Daily Market Reviews by MAYZUS.com - page 5
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11 MARCH 2013: US-DOLLAR KEEPS THE UPPER HAND
DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments
The USD keeps the upper hand in the currencies markets and continue to gain both against a currency basket and major currencies as Euro, GBP and JPY. USD/JPY traded at 96,10 – a 3-and-a-half year high following surprisingly strong USD labor data on Friday. US employers added a more-than-expected 236 000 workers to their payrolls in February. The jobless rate fell to a four year low of 7,7%.
There is still a way to go before the unemployment numbers reach the 6,5% target set by the Federal Reserve (FED) and monetary easing is reconsidered. Before this target is obtained the US economy must produce more than 200 000 monthly jobs for the next three consecutive months. The strong February data has, however, created a momentum and new optimism that the US economy finally is turning and lying the financial crisis from the autumn 2008 behind.
Risk appetite was, however, curbed by a mixed bag of economic data from China painting a patchy recovery in the world’s second-largest economy. The data signaled a looming dilemma for policymakers, as inflation stood at a 10 month high in February. Factory output and consumer spending were weaker than forecast. The data caught commodity prices between growing optimism of increased consumption and a stronger dollar. Non-dollar holders are buying dollar-denominated commodities.
In Asia the MSCI-index for Asia-Pacific was up 0,1% while Shanghai fell 0,3%. The Dow Jones industrial average posted its fourth consecutive record high on Friday. European shares also jumped on the strong US labor data. The strength of the dollar is also a reflection of more fundamental money flows out of the yen and euro. These developments nudge the dollar higher. Currency speculators are boosting their bets in favor of USD and raised their short positions in most other currencies as yen, pound sterling GBP and Euro. Oil and precious metal prices keep steady.
Copyright: MAYZUS Investment Company Ltd
12 MARCH 2013: ASIAN STOCKS HIGHER ON RECORD WALL STREET
DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments
Wall Street’s record close overnight bolstered most Asian shares on Tuesday. Growing confidence in the US economy underpinned investors risk appetite. The Japanese yen slipped to fresh lows on speculation over imminent monetary easing. USD/JPY stands at a new low of 96,51. JPY is losing ground also against Euro and Australian dollar. Euro/USD is trading at 1.3027.
The US stock indexes extended its winning streak to seven sessions and touched its highest intraday level since October 2007. Dow Jones closed at a record high 14 447. The MSCI-index for Asia-Pacific also continued up led by financials echoing US trading where finance were the best performing sector. Also Australia, Hong Kong and Shanghai were up as the Japanese Nikkei. The weaker yen is giving exporters a welcomed boost and Nikkei was up for the eight day in row.
The dollar index, DXY, has benefited from last week’s strong labor data, and continues to jump against the yen. Analysts stress that dollar/yen may take a pause in the second quarter when seasonal weaknesses typically slow US economic indicators. They see a possible USD/JPY downside on 92 yen to a dollar with strong technical support around the 90 level. For now the trend is clearly towards a continued weaker yen.
Euro/USD is steady at 1.3030 level. The Euro is under pressure from Italy’s inconclusive last month elections which are weighing in and delaying the country’s fiscal reform efforts. Gold has edged to 1883 marginally up from yesterday. In new York US crude, NYMEX, traded up 0,2% at USD 92,21 a barrel. Brent crude trades up from below 110 to USD 110,20 a barrel.
Copyright: MAYZUS Investment Company Ltd
13 MARCH 2013: FEAR OF TRIPLE DIP RECESSION PUTS GBP UNDER PRESSURE
DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments
Fears of a triple-dip recession put new downward pressure on British Sterling (GBP) yesterday. January data showed a surprise fall in British industrial output. This pushed GBP down to a low level of $1.482. USD/GBP has since recovered and trades 0,2% to 1.4933. The state of the British economy is highly questionable. Some analysts are waiting an even weaker British sterling, and expect to see that USD/GBP can fall as low as 1.35.
