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FXPro
Broj poruka : 38
Points : 238
Date of Entry : 2017-03-11
Godina : 46
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Follow The Markets

on Sun Mar 12, 2017 3:38 pm
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FXPro
Broj poruka : 38
Points : 238
Date of Entry : 2017-03-11
Godina : 46
http://bit.ly/2mwIVP6

Re: Follow The Markets

on Mon Mar 13, 2017 2:21 pm
Daily Markets Brief
Monday 13th March 2017

Dollar Retreats on Profit-Taking, How Will Central Banks Drive Markets. We have seen the release of the US labour market data for February last Friday.The headline non-farm payrolls figure rose by 235K in February, beating expectations of 190K. The previous reading in January was revised upwardly to 238K, from 227K.

The unemployment rate dropped slightly to 4.7% in February, from 4.8% in January, which was in line with expectations.The average hourly earnings (YoY) rose by 2.8% in February. The previous reading in January was revised upwardly to 2.8%, from 2.5%.

The average hourly earnings (MoM) rose by 0.2% in February, which was weaker than expectations of 0.3%. The previous reading in January was revised upwardly to 0.2%, from 0.1%. The labour force participation rose slightly to 63.0% in February, from 62.9% in January.

In terms of sector breakdown, construction adds 58,000 new jobs, seeing the most in a decade. Manufacturing grew by 28,000, seeing a 3-year high. Other sectors with noticeable job gains include professional and business services (37,000), private educational services (29,000), health care (27,000) and mining (8,000).

As a whole, the US labour market data for February outperforms expectations. The 3-month NFP average figure was around 199K, which was above the 6-month NFP average number of 189K, indicating the US labour market condition has remained solid.

The unemployment rate has seen a continuous decline from 9.4% in early 2011, to the latest figure of 4.7%. The improvement in the unemployment rate has pushed the average earnings up since early 2015. The labour force participation has also seen an uptrend since the beginning of this year.

7 out 10 FOMC members, including the Fed doves Yellen and Brainard, have made a hawkish comment lately. Moreover, the US labour market data for February outperforms. We can expect a probable rate hike in March. Per the CME’s FedWatch tool: the current probability of a rate hike in March has jumped to 93% after the release of the labour market data last Friday.

Contrasting with the better-than-expected US labour market data for February, the dollar index plunged more than 70 points, hitting a one-and-a-half-week low of 101.16 after the release of the data, due to profit-taking pressure. As markets have priced in the expectations for a March rate hike since February.
         
                                         
Gold spot rebounded last Friday after hitting the lowest level of 1194.91 since 31st January, breaking the significant resistance level at 1200. EUR/USD surged around 100 points post the data, touching the significant resistance level at 1.0700. AUD/USD rebounded from the psychological support line at 0.7500.

The economic data for today is thin. However, there will be four central banks announce interest rate decisions and monetary policies in turns this week, including the Fed (18:00 GMT on Wed.), the Bank of Japan (02:00 GMT on Thu.), the Swiss National Bank (08:30 on Thu.), and the Bank of England (12:00 on Thu.). We can expect greater market volatility this week.
FXPro
Broj poruka : 38
Points : 238
Date of Entry : 2017-03-11
Godina : 46
http://bit.ly/2mwIVP6

Re: Follow The Markets

on Thu Mar 16, 2017 3:16 pm
Dollar Retreats Post FOMC Due to Profit-Taking
03.16.2017

The Fed announced a rate hike by 25 basis points yesterday, with rates in a range of 0.75% to 1%, in line with market expectations. The Fed Chair Yellen stated that It is appropriate to gradually remove accommodation, as the US economy is going well. Gradual rate hikes will be appropriate over the next few years, to sustain the economic expansion.

Comparing to the economic projection made in December, the medium economic projection is essentially unchanged. The medium projection for the federal funds rate is 1.4% to the end of 2017, 2.1% to the end of 2018, and 3% to the end of 2019. That is to say, we can expect two more rate hikes from the Fed by the end of this year, a rate hike in June or July is very likely.

The medium projection for GDP growth is 2.1% in 2017 and 2018, and down to 1.9% in 2019. The medium projection for unemployment rate is 4.5% in Q4 and over the next two years. The medium projection for PCE is 1.9% this year and expects to rise to 2.0% in 2018 and 2019.

Yellen commented that the economy continues to expand at a moderate pace, labour market has seen continuous improvements. The unemployment rate was 4.7 percent in February near its recent low. Solid income gains have supported household spending growth. The Fed expects job condition will strengthen further. Business investment has firmed, business sentiment is at a favorable level.

The personal consumption expenditure rose to nearly 2% in January, largely driven by energy prices. The Fed expects core inflation to move up and overall inflation to stabilize around 2% over the next few years. The Fed expects the economy to expand at a moderate pace over the next few years.

Nevertheless, the dollar plunged after the release of the rate decision due to profit-taking pressure, as markets have largely priced in since February. The fall of the dollar pushed other major currencies up. Spot gold surged from the significant support level at 1200, touching a 1-and-a-half week high of 1228.76. EUR/USD surged more than 120 points, hitting a 5-week high of 1.0745. GBP/USD surged more than 110 points, hitting a 2-week high of 1.2308.

Be aware of another profit-taking pressure and retracements post these substantial surges.

Earlier today during the early Asian session, the Bank of Japan announced that the monetary policies remain steady, which was in line with expectations. The rates remain unchanged at -0.1%, 10-yr bond yields keep at a level near zero, asset purchases will remain at about 80 trillion yen a year.

The BoJ stated that Japan’s economy has continued its moderate recovery. However, the BoJ didn’t give hints on any future rate hikes, the rates will likely remain at the current level for an extended period, as it hasn’t seen a sustainable pickup in inflation.

This morning, the Swiss National Bank announced that interest rates remain steady at -0.75%. The Bank of England will announce rate decisions and monetary policies at 12:00 GMT today, market is predicting that the rates will also remain unchanged.
FXPro
Broj poruka : 38
Points : 238
Date of Entry : 2017-03-11
Godina : 46
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Daily Markets Brief

on Mon Mar 20, 2017 6:10 pm
Sterling Hits 3-week High Against Dollar

Sterling has seen its third consecutive session of gains last Friday, and rose to a three-week high against the dollar on Monday, as a result of the weakening of the dollar and a MPC (Monetary Policy Committee) member, Kristin Forbes, voted to raise rate this month, despite Brexit uncertainty and risks on economy.

The recent rebound of Sterling was helped by the MPC member’s vote on a rate hike. However, from a broader scope, the uncertainty associated with the Brexit procedure until the final Brexit deal is done, and the turmoil over a second Scottish referendum, is likely to pose downside risks on the UK economy and Sterling.

