the dollar is intact,” Lennon Sweeting, a San
Francisco-based dealer with USForex Inc. told Bloomberg. “We’re on a slow boat to seeing normalized rates.”
The Colombian peso surged 0.4 percent to 1,910.41 a U.S. dollar, its
strongest in six months, as the market speculated that foreign
investment into the country’s bond market.
The price of Colombia’s key peso bonds that expire in 2024 surged 0.26
centavo to 127.25 centavos per peso. The bond’s yields declined 0.03
percentage point, or three basis points, to 6.30 percent.
The peso has increased 6.3 percent since March 18, just before JPMorgan
Chase & Co announced it would bolster the weighting of the peso
notes, called TES more than two times in two indexes beginning May 30.
JPMorgan predicts that foreign funds will invest roughly $9.4 billion
owing to the increase.
USD/JPY Bears In Control Sub 102.00 With Reversal Signal Lacking
USD/JPY remains below the psychologically-significant 102.00 handle with
the absence of a bullish reversal signal making a bounce look unlikely
at this stage. Further declines may be met by buying support at the
USD/JPY: Open To Further Declines With Bullish Candlestick Missing :
Examining the four hour chart; the Doji
near 102.00 signaled a lack of conviction amongst the bulls near the
key resistance level. With a bullish reversal pattern also absent in
intraday trade, the potential for a bounce may be limited.
USD/JPY: Bulls Lose Steam On Retest Of 102.00 :
2014-05-08 11:00 GMT (or 13:00 MQ MT5 time) | [GBP - Official Bank Rate]
if actual > forecast = good for currency (for GBP in our case)
Bank Of England Maintains Key Rate; QE At GBP 375 Bln
The Bank of England retained its interest rate at a historic-low and
the size of quantitative easing at GBP 375 billion as widely expected.
nine-member Monetary Policy Committee led by Mark Carney voted to keep
the key bank rate unchanged at 0.50 percent. The rate has been at the
current 0.50 percent since March 2009.
The panel also decided to
maintain the asset purchase programme at GBP 375 billion. The previous
change in asset purchases was in July 2012, when it was raised by GBP 50
The bank first launched quantitative easing in March 2009 with an initial value of GBP 75 billion.
August last year, the bank pledged not to hike the interest rate until
the unemployment rate falls to 7 percent. The jobless rate slid to 6.9
percent in three months to February to a five-year low.
unemployment started falling faster than estimated, the BoE widened the
scope of its forward guidance this February, and assured markets that interest rates will not be raised before the second quarter of 2015.
2014-05-08 12:30 GMT (or 14:30 MQ MT5 time) | [USD - Unemployment Claims]
if actual < forecast = good for currency (for USD in our case)
U.S. Weekly Jobless Claims Pull Back More Than Expected
After reporting an unexpected increase in first-time claims for U.S.
unemployment benefits in the previous week, the Labor Department
released a report on Thursday showing that initial jobless claims pulled
back by more than expected in the week ended May 3rd.
Department said initial jobless claims fell to 319,000, a decrease of
26,000 from the previous week's revised level of 345,000. Economists had
expected jobless claims to drop to 325,000 from the 344,000 originally
reported for the previous week.
GBP/USD holds steady after U.S. data
The pound held steady against the U.S. dollar on Thursday, hovering near
five-year highs after the release of upbeat U.S. jobless claims data
and as the Bank of England kept monetary policy on hold.
GBP/USD hit 1.6974 during U.S. morning trade, the session high; the pair subsequently consolidated at 1.6955, easing up 0.01%.
was likely to find support at 1.6866, the low of May 6 and resistance
at 1.6996, the high of May 6 and an almost five-year high.
U.S. Department of Labor said the number of individuals filing for
initial jobless benefits in the week ending May 3 fell by 26,000 to
319,000 from the previous week’s revised total of 345,000. Analysts had
expected jobless claims to fall by 20,000 to 325,000 last week.
Thursday, The BoE’s Monetary Policy Committee voted to keep interest
rates on hold at their current record low of 0.5%. The bank also made no
change in its quantitative easing program, which remains at £375
The BoE will publish the minutes of this month’s meeting on Wednesday, May 21.
for a U.K. rate hike in the early part of next year have propelled
sterling to multi-year highs against the dollar, after a recent string
of strong economic reports indicated that the recovery is deepening.
last week BoE Governor Mark Carney said the U.K. recovery is starting
to broaden, but added that the bank still sees plenty of slack in the
Data released earlier Thursday showed that U.K.
house prices fell 0.2% last month, mortgage lender Halifax reported, and
rose 8.5% in the three months to April, compared to the same period a
year earlier, slowing from an increase of 8.5% in the three months to
Sterling was higher against the euro, with EUR/GBP shedding 0.40% to 0.8172.
Also Thursday, the European Central Bank held its benchmark interest rate at a record low 0.25%, in line with expectations.
at the ECB’s post-policy meeting press conference, Mario Draghi said
that the central bank will continue to monitor developments closely and
will consider all instruments available to support growth. He added that
ECB is ready to act swiftly if further easing is needed.
AUD/USD’s steam dissipating ahead of 0.9400
AUD/USD is trading at 0.9384, up 0.61% on the day, having posted a daily high at 0.9397 and low at 0.9318.AUD/USD
is held up ahead of the 0.94 handle after a positive trading session
overnight in Asia. AUD/USD attracted bids after better labour markets in
April and much better that expected trade numbers from China. Jane
Foley, Senior Currency Strategist at Rabobank explained that the strong
Australian employment release provides further support for the opinion
that the next policy move from the RBA will be a hike. AUD/USD LevelsWith
spot trading at 0.9385, we can see next resistance ahead at 0.9391
(Daily Classic R3), 0.9397 (Daily High), 0.9424 (Monthly High), 0.9424
(YTD High) and 0.9448 (Weekly Classic R3). Support below can be found at
0.9384 (Weekly Classic R2), 0.9374 (Daily Classic R2), 0.9371 (Hourly
20 EMA), 0.9357 (Yesterday's High) and 0.9351 (Daily Classic R1). AUD/USD chart formationsLooking to candlestick patterns, we can see a Doji formation on the 4-hour chart.