Press review - page 156

mohsen parvazi
596
mohsen parvazi  
newdigital:
Hi
What is your strategy?
Sergey Golubev
Moderator
113476
Sergey Golubev  
It was the story about 'how to trade support/resistance lines'. It means - we see that the price touched s/r line 2 times so if the price will do it for the 3rd time on same direction  - it will be breakout (or breakdown) - means - good price movement. It is the classics of s/r trading.

PS. it was not my image. It is image from dailyfx article which is not related to s/r but it is good illustration about how to trades/r and what to watch about during the trading.

Sergey Golubev
Moderator
113476
Sergey Golubev  

GM to Pay $35 Million Fine for Slow Response to Car Ignition Glitch



General Motors Co will pay $35 million in US fine for not responding swiftly to an ignition switch problem with millions of its cars, the US Transportation Department announced today.

The auto maker is also facing probe by the federal government over the way it dealt with the recall of affected cars.

"What we cannot tolerate, what we will never accept, is a person or a company who knows danger exists and says nothing. What GM did was break the law ... They failed to meet their public safety obligations," said US Transport Secretary Anthony Foxx.

The ignition switch flaw was detected for the first time more than 10 years ago and has been tied to at least 13 deaths. However, the first recall was implemented in February 2014 despite consumers having complained for a long time, Reuters report.

The flawed ignition switches on affected GM vehicles can cause engines to stop, in which case air bags fail to deploy in the event of crashes. Also, when the ignition switch changes from “on” to “accessory” position, the power steering and power brakes may stall.

According to USA Today, the fine is part of a settlement with the DOT to resolve the question of whether GM notified the government of the car safety glitch within the required five business days of detecting it.

GM admits in the agreement that if failed to do so.

The company will also be sharing with the DOT’s National Highway Traffic Safety Administration a report compiled after its own internal probe.

CEO Mary Barra had earlier insisted before congressional committees in April that she would not provide them with full access to the internal probe’s results, but would surrender components linked to safety.
Foxx added that the GM fine serves as a warning to other vehicle manufacturers that there will be consequences for delayed reporting of vehicle safety defects.

GM to pay $35 million U.S. fine for delayed response to faulty ignitions
GM to pay $35 million U.S. fine for delayed response to faulty ignitions
  • www.reuters.com
Reuters) - General Motors Co was slapped on Friday with a $35 million U.S. fine for its delayed response to an ignition switch defect in millions of vehicles, as federal regulators accused a long line of company officials of concealing a problem that is linked to at least 13 deaths. U.S. Transportation Secretary Anthony Foxx announced the...
Sergey Golubev
Moderator
113476
Sergey Golubev  

The Week Ahead: Is Now the Time to Change Your Strategy? (adapted from Forbes article)

It was a wide-ranging week for the stock market, while bond prices kept rising as yields hit new six-month lows. Though volume for the week was low, the daily volume was a bit higher on the down days. So Is Now the Time to Change Your Strategy? The sharp selloff was blamed in part on the comments by a well-known hedge fund manager while others guessed that the ?sell in May crowd? decided to pick the middle of the month to dump their stocks. So is now Is Now the Time to Change Your Strategy?

In any case, many investors and traders seem to be risk adverse as we head into the often-difficult summer months. The decline in yields has been a global phenomenon as this table from Bloomberg illustrates. It shows that while the yield on the US 10-year T-note has dropped 11 basis points in the past month, those in Germany and France have declined 17 points.


Even more surprising is the 22 basis points decline in the 10-year bonds in Mexico and Brazil. On a yearly basis, the bonds of Portugal and Greece have declined over 160 basis points in the past year.

The yields on the 10- and 30-year US Treasuries have not yet dropped below their key support levels but they are much closer now than they were last week. A break of these levels would indicate a further drop in yields but I would still not chase the long side of the bond market.

If you have been shortening the maturity of your bond portfolio as I first recommended a year ago, you shouldn’t change the structure of your bond portfolio now. If rates drop further, it will lag the performance of a longer-maturity portfolio. However, the outlook for rates over the next few months is uncertain, and I think yields are likely to be significantly higher a year from now.


Government Bond Yields
  • www.bloomberg.com
Get updated data about global government bonds. Find information on government bonds yields, bond spreads, and interest rates.
Sergey Golubev
Moderator
113476
Sergey Golubev  
Forex Fundamentals - Weekly Outlook May 19-23

Rate decision in Japan, inflation data in the UK and Canada, FOMC Meeting Minutes, Unemployment Claims, German Ifo Business Climate and US housing data are the main events on our list. Here is an outlook on the main market-movers for this week.

