2013-07-25 23:30 GMT (or 01:30 MQ MT5 time) | [JPY - Consumer Price Index (CPI)]
If actual > forecast = good for currency (for JPY in our case)
Basicly - there are many CPI news events coming on the same time for JPY. But high impacted events are core and monthly. I mean:
But as those JPY CPI news events are coming on the same time and as there are many of them (National CPI yearly and monthly, Tokyo CPI yearly and monthly, and core value of those CPI's) so any economic calendar is estimating just 1 or 2 of them. Of course, USDJPY price is moved according to the values of all JPY CPI's value. So, just some press releases about JPY CPI (read below).
Japan Core CPI Jumps 0.4% On Year In June :
Core consumer prices in Japan spiked 0.4 percent on year in June,
the Ministry of Internal Affairs and Communications said on Friday -
marking the fastest annual increase since November.
The data also
sparks hope that the country may finally be starting to pull out of the
deflationary spiral in which it has been trapped for more than a decade.
numbers likely are in response to the aggressive policy measures that
Prime Minister Shinzo Abe and the Bank of Japan have put into place. The
BoJ has set a target of 2 percent inflation in two years.
The headline figure beat forecasts for an increase of 0.3 percent on year following the flat annual reading in May.
inflation was up 0.2 percent on year, also topping expectations for a
0.1 percent increase following the 0.3 percent contraction in the
By category, prices for fuel jumped 5.7 percent on
year, followed by communication (1.8 percent), education (0.5 percent)
and clothing (0.2 percent).
The gains were offset by furniture
costs, which dipped 2.4 percent, recreation (1.2 percent), food (0.9
percent) and housing (0.5 percent).
Both overall CPI and core inflation were flat on month after adding 0.1 percent and 0.2 percent on month, respectively, in May.
By category, prices for fuel climbed 1.0 percent on month, while medical care costs were up 0.1 percent.
Furniture prices were down 0.4 percent and recreation costs dipped 0.3 percent.
Core inflation for the Tokyo region - considered a leading indicator
for the nationwide trend - was up 0.3 percent on year in July. That was
in line with expectations and up from 0.2 in June.
Overall CPI for Tokyo jumped 0.4 percent on year, beating forecasts for 0.2 percent following the flat reading in June.
By category, prices for fuel spiked 9.0 percent on year, followed by communications (1.2 percent) and education (0.3 percent).
gains were offset by furniture costs, which lost 2.5 percent on year,
while recreation costs lost 1.0 percent, medical care was down 0.8
percent and housing dipped 0.7 percent.
On month, core CPI in Tokyo was flat, while overall inflation added 0.2 percent.
By category, fuel costs were up 1.1 percent on month, while costs for communications and food were up 0.8 percent apiece.
Clothing prices declined 3.0 percent on month, while medical care eased 0.3 percent and housing fell 0.2 percent.
2013-07-25 13:55 GMT (or 15:55 MQ MT5 time) | [USD - Reuters/Michigan Consumer Sentiment Index (Jul)]
If actual > forecast = good for currency (for USD in our case)
U.S. Consumer Sentiment Improves To Six-Year High In July :
Consumer sentiment in the U.S. improved to its best level in six
years in the month of July, according to a report released by Thomson
Reuters and the University of Michigan on Friday.
showed that the consumer sentiment index for July was upwardly revised
to 85.1 from the preliminary reading of 83.9. Economists had expected
the index to be upwardly revised to 84.0.
With the upward revision, the index is above the final June reading of 84.1 and at its highest level since July of 2007.
monthly increase by the headline index reflected an improvement in the
assessment of current economic conditions, which jumped to 98.6 in July
from 93.8 in June.
On the other hand, the report showed that the gauge of consumer expectations dipped to 76.5 in July from 77.8 in June.
high level of confidence points toward a continued expansion of
consumer spending in the year ahead," survey director Richard Curtin
said, according to Reuters.