The UK parliament has finally passed the Brexit bill on 13th last Monday. The UK Prime Minister Theresa May is expected to trigger Article 50 of the Lisbon treaty in the end of this month or in April, starting the 2-year negotiation process over the Brexit deal with the EU.

Scotland’s First Minister, Nicola Sturgeon, has called for a second Scottish independence referendum vote, to be held in 2018 or 2019, before the final Brexit deal is sealed. The Scottish Parliament will vote on whether the First Minister should be given the authority to seek a Section 30 order from Westminster on Wednesday. Although the SNP is not the majority party in the Scottish parliament, the Green party also supports independence.

The UK Prime Minister expressed last week that this is not the right timing for a second Scottish referendum, and she will not allow the referendum to carry out before the Brexit, the country should be working together, not pulling apart.

Today is relatively light on economic data releases. We will see the release of a series of UK inflation data for February, at 09:30 GMT on Tuesday. It will likely affect the strength of Sterling and Sterling crosses.
US Secretary of States, Rex Tillerson, visited China for the first time, meeting China’s president Xi Jinping in Beijing on 19th.

Despite the sensitive issues between the US and China, such as trade protectionism, currency manipulation, and North Korea’s nuclear program, Xi Jinping stated that the mutual benefits between the two nations outweighs the conflicts, cooperation is the only right choice for long term development.

The trip paves the way for the prospective summit between Trump and Xi Jinping in April.
FXPro
Broj poruka : 38
Points : 238
Date of Entry : 2017-03-11
Godina : 46
http://bit.ly/2mwIVP6

Re: Follow The Markets

on Wed Mar 22, 2017 12:46 pm
Dollar Tumbles on Trump Uncertainty and Position Closing

USD plunged on Tuesday, the dollar index breaking the significant support line at 100.00 and further testing the next major support at 99.50. The downtrend was held temporarily above that level.

Last week the dollar index fell by 1.3%, marking the worst weekly performance in the past 8 months. Regardless of the rebound in February, the dollar index has retraced approximately 2.1% since the beginning of this year because of profit-taking pressure post the US presidential election surge.
Recently, several investment banks have turned their USD outlook from bullish to bearish, and cut their USD long positions. Market concerns over the uncertainty arising from the Trump administration also pose downside risk on USD. The recent Fed comments were not as hawkish as markets expected. Additionally, the ECB’s recent hawkish tone also weighing on USD.

The price range between 99.00 – 99.50 of the dollar index is likely to provide a stronger support. However, if this zone is broken, we will likely see a further USD sell-off.

On Tuesday, New York Fed President William Dudley (a FOMC permanent voting member) stated that “bank culture needs to be improved”. However, he did not comment on the future prospective of rate hikes.

This comment was followed by Kansas Fed President Esther George (a non-voting member) stated that “it is a critical time for the Fed to remove some of monetary stimulus to prevent the economy from overheating”. However, the Fed needs to be cautious on tightening. She also made no comment on future prospective rate hikes.

UK inflation data for February was released on Tuesday March 21st. UK CPI rose to 2.3%, with core CPI rising to 2.0%, for the first time surpassing the central bank’s 2% target since January and July 2014 respectively. UK inflation has been mainly lifted by weak GBP and the rising cost of fuel.

GBPUSD rallied more than 70 points after the release of the data testing the next significant resistance level at 1.2500. GBP has seen its longest bullish streak since January helped by the increased market expectations on a prospective rate hike led by the recent events: BoE’s MPC member Forbes voted for a rate hike in March, and the above 2% inflation readings. However, weak wage growth is one of the BoE’s major concerns over rate hike.

The UK still needs to face 2-years of political uncertainty before the final Brexit deal is made with the EU. Bank of England President Carney commented that “markets shouldn’t overact on one month’s data”. It will take an extended period for the markets to have a broader scope for the UK economy performance during Brexit negotiation.

Today is relatively light on economic data releases. US EIA crude oil inventory (the week ending March 17) will be released at 14:30 GMT. The Reserve Bank of New Zealand interest rate decision, at 20:00 GMT.
FXPro
Broj poruka : 38
Points : 238
Date of Entry : 2017-03-11
Godina : 46
http://bit.ly/2mwIVP6

Re: Follow The Markets

on Thu Mar 23, 2017 7:36 pm
USD Hovers Around Support Levels Ahead of Yellen’s Speech

Today the US Congress will vote on whether to repeal Obamacare, which is President Trump’s first bill proposal since taking office. President Trump has warned Republicans that, if the healthcare reform bill fails to pass, they will lose their seats. However, if the new healthcare bill passes, that means many Americans pay a much higher amount of money on medical spending.

For the markets the concern is, that if the bill fails to pass, President Trump’s other policies, such as tax-cuts and regulation reform would also encounter hurdles. These concerns weigh on USD and US equities. USD continued falling on Wednesday. The dollar index broke a significant support line at 99.50 and hitting a 7-week low of 99.32. USD bulls attempted to recover the level early this morning. The next significant support is at 99.00; if this level is broken we will likely see a further USD sell-off.

Fed Chair Yellen is scheduled to make a speech at 12:45 GMT today, Thursday March 23rd, at the Community Development Research, which is the major focus amongst this week’s Fed speeches.

The latest French presidential election polls show a tight race between the three candidates: Macron, Le Pen and Fillon. Even with Fillon being charged with creating fake jobs and being put under formal investigation. The right-wing candidate, Le Pen, has stated her attempt to take France out of the EU following Brexit.

Market concerns, over President Trump’s policies and the French presidential election, are resulting in Investors turning to safe havens. The weakening of USD has also pushed gold prices up. Spot gold hit a 3-week high of 1251.20, testing a significant resistance level at 1250 on Wednesday evening.

The Reserve Bank of New Zealand (RBNZ) kept rates unchanged at 1.75% which was in line with expectations. NZD/USD remains unchanged as the RBNZ stated that “monetary policy will remain accommodative for a considerable period because the global economic uncertainties remain substantial and there is no hurry to alter policies”.
Today will see the release of UK retail sales for February at 09:30 GMT. This is followed by US initial jobless claims (for the week ending March 10) at 12:30 GMT, Yellen’s speech at 12:45 GMT and US new home sales for February at 14:00 GMT.

