Press review - page 191

Sergey Golubev
Moderator
113440
Sergey Golubev  
Forex Weekly Outlook Jun 30-Jul 4

The US dollar was on the back foot in a week that saw quite a few breakouts. As the new quarter begins, top tier events are due in the busy calendar. The peak is the early Non-Farm Payrolls release, which happens at the same time that Draghi begins talking. Here is an outlook on the highlights of this week.

The divergence between past and present data became extreme: Q1 contraction was revised to a terrible 2.9% and it certainly hurt the dollar. How will the US reach 2.2% growth in 2014 this way? Well, Q2 continues to look good, with excellent home sales and rising consumer confidence. In the euro-zone, data remains weak, while in the UK, the BOE watered down its comments and sent GBPUSD down. NZD/USD stood out with a challenge of the yearly highs and the loonie continued recovering.

  1. Canadian GDP: Monday, 12:30. The Canadian economy continued to expand in March rising 0.1%, after a 0.2% increase in the previous month while growing at a yearly rate of 2.1% following 2.5% in February. The reading was in line with market forecast. The Bank of Canada maintained its interest rate in its last meeting in June but is under pressure to deliver some policy tightening in the face of an asset bubble that is forming in the housing market. The Canadian economy is expected to grow by 0.2% in April.
  2. US Pending Home Sales: Monday, 14:00. The index of pending U.S. home sales increased modestly in April up by 0.4% to 97.8, indicating the housing market is stabilizing after the harsh winter. The increase was below market forecast of 1.1% and followed a 3.4% jump in the previous month. The index has risen for two consecutive months. However, they fell 9.2% in the 12 months through April. U.S. pending home sales is expected to rise 1.4% this time.
  3. Australian rate decision: Tuesday, 4:30. The Reserve Bank of Australia (RBA) kept the cash rate unchanged at 2.50% in its June meeting. The reading was in line with market expectations posting the eight consecutive meeting of unchanged rates. The Bank’s statement was also the same as in the previous month. Financial conditions are accommodative and price volatility is low. Domestic economy is adjusting to the sharp decline in the resource sector investments and unemployment reaches record highs. No change is expected now.
  4. US ISM Manufacturing PMI: Tuesday, 14:00. The U.S. manufacturing sector continued to expand, in May reaching a revised 55.4 from an initial reading of 53.2. The figure was better than the 54.9 release posted in April, slightly below the 55.7 expected by analysts. This improvement indicated that the manufacturing sector had advanced more rapidly in May compared to April. The U.S. manufacturing sector is predicted to rise further to 55.6 .
  5. US ADP Non-Farm Employment Change: Wednesday, 12:15. US employers hired fewer workers than expected in May adding 179,000 positions from 215,000 in the previous month, but a growth trend was visible in the services sector suggesting the pick-up in economic growth continues after a sluggish start early this year. Nevertheless the ADP release did not forecast the strong job addition of 217,000 posted later that week in the Non-farm Payrolls. US employment market is expected to grow by 206,000 this time.
  6. Janet Yellen speaks: Wednesday, 15:00. Federal Reserve Chair Janet Yellen will speak in Washington D.C. at the International Monetary Fund. Fed Chair Yellen delivered mixed messages after the FOMC meeting leaving investors puzzled about a possible rate hike. Market volatility is expected.
  7. Eurozone rate decision: Thursday, 11:45. The European Central Bank decided to act in its last meeting in June agreed to impose a negative interest rate of -0.10% on its overnight depositors, to encourage banks to lend rather than hoard cash with their central banks and prevent the euro zone from falling into deflation. The ECB was the first central bank to set negative interest rates on banks. The Central bank also cut rates to 0.15% from 0.25%. Economists expected the ECB to cut its rate to 0.10% and reduce deposit rate to -0.10% from zero. The ECB is not expected to make further changes at this point but we Draghi always rocks the markets, as he did last time by closing the door to more cuts.
  8. US Non-Farm Employment Change and Unemployment Rate: Thursday, 12:30. The U.S. economy created 217,000 jobs in May, backing claims that the five-year-long recovery accelerated this spring. The reading cane above forecast for a 214,000 addition, following a huge increase of 282,000 posted in the prior month. The jobless rate remained unchanged at 6.3% beating forecasts for a rise to 6.4%. An addition of 211,000 positions is expected, while the unemployment rate is expected to remain unchanged at 6.3%
  9. US Trade Balance: Thursday, 12:30. US trade deficit edged up 6.9% in April to a two-year high of $47.2 billion, amid a sharp increase in imported goods such as cars, cellphones, computers and networking gear, indicating consumer spending is picking up. However, slower than expected growth in the second quarter increases deficit. The 4-week moving average edged up 2,000 reaching 314,250. US trade deficit is expected to reach 45.1 million this time.
  10. US ISM Non-Manufacturing PMI: Thursday, 14:00. The U.S. service sector continued to expand in May, rising to 56.3 from 55.2 in April, exceeding market forecasts by 0.7 points. The majority of respondents were positive about current and future conditions. The employment index edged up to 52.4, from 51.3 in April, new orders rose to 60.5, from the previous reading of 58.2 and the business activity climbed to 62.1, from 60.9. The U.S. service sector is expected to reach 56.2.
Sergey Golubev
Moderator
113440
Sergey Golubev  

