Asian Market Wrap: 10-year Treasury yields dropped -0.5 bp to 3.054% overnight, 10-year JGB yields lost most of their earlier gains and are at 0.044% and elsewhere across Asia long yields are mostly down as stock markets struggled without fresh new on Sino-American trade in holiday hit trade. Hong Kong and South Korean markets were shut for Buddha’s Birthday and elsewhere across Asia markets yesterday’s recovery fizzled out. Nikkei lost -0.23% as the Yen strengthened and despite reassurance of ongoing monetary stimulus from the BoJ. U.S. stock futures are still slightly higher. Oil prices are up and the WTI future trading at USD 72.49 per barrel.European stock futures are mixed, with the GER30 outperforming in catch up trade after yesterday’s holiday and aided by a weaker EUR. The UK100 future meanwhile is heading south after a largely weaker session in Asia. Today’s calendar focuses on the U.K., which has public finance data, the CBI industrial trends survey as well as a number of BoE speakers.
FX Action: USDJPY has traded moderately softer during the Tokyo session, retreating below 111.00. This interrupts a run higher that yesterday left a four-month high at 111.39. EURJPY and AUDJPY, among other yen crosses, are also softer today. Stock markets in Asia have been mixed-to-lower today. BoJ-speak from the Governor Kuroda and Deputy Governor Wakatabe today reaffirmed commitment to monetary stimulus, with the former saying the central bank is aiming to lift CPI to the 2% target as soon as possible and the latter saying that target can be achieved with prevailing policy. The remarks follow Friday’s weak CPI data of Japan, where headline April CPI fell to 0.6% y/y from 1.1% y/y in March and core CPI ebbed to 0.7% y/y from 0.9% y/y. The outcomes undershot market expectations, and have maintained expectations for the BoJ’s ultra-accommodative monetary policy to sustain. A Reuters survey of market economists earlier last week found that over half of respondents were expecting the central bank to refrain from exiting stimulative policy until 2020.
Charts of the Day
[IMG]
Main Macro Events Today Speeches: MPC Member Vlieghe, MPC Member Saunders, BOE Gov. Carney and BOE Remsden UK Public Sector Net Borrowing – Expectations – at 7.1B pounds deficit in April from the 0.3B surplus seen in March. UK Inflation Report Hearings Support and Resistance Levels
[IMG]
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Asian Market Wrap: Long yields declined as risk aversion picked up and stock market retreated in Asia. The 10-year Treasury yield is down -0.9 bp at 3.050%, the 10-year JGB down 0.4 bp at 0.037%. Stock markets headed south, with Japanese markets underperforming as the yen advanced and the focus returned global risks including the U.S.-North Korea summit and Turkey financial market stability. Nikkei and Topix are down -0.64% and -1.14% respectively. The Hang Seng lost -1.02%, the CSI 300 is down -0.84%. U.S. futures are also heading south and oil prices pulled back from highs over USD 72 per barrel and it is trading at USD 71.92. European stock futures are declining in tandem with U.S. futures after a largely negative session for equities in Asia overnight. The good news for the Eurozone is that peripherals have so far not been hit and the Italian 10-year yield is down -2.4 bp, the Spanish down -1.5 bp in early trade. The calendar has Eurozone PMI readings, as well as U.K. inflation data, a German Schatz auction and the U.K. CBI retailing survey.
FX Action: The yen outperformed as risk aversion flared up in global markets, while the dollar, outside the case of USDJPY, traded mostly firmer, gaining ground on the euro, sterling and dollar bloc currencies, for instance. EURUSD settled back in the mid 1.1700s after yesterday’s recovery gains stalled above 1.1800. EURJPY dropped sharply, to an eight-day low at 129.70, while USDJPY posted a four-session low of 110.37 in Tokyo, extending the correction from Monday’s four-month high at 111.39. A risk-off sentient, supportive of the yen in accordance with the typical correlative pattern, came amid a cocktail of geopolitical concerns. In the mix was U.S. President Trump saying that that there was a “very substantial chance” of the North Korean summit being delayed. The recent dive in the Turkish lira also mutated into a full nosedive in thin market conditions just ahead of the Tokyo session, posting fresh record lows. Concerns about excessive dictatorial control of Turkey’s economic policies have been negatively impacting the lira. In data, Japan’s March all industry activity index undershoot expectations at 0.0% m/m. The median had been for 0.1% m/m growth. Australian construction data also missed expectations.