Minneapolis Fed President Neel Kashkari (an FOMC voting member) will make a speech at 16:30 GMT followed by Dallas Fed President Robert Kaplan (a FOMC voting member) at 23:00 GMT.
FXPro
Broj poruka : 38
Points : 238
Date of Entry : 2017-03-11
Godina : 46
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Re: Follow The Markets

on Fri Mar 24, 2017 11:01 am
Healthcare Vote Postponed Due To Republican Disagreement

The vote on President Trump’s first bill proposal since taking office, to repeal Obamacare and replace it with the American Health Care Act, was postponed abruptly from Thursday evening to Friday due to severe disagreements within the Republican party.

President Trump and Republican leaders have been attempting to convince more Republicans to support the new bill. However, it seems to be difficult to reverse the situation in a short time period. Trump stated that if the bill fails to pass he would leave the Obamacare in place (against his election pledge).

The Republican party holds the majority in the US Congress in both the House of Representatives and the Senate. The Democratic minority will vote against the Bill. The Bill requires at least 215 votes to pass from the House’s 430 current members. Therefore, the maximum of defections is limited to 22 votes from the Republican party’s 237 representatives.

The dollar index has been oscillating in a range between 99.30 – 99.80 set in the past three days. If the Bill fails to pass Markets would likely lose confidence in Trump’s administration and his other policies (such as tax-cuts and regulation reform) which will likely weigh on USD and US equities. The dollar index will likely fall and test the significant support level at 99.00.

Fed Chair Yellen made a speech on Thursday at the Community Development Research. Unexpectedly, she mainly talked about financial education for children and teenagers without mentioning monetary policy and/or the economic outlook.

Dallas Fed President Robert Kaplan (an FOMC voting member) said on Thursday that “the Fed should patiently remove monetary policy accommodation, as the US economy is making progress and the job market is tight, and suggesting three rate hikes this year”. With that said, the Fed will likely raise rates two times more until the end of the year. Conversely, Minneapolis Fed President Neel Kashkari (an FOMC voting member) commented that “inflation remains below the Fed’s target”. He was the only one who dissented a rate hike in last week’s FOMC rate decision.
The Scottish parliament postponed a second Scottish independence referendum vote due to the terror attack at Westminster. The vote was postponed until Tuesday 28 March, which is only one day ahead the triggering of the Brexit process. We can expect volatility on GBP and GBP crosses over the period.

Today we will see the release of US durable goods orders and core durable goods (Fed), accompanied by Canadian CPI and core CPI (Feb), at 12:30 GMT.

Fed presidents are scheduled to deliver speeches today per the following schedule:

  • 12:00 GMT Chicago Fed President, an FOMC voting member, Charles Evans
  • 13:05 GMT St Louis Fed President, an FOMC member, James Bullard
  • 14:00 GMT New York Fed President, an FOMC permanent voting member, William Dudley
FXPro
Broj poruka : 38
Points : 238
Date of Entry : 2017-03-11
Godina : 46
http://bit.ly/2mwIVP6

Re: Follow The Markets

on Mon Mar 27, 2017 12:04 pm
USD Hits Lowest Level Since November on Trump’s Healthcare Failure
03.27.2017
The dollar index slumped to a 4-and-a-half-month low of 98.85 this morning during the European session, US equities also fell, as markets have lost confidence in Trump’s administration to fulfil his promises.

Trump’s first bill proposal since taking office, to repeal Obamacare and replace it with the American Health Care Act, failed on Friday March 24. This is his second failure following the refugee and immigration travel ban. Not surprisingly President Trump blamed the Democrats for the failure.

On one hand, none of Democrats were willing to support the new healthcare bill. On the other hand, the defections within the Republican party were more than the limit of 22. Even Trump had tried to convince his peers on Friday, clearly his warnings and efforts were not effective.

The failure has put an issue on the spot: compared to the Democratic Party’s unity, there seems to be lots of disagreements within the Republican party, and the leadership of Trump and the House Speaker Paul Ryan face severe challenges. The hurdles that Trump’s administration will likely face seem to be more than expected.

President Trump now focuses on his next bill proposal: tax reform, which is a more controversial issue. He promised to cut the corporate tax to 15% during the election. His plan is to make up the reduction of government’s tax income by the decrease of healthcare spending – not an easy task following last week’s failure of the healthcare bill. It is likely the administration will face the same hurdle (Democratic disfavour and Republican disagreements) on the tax reform proposal. Thus, it will be difficult for Trump to keep his promise to reform taxes.

If the tax bill fails to pass the Republican voters’ disappointment might be greatly lifted and the party will likely lose some seats in the 2018 election. USD and US equities still face downward pressure on Trump’s tax plan uncertainty.

UK Prime Minister, Theresa May, will trigger Article 50 of the Lisbon treaty on Wednesday March 29, starting the 2-year Brexit negotiation process with the EU.

Theresa May will formally notify the EU Council President, Donald Tusk. Tusk is expected to present draft Brexit guidelines to the European Union’s 27 member states within 48 hours of the UK triggering Article 50. The member states are expected to hold a Brexit summit within 4-6 weeks. Theresa May’s letter, and Donald Tusk’s response, will likely give markets more clues about the potential difficulties of the upcoming Brexit procedure.
GBP/USD reached 1.2579 the highest the pair has attained since February 9 mainly because of the weakening of USD. The Scottish parliament will vote on whether to hold a second Scottish independence referendum on Tuesday March 28, which is only one day ahead the triggering of the Brexit process. If the result is to hold a referendum, the proposal will be delivered to the UK parliament for voting. In this situation, it will pose more political uncertainties on the UK’s economic prospects and GBP.

UK Q4 GDP final reading will be released this Friday with better-than-expected readings likely providing some support to GBP.
FXPro
Broj poruka : 38
Points : 238
Date of Entry : 2017-03-11
Godina : 46
http://bit.ly/2mwIVP6

Re: Follow The Markets

on Tue Mar 28, 2017 11:57 am
Brexit Flight: A Hard or Soft Landing?
03.28.2017
UK Prime Minister Theresa May will trigger Article 50 of the Lisbon treaty on Wednesday March 29, starting the 2-year Brexit negotiation process with the EU. The EU leaders will hold a summit on April 29 to adopt Brexit guidelines.

There are three possible situations for the negotiation process: soft Brexit, hard Brexit, or failing to achieve any agreements. In the third situation, trade between the UK and the EU must be carried out per the World Trade Organisation (WTO) clauses.
The EU is unlikely to make it easy for the UK to leave, in order to prevent other EU member states from leaving the EU following Brexit. Downward pressure is still on GBP and GBP crosses until the outline of the final Brexit deal draft is clear. Thousands of protesters in the UK marched, on March 25, against Brexit.

The UK government have a list of issues that need to be negotiated with the EU such as; a new post-Brexit trade agreement, tariff, transportation, financial services, fishing waters, and reducing the number of EU immigrants entering the UK etc.