AUDUSD Fundamentals (based on dailyfx article)

Fundamental Forecast for Australian Dollar: Bearish
  • Status-Quo RBA Policy Announcement May Weigh on Aussie Dollar
  • Upbeat US Data May Amplify Decline in the Aussie’s Yield Advantage


Domestic policy returns to focus for the Australian Dollar in the week ahead as all eyes turn to the RBA interest rate decision. Economists’ expectations suggest Governor Glenn Stevens and company will leave the baseline lending rate unchanged yet again. The markets seem to agree, with a Credit Suisse gauge tracking the priced-in policy outlook putting the probability of an adjustment at a mere 1 percent. That puts the spotlight on the statement accompanying the announcement, with traders combing through the document’s verbiage to tease out the central bank’s thinking on where it intends to go in the months ahead.

For the past two months, the combination of the post-meeting RBA statement and the subsequent release of minutes from the sit-down have left investors with a dovish lean in their forward outlook. The statements themselves have struck a fairly neutral tone, steadfastly arguing for a period of stability in benchmark borrowing costs. The minutes have added some dovish color, reflecting a central bank uneasy about a return to tightening. That is not surprising: Australian economic news-flow has dramatically deteriorated relative to consensus forecasts since mid-April, warning against taking any steps that might make matters worse.

July’s meeting seems likely to offer more of the same. While the economy continues to look fragile, it does not seem to have become substantially more so since policymakers convened in June. That opens the door for the status quo to remain in place. Interestingly, the absence of a change in the RBA’s posture may still carry important directional implications for the Aussie. Having previously moved tracked closely with Australia’s 2-year bond yield, the currency has increasingly diverged in recent weeks. While the Australia-US front-end yield spread has moved sharply lower, AUD/USD has continued to oscillate in a range loosely defined between the 0.92 and 0.95 figures.

On balance, this seems to leave the door open for a correction. Moving past the RBA announcement without material changes to the landscape may put a spotlight on the increasingly disconnect between the exchange rate and relative policy bets, forcing the Aussie to correct downward. The move may be amplified by a set of high-profile US data releases. Manufacturing- and service-sector ISM figures as well as the closely-monitored Nonfarm Payrolls reading are in the spotlight. Expectations call for only nominal changes on both fronts, keeping the present setting of investors’ Fed policy bets broadly intact. Cumulatively, the emerging narrative tells of a US central bank that is cautiously reducing stimulus and an Australian one that isn’t, prodding investors to take heed of the shifting landscape and respond accordingly.

Sergey Golubev
Moderator
113440
Sergey Golubev  
EUR/USD forecast for the week of June 30, 2014, Technical Analysis

The EUR/USD pair broke higher during the course of the week, but still remains stuck in the consolidation area we have been in for several weeks now. It is not until we get above the 1.37 level of that we feel comfortable buying this market on more of a longer-term move. A break down below the 1.35 level since this market much lower, probably looking for the 1.33 handle, or perhaps even as low as the 1.31 level. In the meantime, we think this market going to be a little bit tight for longer-term traders to be involved in.