Charts of the Day
[IMG]
Main Macro Events Today Eurozone PMIs – Expectations – Central bankers will watch this month’s round of confidence data with special interest and hopes that data will show signs that growth is recovering in the second quarter, after the slowdown in Q1 that was impacted by special factors. An effective stabilization is expected to be seen in Eurozone PMI readings for May and an improvement in the manufacturing reading to 56.4 from 56.2. The services reading meanwhile seen falling back to 54.5 from 54.7 RBA Gov Lowe Speech UK CPI, PPI & Retail Index – Expectations – CPI at 2.5% y/y and core at 2.2% y/y, which would match the prior month’s figure, which itself had undershot both the market and BoE expectation. The PPI is expected at 1% in April from -0.1% seen last month, while Retail Price Index expected at 0.5% in April from 0.1% in March. US Prel. PMIs – Expectations – Composite PMI for May expected at 55.0 from 54.9, while Services expected at 54.9 from 54.6. FOMC Meeting Minutes Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: 10-year Bund yields quickly recovered opening losses and are now up 0.7 bp at 0.510%, as peripheral bond markets rally led by Italy. The 10-year BTP yield is down -7.9 bp at a still high 2.310%. Spanish and Portuguese 10-year yields are also sharply lower. Reports that Five Star is considering an alternative finance minister to Savona, who promotes Italy’s exit from the euro may be helping. Stock futures meanwhile are mostly heading south in Europe, in tandem with U.S. futures and after a largely negative session in Asia. Released at the start of the session German Q1 GDP was confirmed at 0.3% q/q, and GfK consumer confidence fell back. Still to come the U.K. has retail sales data, ECB’s Praet and BoE’s Carney are scheduled to speak and the ECB publishes the latest Financial Stability Report.
FX Action: Yen out performance has once again been seen, driving USDJPY to a 10-day low of 109.33 and pushing EURJPY further into 10-month low territory. Belligerent rhetoric from North Korea and reports that the Trump administration is mulling a 25% levy on imported cars have provided some added fuel to risk aversion in global markets, which has maintained a safe haven bid for the Japanese currency. The dollar has also remained broadly buoyant, though has steadied off highs seen yesterday versus most currencies. EURUSD posted a fresh five-month low at 1.1675 during the New York PM session yesterday before recouping above 1.1700 following the release of the FOMC minutes to the early May meeting showed the Fed is in no hurry to tighten. Fed funds futures gained a little on the minutes, and were still fully pricing in a 25 bp rate hike in June while showing about odds of about 75% for a further quarter-point hike move in September. Italy will remain in the spotlight and the risk remains that we see further paroxysms in Italian markets as investors digest the formulating policies proposals of the anti-establishment and Eurosceptic coalition government.
German GDP & Consumer Confidence: German Q1 GDP was confirmed at 0.3% q/q as expected, leaving the working day adjusted annual rate at 2.3% y/y. The focus was on the breakdown, which was released for the first time and showed a clearer picture on why growth slowed so dramatically compared to the 0.7% q/q rate in Q4 last year. What the data showed were negative contributions from net exports, stock changes as well as government consumption, with the latter contracting -0.5% q/q in Q1, likely due partly to the political vacuum and the long period without a fully functioning government following the inconclusive election last year. Investment contributed 0.2% points to the quarterly growth rate, private consumption -0.2% points, net exports detracted -0.1% as export growth corrected -1.1% q/q, after rising a very strong 2.6% q/q in Q4 last year. The strong EUR may partly be to blame.
German GfK consumer confidence fell to 10.7 with the advanced reading for June, down from 10.8 in the previous month and the second consecutive dip. The index peaked at 11 in February, but remains at very high levels. Still, the full breakdown for May showed a marked decline in the willingness to buy despite an improvement in income expectations. The willingness to save meanwhile declined. Q1 GDP data today still showed a positive contribution from consumption to overall growth, but the GfK numbers at least signal some slowdown ahead.