The EU is the UK’s biggest trade partner with the two economies being highly interdependent over the past decades. The EU and the UK must manage to minimize the Brexit impact and reach balance between their own interests.

Theresa May aims to get the best Brexit deal with access to the single market and a new trade agreement with minimised trade barriers. The EU economy is highly tied up with UK financial services it is therefore also crucial for the EU to maintain its access to London’s financial sector.

After the UK leaves the EU, the UK will be able to retrieve the control of its borders, jurisdiction, and diplomacy. The UK will be free to sign trade agreements and develop a tighter relationship with other economies such as the US and China. In addition, the UK will get rid of the financial burden of the EU annual membership fee.

The Scottish parliament will vote on whether to hold a second Scottish independence referendum today, which is only one day ahead the triggering of the Brexit process. If the result is to hold a referendum, the proposal will be delivered to the UK parliament for voting. In this situation, it will pose more political uncertainties on the UK’s economic prospects and the value of GBP.

GBP/USD hit a 7-week high of 1.2615 on Monday, mainly because of the slump of USD, be aware that the GBP crosses will likely to be volatile with the proceeding of Brexit.
FXPro
Broj poruka : 38
Points : 238
Date of Entry : 2017-03-11
Godina : 46
http://bit.ly/2mwIVP6

Re: Follow The Markets

on Thu Mar 30, 2017 10:49 am
USD Firms Ahead of Q4 GDP Final Reading

The dollar index has rebounded noticeably from a 4-and-a-half-month low of 98.85, helped by outperforming US consumer confidence for March, and recent Fed comments. This morning, the dollar index rallies and touches a 1-week high of 100.02, . Today, at 13:30 BST, sees the release of US Q4 GDP final reading and Q4 PCE inflation figures for March; with better-than-expected readings it is likely to provide further support to USD. However, per the first and second Q4 GDP annualized readings: a 1.9% growth, showing a slowdown comparing to a 3.5% growth in Q3.

OPEC is considering whether to extend the oil output cut for another 6 months to lift weak oil prices. The decision will likely be made in their scheduled meeting on May 25 in Vienna. In addition, the EIA crude oil inventories (the week ending March 24) dropped to 0.867 million barrels; less than expectations of 1.183 m and the previous figure of 4.954. These two factors cushioned oil prices creating a noticeable bounce off on Wednesday.

Britain’s ambassador to the EU, Tim Barrow, handed over the Brexit triggering notification letter, signed by the UK Prime Minister Theresa May, to the EU Council President, Donald Tusk, in Brussels. Tusk is expected to present draft Brexit guidelines to the European Union’s remaining 27 member states by this Friday. A withdraw agreement must be accepted by 72% out of the 27 states, representing 65% of the population.

Member states are expected to hold a Brexit summit on April 29. The Guardian reports (per a leaked copy of the European Parliament draft resolution) that the EU appears to be taking a strong position aka. “a hard Brexit”. It will likely result in no free trade agreements between the UK and the EU over the next two years, with a transition period of no longer than 3 years. The draft resolution is likely to be discussed next week.
Theresa May now faces a severe challenge: dealing with a prospective hard Brexit negotiation with the EU, at the same time, maintaining the UK territory from falling apart with the threat of Scotland’s independence attempt.

The Eurozone economic sentiment, business climate and consumer confidence (Mar) will be released at 10:00 BST today, followed by German CPI (Mar) at 13:00 BST, accompanied by the US Q4 GDP final readings and US Q4 PCE.
FXPro
Broj poruka : 38
Points : 238
Date of Entry : 2017-03-11
Godina : 46
http://bit.ly/2mwIVP6

Re: Follow The Markets

on Tue Apr 04, 2017 4:50 pm
Dollar Gains Ahead of Trump-Xi Meeting

US President Trump and the Chinese president Xi Jinping, are scheduled to meet in Trump’s Mar-a-Lago resort in Florida, this Thursday April 6.

There are some sensitive issues between the US and China, such as trade protectionism, currency manipulation, South China Sea claims and North Korea’s nuclear program. Trump stated that if China doesn’t take actions to rein in the development of nuclear strength in North Korea then the US will act alone. President Xi expressed in mid-March that “the mutual benefits between the two nations outweighs the conflicts with cooperation as the only right choice for long term development”.

US non-farm payroll and unemployment for March will be released this Friday at 13:30 BST. The US labour market has remained solid, seeing more than 200,000 job gains in average over the past six months.

On Monday evening, FOMC voting member Harker stated that “the Fed is likely to raise rates twice more this year” which is in line with the Fed’s “gradual” rate hike pace. USD strengthened this morning during early European session with the dollar index testing the 100.50 resistance level.

This morning the Reserve Bank of Australia (RBA) announced that rates will remain unchanged at 1.5% in line with expectations. However, the RBA made a dovish statement as the latest unemployment rate rose to a 13-month high. AUD/USD hit a 3-week low of 0.7561 this morning breaking the significant psychological support level at 0.7600.

Economic data for today is thin. UK construction PMI (Mar) to be released at 09:30 BST will likely affect GBP and GBP crosses. The US trade balance is released at 13:30 BST with Fed governor Tarullo making a speech at 21:30 BST.

Bank of Japan Governor Kuroda will make a speech at 08:15 BST on Wednesday April 5. Yen has been one of the best performing currencies over the past few months, as the recent risk events such as Trump’s healthcare bill and the triggering of Brexit, has resulted in the rallying of safe havens.
FXPro
Broj poruka : 38
Points : 238
Date of Entry : 2017-03-11
Godina : 46
http://bit.ly/2mwIVP6

Re: Follow The Markets

on Wed Apr 05, 2017 12:21 pm
How Will US ISM Data and FOMC Minutes Affect USD ?

The dollar index hit a 3-week high of 100.59 yesterday. However, it pulled back after testing the near-term major resistance at 100.50. It currently holds above the support level at 100.30. The crucial US ISM figure will be released this afternoon at 15:00 BST; the non-manufacturing PMI (Mar). This data release will affect USD and USD crosses. US ISM non-manufacturing PMI readings have kept above 50 since February 2010, showing the service sector remains sound.

US ISM manufacturing PMI released on Monday has seen an uptrend since September 2016. The latest figure for March, released on Tuesday, was 57.2 which saw the 94th straight month above 50 indicating the manufacturing sector is still expanding. However, the figure was lower than the previous figure of 57.7. It saw a slowdown for the first time since September 2016 caused by a rise of production costs.
Although rising prices weigh on the manufacturing sector it has pushed inflation up to the Fed’s 2% target. The PCE (YoY) inflation figure for February rose to 2.1% which was the first time above 2% for the past five years.

