Press review - page 19
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2013-07-24 01:45 GMT (or 03:45 MQ MT5 time) | [CNY - HSBC Manufacturing PMI]
If actual > forecast = good for currency (for CNY in our case)
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China Manufacturing Contraction Deepens As New Orders Slide :
China's factory activity fell to the weakest level in eleven months in July amid a continued slide in new orders and faster destocking, preliminary results of a survey by Markit Economics and HSBC revealed Wednesday.
The purchasing managers' index, an indicator of the country's factory sector performance, fell to 47.7 in July from 48.2 in June. An index reading below 50 suggests deterioration in activity.
New orders received by manufacturers fell at a faster pace in July, while the pace of decline in export orders eased, the survey found. The manufacturing output index fell to a nine-month low of 48.2 in July from 48.6 in June.
Employment at manufacturers decreased at faster rate in July, the survey revealed.
The PMI reading suggested "a continuous slowdown in manufacturing sectors thanks to weaker new orders and faster destocking," said Hongbin Qu, Chief China Economist at HSBC. "This adds more pressure on the labour market," he said.
"As Beijing has recently stressed to secure the minimum level of growth required to ensure stable employment, the flash PMI reinforces the need to introduce additional fine-tuning measures to stabilise growth," Hongbin noted.
State media on Tuesday quoted Chinese Premier Li Keqiang as saying that the economy needs at least 7.5 percent growth to maintain labor market stability. In the remarks made at a recent State Council meeting, he said that 7 percent economic growth is the government's bottom line of tolerance.
Just about this news events :
2013-07-24 07:28 GMT (or 09:28 MQ MT5 time) | [EUR - German Markit Manufacturing PMI]
If actual > forecast = good for currency (for EUR in our case)
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2013-07-24 07:28 GMT (or 09:28 MQ MT5 time) | [EUR - German Markit Service PMI]
If actual > forecast = good for currency (for EUR in our case)
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German Private Sector Activity At 5-Month High :
German private sector business activity rose at the fastest pace in five months in July, preliminary results of a survey by Markit Economics showed Wednesday.
The composite output index, that measures performance of both manufacturing and services, rose to a five-month high of 52.8 in July from 50.4 in June. Readings above 50 indicates expansion in activity.
The expansion was underpinned by a return to new business expansion in July, ending a four-month period of contraction, Markit said in the report. This improvement was driven by rising levels of domestic demand as new export volumes dropped for the fifth consecutive month.
The purchasing managers' index, a gauge of factory activity, rose to 50.3 in July from 48.6 in June. This was also the highest reading in five months and higher than economists' forecast of 49.2.
The manufacturing output index rose to a 17-month high of 53.4 in July from 50.5 in June.
The services activity index advanced to 52.5 in July from 50.4 in June. This was above expectations of 50.7.
Both the manufacturing and service sectors posted only moderate increases in new business volumes during the latest survey period.
Staff levels in private sector firms increased in July following two months of moderate declines. The employment growth was driven by the service sector, as manufacturing workforce levels remained broadly unchanged since the previous month.
Watch The Banned HFT Spoofing Algo In Action :
Lately, the parasitic, price manipulative "Office Space"-inspired HFT practice known as "spoofing" has been consistently in the news: a week ago, it was the third largest futures broker, Newedge, who made headlines following a "record" FINRA handslap, a/k/a fine, lobbed at the brokerage for allowing spoofing to take place for four years between 2008 and 2011. Then yesterday, a Red Bank, NJ-based HFT shop called Panther Energy Trading, and its sole owner Michael Coscia were fined $4.5 million and got a 1 year ban from the industry for engaging in precisely the same activity. "Panther, based in Red Bank, New Jersey, and Coscia used a computer algorithm that placed and quickly canceled bids and offers in futures contracts for commodities including oil, metals, interest rates and foreign currencies. Panther and Coscia engaged in spoofing from August 8, 2011, to October 18, 2011, related to 18 futures contracts. The firm accumulated $1.4 million in profits by using the algorithm. Panther’s automated trading system entered 400,000 orders on CME’s electronic platform that were canceled 98 percent of the time and never intended to be completed."
While none of this is fundamentally new to any of our readers, we are happy to report that in conjunction with Nanex, we can now present documentary evidence of the Panther algo in action.
But first, some more on this particular transgression from Bloomberg :
“By placing the large buy orders, Coscia and Panther sought to give the market the impression that there was significant buying interest, which suggested that prices would soon rise, raising the likelihood that other market participants would buy from the small order Coscia and Panther were then offering to sell,” the agency said its statement.
Panther and Coscia must pay $2.8 million in fines and disgorgement of profits to the CFTC, $903,000 to the U.K. Financial Conduct Authority and $800,000 in fines to CME Group (CME) Inc., owner of the world’s largest derivatives market. The CFTC also banned Panther and Coscia from trading for a year.