Charts of the Day [IMG]
Main Macro Events Today UK Retail Sales – Expectations – Likely to show a pick up (from 0.7% from a dire -1.2% in March) but questions remain this be sustainable through to the summer and remainder of Q2. US Initial Claims – Expectations – A 2k decline to 220k is expected for new claims with continuing claims rising to 1.754 million. Plethora of Speeches – Dudley, Carney, Praet, Bostic, & Harker – possibly of some surprises and volatility for USD, EUR and GBP simply from the number of speeches on tap today Support & Resistance Levels
[IMG]
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Stuart Cowell Senior Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Asian Market Wrap: Long yields broadly corrected across Asia, and 10-year JGB yields dropped 0.5 bp to 0.034%, as stock markets struggled with geopolitics back on the agenda after Trump cancelled the North Korea summit. Pyongyang seemed to offer an olive branch and Asian markets are up from earlier lows while U.S. futures are posting gains. Hang Seng and CSI 300 are still down -0.44% and -0.11%. Nikkei and Topix are up 0.22% and down -0.14% respectively, as a weaker yen added some support. Treasury yields gained 1.1 bp and are at 2.988%, still clearly below recent highs. Oil prices fell after Russia’s energy minister suggested that OPEC and its partners will discuss the phasing out of supply curbs at next month’s meeting and the WTI future is trading below USD 71 per barrel.
FX Update: The dollar has returned to form, nudging higher versus the euro and yen, and most other currencies. EURUSD is pressing on 1.1700 as the London interbank gets up an running, putting Wednesday’s six-month low at 1.1675 back in the crosshairs. The Fed remains on a tightening track while the sentiment towards the Eurozone is being marred by Italy. USDJPY has recovered to the 109.50 area from yesterday’s 17-day low at 108.95. The lift has reflected part broader dollar firmness and par broader yen weakness. Stock markets recovered some poise Asia, and U.S. equity index futures also lifted some following a shaky session on Wall Street yesterday when the Trump administration cancelled the planned summit with North Korea. Pyongyang said today that it would still be willing to meet with the U.S. There are also reports that Mexico has made an offer to the U.S. in a bid to seal the NAFTA renegotiation.
Charts of the Day
[IMG]
Main Macro Events Today German Ifo Business Climate – Expectations – expected to stabilize, but comes with a downside bias now after the weak PMI round. The forecasts had been for an unchanged headline reading of 102.1 versus 102.1 in the previous month, with expectations seen falling back slightly, but the current conditions indicator was expected to improve after the holiday related noise in previous months. UK Second Estimate GDP – Expectations – Unchanged at 0.1% q/q and 1.2% y/y. US Durable Goods – Expectations – A 4% decline is expected for April, down to -1.4% from 2.6% in March Plethora of Speeches – RBA Assist Gov Bullock, BOE Gov Carney, Fed Chair Powell, FOMC Member Bostic, & German Buba President Weidmann – possibly of some surprises and volatility for AUD, USD, EUR and GBP simply from the number of speeches on tap today. Support & Resistance Levels
[IMG]
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Geopolitics reared its ugly head again, knocking core sovereign yields lower, while elevating those on the periphery especially in Europe. Mixed messages between Kim and Trump kept markets on their toes about the diplomatic climate between North Korea and the U.S., after the summit was called off, then possibly back on again. Along with worries over Korea and China, concerns about Turkey, Italy and now Spain, have resurfaced. Even against U.S. allies, a 25% tariff on auto imports was floated, leading to concerns that global growth could be compromised down the road.