The UK Markit services PMI (March) will be released at 09:30 BST today. This figure has seen an uptrend since August 2016, however, it has declined since January 2017. GBP/USD has retraced in the past two days; the current price holding above the near-term major support line at 1.2400. The service sector accounts for over 80% of the UK economy, the UK service PMI released today will likely affect GBP and GBP crosses.

This afternoon we will see a series of important US data released – be aware that it will likely cause volatility for USD and USD crosses. ADP employment change (March) at 13:15 BST, which is regarded as a prediction of the non-farm payrolls (March) released this Friday. The Markit services and composite PMIs (Mar) at 14:45 BST. Most importantly we see the release of ISM non-manufacturing PMI (Mar) at 15:00 BST. Crude oil inventory (the week ending Mar 31) is also released at 15:30 BST – always a major influencer in Oil price volatility.

The FOMC minutes will be released this evening at 19:00 BST. The Fed raised rates in the March 15 meeting. Recently several Fed officials have commented on prospective rate hikes, mostly in an optimistic tone, with the likelihood of two more rate hikes by the end of the year. We will likely get more clues about the probability of a rate hike in upcoming FOMC meetings and from the resulting minutes. Per the CME’s FedWatch tool the probability of a rate hike in June is around 59%.

The first Trump-Xi meeting is scheduled for Thursday April 6; be aware that this political event will likely outweigh the economic data performance.
FXPro
Broj poruka : 38
Points : 238
Date of Entry : 2017-03-11
Godina : 46
http://bit.ly/2mwIVP6

Re: Follow The Markets

on Fri Apr 07, 2017 1:54 pm
Will Non-Farm Payroll Lift USD ?

US non-farm payroll and unemployment for March will be released this Friday at 13:30 BST.

In the past three days, the dollar index was oscillating in the range between 100.30 – 100.65. It edges up this morning during European sessions. Be aware that the release of the US labour market data this afternoon will likely cause volatility for USD, USD crosses, and commodities.

The US unemployment has seen a downtrend since 2010, and has stabilised within the range between 4.6% – 5% in 2016. The average revised figure of non-farm payrolls in the past 6 months was around 183K, which is close to the 180K estimate for March. If the upcoming NFP figure outperforms, or is in line with expectations, then we can expect a probable rate hike in June. However, if it is lower than 140K, then it will likely lower the probability of a rate hike.

The ADP employment change (March), regarded as the prediction of NFP, was 263k, better than expectations of 187K, seeing the peak since July 2014. Construction, manufacturing, mining, healthcare, catering, foreign trade and service sectors have seen noticeable job gains. The job creation in construction hit a record high last month.

Be aware that, according to past experience, the market trends sometimes reverse within 1-2 hours after the initial move.

We will see a series of crucial UK data for February to be released at 09:30 BST today, including manufacturing production, industrial production, and trade balance.

The Bank of England governor Carney will make a speech at 10:00 BST. GBP/USD is currently trading in the range between 1.2400 – 1.2500. Be aware that Carney’s speech will likely cause volatility for Sterling.

The European Central Bank President Draghi made a dovish statement on Thursday, weighed on the Euro. EUR/USD hit a 3-week low of 1.0628 on Thursday.

Despite the Eurozone economy is improving, the Eurozone composite PMI for March hit a 6-year high of 56.7. Draghi stated that the substantial monetary accommodation is still appropriate until the end of the year, as the bank has not yet seen sufficient evidence of an inflation pickup.
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Re: Follow The Markets

on Fri Apr 07, 2017 1:57 pm
Market Reaction to Friday’s NFP

The US Nonfarm Payrolls and Unemployment Rate are out this coming Friday, April 7, 2017, at 12:30 (GMT), and are expected to cause significant volatility in the markets.

Considered the one economic indicator that never fails to trigger sharp market movements both in the minutes leading up to its release and in its aftermath, the NFP data is released by the US Department of Labor on the first Friday of each month and outlines changes in the number of employees, excluding farm workers and those employed by the government, non-profit organizations and private households.

What to expect this month?


The U.S. has seen over 6 years (76 months) of job growth. The last time that such figures were registered was at the end of the Great Depression in 1939. While last month’s NFP was well above the historical average at 235K, the market will now be looking to see any downward revisions. 

The recent strength in NFP, and the resulting creation of jobs, has boosted investor confidence in global indices and seen many traders moving into safe haven currencies, despite the recent rise in U.S. interest rates. The market will therefore be looking for continued strength in the data in order to continue these trends. If we see an NFP number < 160K, coupled with an Unemployment Rate>4.7%, the markets will see USD come under downward pressure, which will at once also negate any increase in U.S. interest rates for at least another quarter or more.

An NFP number of >210K, coupled with an Unemployment Rate that remains at 4.7% (or better), will likely result in USD strengthening. This will confirm the FOMC recent interest rate decision and allow them to accelerate the likelihood of another rate rise sooner than expected.

FxPro Analyst Team
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Re: Follow The Markets

on Mon Apr 10, 2017 1:14 pm
USD Rallies as Unemployment Rate Hits a 10-Year Low

Last Friday US non-farm payrolls for March rose by only 98K, which was far below expectations of 180K, marking the lowest growth since May 2016. In addition, the previous figure was revised downwardly from 235K to 219K. The average hourly earnings also underperformed, falling by 0.1% to 2.7% in March, from 2.8% in February.

However, the unemployment rate for March fell to 4.5%, marking the lowest level since July 2007. Initially, the dollar index fell from 100.70 to 100.39 due to the underperforming non-farm payrolls. Dramatically, it was followed by a sharp reversal, lifted by the outperforming unemployment rate, hitting a 3-and-a-half-week high of 101.17.

The strengthening of USD weighed on gold prices. Spot gold fell by nearly 200 points last Friday, from a 5-month high of 1270.51. This morning, the dollar index hit the highest level of 101.24 since March 15.

Fed Chair Yellen will make a speech at 21:10 BST this evening at the University of Michigan. Be aware that her comments may give further clues about a rate hike in June and the shrinking of the Fed’s balance sheet. Per the CME’s FedWatch tool the latest probability of a rate hike in June has increased to 67.2%.

GBP/USD fell to a 2-and-a-half week low of 1.2358 last Friday because of the soft UK manufacturing data (Feb), BoE President Carney’s comment and the strengthening of USD. Carney stated that “the Brexit negotiation would influence bank regulations and cooperation. The transition period poses a risk to the stability of financial system. The global financial system is at a “fork in the road” going into the Brexit talks”.