Sergey Golubev
Moderator
113440
Sergey Golubev  

EUR/USD Forecast Jun 30-Jul 4

EUR/USD did not go too far in the last full week of the quarter, and remained in range. It might be just the time now for the pair to pick a direction: the ECB meeting is undoubtedly the highlight of the week, yet also inflation numbers will eb closely watched. Here is an outlook on the highlights of this week and an updated technical analysis for EUR/USD.

Forward looking PMIs in the euro-zone fell short of expectations, especially in France. Germany is not doing too well either, with a drop in the IFO Business Climate. However, German inflation is finally moving up and this could calm the ECB. In the US, there seems to be an even clearer separation between the horrible first quarter (as reflected in a 2.9% annualized contraction of GDP) and the more upbeat economic activity in Q2, as seen in strong home sales and consumer confidence.

  1. German Retail Sales: Monday: 7:00. German retail sales plunged 0.9% in April, following a 0.7% drop in the previous month, contrary to market forecast for a 0.4% rise. On an annual basis, the index increased 3.4% after sliding 1.9% in the prior month. Analysts had expected a pick-up of 1.5%. Retail sales are expected to rise 0.8% this time.
  2. M3 Money Supply: Monday, 8:00.  The amount of cash circulating in the Eurozone increased 0.8% in April, following a 1.0% rise in March, accompanied by a slowdown in lending. Indicating sluggish economic activity and weak consumer spending. These figures prompted the ECB to make its move and introduce negative deposit rates on banks to spur lending in the Eurozone. Cash circulation is expected to increase by 0.7%.
  3. Private Loans: Monday, 8:00. Lending to households and companies declined further in April falling 1.8% despite the European Central Bank’s accommodative monetary policy. Lending remained muted despite the central bank’s efforts to put pressure on banks to increase their lending. Lending to households  is expected to decline by1.7%.
  4. Inflation data: Monday, 9:00. Euro zone inflation declined unexpectedly in May, reaching 0.5% from 0.7% posted in April as the European Central Bank prepared its monetary policy changes to boost growth. The weak inflation reading increased concerns for deflation. Meanwhile, core inflation, excluding energy, food, alcohol and tobacco, dropped to 0.7% in May from 1.0% in April. Energy prices remained flat on the year, showing no decline for the first time in five months.  CPI Flash Estimate is expected to rise by 0.6% while core estimate is expected to increase 0.7%.
  5. Manufacturing PMI: Tuesday. Euro zone manufacturing output weakened more than initially expected in May, reaching 52.2 from 53.4 in April. Germany’s strong reading failed to offset the contraction in France. This decline was another incentive for the ECB to start acting and cut its deposit rate below zero, reduce its main borrowing rate and launch a refinancing operation aimed at businesses. Italian manufacturing activity continued to expand in May, came in at 53.2 following 54 in April, falling below expectations for a 54.3 reading, but still showing expansion. Spain’s manufacturing sector grew at the fastest rate since April 2010 rising to 52.9 from 52.7 in the prior month and companies increased their purchasing to a four year high. Spain manufacturing PMI is expected to reach 53.2, Italy is predicted to increase to 53.5 and the Eurozone manufacturing is expected to remain at 51.9.