United States: The week of May 28 will be a busy, holiday-shortened one in the U.S., with a slew of data releases after the return from the long Memorial Weekend. The focus will be squarely on the April jobs report after recent readings have fallen short of expectations, but in April the gain is expected to be in line with the year-to-date average. Front and center will be Nonfarm payrolls (Friday), expected to rise 195,000 in May, following a weaker-than-expected April gain of 164,000. The unemployment rate is estimated to be steady at 3.9%. Consumer confidence should be 128.0 in May (Tuesday), down only slightly from a strong 128.7 reading in April and the 17-year high of 130.0 in February. MBA mortgage market applications are due (Wednesday), along with the ADP employment survey seen rising 200k in May from 204k in April. Advanced trade indicators deficit may widen to -$70.5 in April (Wednesday) from $68.3 bln, along with a second update on Q1 GDP. Personal income is expected to rise 0.3% in April (Thursday), following a similar gain in the prior month, while PCE may rise 0.4%. Initial jobless claims are set to fall 8k to 226k in the week ended May 26, following the prior pop to 234k from 222k in the week of May 12. Chicago PMI is due, in addition to NAR pending home sales seen rising to 108.2 in April from 107.6 and delayed EIA inventory data (due to holiday).
Canada: The BOC’s announcement (Wednesday) is front and center this week. No change to the current 1.25% policy setting is expected alongside a maintenance of their gradualist tone, with a likely reiteration that they “will remain cautious with respect to future policy adjustments, guided by incoming data.” As for data that will guide the Bank of Canada, this week has real Q1 GDP (Thursday), March GDP also due Thursday, the current account and the industrial product price index on Wednesday, and the march average weekly earnings on Thursday.
Europe: The ECB is heading for difficult times as political jitters in Italy, and now Spain, threaten to destabilize markets, just as inflation is expected to finally move higher and vindicate the ECB’s move towards policy normalization. So far, the ECB taken the uptick in Italian yields with apparent calm, but if turbulence increases and deepens pressure on Draghi to try and step in with verbal intervention, volatility will intensify.
At the same time, this week’s round of preliminary may inflation data is expected to show an uptick in headline rates, that will back the ECB’s move towards a phasing out of QE. May numbers should bring us closer to “normal”. German HICP (Wednesday) is seen rising to 1.8% y/y from 1.4% y/y, the French rate (Wednesday) to 2.0% y/y from 1.8% y/y and the Italian headline rate (Thursday) to 0.9% y/y, which should bring the Eurozone HICP (Thursday) to 1.6% y/y – up from 1.2% y/y in the previous month. The ESI Economic Confidence (Wednesday) is seen falling back just slightly to 112.5 from 112.7 in the previous month, signalling a slowdown in growth momentum, but not to an extent that would worry the ECB unduly and partly due to capacity constraints in countries such as Germany. Final Markit Manufacturing PMI readings for May (Friday) expected to confirm preliminary numbers, leaving the Eurozone reading at a still robust 55.5. And even if preliminary numbers came in weaker than expected, they still showed that job creation continues and hence the German unemployment rate for May (Wednesday) expected unchanged at a very low 5.3%. The overall Eurozone rate for April meanwhile is seen falling to 8.4% from 8.5% in the previous month.
UK: The calendar this week brings the May Gfk consumer confidence report (Wednesday), where a fractional improvement is anticipated to a -8 reading after -9 in the month prior, April lending data from the BoE (Thursday), and the May manufacturing PMI survey (Friday), which it is anticipated to dip to 53.5 in the headline reading from the 53.9 reading of April.
Japan: The April unemployment (Tuesday) is expected unchanged at 2.5%, with the job offers/seekers ratio steady at 1.59. April retail sales (Wednesday) should rise to a 0.5% y/y growth rate from 0.1% for large retailers, and edge up to 1.1% y/y from 1.0% overall. April industrial production (Thursday) is penciled in at a 1.0% y/y rate, slightly slower than the prior 1.4%, while the contraction in April housing starts (Thursday) is expected to have deepened to -8.5% y/y from -8.3%. April construction spending is also due Thursday. Friday brings the Q1 MoF Capex survey, and the May manufacturing PMI. The preliminary reading came in at 52.5, the lowest since August. It was 53.1 last May.
China: The official CFLP manufacturing PMI (Thursday) is forecast edging up to 51.5, after having dipped 0.1 point to 51.4 in April. It was at 51.2 a year ago. The index has generally been on a downtrend from 52.4 in September, and the slippage has rung some alarm bells over growth. Also, the Caixin/Markit manufacturing PMI (Friday) should dip to 51.0 from 51.1, and is down from 51.6 in February (the highest since the same reading in August). It was 49.6 last May.
