Press review - page 229

Sergey Golubev
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2014-09-09 01:30 GMT (or 03:30 MQ MT5 time) | [AUD - Home Loans]

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

[AUD - Home Loans] = Change in the number of new loans granted for owner-occupied homes. It's a leading indicator of demand in the housing market - most homes are financed, so it provides an excellent gauge of how many qualified buyers are entering the market.

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Australia Home Loans Add 0.3% In July

The total number of home loans in Australia was up a seasonally adjusted 0.3 percent on month in July, the Australian Bureau of Statistics said on Tuesday - coming in at 52,251.

That missed forecasts for an increase of 1.0 percent, and down from the downwardly revised 0.1 percent gain in June (originally 0.2 percent).

The value of home loans for owner-occupied housing was flat on month at A$17.058 billion - down from the 1.7 percent increase in the previous month.

Investment lending climbed 6.8 percent on year to A$11.513 billion, after adding 0.1 percent a month earlier.

Sergey Golubev
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Forum on trading, automated trading systems and testing trading strategies

AminStar, 2014.09.09 22:09

US Dollar Strengthens Broadly as Expectations for Rate Hike Accumulate

The major event of the week until now has been the poll of YouGov in UK for Scotland’s independence. The Sunday poll showed for first time that separatist take the lead with the British pound declining to fresh lows every day. Early on Tuesday morning the GBPUSDdropped to new 10-month low at 1.6064, the sterling remains the weakest major currency against the greenback but a retracement should be expected. Good news could come with the Manufacturing or Industrial production report today or with Mark Carney’s speech. The previous months’ investors were having great expectations for Bank of England monetary tight and for that reason the GBPUSD went up to 1.7187.


The US dollar strengthened further overnight as market participants’ expectations for Fed interest rate raise timing becomes more imminent. The Treasury 10-year yields advance as BlackRock said that the improving labor and indications for inflation suggest that the Fed would increase borrowing costs. That is diverging from almost all other major central banks monetary policies. The greenback rose against the Japanese Yen to fresh 5-year high at 106.33 and fundamentals are expected to remain supportive for the US dollar. At the same time the Japanese Consumer Confidence was reported today lower than expected.


Next week the FOMC would release its projections and most likely would further cut monthly asset purchases program. In addition, the geopolitical risk has diminished significantly compared to August and that does not help the Japanese Yen, therefore continuation of these developments would further increase the USDJPY.


Elsewhere, the Euro against the US dollar also dropped to fresh 14-month low at 1.2864 as the greenback was strengthening while the demand for Euro remains weak. On the data front today we are expecting the Manufacturing and Industrial Production for UK while in the evening investors would anticipate the JOLTS Job Opening for further clues on US labor market performance.

Sergey Golubev
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113476
Sergey Golubev  

Trading Video: FX Volatility Surge Puts Dollar and S&P 500 on Alert

  • FX volatility levels swell - is it a precursor to a deeper shift in sentiment market-wide?
  • EURUSD, GBPUSD and USDJPY maintain trend but curb progress
  • Top event risk rests with an active Pound in BoE testimony and Kiwi on an RBNZ rate decision



Sergey Golubev
Moderator
113476
Sergey Golubev  
2014-09-10 00:30 GMT (or 02:30 MQ MT5 time) | [AUD - Westpac Consumer Sentiment]

if actual > forecast (or actual data) = good for currency (for AUD in our case)

[AUD - Home Loans] = Change in the level of a diffusion index based on surveyed consumers. Financial confidence is a leading indicator of consumer spending, which accounts for a majority of overall economic activity.

==========

Bad time for Australia. Share market falls as consumer confidence drops

The Australian share market has suffered its worst fall in more than a month, with investors influenced by losses on Wall Street and an unexpected fall in consumer confidence.

All sectors fell but finance companies managed to post the slimmest losses.

The NAB and ANZ bank fell by 0.4 per cent and 0.25 per cent respectively, while the Commonwealth closed steady. Westpac gained 0.4 per cent.