With regard to inflation, one-year
inflation expectations rose to 3.1 percent in July from 3 percent in
June, while the five-to-ten-year inflation outlook fell to 2.8 percent
from 2.9 percent.
Foreign Bonds Drop As Dollar Strengthens and Interest Rates Rise :
In “US Bonds Drop Value in 2013 Q2 As Interest Rates Rise” we wrote
about how bonds and bonds funds drop in value as interest rates rise.
Many investors don’t understand why a bond, which pays a fixed rate of
interest and then at the end of the term pays a fixed amount of
principle would have its price fluctuate. But they do. Foreign bonds
also suffered from interest rates rising:
During the second quarter of 2013 the U.S. dollar Index strengthened.
This means that the U.S. dollar gained in value against a specific mix
of foreign currency used to measure the value of the U.S. dollar.
The drop for the average basket of currencies against the U.S. Dollar was greater or smaller depending on the country.
One of the worst drops during the quarter was the Australian Dollar:
Foreign bonds play a very specific role within a portfolio of protecting
a portion of your stable fixed income funds against the devaluation of
the U.S. Dollar.
Just because the dollar strengthens for a quarter does not mean you should abandon this strategy.
Should Euro Debt Worry You? :
It was a heavy weak of earnings with wild after-hours trading as
analysts digested the earnings reports. For example in the first ten
minutes after Amazon.com (AMZN) reported its earnings on Thursday, the stock ranged from down $18 to down just $4.
Overall, over 70% of the companies have beat their earning’s
estimates and just over 53% have beat on revenue. The earnings beat, so
far, is the best since 2006 and was by far the best reading since the
end of the bear market. Weaker revenue numbers have been a concern of
many analysts and investors. The revenue has been in a gradual
downtrend since the 4th quarter of 2009.
The best news last week came from Facebook, Inc. (FB)
whose earnings surprised everyone as its stock gained 22% the day after
its earnings were released. In this week’s trading lesson, I took an
in-depth technical look at five of the tech giants. The market has not been kind to those that missed earnings as Expedia Inc. (EXPE) lost 22% on the opening Friday.
I also reviewed one of the tech industry groups
that has been leading the market higher. It has clearly been a stock
picker’s market as the market-tracking ETFs have not allowed many good
risk/reward entry points.
My current concern for the stock market is what I see as the
longer-term bullish outlook from many analysts. It is not that I
disagree with them, but it is not a positive sign for the near-term
market outlook. The periodic weaker-than-expected economic news has not
dampened the enthusiasm but maybe the Eurozone will again shake up the
market before the summer is over. Some negative news from the Eurozone
could increase the bearish sentiment enough to fuel another phase in the
The recent efforts by Germany to push their austerity plans fell on
deaf ears at the recent economic summit as the majority of the Eurozone,
including France, believes that more attention should be paid to
The table above demonstrates why Germany is concerned as Greece’s
debt is over 160% of its GDP—with Italy, Portugal, and Ireland all over
100% of their GDP, as well. France and Spain are not far behind either. I
have favored the stimulus path as the disastrous austerity push in
1936-1937 clearly postponed the economic recovery. I discussed this
period in depth last fall Austerity Didn’t Work in ’37…What About Now?.
Of course, I think more could still be done, especially to save the
crumbling infrastructure as I fear future disasters will make it clear
that this problem needs to be addressed. The US debt level has gradually
improved as the economy has become stronger. A growing economy is the
fastest way to reduce debt.
There has been some improvement in the economic data from the
Eurozone as last Friday’s data on Spain’s unemployment was an
encouraging sign. Even better was the purchasing managers data on the
Eurozone, which moved above the key 50 level. Germany’s data was even
better as after dropping below 50, it rose sharply to 52.8, and France
also showed nice improvement.
The business sentiment in Germany, Belgium, and the Netherlands also
perked up as Germany’s business confidence improved in each of the past
three months. Italian consumer confidence hit its highest level in over a
This has given some of the Eurozone stock markets a boost as they had
been under pressure for the first half of the year. The % Performance
chart for 2013 shows that the iShares MSCI Italy ETF (EWI) was down almost 14% for the year in early April, but now is just down 3.6%.