Asian shares fell on Wednesday as the recent stock rally run seems to run out of steam. The MSCI index for Asia-Pacific outside Japan fell 0,6%. Stocks in Australia, Hong Kong and mainland China also fell from 0,6 to 1%. The Dow Jones Industrial, however, posted a new record high rising for the eight straight day on Tuesday. European shares retreated just short of fresh 4-and-a-half year high. Some investors fear that stocks have risen, too, quickly without fundamental support. Investors might be more risk willing, but are still scared by past events as the financial crisis in 2008 where fingers were burnt.
USD/JPY which fell to a low of 96,71 yesterday, trades today at 95,87 reflecting fears that the yen has fallen, too, steeply. The Nikkei stock index retreated 0,5% on profit taking after the last days strong rally; boosting exporters taking advantage of a weaker yen.
Euro/USD is steady in the interval between 1,3030 and 1.3040. It was weighed down on Tuesday by a warning from the Chairman of the Bundesbank, Jens Weidmann, who is also on the board of ECB, the European Central Bank. Weidmann stated that euro crisis in no way is over. In other developments drought has put the New Zealand agricultural dependent currency under pressure.
NYMEX crude is up to USD 92,71 a barrel while Brent crude is weaker at 109,64. Gold, silver and copper are all up 0,2% clinging to gains earlier in the week. Gold trades at USD 1592. In yesterday’s daily report, March 12th, gold prices due to a printing error were said to be marginally up USD 1883. The real price was 1583. Regular readers of the Daily Report would have observed that gold prices lately has been in the interval between USD 1550 and 1585.
Copyright: MAYZUS Investment Company Ltd
14 MARCH 2013: RETAIL REPORT BOOSTS DOW TO NEW HIGH
DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments
Surprisingly strong retail sales helped the Dow Jones Industrial to rise for the ninth straight session in a stock rally not seen since 1996. The new record high posted for DOW is 14 455. Also Nasdaq edged higher to 3 245. Trading volume was light with investors consolidating positions after a strong run up in the three first months of the year. Sign of strength in the economy and the Federal Reserve’s (FED) monetary easing have accelerated the advance of US equities, but many investors are asking whether we are in for a technical correction. The retail sales report helped underscore the impression that the economy is gaining momentum.
Asian shares fell for the second day in row with regional factors outweighing the positive sentiments from another Wall Street record close. The MSCI-index for Asia-Pacific was down 0,6%. Australia plunged 1% in spite of positive employment numbers. The Australian dollar reacted positive to the employment news and hit a five-week high. The Japanese Nikkei bucked the negative trend and added 0,4%. Net inflows in Japanese mutual funds reached USD 11 billion in February. A domestic stock rally for the last four months have increased investor’s appetite for Japanese stocks.
Monetary policy direction remains diverse in Asia as countries also watch development in Chinese economy and North Korea closely. Japan wants powerful monetary easing to get out of a vicious deflation spiral harming its economy for two decades. Other central bankers are fearful of inflation. South Korea has been holding the interest rate steady at 2,75% for the last half year.
The Australian dollar jumped to USD 1,0383 after employment soared by 71 000 in February. JPY continues to gain strengthen against USD trading at 96,03 down from its 96,71 peak on Tuesday. Euro/JPY has also retreated from its record high on Tuesday. The brighter forecast for the US economy has negatively affected the Euro trading down to 1,2947. The yield on Italian short and long term bonds increased during yesterday’s auction, the first after the rating agency Fitch downgraded Italy’s credit rating in February. Investor’s attention will today turn to the Spanish bond auction.
Oil prices, gold and silver have dropped since yesterday. NYMEX crude trades at USD 92,28 a barrel. Brent crude is down to 108,40. Gold trades at USD 1586 an ounce.
Copyright: MAYZUS Investment Company Ltd
15 MARCH 2013: STOCK MARKET GROWTH SMILE ON US DOLLAR
DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments
The Dow Jones Industrial rose for a 10th straight day in a stock rally not seen since 1996, and ended up 0,6% at 14 539. This followed a strong session in Europe. In Asia stocks rose again this morning after two loss making sessions. The rally was spurred by new US- labor market data showing a fall in the weekly numbers applying for. The data reflects that the American economy is steadily improving. A raft of recent data from retail sales and manufacturing to employment and housing have shown that the US economy is gathering steam.
