Press review - page 175

Sergey Golubev
Moderator
113476
Sergey Golubev  
AUD/USD Fundamentals - weekly outlook: June 9 - 13

The Australian dollar rose to a more than two-week high against its U.S. counterpart on Friday, after the highly-anticipated U.S. nonfarm payrolls report for May came in broadly in line with market expectations.

AUD/USD hit 0.9358 on Friday, the pair’s highest since May 19, before subsequently consolidating at 0.9334 by close of trade on Friday, down 0.06% for the day but 0.25% higher for the week.

The pair is likely to find support at 0.9256, the low from June 5 and resistance at 0.9358, the high from June 6.

The Department of Labor said Friday that the U.S. economy added 217,000 jobs last month, just under expectations for jobs growth of 218,000. The unemployment rate remained steady at a five-and-a-half year low of 6.3%.

The data disappointed some market expectations for a more robust reading but indicated that the U.S. economy continued to shake off the effects of a weather-related slowdown over the winter, bolstering the outlook for the broader economic recovery.

Meanwhile, in Australia, official data released Wednesday showed that the Pacific nation’s economy grew at a rate of 1.1% in the first quarter, above expectations for an expansion of 0.9%.

On Tuesday, the Reserve Bank of Australia left its benchmark interest rate at 2.5% in a widely expected move and said that "on present indications, the most prudent course is likely to be a period of stability in interest rates."

Data from the Commodities Futures Trading Commission released Friday showed that speculators increased their bullish bets on the Australian dollar in the week ending June 3.

Net longs totaled 21,527 contracts, compared to net longs of 15,848 in the preceding week.

In the week ahead, investors will be looking ahead to Thursday’s U.S. retail sales report for May for further indications on the strength of the economic recovery.

Australian employment data for May due Thursday will also be closely-watched.

Monday, June 9
  • Markets in Australia are to remain closed for a national holiday.
Tuesday, June 10
  • Australia is to publish private sector data on business confidence, as well as official data on home loans.
  • China is to produce data on consumer and producer prices. The Asian nation is Australia’s largest trade partner.
Wednesday, June 11
  • Australia is to release private sector data on consumer sentiment.
Thursday, June 12
  • Australia is to release data on the change in the number of people employed and the unemployment rate, and a private sector report on inflation expectations.
  • The U.S. is to release the weekly report on initial jobless claims, in addition to data on retail sales and import prices.
Friday, June 13
  • China is to release data on industrial production and fixed asset investment.
  • The U.S. is to round up the week with data on producer price inflation and preliminary data on consumer sentiment from the University of Michigan.
Sergey Golubev
Moderator
113476
Sergey Golubev  
NZD/USD Fundamentals - weekly outlook: June 9 - 13

The New Zealand dollar rose to a seven-day high against its U.S. counterpart on Friday, before paring gains to end little changed after the closely-watched U.S. nonfarm payrolls report for May yielded no surprises.

NZD/USD hit 0.8554 on Friday, the pair’s highest since May 28, before subsequently consolidating at 0.8500 by close of trade on Friday, up 0.01% for the day and flat for the week.

The pair is likely to find support at 0.8420, the low from June 5 and resistance at 0.8554, the high from June 6.

The Department of Labor said Friday that the U.S. economy added 217,000 jobs last month, just under expectations for jobs growth of 218,000. The unemployment rate remained steady at a five-and-a-half year low of 6.3%.

The data disappointed some market expectations for a more robust reading but indicated that the U.S. economy continued to shake off the effects of a weather-related slowdown over the winter, bolstering the outlook for the broader economic recovery.

The kiwi rallied along with other risk-sensitive assets on Thursday after the European Central Bank unveiled a package of measures to avert the threat of persistently low inflation in the euro area.

The ECB cut the main refinancing rate in the euro area to a record low 0.15% and imposed negative deposit rates on commercial lenders, in a bid to stimulate lending to businesses.

Data from the Commodities Futures Trading Commission released Friday showed that speculators modestly decreased their bullish bets on the New Zealand dollar in the week ending June 3.

Net longs totaled 17,531 contracts as of last week, compared to net longs of 17,994 contracts in the previous week.

In the week ahead, investors will be looking ahead to Thursday’s U.S. retail sales report for May for further indications on the strength of the economic recovery.

The outcome of a monetary policy meeting by the Reserve Bank of New Zealand will also be in focus.

