Eur/usd - page 221

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Spanish jobless claims rise by 78,000 in January

The number of unemployed people in Spain rose for the first time in three months in January, dampening optimism over the health of the euro zone’s fourth largest economy, official data showed on Tuesday.

In a report, Spain’s Employment Ministry said the number of unemployed people increased by a seasonally adjusted 78,000 last month, disappointing expectations for a drop of 32,400. The number of unemployed people fell by 64,400 in December.

EUR/USD was trading at 1.1324 from around 1.1332 ahead of the release of the data, while EUR/GBP was at 0.7549 from 0.7554 earlier.

 

EURUSD has been sheltered in a tight range since announcing of ECB massive stimulus package. Later today, the EURUSD will get a chance to react to U.S data on Factory Orders.

 

Price made a good correction today and price is over the resistance level 1.1380 closing over the resistance will push the price higher.

 

EUR/USD breaks higher out of wedge – 3 reasons and next levels

EUR/USD has escaped the nice wedge it traded in, and chose the upside. The clear breakout above 1.14 sent the pair to the next resistance line.

What is behind the move? What are the next lines? Here are some answers:

3 reasons for the rise

  • Optimism about Greece: After just over a week in office, the new government seems to align itself with German demands about repaying its debt. While a step back from pre-election rhetoric was certainly expected, it provides a relief to the euro-zone. In addition, the compromise that might arise, a GDP-linked payback of debt, is well received in Greek markets. And while Merkel may drag her legs on a full solution for months, it seems likely that the danger of a Greek exit by PM Alexis Tsipras, or “Alexit”, is off the cards, at least for now.
  • Weak US data: The plunge in factory orders joined a disappointing ISM Manufacturing PMI that joined other underwhelming numbers. Together with yet another bad winter in the US that could slow growth, the prospects for a rate hike coming sooner rather than later seem to diminish.
  • Some positive European data: While the inflation measures show deeper deflation, other figures are beginning to move in the right direction: unemployment was stuck at 11.5% for a long time and it ticked down to 11.4%. Spain and Germany stand out in the improvements, even though the former has a longer way to go than the latter. Spain also posted strong GDP growth. Perhaps deflation is not too bad for growth? In any case, the ECB’s QE is already a done deal.

EUR/USD

As the chart below shows, we have a clear breakout above the wedge and a move above 1.1373. The pair fell short of the next resistance line at 1.1460 which was a low line in January.

Beyond this line, we have some resistance at 1.1540 followed by 1.1650. To the downside, support is found at 1.1290, followed by 1.12 and 1.111.

The big question remains: is this a correction before the next fall or the big turnaround?

source

 

Spain Services Mark 15th Straight Month of Expansion: PMI

Activity in Spain's services sector remained in expansion in the first month of the year, a report from Markit showed on Wednesday.

The services PMI for Spain recorded 56.7 points in January, after reaching 54.3 points in the previous month, data provider Markit Economics said, with the respective reading remaining in expansion territory for the fifteenth month in a row. Market analysts had expected a 54.4 figure.

"The first services PMI reading of 2015 suggests that the sector made a good start to the year, with growth rates of activity and new business at their strongest since the middle of last year. Taken alongside the solid PMI numbers for the manufacturing sector released on Monday, the data suggest that the economic recovery in Spain gathered momentum in January," according to Andrew Harker, senior economist at Markit.

The services PMI shows the views of purchasing managers in the services sector on the status of sales, employment, and their outlook.

January manufacturing PMI

Meanwhile, Spain's manufacturing PMI maintained its pace of growth in January, exceeding analysts' expectations, and firmly remaining in expansion territory, Markit reported on Monday.

The PMI for the manufacturing sector of the euro area's fourth largest economy reached 54.7 in January, after the 53.8 recorded in December.

"The Spanish manufacturing sector began the new year as it ended the previous one, with solid growth of production and new business amid reports of improving economic conditions. Particularlywelcome was a further acceleration in the rate of job creation. Meanwhile, the recent decreases in the price of oil had a clear impact on costs in the sector, with input prices falling to the greatest extent since mid-2009," Markit, said

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Euro Retail Sales Slow in Dec

Stores across the euro area ended the past year on a weaker footing, as their sales markedly eased on a monthly basis, data showed on Wednesday, offering yet another signal that a rapid turnaround in the bloc's economic fortunes seems unlikely in early 2015.