The ETFs that follow Germany (EWG) and France (EWQ) are now up 7.3% and 6% respectively while Spain (EWP)
has just moved back into positive territory. It was down close to 9%
at the start of the month. All are trailing the 18.2% gain in the Spyder Trust (SPY).
Despite these signs of improvement, a shock from the Eurozone is
still possible, and next week the Federal Reserve, European Central
Bank, and the Bank of England are all meeting. Though nothing
substantial is expected from the meetings, a surprise is always
Several of last week’s economic numbers beat expectations as the
flash Purchasing Managers Index showed nice gains, and the Durable Good
Orders were also much higher due to airplane orders for Boeing (BA).
The final reading on consumer sentiment from the University of Michigan
was released on Friday and at 85.1 was better than expected
The monthly jobs report is out this Friday, and there is a full slate
of economic data this week starting with Pending Home Sales and the
Dallas Fed Manufacturing Survey on Monday.
There is more housing data on Tuesday with the S&P Case-Shiller
Housing Price Index. The FOMC also starts its meeting and the Conference
Board releases its latest data on Consumer Confidence.
The data on Wednesday may set the tone for the whole week as we get
the advance reading on the 2nd quarter GDP, the ADP Employment Report,
the Chicago Purchasing Managers Index, and the FOMC announcement.
Besides the jobless claims on Thursday, we also get the ISM
Manufacturing Index, which sets the stage for Friday’s monthly jobs
report. The end of the month adjustment of positions and the full slate
of economic data should keep volatility fairly high.
What to Watch
The flat close in the S&P 500
and the Dow Industrials last week was due to the rally late Friday,
which brought these averages back to positive territory. The market
internals on the NYSE were decidedly negative on Friday. This has
weakened some of the A/D indicators, and we still may see a deeper
correction as we head into the end of the month. There are no strong
sell signals yet, but they may develop this week.
The typical short-term seasonal trend I discussed on June 21
indicated that July would be a better month for stocks. The pattern is
also for the market to turn lower at the end of the month and then
develop a trading range in August. Given the impulsive rally from the
June lows, the pattern may be different this year.
This means that August may be a difficult month for many investors, but those that bought near the recent highs as I discussed last week,
may already have some regrets. A further correction should be an
opportunity to establish positions in some of the regional banks, as
well as the homebuilders, which dropped last week. These stocks are
likely to move even lower before their major up trends resume.
A further correction will help to turn the overall sentiment of both
the professional investors and the public more negative. The public
outlook for the economy is still quite negative as a recent survey by
Rutgers University found that 54% of Americans believe the economy will
take six to 10 years to recover or will not fully recover from the Great
This means that a much smaller percentage of the public is invested
in the market than they were in the late 1990’s. Those who are
investing, like those in the AAII survey, are still too bullish at 45%,
even though this is down from 49% in May. The financial newsletter
writers are also too bullish at 51.5%, up from a reading of 41.7% on
June 26. The number of bears at 19.6% is also too low.
The daily chart of the NYSE Composite shows that while the S&P
500 and Dow Industrials were making new highs last week, it failed to
surpass the May high at 9695.46, line a. There is minor support now at
9443-9462 with the 20-day EMA at 9474.
The quarterly pivot is at 9251, and if last week’s high was a short-term top, then the 38.2% Fibonacci retracement support is at 9348 with the 50% support at 9242. This also corresponds to the 20-week EMA at 9237.
The McClellan oscillator,
which formed multiple positive divergences at the recent lows, line b,
has been diverging as prices moved higher. The drop below the zero line,
Friday, confirms the short-term negative divergence and does allow for a
The daily NYSE Advance/Decline line
did not surpass the May highs last week and is now testing its
still-rising WMA. It is still well above the support at line c, while
the June lows are a more important area of support.