  6. German Unemployment Change: Tuesday, 7:55. German unemployment unexpectedly increased a seasonally adjusted 23,937 to 2.905 million in May. This increase was the first in six months indicating a slowdown in Germany’s economy. However the unemployment rate remained unchanged at 6.7%, the lowest level in more than two decades. The increase in jobless claims went hand in hand with the decline in business confidence. The excellent pace of growth witnessed the first quarter will be hard to achieve in Q2, but analysts still believe Germany is still the leading force in the EU block. The number of German unemployed is expected to decline by 9,000.
  7. Unemployment Rate: Tuesday, 9:00. The Eurozone unemployment rate improved to 11.7 % amid significant signs of improvement in Portugal and Ireland. The number of unemployed in the 18 member states declined by 76,000 in April from March and 487,000 from a year earlier. The unemployment rate among youths also declined by 0.1% in April. Likewise, unemployment improves in the EU’s 28 Member States as a whole declining by 0.1% to 10.4%. The Eurozone unemployment rate is expected to remain unchanged.
  8. Spanish Unemployment Change: Wednesday, 7:00. The number of unemployed in Spain declined a seasonally adjusted 111,900, broadly in line with market forecast following 111,600 drop in April, indicating a continuous improvement in Spain’s economy. The number of unemployed in Spain  is expected to drop further by 97,300.
  9. Services PMI: Thursday. The Services sector in the Eurozone declined slightly in May to 53.2 following 53.1, posted in the prior month, missing market forecast  for 53.5. Meanwhile, the Spanish Services sector declined slightly to 55.7 compared to 56.5 released in April and a consensus estimate of 56.1. Italian services PMI reached 51.6, higher than the 51.1 posted in April and higher than the51.4 expected by analysts. Overall, despite the slight declines, the readings are still in expansion territory indicating the Euro block continues its journey to recovery. Services sector in Spain is expected to rise to 56.3, Italy to 52.3 and the Eurozone is expected to clime to 52.8.
  10. Retail Sales: Thursday, 7:00. Eurozone retail sales edged up unexpectedly in May, increasing 0.4% from a 0.1% rise in March mainly because of food sales. Analysts expected sales to increase 0.1% in April. Domestic demand in the Eurozone has been subdued due to high unemployment rate and uncertainty over the future pace of growth following the slow growth in the first quarter. However April sales increased both on the month and on the year for the fourth consecutive month, suggesting a mild growth trend. Eurozone retail sales is expected to gain 0.3% this time.
  11. Rate decision: Thursday: 11:45. The European Central Bank (ECB) swung into action in its June meeting, deciding to cut interest rates from 0.25% to 0.15% in an attempt to stop the crawling Eurozone inflation from turning into deflation, and also moved its deposit rate into negative territory from 0% to -0.10% in hope that banks will be compelled to lend more. The Central bank’s decision was widely anticipated. The ECB is not expected to change its monetary policy.
  12. German Factory Orders: Friday, 6:00. German industrial orders jumped 3.1% in April following a 2.8% decline in March, indicating demand is rebounding. The increase was mainly driven by foreign orders, indicating good prospects for expansion in factory output during the second quarter. Export orders jumped 5.5 %while domestic orders remained steady. Analysts expected a smaller increase of 1.3%. The unexpected climb may enable German economy to match the high pace of growth seen in the first quarter. German industrial orders  is expected to decline by 0.8%.
Sergey Golubev
Moderator
113440
Sergey Golubev  
AUD/USD weekly outlook: June 30 - July 4