In contradiction to former historical stock rallies where the green buck was used as some kind of a life jacket, the USD has this time benefited greatly on the stock market’s surge to new highs and improved economic data. Against a basket of currency, DXY, the dollar has reached a seven month high. Since January USD/JPY has jumped from 86,67 to over 96. Pound Sterling, GBP, has fallen from 1.62 to a bottom of 1.4832 earlier this week. The moves suggest that the dollar has entered a multi-year bull cycle where the dollar has outperformed nine of the major G-10 currencies.
Political uncertainty in Italy has re-ignited fear about the euro zone’s debt crisis and put new pressure on the Euro. Weak economic growth and prospects of aggressive monetary easing in Japan and Britain have driven the yen and GBP to multi-year lows. Spending cuts in Washington could for sure damper US economic growth and the FED has further pledged to keep interest rates low for the foreseeable future. But capital flows continue to rotate in the favor of US-assets and strengthen both the US economy and the dollar.
The dollar strength against JPY and Euro took a little breather on Friday. USD/JPY trades at 96,03 down from the peak of 96,71 on Tuesday. If the Bank of Japan (BOJ) follows up on its declared strong monetary easing policies, USD/JPY is likely to trade in a future range between 95 – 105. If BOJ disappoints the trading range is expected to be 86 – 96. Euro/USD was in the short term strengthened by a positive Spanish bond auction on Thursday. It trades at 1.3010. Pound sterling and Australian dollar were yesterday’s winners. The Aussie added another 0,8% after another one percentage jump on good employment numbers on Wednesday.
British pound surged yesterday as investors scrambled to cover short positions made on expectations of more quantitative easing by the Bank of England. The Bank’s Governor stated that GDP according to his opinion is properly valued and not seeking further depreciation. GDP was helped by rumors that Qatar is planning to invest billions of GBP into British infrastructure projects. The GDP yesterday’s 1% gain is the biggest seen in seven months.
These short term gains are nevertheless not expected to have any major medium or long term impact. The long medium and long term outlook point towards a stronger USD both in relation to Euro, JPY, GDP and most other currencies. These forecasts for Euro/USD point to a new test on former bottom levels 1.19 – 1.20. It is also predicted that USD/GBP can drop as low as 1.35. The corridor range 95 – 105 is the most likely medium term scenario for USD/JPY.
Copyright: MAYZUS Investment Company Ltd
09 April 2014: Movements In The Markets Are In Line With The News Flow
By Kristina Leonova: Chief Analyst in Investment Research Department
09 April 2014
After two losing days, the U.S. market bounced and ended the trading session in positive territory. The Dow Jones Industrial Average index added 0,06% and finished the trading session at 16256,14 points, the S&P 500 rose by 0,38% to the level of the 1851,96 points, while the index of high-tech companies, Nasdaq, increased by 0,81% and was closed at 4112,99 points.
In the meantime, the European trading session was influenced by the news coming from the IMF and indices closed the trading day in red territory. The British FTSE 100 lost 0,49%, the French CAC 40 decreased by 0,25%, while Germany's DAX was down by 0,21%. The Regional indicator STXE 600 decreased, in turn, by 0,3% and was closed at a level of 333,85 points.
Yesterday, the International Monetary Fund presented updated projections for global growth for 2014 and 2015, having decreased the world GDP this year to the level of 3,6%, the last projections were based on the level of 3,7%. The outlook for global growth in 2015 dropped from 4% to 3,9%. The main reason for the revision was a slowdown in the economy in countries such as Russia and Brazil.
The geopolitical factor on the conflict between Russia and Ukraine at the current moment only positively affects quotations of oil, giving it support due to speculation regarding the transportation of raw materials from Russia to the EU. This morning, oil dropped slightly back from the levels that had been reached, and is traded on $107,19 per barrel on Brent, and $101,39 on WTI, decreasing by 0,40% and 0,41% accordingly.