S&P 500 The Spyder Trust (SPY)
tested the monthly pivot resistance for the first three days of last
week before turning lower. This was the weakest weekly close in the past
five weeks, suggesting the rally has lost momentum. The rally from the
April lows also lasted four weeks and was then followed by a five-week
There is next support at $167.07 and then at the 20-day EMA at
$166.75. The mid-June high was at $166.12, with further support in the
The on-balance volume (OBV)
turned positive in late June and early July when it moved through its
WMA and the downtrend, line d. The OBV has failed to make new highs with
prices and this divergence, may be warning of a deeper correction. The
OBV has strong support at line e. The weekly OBV is still locked in its
trading range and is above its WMA.
The daily S&P 500 A/D made new highs last Monday and has now
dropped back to its rising WMA. The WMA could fatten out this week
before it is ready to decline. There is initial resistance for SPY in
the $168.75-$169.20 area.
Dow Industrials The SPDR Diamond Trust (DIA)
failed to make new highs last week with the Dow Industrials as the high
at $155.70 was just below the prior week’s high at $157.74. The flat
weekly close has weakened some of the momentum studies as the 20-day EMA
at $153.55 was tested on Friday.
The former downtrend, line a, is now in the $150 area with the
longer-term up tend, line b, in the $149 area. The key support from late
June is at $145.17.
The daily Dow Industrials A/D line broke through the May-June trading
range, line c, in early July, and made significant new highs this
month. Another new high was made last week though it has now turned
Nasdaq-100 The PowerShares QQQ Trust (QQQ) did much better last week after absorbing the losses from Google, Inc. (GOOG) and Microsoft, Inc. (MSFT)
the prior week. Unlike SPY or DIA, it closed the week almost 1% higher
as it held above the 20-day EMA at $74.13 and the support at $73.70,
There is additional support now at $72-$73 with the 20-week EMA at $71.83. The quarterly pivot is at $71.03.
The Nasdaq-100 A/D line was stronger than prices last week as it made
a new high before turning lower late in the week. The A/D line is still
holding above its WMA as it staged a powerful breakout above
resistance, line c, in late June.
There is first resistance for QQQ at $75-$75.54 and monthly pivot resistance at $76.08. The weekly starc+ band is at $77.42
Russell 2000 The iShares Russell 2000 Index (IWM)
was down a bit for the week as its rally stalled just below $105. The
daily starc+ band is now at $106.15 with the quarterly R2 resistance at
The daily OBV did confirm the recent highs and is holding well above
its WMA and long-term support at line e. The weekly OBV also made new
highs, so both OBV time frames are positive.
After breaking out of its trading range, the Russell 2000 A/D line
has continued to act strong as it did make a new high with prices and is
holding above its WMA.
The rising 20-day EMA is at $102.25 with the daily starc band. There
is further support in the $100.38 to $101 area with the quarterly pivot
well below current levels at $95.50.
FOCUS: No FOMC Tapering Expected This Week; Many Anticipate Announcement In September :
As much as anything, market participants will be eyeing this week’s
meeting of the Federal Open Market Committee largely for clues on what
to expect when the next monetary-policy confab occurs in September.
For some time now, traders in a range of markets – from currencies to
Treasury bonds to gold – have tried to gauge when Fed members will
start to taper their monthly bond-buying program known as quantitative
easing. The central bank has been buying $85 billion a month in Treasury
and mortgage-backed securities in a bid to push down long-term interest
rates and boost the economy.
Federal Reserve Chairman Ben Bernanke has said that tapering could
begin this year, assuming economic data continues to improve. But at the
same time, Fed officials have also tried to emphasize that even when
they start trimming bond purchases, monetary policy will remain
accommodative and that tapering is still a long ways from actually
hiking the federal-funds rate.
Many economists have said they expect tapering to be announced in September, although others suspect later.
Policymakers have let the markets know they are “very interested in
reducing the amount” of quantitative easing as the economy improves,
said Andrew Busch, editor and publisher The Busch
Update political and financial newsletter. Yet, officials have also
tried to emphasize this will be dependent on data, such as the rise of
195,000 in June non-farm payrolls, he continued.