The Australian dollar edged higher against its U.S. counterpart on Friday, amid speculation the Federal Reserve will keep interest rates at record-low levels for a considerable time.

AUD/USD hit 0.9444 on Wednesday, the pair’s highest since April 10, before subsequently consolidating at 0.9423 by close of trade on Friday, up 0.09% for the day and 0.35% higher for the week.

The pair is likely to find support at 0.9353, the low from June 25 and resistance at 0.9444, the high from June 23.

Upbeat U.S. consumer sentiment data released Friday failed to dispel concerns over the outlook for the wider economic recovery.

The final reading of the University of Michigan's consumer sentiment index rose to 82.5 this month from 81.9 in May, compared to expectations of 82.2.

The report did little to alter expectations that the Federal Reserve will keep rates on hold for an extended period after data earlier in the week showed that U.S. first quarter growth was revised sharply lower.

The dollar weakened broadly after the Commerce Department said Wednesday that the U.S. economy contracted at an annual rate of 2.9% in the first three months of the year, compared to the consensus forecast for a decline of 1.7%.

U.S. first quarter GDP was initially reported to have increased by 0.1%, but was subsequently revised to show a contraction of 1.0%.

The dollar came under additional pressure after data on Thursday showed that U.S. consumer spending rose by just 0.2% in May, below forecasts for 0.4%.

In the week ahead, investors will be looking to the U.S. nonfarm payrolls report on Thursday for further indications on the strength of the labor market, while the Reserve Bank of Australia’s policy meeting on Tuesday will also be in focus.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, June 30
  • The U.S. is to produce data on manufacturing activity in the Chicago region and a report on pending home sales.
Tuesday, July 1
  • The Reserve Bank of Australia is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision.
  • Later Tuesday, the Institute of Supply Management is to publish a report on U.S. manufacturing activity.
Wednesday, July 2
  • Australia is to release data on the trade balance, the difference in value between imports and exports.
  • The U.S. is to release the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days. The U.S. is also to release data on factory orders.
  • Later Wednesday, Fed Chair Janet Yellen is to speak at an event in Washington; her comments will be closely watched.
Thursday, July 3
  • Australia is to publish data on building approvals and retail sales. RBA Governor Glen Stevens is to speak at an event in Hobart.
  • The U.S. is to release data on the trade balance, as well as the weekly report on initial jobless claims. The U.S. is also to publish what will be closely watched government data on nonfarm payrolls and the unemployment rate, one day ahead of schedule due to the fourth of July holiday.
  • Later Thursday, the ISM is to publish a report service sector activity.
Friday, July 4
  • Markets in the U.S. are to remain closed for the Independence Day holiday
Sergey Golubev
Moderator
113440
Sergey Golubev  
EUR/USD weekly outlook: June 30 - July 4

The euro moved higher against the broadly weaker dollar on Friday as concerns over the outlook for U.S. economic growth continued to weigh, despite a report showing that U.S. consumer sentiment improved this month.

EUR/USD ended Friday’s session at 1.3649, up 0.28%. For the week, the pair added 0.43%.

The pair is likely to find support at 1.3600 and resistance at 1.3670.

The dollar remained lower after data on Friday showed that the final reading of the University of Michigan's consumer sentiment index rose to 82.5 this month from 81.9 in May, compared to expectations of 82.2.

The report did little to alter expectations that the Federal Reserve will keep rates on hold for an extended period after data earlier in the week showed that U.S. first quarter growth was revised sharply lower.

The dollar weakened across the board after the Commerce Department said Wednesday that the economy contracted at an annual rate of 2.9% in the first three months of the year, compared to the consensus forecast for a decline of 1.7%.

U.S. first quarter GDP was initially reported to have increased by 0.1%, but was subsequently revised to show a contraction of 1.0%.

The dollar came under additional pressure after data on Thursday showed that U.S. consumer spending rose by just 0.2% in May, below forecasts for 0.4%.

The euro was flat against the yen late Friday, with EUR/JPY at 138.45, and ended the week down 0.22%.

The yen was boosted after stronger-than-forecast data on Japanese retail sales for May curbed expectations for additional monetary easing by the Bank of Japan.

In the week ahead, investors will be looking to the U.S. nonfarm payrolls report on Thursday for further indications on the strength of the labor market, while Monday’s euro zone inflation report will also be in focus, ahead of the European Central Bank’s policy meeting and press conference on Thursday.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, June 30
  • The euro zone is to produce preliminary data on consumer price inflation, which accounts for the majority of overall inflation. Meanwhile, Germany is to publish data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.
  • The U.S. is to produce data on manufacturing activity in the Chicago region and a report on pending home sales.
Tuesday, July 1
  • The euro zone is to release data on the unemployment rate. Germany is release data on the change in the number of people unemployed, while Spain and Italy are to release reports on manufacturing activity.
  • Later Tuesday, the Institute of Supply Management is to publish a report on U.S. manufacturing activity.
Wednesday, July 2
  • In the euro zone, Spain is release data on the change in the number of people unemployed.
  • The U.S. is to release the ADP report on private sector job creation, as well as data on factory orders.
  • Later Wednesday, Fed Chair Janet Yellen is to speak at an event in Washington; her comments will be closely watched.
Thursday, July 3
  • The euro zone is to release data on retail sales, while Spain and Italy are to publish data on service sector activity. The ECB is to announce its benchmark interest rate. The announcement is to be followed by a press conference with President Mario Draghi.
  • The U.S. is to release data on the trade balance, as well as the weekly report on initial jobless claims.
  • The U.S. is also to publish what will be closely watched government data on nonfarm payrolls and the unemployment rate, one day ahead of schedule due to the fourth of July holiday.
  • Later Thursday, the ISM is to publish a report service sector activity.
Friday, July 4
  • Germany is to publish data on factory orders.
  • Markets in the U.S. are to remain closed for the Independence Day holiday.
Sergey Golubev
Moderator
113440
Sergey Golubev  