Australia: The Building permits (Wednesday) are expected to rise 2.0% in April after the 2.6% gain in March. Private capital expenditures (Thursday) are seen expanding 2.0% in Q1 after the 0.2% dip (q/q, sa) in Q4. The next Reserve Bank of Australia event is the policy meeting on June 5, where no change to the current 1.50% setting for the cash rate, is expected.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Asian Market Wrap: 10-year Treasury yields fell below 2.9% for the first time this month before coming back from overnight lows to currently 2.902%, down -2.9 bp on the day. 10-year JGBs are down -0.4 bp at 0.028%. Italy angst triggered risk aversion in holiday thin markets and as the dip in yields weighed on the dollar, the strengthened yen put further pressure on Japanese stock markets. Topix and Nikkei are down -0.75% and -0.97% respectively. Hang Seng and CSI 300 both lost -0.65%, the ASX outperformed and is posting slight gains. Asian stock markets are also mostly down, although the NASDAQ managed to make some headway as U.S. markets prepare to come back from yesterday’s holiday. Overall risk aversion continues to dominate amid political turmoil in Europe and as the end U.S. exemptions on tariffs on steel and aluminium loom on the horizon. At hopes that the U.S. – North Korea summit will take place after all remains alive as a diplomacy seems to heat up. Oil prices remained under pressure as Saudia Arabia and Russia mull higher output to ease concerns over supply shortages. The WTI future is trading at USD 66.72 per barrel, after falling to a low of USD 65.80.
In Europe, the Italian 10-year meanwhile is already up a further 13 bp and at 2.788% set to overtake U.S. yields for the first time since 2014 as the ECB remains quiet on the sidelines and the impact of Draghi’s promise to do “all it takes”, starts to be priced out. Portuguese 10-year yields are also up 13 bp already this morning. In Italy 2-year bonds are selling even faster and the yield is up nearly 50 bp at 1.33%. There are a number of ECB speakers today and with the bond market rout widening pressure on the central bank to step in with some form of verbal intervention is mounting. Stock futures are also selling off and financial market turmoil will overshadow today’s data calendar, which includes Eurozone M3 as well as Italian confidence data.
Charts of the Day
[IMG]
Main Macro Events Today
EU M3 Money Supply – Expectations – at 3.9% y/y from 3.7% y/y seen in April. US S&P/CS Composite-20 HPI – Expectations – S&P/Case-Shiller Home Price Indices expected slightly lower at 6.5% y/y in March from 6.8% y/y in April. US CB Consumer Confidence – Expectations – 128.0 in May, down only slightly from a strong 128.7 reading in April and the 17-year high of 130.0 in February. RBNZ Financial Stability Report Support and Resistance levels
[IMG]
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Asian Market Wrap: Treasury yields moved up from yesterday’s lows and the 10-year is at 2.804%, up 2.3 bp on the day, but still firmly below 3% as confidence in the Fed rate path evaporates amid widening market turmoil. Yields in Asia remained under pressure as risk aversion dominated and 10-year JGB yields are down -0.5 bp at 0.016% while the sell off in stocks continued. The Nikkei is down -1.54%, Hang Seng and CSI 300 lost -1.63% and -1.29% respectively after the U.S. closed with broad losses.Spanish yields meanwhile are still jumping higher and gained 10.6 bp so far, suggesting special factors rather than a wider stabilisation of sentiment is at play in the case of Italy. The situation looks similar at the short end, where the Italian 2-year yield is down -47.3 bp. Italy’s political turmoil and renewed concern about trade tensions between China and the U.S. continued to weigh on sentiment and a stronger yen added to pressure on Japanese markets. U.S. futures are also heading south and the correction in stocks doesn’t seem to have run its course yet. The calendar still has the Swiss KOF, French consumer spending and Q1 GDP, German jobless numbers, ESI economic confidence data and most importantly preliminary German HICP inflation, with the latter expected to pick up to 1.8% y/y.
German retail sales jump 2.3% m/m in April. A much stronger rebound from the dip in March than anticipated. With March numbers revised up to -0.4% m/m from -0.6% m/m, the annual rate still fell back to 1.2% from 1.7% y/y in the previous month, although the timings of Easter are likely to still distort the annual comparison. The numbers are volatile and often subject to heavy revisions, but the rebound over the month is still a positive sign after a raft of disappointing data that cast a shadow over the German growth outlook.