“So, the markets interpret this as tapering will begin in September
if the economy continues to show a trend of improvement,” Busch said.
The general expectation is policymakers might then trim their monthly
bond purchases by $20 million to $65 billion. “It’s nothing too
significant but a gradual reduction,” Busch said.
U.S. Treasury yields began rising in May when Bernanke first hinted tapering could begin in the “next few meetings.”
FOMC members have been trying to be transparent, but “clearly are
struggling” to communicate their message, Busch said. “That’s why we are
getting volatility in bond yields,” he added.
Treasury yields and the dollar tend to rise, and gold fall, whenever
markets ramp up expectations for tapering. Conversely, dovish comments
from Fed officials on monetary policy tend to hurt yields and the dollar
and help gold.
Traders To Be Watching Wednesday For Clues On Future
Observers do not expect Fed action as soon as the Tuesday-Wednesday
meeting. If this is indeed the case, then market participants will be
scrutinizing the Fed statement for any change in language that offers a
clue on when policymakers will do something.
“You may get a little more of a hinting one way or another on what
the voters are thinking regarding tapering in September, although the
market is pretty much expecting them to (announce tapering in
September),” said Jeffrey Rosen, chief economist with Briefing.com. “Or
it might be the other way around, you may get more dovish talk to
appease (the market).”
For instance, Rosen cited comments from St. Louis Fed President James
Bullard this month saying the central bank should not start scaling
back bond purchases until inflation accelerates the Fed’s target rate.
Currency analysts at Brown Brothers Harriman say if the Fed was to
begin tapering in September, as many expect, they would expect stronger
signals in the statement after this week’s meeting, which is the last
one before September.
However, Busch doubts policymakers will try to communicate much new
to avoid spooking markets again. In the two months, when the Fed has
spooked the bond market and resulted in higher Treasury yields,
officials then seemingly because more dovish, he pointed out.
“Because of what happened from May to June, the Fed spent a lot of
time in July trying to back down market expectations of sharply higher
interest rates….From that context, I doubt they are going to be very
aggressive saying anything that would disrupt the markets at this point,
given all of the work that they spent doing in the last month,” Busch
The 10-year Treasury yield hit a longtime high of 2.657% in late June
and extended this to 2.725% in early July, before backing down and
moving sideways. It was at 2.587% as of 12:40 p.m. EDT.
“In the U.S., our economists do not expect any change in the Fed’s
asset purchases at this meeting, but will look for any update to its
forward guidance on tapering and its first interest rate hike, as well
as any indication of the impact of financial market volatility to its
economic outlook,” Nomura said.
An article in the Wall Street Journal Friday suggested policymakers
may describe whether to refine or revise their “forward guidance,” or
their intentions for the future. The Fed previously indicated that
short-term interest rates would remain near zero until the unemployment
rate falls to 6.5% or annualized inflation is 2%. However, the Journal
article written by Jon Hilsenrath pointed out that Bernanke last month
suggested policymakers might lower the 6.5% jobless threshold, which
would emphasize to the markets that short-term interest rates will
remain low for a long time. Another option might be if the Fed, which
has set an upper limit on inflation, also set a floor.
Nomura analysts questioned whether the Fed will lower the
unemployment-rate threshold mainly because of a lack of clear consensus.
Instead, the introduction of an inflation floor might be a more likely,
thus Nomura says it sees “limited scope for a clear dovish surprise on
Nomura added that market participants may have to wait until the FOMC
minutes of this meeting are released on Aug. 21 to get more detailed
information on future guidance, should any be forthcoming.
The International Monetary Fund last week went on record saying it
wants to see the Fed not taper until next year, arguing that the
benefits exceed the costs.
