Eur/usd - page 115
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
Italy Industrial Orders Rise More Than Forecast In April
Italy's industrial orders rose more than expected in April, a report released by the statistical office Istat showed Friday.
New industrial orders rose 3.8 percent on month in April, exceeding economists' expectations of a 1 percent increase. In March, industrial orders rose by revised 1.4 percent.
On a year-over-year basis, total orders rose by unadjusted 6.2 percent in May after increasing 2.8 percent in March.
Foreign orders rose 9.2 percent month-over-month in April, while domestic orders fell 0.4 percent in April.
Meanwhile, industrial turnover declined 0.2 percent on month in April versus a 0.4 percent rise in March. Compared to the corresponding month of the previous year, turnover grew 2.2 percent.
EUR/USD forecast for the week of June 23, 2014
The EUR/USD pair broke higher during the course of the week, using the 1.35 level as support. That being the case, it looks as we continue to bounce around in this general vicinity, using the 200 pips as the range for the market right now. Long-term traders will probably avoid this market, but short-term traders will probably find it very profitable as it looks very well contained and we have very obvious support and resistance levels. However, if we do get above the 1.37 level, we feel that the market will finally go back towards a 1.40 handle. A move below the 1.35 level since this market down to the 1.33 handle.
EUR/USD Forecast June 23-27
EUR/USD managed to hold its ground and even rise a bit thanks to the greenback’s weakness. Has it found a bottom? Purchasing managers’ indices, initial German inflation numbers for June and another important German survey are the important events. Here is an outlook on the highlights of this week and an updated technical analysis for EUR/USD.
In the euro-zone, fears of deflation still remain: even if May’s numbers were not downgraded, the recent German PPI and the strong value of the euro leave worries in place. Also the German ZEW indicator disappointed by falling once again. The pair’s strength came from weakness on the other side of the Atlantic: the Fed left the dovish tone unchanged and did not hint of earlier than expected rate hikes. Will the ECB accept the current levels or try to talk the euro down?
read more
Euro Buoyed as New ECB Policies Take Effect, Attention Shifts to Inflation
The Euro has seen little knock-on ramifications resulting from the European Central Bank’s June policy meeting, and settled the week in a +/-0.50% range against six of the other seven major currencies (but for EURAUD, which appreciated by +0.59%). Driven by a weaker US Dollar in the immediate hours of the Federal Reserve policy meeting this week, EURUSD was able to settle back above its pre-ECB range lows of $1.3585, signaling that the market isn’t quite ready to offer the Euro lower just yet.
There are several factors in play that are helping keep EURUSD buoyed, and as a result, the broader EUR-complex. With US yields still low and only recently starting to show a tendency to drift higher, the US Dollar still isn’t positioned to be seen as a risk-adjusted viable alternative to the Euro. Case and point: Italian and Spanish yields have lurched lower in recent weeks, as investors seek yield and see the ECB’s implicit backstop as more or less eliminating credit risk.
Further to this point, the Euro has stayed elevated as EONIA rates have plunged. The overnight interbank lending rate slumped to 0.01% by the end of the week, in line with the ECB’s efforts to narrow the interest rate corridor by dropping the lower bound into negative territory.
Liquidity is seen as plentiful and risk is seen as a distant likelihood, continually driving real money into the Euro-Zone (which has been an ongoing process over the past several months and years). Look no further than the core/Northern Euro-Zone countries’ growing current account surpluses.
With European bond yields falling (prices rising), equities prices rising, and the Euro staying elevated in the wake of the ECB meeting, we can at least surmise that investors aren’t abandoning the region wholesale even as a negative interest rate regime sweeps across the region. Market participants are more interested in the developing price environment, as that will ultimately be the determinant of what the ECB does next.
June German inflation data at the end of the week, which should show a modest improvement after the May monthly deflation and yearly disinflation figures, should be paid particular attention to as the ECB has made clear that any additional easing will only come if the inflation outlook deteriorates further.
"[QE] is possible, it is in the toolbox, but it isn't needed today," ECB executive board member Benoît Coeuré said on Friday. "We've been clear that in case inflation would be too low for too long, we can use additional instruments, including additional non-standard measures…"But we're not in that situation today. So I think there is no disagreement with the IMF." We’ll take the ECB at its word – and we’ll be watching the Euro intently over the coming days to measure the like likelihood of additional ECB action.
source
EUR/USD Forecast June 23-27
EUR/USD managed to hold its ground and even rise a bit thanks to the greenback’s weakness. Has it found a bottom? Purchasing managers’ indices, initial German inflation numbers for June and another important German survey are the important events. Here is an outlook on the highlights of this week and an updated technical analysis for EUR/USD.