Bart Chilton, always happy to make a media appearance and take some time away from his busy poetry-book writing schedule, chimed in:
Bart Chilton, one of three Democrats among the CFTC’s four commissioners, said in a statement that the trading ban should have been longer than one year. The firm’s conduct was an “egregious violation” of commodities law, he said, “and warrants the imposition of a much more significant trading ban to protect markets and consumers, and to act as a sufficient deterrent to other would-be wrongdoers.”
In other news, the HFT industry is shaking in its boots knowing the full wrath of the regulators' wristslapping power and fury is about to be unleashed, if only on the no name, one-man shop operations. The same regulators who used another Red Bank, NJ-based HFT firm, Tradeworx, to "conclude" that high frequency trading was not at fault in the flash crash.
The Panther Energy Trading case was the first to use Dodd-Frank regulations barring disruptive trading practices, including spoofing of orders by bidding with an intent to cancel before a trade is conducted, the CFTC said. The 2010 law overhauled market oversight after largely unregulated trades helped fuel the 2008 credit crisis.
“I would expect more CFTC investigations and actions related to ‘disruptive trading practices,’ which will further add to the regulatory scrutiny that so-called ‘high-frequency traders’ currently face,” Stephen Humenik, a lawyer at Covington & Burling LLP, said in an e-mail.
We wouldn't, although even if the CFTC did take its role as a regulator (headed by former Goldmanite Gary Gensler) seriously, the opportunity cost of spoofing, namely the occasional fine, would still be perfectly acceptable in an industry where a one-man shop with a few computers can make $1.4 million in 2 months. Which also means that many more Panther Energies will emerge in the coming weeks and months.
Until then, here is Nanex, explaining to all those who suddenly turned green with envy that one firm can make almost $10 million profit per year from high frequency trading, how it's done.
If actual > forecast = good for currency (for USD in our case)
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U.S. New Home Sales Jump To Five-Year High In June :
New home sales in the U.S. rose by much more than anticipated in the month of June, according to a report released by the Commerce Department on Wednesday, although the report also showed downward revisions to the data for the past few months.
The report said new home sales surged up by 8.3 percent to an annual rate of 497,000 in June from the revised May rate of 459,000.
Economists had expected new home sales to climb to an annual rate of 481,000 from the 476,000 originally reported for the previous month.
In addition to the downward revision to new home sales in May, the annual rate of new home sales in April was downwardly revised to 453,000 from 466,000.
"New home sales are volatile and monthly changes are hardly ever statistically significant," said Teunis Brosens, Senior Economist at ING Bank. "Still, today's release confirms that new home sales remain on an upward trend."
With the continued upward trend, new home sales in June were at their highest annual since May of 2008. Sales were also up by 38.1 percent compared to the same month a year ago.
Meanwhile, the report said the median sales price of new houses was $249,700 in June, down 5 percent from $262,800 in May. The median price was still up 7.4 percent year-over-year.
The Commerce Department also said there were 161,000 houses for sale at the end of June compared to 159,000 at the end of May.
The number of houses for sale represents 3.9 months of supply at the current sales rate, down from 4.2 months due to the faster rate of sales.
The report showed a notable increase in new home sales in the Northeast, where sales surged up by 18.5 percent in June.
New home sales in the West and the South also jumped by 13.8 percent and 10.9 percent, respectively, while sales in the Midwest slumped by 11.8 percent.
On Monday, the National Association of Realtors released a separate report showing an unexpected decrease in existing home sales in June.
NAR said existing home sales dipped 1.2 percent to an annual rate of 5.08 million in June from a downwardly revised 5.14 million in May.
The drop surprised economists, who had expected existing home sales to climb to 5.27 million from the 5.18 million originally reported for the previous month.
Silver prices are bumping up against $20-an-ounce level and if the area is “convincingly cleared” then the metal could see further gains, perhaps to $22, said Societe Generale on Wednesday.
There is heavy selling interest at $20, based on the number of December options positions, the firm said, but technical charts turned positive when the 10-day moving average crossed above the 20-day moving average.
“These conflicting signals point to renewed volatility in the silver price, something to which most silver investors are fully accustomed. If the $20 level is convincingly cleared then we can expect an attack on $22, which is a Fibonacci retracement level from the drop from $35.36 last October,” the firm said.
Strong demand in India and China supports silver, and there’s been renewed exchange-traded-fund buying in silver after dovish testimony from Federal Reserve Chairman Ben Bernanke earlier this month, they said.
The gains in silver come on the back of buyers seeing bargains in the metal after the recent fall in price, along with some switching to silver jewelry from gold because of economic austerity, they said. Further gains are likely, but could be limited.