Some observers have commented that by delaying tapering until
September, policymakers will have the benefit of two more monthly jobs
reports. The July data is scheduled for release on Friday, with non-farm
payrolls expected to rise 175,000. The August jobs report is due out in
Also, the Federal Reserve’s Web site shows that the Sept. 17-18
meeting of the FOMC will include a summary of economic projections from
Fed officials and will be followed by a news conference by Bernanke.
“I definitely think the Treasury market is (factoring) in tapering,”
Rosen said. “The Treasury market had a run-up in rates that started soon
after the Fed hinted that tapering (is) coming sooner than later. The
consensus of expectations on surveys shows that September is the main
view of when you’ll get an announcement on tapering.
“Are they going to taper as soon as the announcement? Possibly,
possibly not. They may say they will start tapering in October or
November, but the idea right now is that it’s coming…..”
Some European Markets Did Better Than Global Averages During Q2 2013 :
While the S&P 500 did reasonably well during the second quarter of 2013, the global markets did not. Emerging Markets did particularly poorly.
But, in a reversal from past trends, European markets did better:
Meanwhile the S&P 500 was also positive for the quarter:
Diversifying your assets outside of the United States is part of
protecting your assets against all being subject to a single country’s
economic failure or success.
2013-07-30 01:30 GMT (or 03:30 MQ MT5 time) | [AUD - Building Approvals]
If actual > forecast = good for currency (for AUD in our case)
Australia Building Approvals Contract Unexpectedly In June :
The number of dwelling units approved in Australia in June declined
unexpectedly, the latest figures from the Australian Bureau of
Statistics showed Tuesday.
Building approvals fell a seasonally
adjusted 6.9 percent month-on-month in June compared with forecast of a 2
percent increase. The number of approvals declined 4.3 percent in May.
On an annual basis, building consents contracted 13 percent. The number of approvals totaled 12,778 during the month.
many as 7,926 private sector houses were approved during the month.
This was 1.2 percent less than a month earlier and represented the first
monthly decline in six months. Year-on-year, number of private sector
houses approved rose 9.9 percent.
2013-07-30 07:00 GMT (or 09:00 MQ MT5 time) | [EUR - Spanish GDP]
If actual > forecast = good for currency (for EUR in our case)
Spanish Economy Contracts At Slower Pace In Q2
Spanish recession eased further in the second quarter of 2013, a
preliminary report from the statistical office Ine suggested Tuesday.
gross domestic product contracted 0.1 percent quarter-on-quarter in the
second quarter of 2013, slower than a 0.5 percent fall in the first
The pace of contraction has now eased for a second consecutive quarter. The outcome was in line with economists' expectations.
GDP fell 1.7 percent in the second quarter, slower than a 2 percent
decline reported in the first quarter. Economists had forecast a 1.8
"This result was basically caused by a more
negative contribution in the domestic demand, which was compensated
partially by a positive contribution of the external demand," the
statistical office said.
Another flash estimate from Ine today
showed that the harmonized index of consumer prices rose 1.9 percent
year-on-year in July as expected. The pace of increase was weaker than a
2.2 percent rise recorded in June.
The consumer price index
increased 1.8 percent year-on-year in July, slower than 2.1 percent rise
in June. On a monthly basis, the HICP fell 1.1 percent and the CPI
decreased 0.5 percent, according to the flash estimate.
Forex News Trading Summary
One of the major economies that most traders keep
their focuses on is the economic and the political situation of the
American economy. Also, you should watch out for indicators from the
European Union although they may have a smaller impact than those from
You may also check with heads of central banks
announcements. This can give you ideas of possible increases or
decreases in inflation and interest rates. Inflation has a direct effect
on interest rates as when it goes up, banks try to leverage the
Fundamental analysis comprises the examination of
macroeconomic indicators and political considerations when evaluating
one nation's currency relative to another.
Fundamental traders follow these news announcements,
known as fundamental indicators, because they paint a picture of a
currency's strength in relation to other countries.
Fundamental indicators are reports that include
statistical data on things such as employment report,GDP, international
trade balance, retail sales, manufacturing data, inflation and interest
What you should know about trading the news in Forex