The European Union's statistics agency, Eurostat, said retail sales rose by 0.3% in December compared to the previous month.

Back in November, the gauge rose by a modest upwardly revised 0.7%, markedly outpacing estimates. In December, analysts had expected the gauge to post a zero growth.

On an yearly basis, sales gained 2.8% during the reported month, accelerating growth after an upwardly revised 1.6% hike seen in November.

Forecasts had called for an upturn to 2.0% in December.

Retail sales and consumer spending data tend to be closely watched, especially as the currency bloc experienced a second straight month with negative price growth in January. In a deflationary spiral, businesses and households tend to delay purchases, throttling demand and triggering job losses and recession.

 

EURUSD rose during yesterday session to a daily resistance zone at 1.1460. However, this is an area that begins a cluster of resistance up to the 1.1557 level. A break above the 1.1557 could trigger an upward move to 1.1752 the next daily resistance zone.

 

price keep bouncing from the support and the resistance it's going to be like this until the non-farm payroll.

 

ECB Shuts Off Direct Funds to Greece as Reform Progress in Doubt

The European Central Bank said it will no longer suspend its own collateral rules for Greek government debt, citing doubt over the commitment of the new government to previous reform pledges.

“The Governing Council of the ECB today decided to lift the waiver affecting marketable debt instruments issued or fully guaranteed by the Hellenic Republic,” the Frankfurt-based central bank said in an e-mailed statement. “The Governing Council decision is based on the fact that it is currently not possible to assume a successful conclusion of the program review and is in line with existing Eurosystem rules.”

The decision will force Greek lenders, who since 2010 had been able to access funds from the ECB against junk-rated collateral, to apply for funding from their national central bank at less-advantageous rates. The decision comes hours after Greek Finance Minister Yanis Varoufakis met ECB President Mario Draghi in Frankfurt to gain support for his government’s push to renegotiate the terms of its international bailout.

“This decision does not bear consequences for the counterparty status of Greek financial institutions in monetary policy operations,” the ECB said in the statement. “Liquidity needs of Eurosystem counterparties, for counterparties that do not have sufficient alternative collateral, can be satisfied by the relevant national central bank, by means of emergency liquidity assistance (ELA) within the existing Eurosystem rules.”

The ECB also has the power to refuse permission for the Greek central bank to supply funds under ELA, and reviews the procedure every two weeks.

source

 

ECB Stops Greek Banks from Using Gov't Debt as Collateral

The Governing Council of the European Central Bank (ECB) lifted on Wednesday its current waiver of minimum credit rating requirements for marketable instruments issued or guaranteed by the government of Greece, effective from Wednesday, February 11.

The decision puts more pressure on Greece’s new government trying to renegotiate the terms of its international bailout program as Greek banks will not be able to use the country’s sovereign debt as collateral for ECB-provided liquidity.

"The Governing Council of the European Central Bank (ECB) today decided to lift the waiver affecting marketable debt instruments issued or fully guaranteed by the Hellenic Republic," the ECB said in a statement issued after the decision.

"The waiver allowed these instruments to be used in Eurosystem monetary policy operations despite the fact that they did not fulfill minimum credit rating requirements. The Governing Council decision is based on the fact that it is currently not possible to assume a successful conclusion of the (bailout) program review and is in line with existing Eurosystem rules," the statement continued.

The ECB move looks like a stern warning that the ECB doesn't plan to meet Greek government's request for a debt swap and, reportedly, is also not willing to allow Greece to raise short-term cash by issuing additional debt in an effort to keep the government funded while it tries to renegotiate a new deal with its internatonal lenders.

Greek banks' problems

Greek banks may face serious problems as they have suffered large deposit withdrawals in December and January before the January general elections, which brought the anti-bailout and anti-austerity Syriza government to power.

However, Greek banks will be able to further use an emergency liquidity assistance (ELA) program, but such loans are more expensive than regular ECB assistence.

"The decision does not bear consequences for the counterparty status of Greek financial institutions in monetary policy operations," the ECB says. "Liquidity needs of Eurosystem counterparties, for counterparties that do not have sufficient alternative collateral, can be satisfied by the relevant national central bank, by means of emergency liquidity assistance (ELA) within the existing Eurosystem rules," the ECB concluded.

source

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