Tuesday April 11, at 09:30 BST, will see the release of a series of UK inflation data for March, including CPI, core CPI, PPI and core PPI. It will likely cause volatility for GBP and GBP crosses.

Trump has condemned China for the theft of millions of US manufacturing jobs resulting in the shutdown of numerous US factories. The Trump-Xi meeting ended last Friday symbolising the start of a new bilateral relationship. The result was in line with Xi’s goal of cooperation for mutual benefits.

China will likely make a large amount of investment in the US which will create around 700,000 jobs, by placing an order to purchase Boeing airplanes, and opening of automotive, agriculture and consumer markets to US companies.
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Re: Follow The Markets

on Tue Apr 11, 2017 3:47 pm
How will UK Inflation and Labour Market Data Affect GBP ?

This morning at 09:30 BST will see the release of a series of UK inflation data for March including; CPI, core CPI, PPI and core PPI. It will likely cause volatility for GBP and GBP crosses. GBP/USD is currently trading above the psychological level at 1.2400.

The German ZEW economic sentiment and current situation (Apr), and Eurozone industrial production (Feb), at 10:00 BST, will likely affect the strength of the Euro and the trend of the DAX index.

UK CPI has seen an uptrend since the end of 2015, helped by a weakening Sterling rising food and fuel prices. CPI and the core CPI for February both reached above the Bank of England’s 2% target for the first time since January and July 2014 respectively.

UK inflation uptrend is likely to continue; however, the economic prospect seems to be uncertain due to Brexit uncertainty. The Bank of England is likely to keep rates on hold for the near future.

Wednesday April 12, at 09:30 BST, will see the release of UK labour market data (Mar), including average earnings (from Dec to Feb). If the pace of wage growth is slower than the pace of inflations rise then it will likely result in the weakening of household spending and purchasing power, which will lead to the slowdown of economic growth.

To adapt to rising inflation the UK government is increasing the minimum wage from £7.20 to £7.50 this month and has frozen tax on petrol and diesel for the seventh year.

Monday morning, during the early European session, the dollar index hit its highest level of 101.24 since March 15. However, it retraced and is now trading below the resistance level at 101.00. Fed Chair Yellen made a speech yesterday at the University of Michigan. She stated that “the US economy is healthy and growing at a moderate pace with the Fed close to achieving its goals on employment and inflation, neutral monetary policy and that a gradual rate hike would be appropriate”.


FOMC voting member, Neel Kashkari, will make a speech at 18:45 BST this evening.

There are only two weeks ahead until the first round voting of the French presidential election. Polls conducted by BVA-SALES FORCE showed a tightening race: Macron, Le Pen and Fillion are 23%, 23%, and 19% respectively. Macron and Le Pen got a lower share of the vote compared to 25% from a previous poll. Surprisingly, the far-left candidate Jean-Luc Melenchon, has slipped to third position, with 19% of voters, which is equal to Fillion, which poses more uncertainty to the election.
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Re: Follow The Markets

on Fri Apr 21, 2017 2:43 pm
All Eyes on the First-Round Voting of the French Election
04.21.2017

The first round voting of the French election will be held this Sunday April 23. The market consensus is that the Centrist Macron and the far-right wing Le Pen would likely get into the second round, then Macron would likely win the final vote.

The most embarrassing situation is that the far-right wing Le Pen and the far-left wing Mélenchon both get into the second round, which will likely result in further rallies of safe havens (such as gold, the yen and the Swiss franc), lower European stocks and a falling Euro.

Be aware that if the result of the first-round surprises the markets, especially if the far-right wing Le Pen’s share of vote sees a large increase, it will likely push safe havens further up. Conversely, if Le Pen and Melenchon lose, no matter who is the victor out of Macron or Fillion, the Euro and European stocks will likely rally as market concerns over the collapse of the EU would be relieved.

Non-voting share and undecided voters are likely to play decisive roles in the French presidential election. The IFOP polls showed there are about 31% non-voting and 28% undecided voters. The candidates have been trying to win undecided voters’ supports in the final sprint of the race.

The independent centrist candidate Macron is in favour of free trade and the integrity of the EU. HIs measures aim to change the country’s long-standing bureaucracy and excessive government control to revive the sluggish economic performance. Macron’s policies will likely effectively reduce the number of unemployed, increase investments and save a large amount of spending which could be used on improving economic growth.

Fillion and Macron’s policies have some similarities. Fillion has lost supports by many neutral voters due to the fake parliamentary job scandal. However, he has a large committed Catholic voter base accounts for 79% of his supporters.

Although Macron is the top candidate, he doesn’t have a large committed voter base comparing to Le Pen and Fillion. Macron and Mélenchon are the two candidates among the four with the highest share of undecided voters (60% for Macron and 47% for Mélenchon). The bigger the nonvoting share, the more adverse to the two candidates. Consequently, it will increase the probability for Le Pen and Fillion to win, as they have larger committed voter bases.

The US Treasury Secretary Munichin stated yesterday that the Trump administration plans to release a major tax reform proposal very soon, Regardless of the failure of the healthcare bill, they will make the tax reform done. After his statement, the dollar index nudged up, touching a 2-day high of 99.75. It is inspiring to see the Trump administration is trying to show the markets determination and leadership. However, it will still need the Congress’ approval to pass the bill. It is not impossible the same hurdle for the healthcare bill to reoccur.
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Re: Follow The Markets

on Tue Apr 25, 2017 12:04 pm
Global Equities Up, Oil & Yen Weaken
04.25.2017

Following the somewhat centrist victory in the first round of the French Presidential Elections global markets appear to be have gained some risk appetite back with Asian equities reaching a near 2 year high on Tuesday. The election also helped lift EUR and put downward pressure on safe-haven instruments. It is therefore likely that European equities will have a strong start this morning.

French Polls show Emmanuel Macron defeating anti-euro nationalist Marine Le Pen by as much as 30 percentage points in the second round of the French presidential election on May 7th.

Markets are likely to see additional impetus with President Trump promising an announcement on US Tax Reforms on Wednesday.

EUR was holding steady at $1.0885, retaining most of Monday’s 1.3 percent gain where EUR posted its strongest one-day performance in nearly a year; lifting EUR to a near 6 month high.

EUR gains had weighed on the dollar index, which touched a four-week low overnight. The index was marginally higher at 99.134, failing to make up most of Monday’s 0.9 percent loss.

USD advanced 0.4 percent to 110.32 JPY extending Monday’s 0.5 percent jump as investors sold off the “safe-haven” JPY.

Oil recovered marginally, following a week of losses, although gains were restricted by concerns that purported output cuts may not affect the current oversupply in global markets.