The All Ordinaries index and the ASX200 both fell 34 points or 0.6 per cent to close at 5,574.

The mining sector was one of the hardest hit; BHP Billiton dropped 0.8 per cent and Rio Tinto 0.4 per cent, as the benchmark Chinese iron ore price softened a touch more overnight Tuesday.

Atlas Iron dropped 4.2 per cent and Fortescue Metals Group fell 2.7 per cent, but gold miner Newcrest gained 1.25 per cent.

The Westpac Melbourne Institute Consumer Confidence index fell sharply and unexpectedly in its latest reading, erasing the gains it had made over the previous three months.

The index is now 4.6 points lower at 94, with any reading below 100 indicating that pessimists outnumber optimists.

The Australian dollar was also hurt by the confidence index and continued its slide on speculation that US interest rates will begin increasing before those domestically.


Sergey Golubev
Moderator
113476
Sergey Golubev  

Trading the News: Reserve Bank of New Zealand (RBNZ) Rate Decision (based on dailyfx article)

  • RBNZ Expected to Retain Current Policy Amid Period of ‘Interest Rate Stability’.
  • Will RBNZ Governor Graeme Wheeler Remove the Verbal Intervention on Kiwi?

According to a Bloomberg News survey, all of the 13 economist polled see the Reserve Bank of New Zealand (RBNZ) keeping the interest rate on hold at 3.50%, but the fresh batch of central bank rhetoric may produce increased volatility in the NZD/USD as market participants weigh the outlook for monetary policy.

What’s Expected:



Why Is This Event Important:

In light of the marked depreciation in the NZD/USD, the biggest risk for surprise will be a removal of the verbal intervention on the kiwi, and a further decline in the exchange rate may prompt Governor Graeme Wheeler to adopt a more hawkish tone for monetary policy as it fuels imported inflation.

Below-target inflation along with the slowdown in employment may encourage the RBNZ to retain a period of ‘interest rate stability’ in New Zealand, and the fresh batch of central bank rhetoric may spur a further decline in the NZD/USD should it drag on interest rate expectations.

Nevertheless, the RBNZ may no longer jawbone the kiwi as the lower exchange rate raises the risk for imported inflation, and the NZD/USD may face a more meaningful rebound ahead of the next Fed meeting on September 17 should Governor Wheeler unexpectedly adopt a more hawkish tone for monetary policy.

How To Trade This Event Risk
Bearish NZD Trade: RBNZ Continues Talk Down Interest Rate Expectations

  • Need red, five-minute candle following the statement to consider a short New Zealand dollar trade
  • If market reaction favors selling kiwi, short NZD/USD with two separate position
  • Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward
  • Move stop to entry on remaining position once initial target is hit, set reasonable limit
Bullish NZD Trade: Governor Wheeler Removes Verbal Intervention
  • Need green, five-minute candle to favor a long NZD/USD trade
  • Implement same setup as the bullish New Zealand dollar trade, just in the opposite direction
Potential Price Targets For The Release
NZDUSD Daily


  • Will look for fresh highs should the NZD/USD carve a higher-low in July
  • Interim Resistance: 0.8430 (23.6% retracement) to 0.8450 (23.6% expansion)
  • Interim Support: 0.8160 (100% expansion) to 0.8180 (38.2% retracement)
Impact that the RBNZ rate decision has had on NZD during the last meeting
PeriodData ReleasedEstimateActualPips Change
(1 Hour post event )
Pips Change
(End of Day post event)
JUL 2014 07/23/2014 21:00 GMT 3.50% 3.50% -79 -114
As expected, the Reserve Bank of New Zealand (RBNZ) raised the Official Cash Rate (OCR) by another 25 pips to 3.50%, marking the fourth consecutive interest rate hike since March 2014. However, the RBNZ revised down the GDP forecast to 3.7% from 4% in June amid falling export prices of diary and timber, and went onto say that there will ‘be a period of assessment before interest rates adjust further towards a more-neutral level’. The NZD/USD was pulled down nearly 90 pips following the shift in the policy outlook, with the pair ending the day at 0.8584.