Last week, major US figures came out above expectations; Annual inflation reached 2%, as expected and the monthly CPI edged up to 0.3%. Meanwhile, the annual core inflation beat forecasts with a 1.8% reading. Furthermore, the sharp drop in the number of unemployment claims reaching a 7-year low of 297,000, reaffirms the strength of the US labor market. These positive signs support the Fed’s tapering plan, indicating the US economy is getting stronger and does no longer need QE. Will the US housing data also change for the better this week.
  1. UK inflation data: Tuesday, 8:30. UK inflation remained below the BOE’s 2.0% inflation target in March, reaching 1.6%, the lowest reading since October 2009. This reading was preceded by 1.7% in February. This was the sixth consecutive month of low inflation narrowing the gap between wage growth and the rise in prices contributing to business stability. UK inflation is expected to increase to 1.7%.
  2. Japan rate decision: Wednesday. Governor Haruhiko Kuroda maintained the BOJ’s monetary policy in April expressing confidence that the economy is advancing according to plan. However, many analysts believe the BOJ will have to ease policy in the near future to prevent a deflation trend. Kuroda told Prime Minister Shinzo Abe that he will adjust policy without hesitation in case the 2.0% inflation target may be jeopardized. No change is expected this time.
  3. US FOMC Meeting Minutes: Wednesday, 18:00. FOMC minutes released in April indicate the Fed’s intention of maintaining loose monetary policy for years to come. The FOMC welcomed the pickup in GDP growth registered after the weak first quarter affected by the cold weather. The members supported a low fed funds rate for as lonf as inflation remains below the 2% target. Tapering should continue and changes to guidance are possible. The FOMC expects that the economy will improve.
  4. UK GDP data: Thursday, 8:30. According to the NIESR estimates GDP edged up 1.0% in the second quarter after posting a 0.8% expansion rate in the first three months of 2014. The growth levels nearly equal the pre-financial crisis peak. NIERS forecasts a 2.9% growth rate in 2014. However, despite the pick-up, income per capita will need another three years to catch up with GDP expansion. GDP growth in the second quarter is expected to reach 0.8%.
  5. US Unemployment Claims: Thursday, 12:30.Initial claims for U.S. unemployment benefits hit a seven-year low of 297,000 claims last week, confirming the strong recovery in the US economy. Claims fell 24,000 from the preceding week, indicating stronger economic growth in the second quarter. Stronger labor market and rising inflation pressures give green light to the Fed’s ongoing tapering move. Jobless claims are expected to increase to 312,000.
  6. US Existing Home Sales: Thursday, 12:30. Second hand homes sales declined to their lowest level in more than 1-1/2 years in March, reaching an annual rate of 4.59 million units. However, sales were stronger than the 4.57 million forecasted by analysts, indicating that the negative trend in the housing market may be over. Supply increased as well as the number of first time buyers. Existing Home Sales are expected to rise to 4.71 million.
  7. German Ifo Business Climate: Friday, 8:00. German business climate index rose to 111.2 in March, following a revised 110.7 in February. The reading was stronger than the 110.5 points forecasted by analysts. The Ukraine crisis took less attention in the survey despite Barack Obama’s warnings of additional sanctions against Russia in case it fails to reach an agreement with Ukraine. German business climate is predicted to reach 111.
  8. US New Home Sales: Friday, 14:00. Sales of new U.S. homes plunged to their lowest level in eight months reaching a seasonally adjusted annual rate of 384,000 units in March. It was the second consecutive monthly drop indicating a slowdown in sales. Economists expected sales to increase to 455,000 saying the unexpected drop may be related to cold weather conditions. However, the weak demand increased the months’ supply of houses on the market to 6.0, the highest level since October 2011, from 5.0 months in February. New home sales are expected to reach 426,000.
Sergey Golubev
Moderator
113476
Sergey Golubev  

USDJPY Fundamentals (based on dailyfx article)

Fundamental Forecast for Japanese Yen: Neutral
  • Japan GDP Trumps Estimates, USD/JPY Targets 99.44 if Support Broken
  • Price & Time: Watching & Waiting in the Yen


The USD/JPY extended the decline from earlier this month, with the pair slipping to a fresh low of 101.30, and the Bank of Japan (BoJ) interest rate decision may continue to undermine the bullish sentiment surrounding the dollar-yen should we see a more material shift in the policy outlook.