In the euro-zone, fears of deflation still remain: even if May’s numbers were not downgraded, the recent German PPI and the strong value of the euro leave worries in place. Also the German ZEW indicator disappointed by falling once again. The pair’s strength came from weakness on the other side of the Atlantic: the Fed left the dovish tone unchanged and did not hint of earlier than expected rate hikes. Will the ECB accept the current levels or try to talk the euro down?
* All times are GMT
read more
QE part of ECB toolkit, but focus now on current stimulus -Draghi
European Central Bank President Mario Draghi said large-scale asset purchases are part of the central bank's toolkit, but for now it would focus on its latest set of stimulus measures.
Draghi told Dutch newspaper De Telegraaf in an interview published on Saturday that the euro zone recovery was still weak, uneven and vulnerable and that interest rates would stay low over a longer period.
Asked what needed to happen before the ECB would start buying assets to give banks more money to lend, also known as quantitative easing, Draghi said "that would be the answer to a deterioration of inflation expectations over the medium term."
"At the moment, however, we are focusing on the measures announced on 5 June," Draghi was quoted as saying.
The ECB's target for medium-term inflation is below, but close to 2 percent, a far cry from the current level of 0.5 percent, which has sparked concern the euro zone could enter a Japan-style deflationary spiral of falling prices, slowing growth and waning consumption and investments.
At the June policy meeting, the ECB cut interest rates to record lows - the deposit rate below zero - and launched a series of steps to boost lending to companies. Draghi said after the meeting the ECB could still do more if necessary.
Buying government bonds "is indeed possible within our mandate, namely if the purchases are aimed at ensuring price stability," Draghi told the paper. "Quantitative easing can include not only government bonds, but also private sector loans. We will discuss that when the time comes," Draghi said.
But he emphasised that the ECB had not seen any deflation in the sense of prices declining across the whole spectrum in the euro zone, with households and firms postponing consumption and investment because they are waiting for lower prices.
The recovery was still vulnerable, however, and Draghi warned that disruptions in the global economy could "quickly change the situation." Persistently low inflation also made adjustments more difficult, Draghi added.
Asked how long interest rates would remain low, he said:
"We have prolonged banks' access to unlimited liquidity up to the end of 2016. That is a signal. Our programme in support of bank lending to businesses will continue for four years. That shows that interest rates will remain low over a longer period."
Thereafter rates would increase when the recovery firmed up.
PERFECT MONETARY UNION
A key step that took the sting out of the European debt crisis was Draghi's signature policy - the OMT bond-buy plan he launched in 2012 to back up his pledge to do "whatever it takes" to save the euro.
Even without deploying the tool, markets calmed down.
Draghi said he was, like many others, surprised by the magnitude of the effect the programme has had.
"We were all surprised," he said, adding that the programme despite not being used so far could be activated if needed.
"In order to be credible, we also had to be sure that we could actually use the instrument. We were not bluffing, most certainly not," he said.
Turning to euro zone politics, Draghi said "far more is necessary for a perfect monetary union" and suggested to subject structural reforms to union-wide discipline, too.
"In the case of the budget agreements, sovereignty has been shared among member states. That should also be done with respect to the labour market, competitiveness, bureaucracy, agreements on the internal market," Draghi said.
"You could grant greater powers to the European Commission, or to the member states within the European Council, or you could create new European institutions. That is not for me to decide," Draghi said.
source
French manufacturing PMI falls to 6-month low of 47.8 in June
Manufacturing activity in France contracted at the fastest pace in six months in June, underlining concerns over the economic outlook of the euro zone’s second-largest economy, preliminary data showed on Monday.
In a report, market research group Markit said that its preliminary French manufacturing purchasing managers’ index fell to a seasonally adjusted 47.8 this month from a reading of 49.6 in May. Analysts had expected the index to dip to 49.5 in June.
Meanwhile, the preliminary services purchasing managers’ index weakened to a seasonally adjusted 48.2 this month from 49.1 in May and worse than expectations for a reading of 49.4.
A reading above 50.0 on the index indicates industry expansion, below indicates contraction.
Following the release of the data, the euro turned lower against the U.S. dollar, with EUR/USD shedding 0.03% to trade at 1.3596, compared to 1.3610 ahead of the data.