Weekend Edition with Tyler Reesor


Using precious metals and rare coins to ones portfolio can help diversify and protect from volatile market moves. Tyler Reesor of RCW Financial joins Merlin for a look at how to mix rare coins into ones financial portfolio. Tyler also shares with listeners some of the significant advantages as well as tax benefits rare coins provide. Tyler also shares with listeners a coin from 1793 valued at nearly $200,000! The duo also take a look at some of the current macro economic data and how it might shape markets going forward.

Sergey Golubev
Moderator
113440
Sergey Golubev  

2014-06-30 06:00 GMT (or 08:00 MQ MT5 time) | [EUR - German Retail Sale]

if actual > forecast = good for currency (for EUR in our case)

[EUR - German Retail Sale] = Change in the total value of inflation-adjusted sales at the retail level, excluding automobiles and gas stations. It's the primary gauge of consumer spending, which accounts for the majority of overall economic activity.

Also Called : Real Retail Sales.

==========

German Retail Sales Fall Unexpectedly In May

German retail sales fell unexpectedly in May from the prior month, official data revealed Monday.

Retail sales were down 0.6 percent month-on-month in May, but slower than the 1.5 percent drop seen in April, provisional results from Destatis showed. This was the second consecutive fall in sales. Economists had forecast a 0.8 percent rise in turnover in May.

Meanwhile, retail turnover grew 1.9 percent in May from the same period of last year, when it was expected to rise by 1 percent. Nonetheless, the rate of growth slowed from 3.2 percent logged in April.

Compared with the previous year, turnover in retail trade was in the first five months of the year in real terms 1.4 percent larger than that in the corresponding period of the previous year.

Sergey Golubev
Moderator
113440
Sergey Golubev  

The saga at 0.9400 in AUD/USD continues

We’ve had more episodes at 0.9400 than Dallas and we could have yet another failure on the cards.

We’ve just knocked below it but only by 4 pips but it’s looking like more upside disappointment for the bulls.

Since the beginning of the month the 100 h4 ma has acted as good support and at 0.9380 is worth watching.


Further down we have the 200 h4ma coinciding with the 55 dma at 0.9329/33.

While we remain below 0.9450 the risk of a bigger fall looms larger.

Sergey Golubev
Moderator
113440
Sergey Golubev  

2014-06-30 14:30 GMT (or 16:30 MQ MT5 time) | [USD - Dallas Fed Manufacturing Business Index]

[USD - Dallas Fed Manufacturing Business Index] = The Dallas Fed conducts the Texas Manufacturing Outlook Survey monthly to obtain a timely assessment of the state's factory activity. Firms are asked by Federal Reserve Bank of Dallas whether output, employment, orders, prices and other indicators increased, decreased or remained unchanged over the previous month. Survey responses are used to calculate an index for each indicator. Each index is calculated by subtracting the percentage of respondents reporting a decrease from the percentage reporting an increase.

==========

DALLAS FED MANUFACTURING HEATS UP


The Dallas Fed's latest manufacturing outlook survey is out, and the numbers look good.

The headline index jumped to 11.4 in June from 8.0 in May.

Economists were looking for a reading of 8.5.

Dallas Fed Manufacturing Business Index: United States
  • www.fxstreet.com
Real time Dallas Fed Manufacturing Business Index: United States: Find the expected, current and historical data for the event, and discover related analysis and news articles.