“The price has therefore recovered towards $20 in the first weeks of July, and has the potential to sustain a short-covering rally towards $22, but silver remains in surplus, the majority of both supply and demand is not price-responsive and silver is likely to remain largely bound to gold. We continue to expect a bear market for the longer-term, with prices drifting towards a $15 average in 2017,” they said.
Some more about NZD news event :
2013-07-24 21:00 GMT (or 23:00 MQ MT5 time) | [NZD - RBNZ Interest Rate Decision]
If actual > forecast = good for currency (for NZD in our case)
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RBNZ's Wheeler Signals Policy Tightening In 2014 :
Reserve Bank of New Zealand Governor Graeme Wheeler on Thursday indicated that the bank may consider tightening policy in 2014 if the overheated housing market stokes price pressures.
At the same time, he noted that the bank will keep the Official Cash Rate unchanged through the end of this year.
"The extent of the monetary policy response will depend largely on the degree to which the growing momentum in the housing market and construction sector spills over into inflation pressures," Wheeler said while announcing the bank's decision to hold the OCR unchanged at 2.5 percent.
"Although removal of monetary stimulus will likely be needed in the future, we expect to keep the OCR unchanged through the end of the year," Wheeler said.
He noted that the CPI inflation has been very low over the past year, reflecting the high New Zealand dollar and strong international and domestic competition. However, the bank expects inflation to trend upwards towards the mid-point of the 1-3 percent target band as growth accelerates over the coming year.
Wheeler said the Reserve Bank does not want to see financial or price stability compromised by housing demand getting too far ahead of the supply response.
In May, Wheeler signed a memorandum of understanding with Finance Minister Bill English, which awarded the central bank will more powers to curb excessive growth in credit and asset prices in the country through the use of four macro-prudential tools.
The tools included adjustments to the core funding ratio, a countercyclical capital buffer, adjustments to sectoral capital requirements and quantitative restrictions on the share of high loan-to-value ratio (LVR) loans to the residential property sector.
In addition to this, the central bank is expected to announce measures to limit low-deposit mortgage lending to cool the housing market.
Deputy Governor Grant Spencer said on June 27 that limited house supply was at the heart of the problem and strong demand supported by easy credit was underpinning the rapid escalation of house prices.
However, he said housing cannot yet be described as a threat to overall inflation, given some slack still in the economy. Nonetheless, Spencer opined that higher interest rates are not the right policy response at this time and that the bank is seriously considering the use of macro-prudential policy tools.
2013-07-25 08:30 GMT (or 10:30 MQ MT5 time) | [GBP - Gross Domestic Product (GDP)]
If actual > forecast = good for currency (for GBP in our case)
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U.K. Q2 GDP Growth Picks Up :
The U.K. economy expanded at a faster pace as expected in the second quarter on a widespread support from production, construction and services.
The increase in gross domestic product doubled to 0.6 percent from 0.3 percent in the first quarter, preliminary estimate published by the Office for National Statistics showed Thursday. The growth rate matched expectations.
As expected, GDP was 1.4 percent higher in the second quarter compared with a year ago.
The largest contribution to GDP growth came from services, which expanded 0.6 percent sequentially. Further, construction output grew 0.9 percent, recovering from a 1.8 percent fall in the first quarter, when output was at its lowest level since the start of 2001.
Contributing 0.08 percentage points to GDP, overall production advanced 0.6 percent, within which manufacturing grew 0.4 percent, it said.
Sorry - I did not trade USD Durable Goods Orders and USD Initial Jobless Claims which were at 12:30 GMT (or 14:30 MQ MT5 time), I missed those events. But there are some press releases about.
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U.S. Durable Goods Orders Rise More Than Expected In June :
With orders for transportation equipment showing a substantial increase, the Commerce Department released a report on Thursday showing that new orders for U.S. manufactured durable goods rose by much more than expected in the month of June.
The report said durable goods orders surged up by 4.2 percent in June following an upwardly revised 5.2 percent jump in May. Economists had expected orders to rise by 1.5 percent compared to the 3.7 percent increase that had been reported for the previous month.
Excluding the 12.8 percent jump in orders for transportation equipment, durable goods orders were unchanged in June compared to a 1.0 percent increase in May.
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U.S. Weekly Jobless Claims Slightly Higher Than Expected :
First-time claims for U.S. unemployment benefits saw a modest increase in the week ended July 20th, according to a report released by the Labor Department on Thursday, with claims coming in slightly above economist estimates.
The report said initial jobless claims rose to 343,000, an increase of 7,000 from the previous week's revised figure of 336,000. Economists had been expecting jobless claims to climb to 341,000 from the 334,000 originally reported for the previous week.