Euro Dollar Rate Forecasts for 2014-2015 - page 47
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EUR/USD Post-FOMC - SocGen The FOMC has finally raised the Fed Funds rate, as universally expected, by 25bp.
In reaction to that, SocGen thinks that EUR/USD might end the year around 1.11 and a range for the the next month or two of 1.05-1.15.
"A wide range that reflects uncertainty. However, given a Fed forecast of unemployment bottoming out soon, we’d also guess that a continuation of the 204k rate of NFP gains of the last 5 years will take unemployment lower, faster and make the market move towards the pace of hikes that is implied by the dots. That will/should support the dollar over time. EUR/USD will get to parity, just not yet," SocGen adds.
German Factory Gate Deflation Continues: November PPI The prices of goods leaving German factories in November fell as producers saw some relief from lower oil prices, while weak demand kept up the pressure on costs.
The Producer Price Index (PPI) fell -0.2% over the month in November and translated into a fall of 2.5% over the year, the German statistical authority Destatis said on Monday.
Falling 2.5% over the year in November, German producer prices marked the steepest fall since February 2010.
"In November 2015 energy prices decreased by 7,1% compared with November 2014, prices of non-durable consumer goods by 0.1% and prices of intermediate goods by 2.2%. In contrast prices of capital goods rose by 0.7% and prices of durable consumer goods by 1.5%," Destatis wrote in the report.
Excluding energy costs, the overall index decreased by 0.7% compared with November 2014.
The PPI measures the average change in the prices of goods and services sold by manufacturers and producers in the wholesale market during a given period.
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EUR: Doing What's Expected Is Good Enough - CIBC "The last time US and European monetary policy moved in opposite directions during the same month the Blue Jays were reigning World Series champions. In May 1994, US rate increases and German cuts saw the mark depreciate by more than two percent versus the USD.
But, in an odd turn of events, the euro’s been one of the top performers versus the greenback this month. That’s simply because of expectations. The ECB failed to live up to expectations, while the Fed did exactly what everyone thought it would.
H&S Pattern Formation In GBP/USD & EUR/USD - SocGen
Having formed a bearish engulfing last week, GBP/USD shows signs of continuation in downtrend, notes SocGen.
"Undercurrent remains weak as highlighted by weekly MACD which is sustaining in negative territory and below its trigger line. The down move is expected to remain choppy but to continue towards lows formed earlier this year and the multiyear channel limit at 1.45.
If we drop down to daily chart, the pair has recently confirmed a head and shoulders pattern and is currently testing a descending channel limit at 1.4860/1.48...A move below 1.4860/1.48 will mean persistence in downtrend towards 1.45," SocGen projects.
"Near term upside, if any, is likely to find resistance at neckline of the formation near 1.5110/70 while October highs of 1.5530 will be an important hurdle. Daily indicator (here RSI) is still below its resistance line which suggests more likelihood of further correction," SocGen adds.
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EUR To Face Upside Risk On Unstable Risk; Sell Rallies - Credit Agricole Looking ahead, we remain of the view that risk sentiment will turn more unstable in the weeks to come.
This is mainly due to strongly capped liquidity expectations. Considering the Fed’s more hawkish stance and falling expectations of the ECB and BoJ considering additional stimulus measures this is unlikely to change unless global growth expectations improve more considerably.
Under the above outlined conditions it cannot be excluded that the EUR will face further upside correction risk in the days to come. However, as stressed previously we remain of the view that rallies should be sold.
Even if most ECB members indicated that no more policy action is required, such a stance may change anew should medium-term inflation expectations fall again.
US Dollar Retreats as Post-FOMC Correction Continues The US Dollar resumed its post-FOMC downward correction in overnight trade after brief respite in yesterday’s session, falling to the lowest level in a week against an average of its top counterparts. The move played out alongside a drop in front-end US Treasury yields, hinting profit-taking on the “Fed tightening” theme into the year-end is the likely catalyst driving price action.
Looking ahead, the Christmas holiday will see most top financial markets shuddered through next week. Indeed, trading volumes for FX futures contracts tracking the major currencies have been dropping since mid-month, hinting at larger market-wide dynamics. This is likely to make for near-standstill in the final 48 hours of the trading week.
It ought to be noted however that the drop in participation may amplify knee-jerk volatility in the event that unexpected headline risk catches markets unprepared. In fact, last week’s BOJ rate decision was a case in point. With that in mind, traders would be wise to tread carefully despite apparent calm.
A handful of economic data releases will cross the wires into the week-end, with weekly US jobless claims figures as well as Japan’s labor market and inflation reports are on tap. Both ought to pass with little fanfare. Claims numbers are unlikely to single-handedly change anything about investors’ Fed policy outlook. Meanwhile, the BOJ’s reluctance to actually expand stimulus despite this month’s tinkering with the policy mix undermines CPI figures’ market-moving potential.
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EUR/USD forecast for the week of December 28, 2015 The EUR/USD pair rose during the course of the week, slamming into the 1.10 level again. This is an area that has been rather resistive, and as a result we are bit hesitant to go long here. We don’t have the proper negative candle to start selling though, so quite frankly as far as long-term trading is concerned, we would be a bit hesitant to initiate any positions between now and the new year. However, one has to recognize that this pair is most certainly bearish over the longer term
EUR/USD: Euro Fails at $1.10, Corrects Lower The shared currency was trading stronger on Monday, but it failed to breach the $1.10 level and corrected somewhat lower, to trade around $1.0970 during the US session.
There is not much on the agenda from the point of view of macroeconomic news during the coming week. The S&P/Case-Shiller home price indices, along with consumer confidence are due on Tuesday, followed by jobless claims and the Chicago PMI on Thursday.
From the euro zone perspective, the week offers up very little, with only adjusted Spanish retail sales and the Italian manufacturing confidence index scheduled for Tuesday.
Due to the holiday season, trading activity and liquidity should be lower, which might result in smaller movements across markets.
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JPMorgan to raise deposit rates for some big clients in January: WSJ JPMorgan Chase & Co (N:JPM) will begin raising deposit rates for some of its biggest clients in January, the Wall Street Journal reported, citing a person familiar with the matter.
The bank's deposit-rate increase will affect most institutional clients and the size of the increases will vary, the Journal reported, citing the person.
Earlier this month, major U.S. banks raised their prime rates, a benchmark for a wide range of consumer and commercial loans, for the first time since 2006, following a rate hike from the Federal Reserve.
JPMorgan did not immediately respond to a request for comment.
Spokesmen for Bank of America Corp (N:BAC), Citigroup Inc (N:C) and Wells Fargo & Co (N:WFC) said the banks had not raised deposit rates.