Gold is up by 0,11%, traded on a price of $1310,50 per troy ounce, and silver is losing 0,63%, and is traded on a level of $19,93 per troy ounce.
Today, investors attention may be attracted to the protocol of the last meeting of FOMC, which shows the growing number of supporters of a faster increase of the rates, or at least a more detailed discussion of the labor market potentials and risks to financial stability. If either are discussed,this could potentially return interest to the U.S. currency.
23 April:Results From The Largest American Companies Are Pushing Indices Up
Reports from the largest American companies who demonstrated good quarterly results, are pushing indices up. Due to this, optimism continues in the American stock market. The Dow Jones Industrial Average Index raised 0,4% to the level of 16514,37 points, the index of the wide market, Standard & Poor's 500, increased by 0,41% to the level of 1879,55 points, and the index of high-tech industries, Nasdaq Composite, went to a plus on 0,97% and reached the level of 4161,46 points.
European stock markets also had a rather positive trading session. The British index, FTSE 100, grew by 0,85%, the French CAC 40 added 1,18%, and the German DAX went to a plus on 2,02%. The regional STXE 600 indicator increased, in turn, by 1,4% and was closed on the level of 337,03 points. This morning, indices are bargaining at the previous levels reached, and positive attitudes were also brought on by published macroeconomic data.
The index of business activity in the services sector of the Eurozone, according to the preliminary data, made 53,1 points in April, whilst analysts were only expecting an increase to the level of 52,4 points. The previous value was on the level of 52,2 points. The index of business activity in the industry sector of the Eurozone, according to the preliminary data, made 53,3 points in April, moving up from the level of 53,0 points, recorded last month. Analysts were expecting the level of 53,0 points only.
This morning, a lot of important macroeconomic statistical reports were published. Later, during the course of the day, we are going to see statistics on sales of new houses in the American market. We would like you to note that it seems economists are rather optimistic, predicting an increase of the indicator in March to 0,451 million from 0,440 million the previous month. Also, the weekly data on the dynamics of stocks of oil is going to be presented late in the evening.
25 April 2014: The Markets Drift Due To Disappointing News
Yesterday, the American stock market had another moderate trading session, which helped indices to keep their gained positions, and even show a small increase. The stock market was again supported by good quarterly results of companies such as Apple, Caterpillar and Microsoft. Additionally, data on orders of goods of long use in March showed a growth of 2,6%, whilst analysts predicted a level of only 2,0%.
At the same time, negative news flooded the markets. The number of primary requests for unemployment benefits increased to 329 thousand from 305 thousand the previous month, when analysts were expecting the number to be on the level of 310 thousand. Also, the index of business activity in the industry of the FED of Kansas in April decreased to 12 points from 22 points a month earlier.
Additionally, the situation with the conflict in Ukraine is still influencing the market and brings even more uncertainty, as the situation in the country before the weekend keeps getting worse. This morning, the S&P agency lowered the sovereign rating of the Russian Federation from “BBB” to “BBB-“, which is definitely a very bad signal for the country and will have a bad influence on the opening of the trading session in Russia.
The trading session in the stock market in the U.S yesterday finished with the Dow Jones Industrial Average index being unchanged, and closing the day at the level of 16501,65 points. The index of the wide market, S&P 500, grew by 0,17% to the level of 1878,61 points, and the index of the hi-tech companies, Nasdaq, added 0,52% and reached the level of 4148,34 points.
European stock markets already opened the trading day, and are trading in the red zone. Prices of commodities are also bargaining without any significant change. Brent and WTI are losing 0,35% and 0.32% accordingly, traded on levels of $109,95 and $101,62 per barrel. Gold is up by 0,20% and is traded on a level of $1293,14 per troy ounce, silver is losing 0,48% and is on the price of $19,59 per troy ounce.