Gold recovered from last week’s lows of 7095 trading up to 1278.06 in early trading before retracing back to 1270.28.
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Re: Follow The Markets

on Fri Apr 28, 2017 12:31 pm
Will US Q1 GDP Growth Show a Slowdown ?.

by Devata Tseng, Technical Analyst


There are two crucial GDP figures to be released today; UK Q1 GDP initial reading will be released at 09:30 BST, followed by the and US Q1 GDP annualized initial reading, Q1 PCE and Q1 core PCE inflation figures (QoQ) at 13:30 BST.

This will be the first US GDP figure reported after Trump took office. Presently the US economic condition remain sound – whereas, per the Q4 GDP annualized final reading, we saw 2.1% growth showing a slowdown compared to a 3.5% growth in Q3. Market expectations for the upcoming Q1 GDP initial reading is 1.3%, which is lower than a 2.1% growth in Q4.

Growth around 2% is still sound however it shows a slowdown compared to the robust economic expansion over past decades. The reason for the recent slowdown is partially because of reduced consumer spending (especially on automobiles) caused by delayed tax returns and a warm winter. I addition; decreased corporate investment and government spending (Trump froze federal hiring recently) will also weigh on Q1 GDP growth.
However, the global economy is seeing a gradual recovery. The weakening of USD since the beginning of the year has boosted overseas demand for US products and US exports. In addition, the US job market is close to full employment which also provides Q1 GDP some support.

The US economic cycle is typically sluggish during the winter months then starts to see a revival in spring and summer. Therefore, the Q2 and Q3 GDP readings will likely see a better performance.
The dollar index saw a rebound over the past two days after hitting the lowest level of 98.55 since November 11. The current price is trading below the significant psychological level at 99.00.

Per the CME’s FedWatch tool the current probability for a rate hike in June is 67.6%. If the US Q1 GDP reading beats expectations, then we can expect an increase in the probability and further support to USD. Conversely, if Q1 GDP underperforms, it will likely weigh on USD and lower the probability of a rate hike in June.
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Re: Follow The Markets

on Wed May 03, 2017 11:17 am
Fed Expected to Keep Rates Steady in May
by Devata Tseng, Technical Analyst


Eurozone Q1 GDP initial readings (YoY and QoQ) will be released at 10:00 BST today, followed by the US Markit Services and Composite PMIs (Apr) at 14:45 BST, the US non-manufacturing PMI (Apr) at 15:00 BST and the FOMC interest rate decision at 19:00 BST.

The crucial US non-manufacturing PMI and manufacturing PMI have been above 50.0 for some time: Non-Manufacturing PMI since February 2010 and Manufacturing PMI since March 2016. Despite the recent moderate slowdown in manufacturing sector the figure indicates that both the US service and manufacturing sectors saw continuous expansions.

The FOMC meeting will be held this evening at 19:00 BST. Per the Fed’s “gradual pace of rate hikes” markets are expecting the Fed to raise rates in June, instead of May, since the Fed just raised rates in March.

It is reported that Fed Chair Yellen is not due to hold a press conference today and there will, therefore, not be any economic forecast provided. The only focus on the meeting will be whether there are any hints in the monetary policy statement about prospective shrinking of its balance sheet. During the past 10 years, the Fed has added its balance sheet over $4.5 trillion in bonds. The Fed needs to see a stable upswing in economic growth and inflation before unwinding its balance sheet.

Today's important market news

However, the recent US economic data has been weak, such as the non-farm payroll in March, the Q1 GDP and auto sales etc. which makes a rate hike even more unlikely this month. Per the CME’s FedWatch tool the probability for a rate hike in May is just 4.8% whereas for June it is 67.4%.

Recently several Fed officials are forecasting two more rate hikes by the end of this year. Markets are expecting one in June and one in September. The recent soft US data has not yet reduced the probability of a rate hike in June. However, if the upcoming data keeps on underperforming, it will put more stress on the Fed to raise rates.


With a possibility of a shrinking balance sheet in today’s statement, USD is likely to rise. The dollar index will likely recover from the significant resistance level established at 99.00. Conversely, if it is not mentioned in the statement, we can expect that the market will not have a big reaction to it, as it will be just in line with market expectations to keep rates on hold.
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Re: Follow The Markets

on Fri May 05, 2017 7:07 pm
Markets Await French Election Result
by Devata Tseng, Technical Analyst

The second-round of the French presidential election will be held this Sunday May 7.

Per the latest IFOP (French Institute of Public Opinion) projections; Macron has 60.93% share of votes whereas Le Pen has 39.07%. Macron inherited 43% of Fillion’s, 70% of Hamon’s and 50% of Melenchon’s voters. Le Pen inherited 31% of Fillion’s, 3% of Hamon’s and 12% of Melenchon’s voters.

EUR has strengthened as markets expect Macron to win the final vote. This is based on Macron’s large lead of at least 20 points in the major polls after the first round of the election.

During the early European session today EUR/USD hit a high of 1.0989, last seen November 9 of 2016 and EUR/JPY hit a high of 123.66, last seen on January 9. On Thursday, the France CAC 40 index hit a 2-week high of 5384.96. The DAX index also hit a record high of 12657.16

During a TV debate on May 3, Le Pen condemned Macron’s policies with a lack of national security enhancement. He is regarded as being soft toward Islamic terrorism and beholden to large business interests. She claims that she will expel foreigners on a terrorist watch list.

If Macron wins, it will likely push EUR and European stocks further up. Conversely, if Le Pen wins, it will trigger risk-off sentiment and market concerns over the collapse of the EU, which will result in a slump in EUR and European stocks, causing a rebound in gold and silver prices.

Be aware that, the result will likely cause big volatility in the market. Market prices will likely open with slippages, which will result in stop losses being triggered with market prices instead of pre-set prices during early Asian session on Monday May 8.

The crucial US labour market data for April will be released this afternoon, at 13:30 BST. It includes non-farm payrolls, unemployment rate and average hourly earnings. Please note that the release of US labour market data will likely cause volatility for USD, USD crosses and commodities.
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Re: Follow The Markets

on Mon May 08, 2017 9:03 pm

Macron Wins French Election With Landslide Victory

by Devata Tseng, Technical Analyst

Macron won the final battle of the French presidential election which was in line with market expectations. He has become the youngest president in the French history.

Notably, Macron got 66.06% of the votes, largely surpassing his opponent Le Pen’s 33.94% outperforming the 20% lead poll projections.

The voting ratio was 65.3%, which was lowest compared to the past three presidential elections; 71.96% in 2012, 75.11% in 2007 and 67.62% in 2002.
Macron received a higher share of votes in big cities such as Paris and Marseille whilst Le Pen received a higher share of votes in the suburbs.