Charts of the Day
[IMG] Main Macro Events Today German Unemployment Change & HICP – Expectations – Unemployment change expected unchanged at 5.3% y/y in May, while German HICP is seen rising to 1.8% y/y from 1.4% y/y. US ADP Non-Farm Employment – Expectations – seen rising 188k in May from 204k in April. US Goods Trade Balance & Prelim. GDP – Expectations – Advanced trade indicators deficit may widen to -$70.5 in April from $68.3 bln, along with a second update on Q1 GDP, which anticipated to remain at 2.3%, unchanged from the initial release. BOC Rate Statement – Expectations – no change to the current 1.25% policy setting alongside a maintenance of their gradualist tone, with a likely reiteration that they “will remain cautious with respect to future policy adjustments, guided by incoming data.” Support and Resistance levels
[IMG]
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Asian Market Wrap: Treasury yields moved up from yesterday’s lows and the 10-year is at 2.804%, up 2.3 bp on the day, but still firmly below 3% as confidence in the Fed rate path evaporates amid widening market turmoil. Yields in Asia remained under pressure as risk aversion dominated and 10-year JGB yields are down -0.5 bp at 0.016% while the sell off in stocks continued. The Nikkei is down -1.54%, Hang Seng and CSI 300 lost -1.63% and -1.29% respectively after the U.S. closed with broad losses.Spanish yields meanwhile are still jumping higher and gained 10.6 bp so far, suggesting special factors rather than a wider stabilisation of sentiment is at play in the case of Italy. The situation looks similar at the short end, where the Italian 2-year yield is down -47.3 bp. Italy’s political turmoil and renewed concern about trade tensions between China and the U.S. continued to weigh on sentiment and a stronger yen added to pressure on Japanese markets. U.S. futures are also heading south and the correction in stocks doesn’t seem to have run its course yet. The calendar still has the Swiss KOF, French consumer spending and Q1 GDP, German jobless numbers, ESI economic confidence data and most importantly preliminary German HICP inflation, with the latter expected to pick up to 1.8% y/y.
German retail sales jump 2.3% m/m in April. A much stronger rebound from the dip in March than anticipated. With March numbers revised up to -0.4% m/m from -0.6% m/m, the annual rate still fell back to 1.2% from 1.7% y/y in the previous month, although the timings of Easter are likely to still distort the annual comparison. The numbers are volatile and often subject to heavy revisions, but the rebound over the month is still a positive sign after a raft of disappointing data that cast a shadow over the German growth outlook.
Charts of the Day
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Support and Resistance levels
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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Fixed Income Outlook: 10-year Bund yields are up 4.5 bp at 0.378% in opening trade, 2-year yields gained 3.6 bp and are at -0.643%. The rise in rates at the long end mirrors moves in Treasury and JGB yields, which lifted, the latter after the BoJ cut purchases of some debt at its regular operations. Peripherals are outperforming and the Italian 10-year is down -10.1 bp at 2.644%, after a last minute agreement with President Mattarella cleared the way for a populist coalition government, with Giuseppe Conte set to be sworn in today. Spain’s Rajoy meanwhile seems on the way out with the Socialists preparing to take control after reportedly gaining sufficient votes to win a vote of no confidence against Rajoy today. Stock futures are moving higher in Europe and the U.S. on the day Trump’s long announced tariffs finally come into effect. The EU’s countermeasures will start with the May 18 list of duties in U.S. goods ranging from Whiskey to Jeans, hardly the top of EU imports from the U.S. and there is lingering hope that despite the harsh tones from all sides, the high stakes will bring them back to the negotiating table. Data releases today focus on manufacturing PMI readings for the Eurozone, the U.K. and Switzerland.