Tuesday, June 10

  • China is to produce data on consumer and producer prices. The Asian nation is New Zealand’s second-largest trade partner.
Thursday, June 12
  • 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.
  • The central bank is also to hold a press conference to discuss the monetary policy decision.
  • Later in the day, the U.S. is to release the weekly report on initial jobless claims, in addition to data on retail sales and import prices.
Friday, June 13
  • New Zealand is to release private sector data on manufacturing activity.
  • China is to release data on industrial production and fixed asset investment.
  • The U.S. is to round up the week with data on producer price inflation and preliminary data on consumer sentiment from the University of Michigan.
Sergey Golubev
Moderator
113476
Sergey Golubev  
GBP/USD Fundamentals - weekly outlook: June 9 - 13

The pound slid lower against the dollar on Friday after data showing that the U.S. economy added jobs for a fourth successive month in May bolstered optimism over the wider economic recovery.

The Department of Labor reported that the U.S. economy added 217,000 jobs last month, just under expectations for jobs growth of 218,000, while April's figure was revised to 282,000.

The U.S. unemployment rate remained unchanged at a five-and-a-half year low of 6.3%.

GBP/USD touched highs of 1.6844 just after the release of the data, before slipping back to 1.6801 late Friday. For the week, the pair was still up 0.35%.

Cable is likely to find support at 1.6750 and resistance at 1.6880.

Elsewhere Friday, sterling was unchanged against the euro, with EUR/GBP settling at 0.8121, recovering from the one-and-a-half year lows of 0.8063 struck in the previous session.

The euro remained supported after the European Central Bank unveiled a package of measures to avert the threat of persistently low inflation in the euro area on Thursday.

The ECB cut the main refinancing rate in the euro area to a record low 0.15% and imposed negative deposit rates on commercial lenders, in a bid to stimulate lending to businesses.

The ECB acted after a report earlier in the week showed that the annual rate of inflation in the euro zone slowed to 0.5% in May, far below the ECB’s target of close to but just under 2%.

Demand for the pound continued to be underpinned by expectations for a rate hike by the Bank of England in the early part of next year.

Data on Wednesday showed that the U.K. service sector expanded at a faster-than-expected rate in May, indicating that the economic recovery is continuing to deepen.

In the week ahead, investors will be looking ahead to Thursday’s U.S. retail sales report for further indications on the strength of the U.S. recovery, while the latest U.K. jobs report will also be in focus.

Tuesday, June 10
  • The U.K. is to release data on industrial and manufacturing production.
Wednesday, June 11
  • The U.K. is to publish data on the change in the number of people employed and the unemployment rate, as well as data on average earnings.
Thursday, June 12
  • The U.S. is to release the weekly report on initial jobless claims, in addition to data on retail sales and import prices.
  • BoE Governor Mark Carney is to speak at an event in London.
Friday, June 13
  • The U.S. is to round up the week with data on producer price inflation and preliminary data on consumer sentiment from the University of Michigan.
Sergey Golubev
Moderator
113476
Sergey Golubev  
EUR/USD Fundamentals - weekly outlook: June 9 - 13

The euro slid lower against the dollar on Friday after data showed that the U.S. economy added jobs for a fourth straight month in May, a day after the European Central Bank unveiled a package of measures to avert the threat of persistently low inflation in the euro area.

The Department of Labor reported that the U.S. economy added 217,000 jobs last month, just under expectations for jobs growth of 218,000, while April's figure was revised to 282,000.

The unemployment rate remained steady at a five-and-a-half year low of 6.3%.

EUR/USD initially touched a two-week high of 1.3677 following the release of the data, before pulling back to 1.3642 late Friday. For the week, the pair was 0.34% higher.

The U.S. jobs report came one day after the ECB announced fresh steps to stave off low inflation in the euro zone, briefly sending the single currency to four month lows of 1.3502 against the dollar, before later erasing the day’s losses.

The ECB cut the main refinancing rate in the euro area to a record low 0.15% and imposed negative deposit rates on commercial lenders, in a bid to stimulate lending to businesses.

The bank also implemented a new Long-Term Refinancing Operation, designed to help banks lend to small companies and said it would "intensify" its preparatory work on the 'asset-backed security' market.

The ECB acted after a report on Wednesday showed that the annual rate of inflation in the euro zone slowed to 0.5% in May, well below the bank’s target of close to but just under 2%.

Elsewhere Friday, EUR/JPY was almost unchanged at 139.87 at the close of trade, recovering from the lows of 138.66 struck in the previous session. For the week, the pair was 0.42% higher.