In light of the marked pickup in Japan’s 1Q GDP report, the BoJ may sounds increasingly upbeat on the economy, and the central bank may continue to scale back its willingness to further expand its asset-purchase program as Governor Haruhiko Kuroda remains confident in achieve the 2% target for inflation. With that said, we may see a growing number of BoJ officials soften their dovish tone for monetary policy, and the USD/JPY may weaken further in the week ahead should the board show a greater disposition to halt the easing cycle sooner rather than later.

At the same time, we are likely to get more of the same with the Federal Open Market Committee (FOMC) Minutes as Chair Janet Yellen remains reluctant to move away from the zero-interest rate policy (ZIRP), and a further deviation in the policy outlook may encourage a more bearish outlook for the USD/JPY as it threatens the bullish trend carried over from the previous year.

In turn, the fundamental developments coming out next week may encourage a more bearish outlook for the USD/JPY, and we may see a more meaningful run at the 101.00 handle as the BoJ turns increasingly upbeat towards the Japanese economy.

Sergey Golubev
Moderator
113476
Sergey Golubev  

GOLD Fundamentals (based on dailyfx article)

Fundamental Forecast for Gold: Neutral
  • USDOLLAR, Gold Setups Target Key Resistance- Breakouts Pending
  • Gold Oscillates Around 200 Day Average


Gold prices are marginally higher this week with the precious metal inching up 0.18% to trade at $1291 ahead of the New York close on Friday. Bullion has held a tight range for some time now and while our immediate bias remains neutral, a clear setup presents itself as we head into next week with the technical outlook warning of a possible near-term break in gold prices.

Broader market sentiment remains uneasy heading into the weekend with all three major stock indices closing markedly lower on the week as the yield on the US 10Yr dropped to its lowest levels since October 2013 at 2.47%. The key data print came on Thursday with the US consumer price index showing an uptick in both m/m and y/y core CPI. The data could begin to undermine the Fed’s dovish tone and with the labor market recovery seemingly on proper footing, the inflation outlook is likely to remain central focus for the central bank moving forward.

Looking ahead to next week, the release of the minutes from the April FOMC policy meeting will be central focus as investors continue to search for clues as to the central bank’s outlook on interest rates. Highlighting the economic docket next week will be an update on the housing market with existing homes sales on Thursday and New home sales on Friday. Data on Friday showed housing starts jumped 13.2% m/m in April, far surpassing expectations for a gain of just 3.6% m/m and strong data next week could further weigh on gold as prospects for policy normalization from the fed begin to take root. Existing home sales are expected to rise by 2.1% m/m after a 0.2% contraction in March with consensus estimates calling for new home sales to jump by 10.6% m/m, rebounding from a contraction of more than 14% the previous month.

From a technical standpoint, gold has continued to trade into the apex of a multi-week consolidation pattern off the April highs and a break-out ahead of the May close is in focus. A break below 1260/70 is needed to put the broader bearish trend back into play targeting $1216/24 and the 2013 lows at $1178. Interim resistance and our near-term bearish invalidation level stands at $1307/10 with a move surpassing $1327/34 shifting our broader focus back to the long-side of gold. Bottom line: look for a decisive break of this pattern next week with a move surpassing the May opening range to offer further clarity on our medium-term directional bias. The broader outlook remains weighted to the downside sub $1334.

Sergey Golubev
Moderator
113476
Sergey Golubev  

GBPUSD Fundamentals (based on dailyfx article)

Fundamental Forecast for Pound: Bearish
  • British Pound falters as Bank of England shows no rush to raise rates
  • Cable nears critical price levels, next move is key


The British Pound pulled back further from multi-year highs as a drop in UK yields and a broader US Dollar reversal produced the second-consecutive week of GBPUSD declines. Key economic data may need to impress to spark a larger GBP bounce.

A highly-anticipated Bank of England Inflation Report showed officials are likely to keep interest rates unchanged for some time to come. The disappointment sent UK yields considerably lower, and the interest rate-sensitive GBP followed in kind.

Those same interest rate and FX traders will watch upcoming UK Consumer Price Index inflation figures, Retail Sales results, and Q1 GDP growth numbers for greater clarity on the future of domestic interest rates.

Risks to the British Pound seem weighed to the downside as the BoE dashed hopes that strong growth figures would be enough to force the bank into action on interest rates. And indeed short-term government bond yields matched their largest single-week drop on the year. Given strong correlations between interest rates and the GBP, any further deterioration could sink the Sterling for the third-consecutive week.