25 April 2014: FORECAST FOR APRIL 28 – MAY 2, 2014
Next week will be filled with macro and microeconomic data from the major world’s economies. Let us revise key events of the week. Monday, April 28 First day of the working week will not have much news from the major world’s economies. Retail sales from Japan are worth paying attention to, as well as pending home sales in the US. Tuesday, April 29 Traders interested in NZD should pay attention to the trade balance of New Zealand that will be published at 1:45 a.m. (GMT+3). During the day, traders will pay attention to the Great Britain’s GDP. GBPUSD will be volatile. S&P Case-Shiller Index will be published at 4 p.m. It shows change of the price of housing in 20 regions of the USA. An hour after that, the US Consumer Confidence index will be announced by the Conference Board. Wednesday, April 30 Clients interested in JPY should pay attention to the industrial manufacturing numbers that will be published in Japan at 2:50 a.m. AUD might be volatile at 4:30 a.m., when private sector loans stats will be announced. Major Eurozone countries will provide their stats in the morning (terminal time), including Consumer Climate from Germany, Consumer Spending from France, GDP from Spain and German unemployment level. Traders will switch their attention to the USA at 3:15 p.m. ADP will publish information about new jobs that can provide a fist assessment of the situation on the labor market. It is expected that the US economy has created 178 new jobs in April. US and Canadian GDPs will be published at 3:30 p.m. The Federal Reserve meeting results will be announced at 9 p.m. The meeting will decide the future of the interest rate and QE3 cuts. Certain trading instruments will be volatile. Thursday, May 1 Europe is celebrating the Labor Day on May 1st, and all major stock exchanges in Europe will be closed. You can find changes of the trading schedule.China will publish its Manufacturing PMI at 4 a.m., and Britain will do the same at 11:30 a.m. The USA will be providing a range of economic indices during the day. The list includes consumers’ income and expenditure, a number of applications for unemployment benefits and ISM index. Friday, May 2 A level of unemployment in Japan, Japanese household spending and Australian PPI will be published during the Asian session. Germany, France and Eurozone will provide their PMIs during the day. Eurozone’s unemployment rate will be announced in the afternoon. Change in Non-farm Payrolls and a number of new jobs will become key events of Friday. According to experts’ expectations, USA should create 181 thousand new jobs and unemployment should drop from 6.7% to 6.5%. US Labor market stats will attract attention of traders all over the world, and volatility will be extremely high. This information is an analytical review of Capital and FX markets. The material presented, and the information contained, is investment research and should in no way be considered as the provision of investment advice for the purposes of Investment Firms Law 144(I)/2007 of the Republic of Cyprus, or any other form of personal advice, which relates to certain types of transactions, with certain types of financial instruments.
29 April, 2014: The Markets Look Forward To Decisions From The FED
Yesterday, important macroeconomic statistical reports were not published in the U.S., which resulted in no significant influence to the development throughout the trading session, and, as a result, indices closed the trading session with a moderate growth.
The Dow Jones Industrial Average index increased by 0,53% to the level of 16448,74 points, the index of the wide market, Standard & Poor's 500, grew 0,32% to the level of 1869,43 points, and the Nasdaq Composite went to a minus by just 0,03%, and reached the level of 4074,4 points.
Oil prices are moving in a positive direction, Brent adds 0,61% and is traded on a level of $108,77 per barrel, while WTI is up 0,54% and is bargaining at a price of $101,39 per barrel. Prices of precious metals are losing in value, gold and silver are down by 0,78% and 1,11% accordingly, traded on prices of $1288.89 per troy ounce for gold, and $19,37 for silver.
Today, quite a large volume of macroeconomic statistical data is expected. In the first part of the day, we are going to see preliminary data on the gross domestic product of Great Britain for the first quarter. Later on, the preliminary consumer inflation of Germany is expected, alongside the index of consumer confidence for April, which, according to market expectations, increased from 82,3 points a month earlier, to 83 points. Besides that, the two-day meeting of the FED will begin today in the U.S, and by tomorrow we will be able to follow the results of the meeting.