Meanwhile, European stock markets were modestly lower after the open. The Euro Stoxx 50 dipped 0.2%, France’s CAC 40 declined 0.1%, London’s FTSE 100 slumped 0.1%, while Germany's DAX fell 0.1%.
Sluggish euro zone business growth data push bond yields lower
Top-rated euro zone bond yields fell on Monday after business surveys showed the region's economic recovery remained feeble and uneven, while the European Central Bank signalled interest rates will stay low until at least the end of 2016.
Expansion of the euro zone private sector unexpectedly slowed this month. German activity kept expanding robustly but failed to meet investor expectations, while France's shrank at the fastest rate in four months.
The data overshadowed upbeat Chinese manufacturing figures, which pushed yields higher in early trade.
German 10-year Bund yields, the benchmark for euro zone borrowing costs, fell 2 basis points to 1.33 percent, within touch of 2014 lows of 1.285 percent. French, Finnish, Austrian, Dutch, Belgian and Irish yields also fell, while the rest were flat or slightly higher.
"It was disappointing," ING rate strategist Alessandro Giansanti said of the euro zone data. "German Bunds are expensive, but it's not easy to see a jump in yields with no inflation expectations and still depressed growth."
Short-dated yields across the euro zone dipped after ECB President Mario Draghi told Dutch paper De Telegraaf that prolonging banks' access to unlimited liquidity up to the end of 2016 was a signal on rates.
His Austrian colleague Ewald Nowotny also said rates would only rise when growth picked up at a pace faster than 2 percent, which was unlikely to happen before 2016.
German two-year yields dipped 1 basis point to 0.03 percent, with other similar-dated yields in the euro zone falling 1-4 bps.
"Clearly Draghi wants to strengthen the forward guidance and he has put more flesh on the bones with those comments," said Jan von Gerich, chief fixed income analyst at Nordea.
Natixis fixed income strategist Cyril Regnat said the ECB's stance and the poor economic data will force investors to switch into bonds with longer maturities in search for yield, flattening yield curves across Europe and especially in Germany.
"German 10-year Bunds are really expensive, but if we get inflation at 0.2 or 0.3 percent in June or July we can have even lower yields," Regnat said.
Other strategists say the ECB's ultra-easy policy stance will eventually foster growth and recommend investors to position for steeper curves. They say Bund yields might track moves higher in U.S. Treasuries and British gilts, as the Federal Reserve and the Bank of England prepare to change course on policy.
Traders said profit-taking on this year's rally before the end of the quarter and debt sales from Italy this week were putting some selling pressure on peripheral debt.
Italy sells up to 3.5 billion euros of inflation-linked debt and zero-coupon bonds on Wednesday and medium- and long-term bonds on Friday.
source
Eurozone Private Sector Growth Slows To 6-Month Low As France Contracts
Eurozone private sector growth slowed for a second month running in June and was the weakest since December as downturn deepened in France.
The headline index covering output of both manufacturing and services fell to 52.8 from 53.5 in May, flash survey data from Markit Economics showed Monday. The score was above the neutral 50-mark, but below economists' forecast of 53.4.
Although the survey suggested a slowdown, the average Purchasing Managers' Index reading for the second quarter as a whole was the highest since the second quarter of 2011.
The currency bloc is currently finding it hard to build growth momentum despite much reduced fiscal headwinds, sustained negligible sovereign debt tensions and very accommodative monetary policy providing a more supportive environment, IHS Global Insight's Chief European Economist Howard Archer said.
The services PMI dropped to 52.8 in June from 53.2 in May, when it was expected to rise to 53.3. Meanwhile, the manufacturing PMI fell to 51.9 from 52.2 in the prior month. The expected reading was 52.1.
"The June PMI rounded off the strongest quarter for three years, but a concern is that a second consecutive monthly fall in the index signals that Eurozone recovery is losing momentum," Chris Williamson, chief economist at Markit, said.
The euro area grew only 0.2 percent in the first quarter. The European Central Bank predicts 1 percent growth this year and 1.7 percent in 2015.
Output rose for the twelfth consecutive month in June, but the rates of growth in manufacturing and services slowed to nine- and three-month lows, respectively.
In a sign that activity may re-accelerate, the survey's measure of new orders rose to its highest since May 2011, driven by the service sector.
read more
EURUSD tried to rise up from support early in the week, rising on the weakness of the US dollar. However, the euro has issues of its own (ECB) and the pair eventually dropped back to support. Sell the rallies but be aware US housing data that lies ahead.
Current range: 1.3585 to 1.3650.