Trump administration’s announcement that it was proceeding with slapping tariffs on steel and aluminium imports from Canada. The U.S. also hit Mexico and the EU with the same tariff (even though Mexico is a net buyer of U.S. steel and aluminium), and all three rapidly responded with announcements of counter tariffs. This weighed on global stock markets and underpinned safe havens, including the yen. In the mix were a bag of perky U.S. data releases, including weekly initial claims, personal income and the latest Chicago PMI survey, a spike in Eurozone HICP to 1.9% y/y in the preliminary May estimate from 1.2% y/y in April, above-forecast China manufacturing PMI and a miss in Japanese production data for April.
Canada announced plans to challenge the U.S. tariffs via both NAFTA and the WTO, while Macron of France declared them “a mistake and illegal.” Macron said the decision on the metals tariffs “closes the door on other talks,” though he plans to speak with Trump later tonight. The German economic minister said that the tariffs decision was damaging both for Europe and the U.S., but the transatlantic relationship remains extremely important for Germany.
Charts of the Day
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Main Macro Events Today EU Final Manufacturing PMI – Expectations – expected to confirm preliminary numbers, leaving the Eurozone reading at a still robust 55.5. UK Manufacturing PMI – Expectations –anticipate to dip to 53.5 in the headline reading from the 53.9 reading of April. US NFP – Expectations – expected to rise 188,000 in May, following a weaker-than-expected April gain of 164,000. US ISM Manufacturing PMI – Expectations – estimated to tick up to 58.1 from 57.3 in April. Support and Resistance levels
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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Asian Market Wrap: 10-year Treasury yields are down -0.5 bp at 2.937%, 10-year JGBs unchanged at 0.040%. After putting trade concerns aside and focusing on U.S. growth during the Monday session, stock markets struggled in Asia. The RBA left rates on hold as expected and maintained cautious optimism on the global and local growth outlook while suggesting that wage growth may have bottomed out, which saw the ASX underperforming and down -0.35%. Nikkei and Topix are up 0.20% and down -0.05% respectively, the Hang Seng gained 0.22% and the CSI outperformed with a 0.81% gain. A mixed picture, with markets appearing to take a wait and see stance. U.S. stock futures are slightly in the red, oil prices are slightly higher and the front end Nymex future is trading at USD 65.02 per barrel.
FX Action: EURUSD has steadied above the N.Y. low of 1.1677, though continues to find sellers ahead of the 1.1700 mark. The pairing has steadied well above last week’s 11-month low of 1.1508, largely as the worst of the European political meltdown appears to be behind us for now. This said, there may still be some political fissures yet to bubble up, so EURUSD is expected to remain in sell-the-rally mode.
Charts of the Day
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Main Macro Events Today EU Markit Services PMI – Expectations – expected to be confirmed at 53.9, leaving the composite at 54.1, down from the previous month, but still pointing to a solid pace of expansionand at least for the manufacturing sector market reported ongoing job creation amid capacity constraints and an overall optimistic view on the outlook over the next 12 months. UK Services PMI- Expectations – a dip is anticipated to 53.0 in the headline reading after 52.8 in April. US May ISM non-manufacturing PMI – Expectations – will be of most interest given the timeliness of the release. A 0.7 point increase has been forecasted to 57.5, after falling 2.0 points to 56.8 in April, after hitting a 12-year high of 59.9 in January. The slight improvement will leave the service sector tracking the expected performance for the May factory surveys which are showing improvement. These readings remain robust, supported by fiscal stimulus as well as stronger global growth. Canadian Q1 productivity – Expectations – projected to slip 0.1% (q/q, sa) following the 0.2% gain in Q4. Speeches: UK MPC Member Cunliffe, German Buba President Weidmann, RBA Assist Gov Bullock Support and Resistance levels
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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Asian Market Wrap: Risk appetite is back and stocks in Asia moved mostly higher in tandem with U.S. futures. Treasury yields picked up and the 10-year yield is at 2.939%, up 1.1 bp. 10-year JGB yields climbed 0.3 bp to 0.043%. Concerns about rising protectionism seem on hold for now, and Nikkei and Topix are up 0.39% and 0.12% respectively, the Hang Seng gained 0.52%. The CSI 300 meanwhile is down -0.20%, in tandem with Shanghai and Shenzen Comps amid lingering concerns about Sino-American relations. U.S. stock futures meanwhile are broadly higher and oil prices are set for a second day of gains and currently trading at USD 65.89 per barrel.