MetaTrader Trading Platform Screenshots

NZDUSD, M5, 2014.09.11

MetaQuotes Software Corp., MetaTrader 5, Demo

NZDUSD M5 : 35 pips price movement by NZD - Official Cash Rate news event

NZDUSD, M5, 2014.09.11, MetaQuotes Software Corp., MetaTrader 5, Demo


Sergey Golubev
Moderator
113476
Sergey Golubev  

AUDUSD Technical Analysis (based on dailyfx article)

  • AUD/USD Technical Strategy: Short at 0.9186
  • Support:0.9085, 0.8955, 0.8826
  • Resistance: 0.9195, 0.9264, 0.9365


The Australian Dollar appears poised to continue lower against the US Dollar after sliding to the weakest level in close to five months. A break below support at the bottom of a falling channel set from mid-June exposes the 38.2% Fibonacci expansion at 0.9085, with a further push beyond that targeting the 50% level at 0.8955. Alternatively, a reversal back above the channel floor – now recast as resistance at 0.9195, opens the door for a test of the 0.9245-64 area marked by a rising trend line set from April and the 23.6% expansion.
Sergey Golubev
Moderator
113476
Sergey Golubev  

Technical Analysis: AUDUSD & NZDUSD trade similarly for different reasons

The NZDUSD made new lows on the back of comments from RBNZ’s Wheeler who said that the currency was overvalued and that rates would stay on hold until 1Q of 2015. Meanwhile in Australia, the AUDUSD made it’s new move lows despite much stronger employment statistics that had the market questioning the seasonals.


Sergey Golubev
Moderator
113476
Sergey Golubev  
Forex Weekly Outlook September 15-19

Inflation data in the UK and the US, German Economic Sentiment, US Federal Funds Rate and FOMC Press conference, GDP in New Zealand, US unemployment claims, Scottish Independence Vote are the major topics in Forex calendar. Check out these events on our weekly outlook.