In the week ahead, investors will be looking ahead to Thursday’s U.S. retail sales report for further indications on the strength of the U.S. recovery, while the euro zone is not scheduled to release any major economic data.

Tuesday, June 10
  • In the euro zone, France is to publish data on industrial production.
Thursday, June 12
  • The euro zone is to release data on industrial production, while the ECB is to publish its monthly bulletin.
  • The U.S. is to release the weekly report on initial jobless claims, in addition to data on retail sales and import prices.
Friday, June 13
  • The U.S. is to round up the week with data on producer price inflation and preliminary data on consumer sentiment from the University of Michigan.
Sergey Golubev
Moderator
113476
Sergey Golubev  

What I Learned About Risk-Taking From Playing Blackjack



"I lived in Las Vegas for 5 years and played blackjack almost every day. I didn’t play for fun. It was strictly business. I never gambled by playing roulette or craps or slot machines. Every hand I played was based on the mathematics of it."

I learned to take risks based on assessing probability correctly. Here are my thoughts:

1. When the probabilities are favorable and you’re sure of it, get the big bets out. Be fearless about it.

2. If you think you’re being cheated, get up and leave the table. Never play if you have any doubts about game integrity.

3. Long losing streaks are ordinary and do not mean you need to alter the process. Keep playing correctly.

4. During a losing streak — or draw down — adjust position-sizing  relative to bankroll aka assets under management.

5. Seek out only the most favorable conditions. If you can’t find them, don’t play.

6. To take risks is to step outside of the comfortable and secure.

7. When taking risks, stay clean and sober. It only works if you’re sharp and present.

Sergey Golubev
Moderator
113476
Sergey Golubev  

EURUSD Fundamentals (based on dailyfx article)

Fundamental Forecast for Euro: Neutral
  • The Euro’s technical posture improved after the ECB meeting, but the spot-on US NFPsproduced limited follow through.
  • Still, June has proven to be a seasonally strong month for the Euro, at least in the QE era.


The European Central Bank, after weeks of rampant speculation, delivered on its promise made on May 8 for substantive policy action. Yet, the duration and depth of the impact on the Euro has proven thus very limited, raising the question: did the ECB do enough? The Euro ended the week down only against three of the major currencies, while posting meager gains against the other four. Evidently, the market is taking the ECB’s actions as a sign that they’re willing to do what is necessary to help spur lending and ultimately growth in the region; but not necessarily weaken the Euro.

The breadth of ECB action was plentiful, insofar as there were many changes to various aspects of the ECB’s current accommodative monetary program. Everything that was speculated upon in the weeks leading up to the June meeting ended up panning out. The notable changes, to wit:

- Rate cuts: The main refinancing rate was cut by -10-bps to 0.15%; the deposit facility rate was cut by -10-bps to -0.10%; and the marginal lending rate was cut by -35-bps to 0.40%. The rate cuts were in line with expectations, as negative rates had been discussed over the last few weeks (and priced in). The measures should help keep interbank lending rates (EONIA) below 0.40%.

- Liquidity: No more 1-month LTRO, but SMP holdings will no longer be sterilized after the June 10 auction; TLTRO (Targeted LTRO, the ECB’s version of the Bank of England’s Funding for Lending Scheme (FLS)) for up to four years. The SMP unsterilization will boost excess liquidity in the Euro-Zone by about €160B.

- Guidance: Reduced GDP forecast for 2014 from +1.2% to +1.0%, but upgraded 2015 forecast from +1.5% to +1.7%; 2016 GDP forecast unchanged at +1.8%; 2014 inflation forecast downgraded from +1.0% to +0.7%; 2015 inflation forecast downgraded from +1.3% to +1.1%; 2016 inflation forecast downgraded from +1.5% to +1.4%; Asset-Backed Securities (ABS) purchase program discussed.

The efforts made by the ECB are established across all fronts, from traditional easing steps to non-standard measures. There were two definitive steps taken, however, that can be pointed to as perhaps viable reasons why the Euro didn’t endure a greater decline around the ECB’s meeting on Thursday. First, the ECB’s updated its expected EURUSD exchange rate over its forecast horizon to $1.3800 from $1.3600. Second, President Mario Draghi said in his Q&A that the ECB’s rates were essentially ‘at the lower bound’.