Le Pen’s extreme stance and policies, such as anti-globalization, anti-immigrants, trade protectionism and making France leave the EU, will likely lead France’s direction back toward conservativism and enclosure.

Conversely, Macron’s policies aim to change the country’s long-standing bureaucracy and excessive government control to revive the sluggish French economic performance. The outright victory of the independent centrist Macron indicates that French citizens aspire for change and variety.

Macron’s victory has eased market concerns over France’s leaving the EU and the collapse of the EU, pushing EUR and Europeans stocks further up.

During the early Asian session on Monday, EUR/USD hit a 6-month high of 1.1021. EUR/JPY hit a high of 124.49, last seen May 12 of 2016. Spot gold hit a low of 1220.77, last seen March 17. However, EUR and European stocks saw a retracement during early European session due to profit taking pressure.

Macon now must face severe challenges such as high unemployment rate, low economic growth and immigration issue.
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Re: Follow The Markets

on Tue May 16, 2017 12:22 pm

Push & Pull: USD Pressure & EUR Strength


by Devata Tseng, Technical Analyst

The Asian session saw equities climb to a fresh-two year high early on Tuesday on the back of an overnight rise in Wall Street fueled by reports that President Trump had disclosed classified information with the Russian Foreign Minister without necessary authorization from the source. This re-fueled the continued underlying uncertainties and reinforced doubts surrounding the Administration’s economic agenda. Oil continued extending extended gains following a pledge from the major producers Saudi Arabia and Russia to push for an extension of supply cuts into 2018.

EURUSD has broken the psychological 1.1000 level as a result of the likelihood of a shift in Eurozone economic policy for the second half of 2017. ECB Chief Economist Praet commented “that the balances of risk would be assessed at the June meeting”. However, he also stated that “the central bank would need to be very careful over removing policy accommodation”.

The dollar index continued lower trading around 98.55 with May’s low of 98.50 forming a slight support area. Per the latest CME Fedwatch; the expectations of a rate increase in June is now at a 73.8% probability compared to 84% last week.
With a degree of “risk-on” sentiment gold has seen a slight rise from early May lows of $1214 to trade just above $1234.

Today sees the release of UK CPI at 9:30 BST; forecast at 2.6% from the last release of 2.3% and US Housing Starts at 13:30 BST; expecting a minimal gain from the previous release.
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Re: Follow The Markets

on Wed May 17, 2017 3:06 pm

USD Hit Post Election Low on Trump’s Russia Leak Scandal


by Devata Tseng, Technical Analyst


It was widely reported that President Trump shared highly sensitive information with the Russia Ambassador at a recent meeting at the White House putting further pressure on USD. During today’s early European session the dollar index hit the lowest level of 97.74 last seen back in November 2016, EUR/USD traded as high as 1.1121 a level last seen back in November 2016. In line with the continued weakness in USD, spot gold had a fifth day of gains trading at a 2-week high of 1244.91.

To date the dollar index has almost given up all of the post presidential election rally, retracing about 1.4% over the past 4 trading sessions. Per CFTC data (Commodity Futures Trading Commission), Hedge funds’ USD long positions have reduced to the lowest level since August 2016.

Japanese Q1 GDP first reading will be released at 00:50 BST on Thursday. The Japanese economy has seen a recovery since last year. The global economy also saw a recovery, helping exports. However, as inflation has not yet seen a stable upswing the Japanese economic recovery is still fragile. The performance of the Q1 GDP will likely affect JPY and the JPY crosses.

USD/JPY has retraced in the past week as a result of the weakening of USD. USD/JPY hit a 1-week low of 112.24 on Wednesday during early European session.

There are two upcoming events that will likely affect oil markets; firstly, the Iran presidential election will be held this Friday, May 19th and secondly the OPEC meeting will be held on May 25. The result of the Iran presidential election and the associated geo-political risks will likely affect its oil supply. Iran has greatly increased its oil output after the US sanction was removed.

The US shale oil industry has seen a marked recovery since February last year because of higher oil prices. The US Baker Hughes data (that records the number of new Oil Rigs) is showing additional Rigs added every week. The increase in shale oil supply has offset OPEC’s recent output cut effort to an extent.

However, the Saudi Arabia Oil Minister, Khalid al-Falih, stated on May 8th at the Asia Oil and Gas Conference in Malaysia that “the output cut could be extended another 6 months or even further into 2018”. OPEC will hold a meeting in Vienna on May 25 where the decision whether to extend the output cut agreement will likely be announced.

Oil prices have retraced substantially around 12.88% since April 12th and have experienced a 3.74% rebound since May 5th. Last Wednesday’s EIA crude oil inventory data saw a drop of 5.247 million barrels hitting the lowest level this year helping push oil prices higher.

WTI and Brent crude oil will likely see selling pressure at $50 and $53 respectively. The US EIA Crude Oil Inventories data (for the week ending May 12) will be released at 15:30 BST this afternoon. Please be advised that this release is likely to cause significant volatility in oil prices.
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Re: Follow The Markets

on Fri May 26, 2017 11:48 am
Oil Slumped Post OPEC Extension Announcement
by Devata Tseng, Technical Analyst

On Thursday, OPEC announced that the existing output cut agreement will be extended for an additional 9 months, which was in line with market expectations.

However, the scale of output cut remains the same at 1.8 million barrels a day. Besides, no new OPEC member states will join the agreement extension. In addition, the market witnessed some profit-taking pressure which weighed on oil prices resulting in a drop of 5%.

On early Friday morning, WTI spot and Brent crude spot hit a 2-week low of 48.31 and 51.17 respectively before retracing higher.

The next meeting of OPEC and non-OPEC oil producers is schedule 30 November.

OPEC member states, Iran, Libya, and Nigeria are still exempted from the output cut agreement and have been increasing their production. Some non-OPEC oil producers, such as Russia and Kazakhstan have also attempted to boost their production.

The US shale oil industry has seen a marked recovery since February last year due to the rebound in oil prices. The US Baker Hughes data (that records the number of new Oil Rigs) is showing additional Rigs added every week.

In general, the oil supply remains high which has, and will, offset OPEC’s output cut effort to an extent. In the long term, oil prices are still under pressure.

On early Friday morning, we have seen USD weakening with the dollar index currently testing the support line at 97.00.

US durable goods, core durable goods (Apr) and Q1 GDP second reading will be released at 13:30 BST this afternoon. The first Q1 GDP reading indicated a mere 0.7% growth, which was the slowest growth in three years. If we see a higher second reading, it will likely provide USD support.
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