Last week US jobless claims increased 11,000 last week, reaching 315K, exceeding the revised 304K posted in the week before. However, the 4 week moving average was little affected, rising 750 to 304K, 7% less than a year ago and still behind prerecession levels. Despite sluggish, hiring in August, the general trend is positive. The economy has generated an average of 215,000 jobs a month so far in 2014, up from 194,000 in 2013 and wage growth is expected to rise in the coming months alongside economic expansion. Will this trend continue?
  1. Haruhiko Kuroda speaks: Tuesday, 5:30. BOE Governor Haruhiko Kuroda will press conference in Osaka. Market volatility is expected.
  2. UK inflation data: Tuesday, 8:30. Annual inflation rate dropped more than expected in July, reaching 1.6% from 1.9% in June, lowering the chance of an interest rate rise in 2014. Economists expected a smaller decline to 1.8%. The main cause for the sharp fall was price reduction in summer clothing. Inflation was held below the BOE’s 2% target for the seventh consecutive month, indicating the UK economy is stabilizing. However, cost of living and income tax are still too high compared to wage growth. Annual inflation is expected to reach 1.5% in August.
  3. Eurozone German ZEW Economic Sentiment: Tuesday, 9:00. German economic sentiment plunged in August to 8.6 from 27.1 in July. The 18.5 fall brought sentiment to its lowest level since December 2012. Analysts expected a more modest decline to 18.2 points. The Current Conditions Index dropped to 44.3 from 61.8 in July, missing predictions for a decline to 55.5. The ongoing geopolitical tensions are the main reason for the sharp decline. Economic climate is expected to decline further to 5.2.
  4. US PPI: Tuesday, 12:30. U.S. producer prices inched marginally in July rising 0.1%, in line with market forecast, following a 0.4% gain in the previous month. The slow advance resulted from a decline in the cost of energy goods, lowering prices of finished goods. Despite the volatility in the PPI series, a trend of inflation is gathering pace, easing the Central Bank’s concerns. The government introduced three new indexes to the PPI series focusing on personal consumption. Personal consumption less food and energy rose 0.2% in July after a 0.3% gain in June. Excluding food, energy and trade services, the index increased 0.2% after a similar rise in June. Producer prices are predicted to gain 0.1% in August.
  5. UK employment data: Wednesday, 8:30. The number of people claiming unemployment benefits in the U.K. contracted more-than-expected in July, declining a seasonally adjusted 33,600, after a 39,500 fall in the previous month, lowering the Unemployment level to 6.4% in the three months to June. Economists expected a smaller decline of 29,700. Meanwhile, the average earnings index fell 0.2% in the three months to June after a 0.4% gain in the three months to May. The number of job seekers is expected to decline by 29,700 in August.
  6. US inflation data: Wednesday, 12:30. U.S. consumer prices inched 0.1% in July, in line with market forecast, following a 0.3% rise in June. On a yearly base, consumer prices gained 2.0%, compared to June’s increase of 2.1%. Excluding the volatile food and energy costs, July core consumer prices gained 0.1% after posting the same gain in June. On an annual basis, core CPI rose 1.9%, unchanged from June. Economists expect core CPI to rise above the 2% target next year, prompting the Fed to raise rates in March. U.S. consumer prices is expected to grow by 0.1% whiel Core CPI is predicted to gain 0.2%.
  7. FOMC Economic Projections, Rate statement and Press conference: Wednesday, 18:00. The Federal Reserve downgraded its outlook for the U.S. economy in its June meeting but continued with tapering as planned. Growth forecast was reduced to 2.1% from 2.3% due to the harsh winter in which the economy contracted 0.1%. However, Fed Chair Janet Yellen stated economic activity has rebounded in the second quarter. The Fed voted unanimously to continue the cut the monthly purchases down to $35 billion. The labor market continues to improve together with underlying strength in the broader economy. Economists believe inflation will rise once the Unemployment rate reaches 6%. Regarding interest rate increase, the Fed may stall its planned hike until reaching solid growth.
  8. New Zealand GDP: Wednesday, 22:45. New Zealand economy expanded 1.0% in the first quarter following a revised 1.0% in the last quarter of 2013. Construction sector was the main contributor to expansion, rising 12.5%, the largest since March 2000. Retail trade edged up 1.4% and 4.4% on a yearly base. Mining rose 6.3% in the first quarter. Household spending remained unchanged, despite the 7.3% gain in real gross national disposable income, the largest ever annual rise. Exports increased 3.1% for the quarter driven by an 18.6% rise in agriculture and fishing products.
  9. Switzerland rate decision: Thursday, 7:30. The Swiss National Bank (SNB) decided to maintain its Libor target at the historically-low range of 0% to 0.25%, in line with market forecast. The Central bank stated that economic growth picked up in the first quarter, after a softer fourth quarter last year. However, the Bank also noted that production capacities are still not fully utilized and expects a pickup in economic activity during the coming quarters. The downside risks remained unchanged including weaker-than-expected growth in major economies, geopolitical tensions, Eurozone financial difficulties. No change in rates is expected.
  10. US Building Permits: Thursday, 12:30. US building permits surged 15.7% in July, reaching a seasonally adjusted annual pace of 1.09-million units. The rise came after two consecutive declines. Economists expected starts to rise to a 969,000-unit rate. The housing market softened after the rise in interest rates. The government reported last month that the homeownership rate hit a 19-year low in the second quarter, while the rental vacancy rate was the lowest in more than 19 years. The number of Building permits is expected to reach 1.04 million units this time.
  11. US Unemployment Claims: Thursday, 12:30. The number of Americans seeking U.S. unemployment benefits increased by 11,000 last week to 315,000. However, the four-week average inched up only 750 to 304,000. The average remained 7.1% lower than last year. Unemployment benefits data can be volatile around holidays and could explain the 11,000 rise. Overall, the Us labor market continues to strengthen with a clear growth trend. Jobless claims are expected to grow by 312,000 this week.
  12. Janet Yellen speaks: Thursday, 12:45. Federal Reserve Chair Janet Yellen will speak in Washington DC. She may talk about the US labor market and the prospects of a rate hike following the taper period. Market volatility is expected.
  13. US Philly Fed Manufacturing Index: Thursday, 14:00. Business conditions in the Philadelphia area improved in August surging to 28 from 23.9 in July. This was the third consecutive rise and posting the highest reading since March 2011. Economists expected a more modest rise to 19.7 points. However despite the less encouraging new orders index, the general tone is positive. Business conditions in the Philadelphia area are expected to decline to 22.8.
  14. Scottish Independence Vote: Thursday. In September 18, Scottish voters will decide whether to split from the United Kingdom or stay as one country with England, Wales and Northern Ireland. A YouGov poll conducted for The Sunday Times and released on Sunday showed the “yes” vote at 51% and “no” at 49%. Scotland’s first minister and SNP leader Alex Salmond has been a vocal proponent of independence. British Prime Minister David Cameron wants Scotland to remain part of an undivided United Kingdom of Great Britain and Northern Ireland. Uncertainty over the outcome of the Scottish referendum weakened the pound.
Sergey Golubev
Moderator
113476
Sergey Golubev  