What these slight tweaks to the ECB’s policies equate to is that, at current time, there is no real imperative to speculate that the ECB could cut rates further. Additionally, it means that the EURUSD (at $1.3641 at the end of the week) is below the ECB’s expected exchange rate. Going forward, the market will pay less attention to the ECB – that is unless economic data weakens to the point that further action may be necessary.
Sergey Golubev
Moderator
113476
Sergey Golubev  

This week - 67% bearish on US dollar this week: CNBC poll

Patrick Bennett, FX Strategist at CIBC, discusses CNBC's latest forex sentiment survey, where more than two-thirds of respondents were bearish on the greenback.

67% bearish on US dollar this week: CNBC poll
67% bearish on US dollar this week: CNBC poll
  • www.cnbc.com
Patrick Bennett, FX Strategist at CIBC, discusses CNBC's latest forex sentiment survey, where more than two-thirds of respondents were bearish on the greenback.
Sergey Golubev
Moderator
113476
Sergey Golubev  

Audio - Weekend Edition with Bert Dohmen & John O'Donnell 


With over 40 years of trading experience under his belt, President of Dohmen Capital Research, Bert Dohmen joins Merlin and John for a look at the current status of the markets. After creating a distinction between the market and the economy, Mr. Dohmen addresses several issues plaguing both and raising concern for another large correction in the near future. The trio talk about jobs, “Prelude to a Meltdown”, future market moves, FreedomFest and much more.

Sergey Golubev
Moderator
113476
Sergey Golubev  

Video for tomorrow:

2014-06-10 01:30 GMT (or 03:30 MQ MT5 time) | [CNY - CPI]

Will China CPI boost AUD tomorrow?

With Chinese CPI released alongside Australian Home Sales, Job adverts and Business Sentiment tomorrow we could see some much needed volatility



---------

The history of [CNY - CPI] by price movement:

2014-04-11 01:30 GMT (or 03:30 MQ MT5 time) | [CNY - CPI]

AUDUSD M5 : 17 pips price movement by CNY - CPI news event :

---------

2013-02-14 01:30 GMT (or 02:30 MQ MT5 time) | [CNY - CPI]

NZDUSD M5 : 13 pips price movement by CNY - CPI news event :


Sergey Golubev
Moderator
113476
Sergey Golubev  

NZD/USD Fundamental Analysis June 10, 2014 Forecast


The NZD/USD gained 17 points to trade at 0.8517 moving towards the top of its trading range climbing steadily after the roll out of ECB big guns, which should benefit the commodity currencies. The addition of stimulus supports small nations and emerging nations by increasing money flow and also demands for exports to fuel growth. Over the weekend Chinese trade data was released showing a surge in exports but a drop in imports. The main focus this week will be the RBNZ where governor Graeme Wheeler is expected to hike the official cash rate a quarter point to 3.25 percent this Thursday and traders are mulling whether he will soften his projection for future rate rises given recent weakness in milk prices, and labour and inflation data. Still, many say the market has gone too far in pulling back expectations for future hikes by 65 basis points over three years, given the strength of the local economy which is underpinned by strong migration and government spending.

“The Reserve Bank should surprise to the upside because markets have priced in too much of a downgrade to the OCR track,” said Imre Speizer, senior market strategist at Westpac Banking Corp. “We think that the Reserve Bank will revise its track down a little but we are only talking in the order of 10 basis points, not in the order of 65. The market is basically saying they will take the equivalent of two full hikes out of the multi-year tightening programme. We don’t agree with that. We think that they will just take a little bit out and as a result the markets will then be disappointed at the failure of the Reserve Bank to endorse its pricing and interest rates then will need to bounce on the day and that will push the kiwi/US higher.”

The US dollar remains strong trading at 80.44 to start out the week after a smart release of US nonfarm payroll data on Friday. The US economy might have contracted in the first quarter but it has rebounded quickly, with non-farm payrolls posting its strongest four-month period in two years. 

Non-farm payrolls rose by 217,000 in May, consistent with expectations, following solid gains since February. Job creation in April was revised down to 282,000 (from 288,000).

This was the first time in 14 years that non-farm payrolls rose by 200,000 in four consecutive months and it was the strongest four-month gain since April 2012. To put this in perspective there have been just three four-month periods with this level of job creation in the past eight years.  

Upcoming Economic Events that affect the AUD, NZD, JPY and USD:

Date

Currency

Event

Forecast

Previous

Jun. 10

AUD

Home Loans (MoM)

0.2%

-0.9%

 

AUD

NAB Business Confidence

 

6

 

CNY

Chinese CPI (YoY)

2.4%

1.8%

 

CNY

Chinese PPI (YoY)

-1.5%

-2.0%

 

CNY

Chinese CPI (MoM)

-0.1%

-0.3%