Consensus forecasts for upcoming inflation, consumption, and growth figures are relatively tame; the recent tumble in yields suggest we need to see strongly positive surprises to force a material Sterling bounce. From a technical perspective it’s important to note that the GBPUSD trades near pivotal support, and its next moves could guide price action for some time to come.

It’s shaping up to be an important week for the previously high-flying GBP. And though it remains relatively close to multi-year peaks, continued failure at these levels suggests that the uptrend may be over.

Sergey Golubev
Moderator
113476
Sergey Golubev  

AUDUSD Fundamentals (based on dailyfx article)

Fundamental Forecast for Australian Dollar: Bearish
  • Lull in Australian Economic News-Flow Puts Spotlight on External Catalysts
  • Upbeat US Data, Hawkish FOMC Minutes to Hurt Aussie Amid Risk Aversion


Another quiet week on the Australian economic data front keeps the spotlight on external factors, with the evolving outlook for Federal Reserve monetary policy in focus. A central theme driving markets since the beginning of the year has been the disparity between soft US news-flow and the Fed’s commitment to continuing to “taper” its QE effort. That encouraged investors to suspect that the central bank may pause or abandon the process of reducing the size of its monthly asset purchases.

For its part, the Fed has steadfastly reduced the pace of balance sheet expansion by $10 billion/month since the cutback process was initiated in December. Fed Chair Janet Yellen and her colleagues on the rate-setting FOMC committee argued that the slowdown in US economic performance in the first quarter was transitory and didn’t warrant a change of course. The markets were duly skeptical of this position absent hard evidence to support it. This may be changing at last.

A Citigroup index tracking how US economic releases stack up relative to expectations found a bottom in early April and started to reverse upward, finishing last week at the highest level in three months. That suggests analysts are underestimating the resilience of US recovery, opening the door for upside surprises. In the week ahead, that means measures of April’s new and existing home sales may yield rosier results than consensus forecasts envision.

The item of greatest significance is likely to be the release of minutes from the Fed’s April monetary policy meeting. Traders will be keen to gauge policymakers’ confidence in QE reduction continuity in the early weeks of what is increasingly looking like a re-acceleration of US growth. Recognition of the transition in its infancy would go a long way toward brandishing the Fed’s ability to read the business cycle, bolstering the central bank’s credibility and scattering doubts about the likelihood of an end to QE by autumn.

Unencumbered speculation about the culmination of stimulus expansion and the commencement of interest rate hikes thereafter sparked liquidation across the spectrum of risky assets last year, when then-Chairman Ben Bernanke first introduced the concept of “tapering”. As one of the higher yielders in the G10 FX space, the Australian Dollar is highly sensitive to broad-based risk aversion, meaning another mass exodus from sentiment-geared assets stands to punish currency.

Sergey Golubev
Moderator
113476
Sergey Golubev  

Election of Pro-business Government in India Sparks Market rally

  • Friday’s election results showing Modi win sparked a rally in the Indian Rupee and the Mumbai Sensex.
  • Mumbai’s Sensex stock index is up over 7% this week and 14% since the start of the year over the prospects of the Pro-business Modi taking office.
  • Markets are hopeful that the new Prime Minister will be able to revitalize a stagnating Indian economy which has seen GDP growth slow to a mere 4.7% and a currency that has lost a third of its value since 2011.
Narendra Modi achieved a landslide victory in India’s election to take office as the nation’s new Prime Minister. Mumbai’s Sensex stock index and the Indian Rupee rallied as Modi’s Bharatiya Janata Party takes the majority in Parliament for the first time in three decades.

One of India’s largest stock indexes, the Mumbai Sensex, has soared over 7% this week in anticipation of the victory by the Pro-business Modi and has risen by 14% since the start of the year. The Indian Rupee has rallied 0.45% against the US dollar in the past week. Narendra Modi campaigned with a mandate to pass sweeping economic reform amid a stagnating Indian economy. From achieving impressive growth rates of above 9% in the decade through 2000, the growth in the Indian economyslowed to a mere 4.7% in the wake of the global recession while the value of the Rupee saw its value decline by over third against the US Dollar since 2011.

The Indian economy plays a vital role in the emerging markets and in the global economy as it makes up 5.83% of global gross domestic product in 2013. A strong performance from the world’s second most populous nation could contribute to recovery in developed nations similar to the impact that strong growth in China would have.