EURUSD Fundamentals (based on dailyfx article)

Fundamental Forecast for Euro: Neutral
  • Euro May Bounce on Strong Demand at First ECB TLTRO Operation
  • FOMC Announcement, Scotland Referendum May Stoke Euro Volatility


Euro selling pressure appears to be waning at last after eight consecutive weeks of losses that brought the single currency to the lowest level in 14 months against the US Dollar. The operative question going forward is whether this precedes a period of consolidation before a reinvigorated push downward or a correction upward. The answer will be found in the markets’ response to a hefty dose of high-profile event risk on the domestic and the external fronts in the week ahead.

Looking inward, thespotlight is on the first ECB TLTRO operation due to be held on September 18. The effort represents one of many easing tools that Mario Draghi and company have deployed in recent months in an attempt to check the slide toward deflation and repair the seemingly broken monetary policy transmission mechanism that has made the central bank’s prior attempts at stimulus largely ineffective. The scheme envisions offering Eurozone banks cheap capital tied up with conditions pushing them re-lend it while passing on low borrowing costs to the real economy, stoking activity and boosting prices. The key variable in play will be the size of the liquidity provision that is ultimately taken up by banks tapping the facility. In a somewhat counter-intuitive turn of events, a large capital allocation seems likely to offer support to the Euro.

Externally, the first major item of note is the FOMC policy announcement. September’s outing will be accompanied by the release of an updated set of forecasts for key metrics of US economic activity as well as press conference from Chair Janet Yellen. The Fed has long warned about complacently buoyant risk appetite as the end of QE3 looms ahead next month. If policymakers opt to shake things loose with upbeat activity projections and/or a hawkish outing from Ms Yellen, this may put the Euro’s increasingly unattractive yield profile in stark relief and reinvigorate bearish momentum.

The second is the Scottish Independence referendum. Opinion polls ahead of the ballot essentially point to a 50/50 chance that Scotland will secede from the UK. This implies that – whatever the final result – a surge of volatility is likely to follow the results as those on the wrong side of the outcome are forced to readjust positions. A final vote in favor of independence is likely weigh on Sterling, sending capital fleeing to alternatives. The Euro looks like a natural beneficiary in such a scenario. Needless to say, a victory for the “no” campaign will probably yield the opposite result.

Sergey Golubev
Moderator
113476
Sergey Golubev  
Forex - Weekly outlook: September 15 - 19

The U.S. dollar ended its ninth successive weekly gain against a basket of other major currencies on Friday as expectations for an early hike in U.S. interest rates continued to bolster investor demand.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was last down 0.18% to 84.32, but ended the week with gains of 0.39%. It was the longest series of successive weekly gains in more than 17 years.

The dollar rallied to fresh six-year highs against the yen on Friday, with USD/JPY up 0.23% to 107.33 at the close. For the week, the pair added 2.05%.

Expectations that the Federal Reserve is growing closer to raising interest rates continued to boost the dollar against the yen and the euro, with the Japanese and European central banks likely to stick to a looser monetary policy stance.

A study by the San Francisco Fed published on Monday indicated that central bank officials see rates rising sooner than markets expect.

The Fed was expected to cut its asset purchase program by another $10 billion at its upcoming policy meeting next week which would keep it on track for winding up the program in October, and to start raising interest rates sometime in mid-2015.

Data on Friday showing that U.S. retail sales rose in August and another report showing that consumer sentiment rose to a 14-month high in September underlined the view that the economic recovery is deepening.

The yen remained under pressure after Bank of Japan Governor Haruhiko Kuroda said Thursday that the bank would be prepared to immediately loosen monetary policy or implement other measures if its 2% inflation target becomes difficult to meet.

EUR/USD was up 0.33% to 1.2964 late Friday, holding above the 14-month trough of 1.2858 reached on Tuesday.

The single currency has remained under pressure since the European Central Bank unexpectedly cut rates to record lows on September 4 and unveiled new easing measures in a bid to shore up inflation in the euro area.

The pound also pushed higher against the dollar on Friday, with GBP/USD up 0.18% to 1.6267 in late trade. The pair fell to 10-month lows on Wednesday as the prospects of Scottish independence rattled financial markets.

However, uncertainty over what currency an independent Scotland would use, as well as concerns over how much of the U.K. national debt it would take on looked likely to cap sterling’s gains ahead of the September 18 referendum.

In the week ahead, investors will be focusing on the outcome of Wednesday’s Fed policy meeting. Fed Chair Janet Yellen was to hold a press conference following the meeting.

Market participants will also be closely watching the outcome of Thursday’s independence referendum in Scotland.

Monday, September 15
  • Markets in Japan are to remain closed for a national holiday.
  • Switzerland is to produce data on producer price inflation.
  • In the euro zone, Germany’s Bundesbank is to publish its monthly report.
  • The U.S. is to release reports on manufacturing activity in the Empire State and industrial production.
Tuesday, September 16
  • The Reserve Bank of Australia is to publish the minutes of its latest policy meeting, which contain valuable insights into economic conditions from the bank’s perspective.
  • The U.K. is to publish data on consumer price inflation, which comprises the majority of overall inflation.
  • The ZEW Institute is to release its closely watched report on German economic sentiment, a leading indicator of economic health.
  • Canada is to release data on manufacturing sales.
  • The U.S. is to produce data on producer price inflation.
Wednesday, September 17
  • New Zealand is to publish data on the current account.
  • 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. In addition, the Bank of England is to release the minutes of its latest policy meeting.
  • The euro zone is to release revised data on consumer price inflation.
  • The U.S. is to produce data on consumer prices. Later Wednesday, the Federal Reserve is to announce its federal funds rate and publish its rate statement. Fed Chair Janet Yellen is to hold a press conference following announcement.
Thursday, September 18
  • New Zealand is to publish data on gross domestic product, the broadest indicator of economic activity and the leading measure of the economy’s health.
  • Japan is to release data on the trade balance, the difference in value between imports and exports.
  • Switzerland is also to release a report on the trade balance. At the same time, the Swiss National Bank is to announce its libor rate and publish its monetary policy assessment.
  • The U.K. is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. Meanwhile, Scotland is to hold its independence referendum.
  • The U.S. is to produce a flurry of economic data, including reports on initial jobless claims, building permits, housing starts and manufacturing activity in the Philadelphia region.
Friday, September 19
  • Canada is to round up the week with data on consumer prices and wholesale sales.