FX Update: Both the dollar and yen have traded softer against most other currencies. EURUSD has edged out a two-week high at 1.1734. EURJPY also posted a two-week peak, though the euro has traded more mixed (i.e. net neutral) versus other currencies, with euro crosses having flattened out for the most part out after rallying over the last week on the shifting Italian political situation. Concerns remain about how viable a government Italy’s unusual Five Star and League populist parties will make; about whether their anti-establishment, Eurosceptic colours will start to show through in policy. USDJPY has remained buoyant, near yesterday’s two-week high at 110.00, aided by AUDJPY strength following forecast-beating GDP data out of Australia, along with a backdrop of mostly higher stock markets in Asia. Strength in tech stocks helped lift stock markets, while Beijing said today that it would buy $70 worth of U.S. goods if the Trump administration lifts steel and aluminium tariffs. Cable built on gains seen yesterday, lifting into two-week high territory above 1.3400. AUDUSD, buoyed by solid Australian growth data, rallied over 0.5% in making a six-week high at 0.7672.
Charts of the Day [IMG]
Main Macro Events Today Swiss CPI – Expectations – expected rising to a 0.3% m/m from 0.2% m/m in April. MPC Member Tenreyro & MPC Member McCafferty Speech US Trade Report & Non-Farm Productivity – Expectations – deficit should be unchanged at -$49.0 bln, and much narrower than a cycle-high -$57.7 bln in February. Revised Q1 nonfarm productivity is expected to slow to 0.7% versus the initial estimate of 0.7%. Canadian Trade Balance & Building Permits – Expectations – the deficit expected to narrow to -C$2.8 bln in April from a -C$4.1 bln shortfall in March. Building permits are expected to fall 2.0% (m/m, sa) in April after the 3.1% rise in March values. US Crude Oil Inventories Support and Resistance levels [IMG]
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Asian Market Wrap: Stock markets continued to move higher during the Asian session on improving confidence in the world economy and despite the prospect of tensions at the G7 meeting over the future of trade relationships and U.S. sanctions. The fact that central banks remain on course to reduce stimulus seems to be seen as a sign that the recovery remains intact rather than a threat to equities, at least for now. 10-year Treasury yields are little changed at 2.968%, down -0.4 bp, 10-year JGBs gained 0.4 bp and are at 0.043% amid a broad move higher in yields across Asia. Nikkei and Topix gained 0.93% and 0.66% respectively. The Hang Seng is up 0.48%, the ASX 0.55%. Mainland China bourses meanwhile erased early gains and are in the red. with concerns about Sino-American trade relations continuing to weigh. U.S. futures are higher though – confirming that the overall mood in equity markets is improving. Oil prices have moved up from lows below USD 65 per barrel and are trading at USD 65.10.
German orders slumped -2.5% m/m in April, with the March reading revised down to -1.1% from -0.9%. The second months of contraction left the annual rate at -0.1%, down from 2.9% y/y in March and the first negative reading since July 2016. Expectations had been for a rebound from the dip in the previous month and while there may be some special factors still at play related to holiday’s and bridging days, the numbers are a worry and will add to concerns that the German recovery is slowing down much faster than feared. The breakdown showed domestic orders in particular weighing down the index, with a drop of -4.8% m/m. Again this may be due to special factors, but the fact that export orders rose for a second months and that Eurozone orders slumped -9.9% m/m, after already falling -2.9% m/m in March cast a shadow over the outlook. This won’t prevent the ECB from phasing out QE by the end of the month, but it highlights that the window of opportunity for the change in direction at the ECB is closing faster than previously thought.
Charts of the Day
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Main Macro Events Today Eurozone GDP – Expectations – to be confirmed at 0.4% q/q , but comes with a slight downward bias, after the revision to the final French reading. The earlier timing of Easter and adverse weather conditions left their mark on growth in the first quarter and the data are too backward looking to really change the outlook. US Jobless Claims – Expectations – are set to fall 11k to 223k in the week ended May 26, following the prior pop to 234k from 222k in the week of May 12. BOC Gov Poloz and MPC Member Ramsden Speeches Support and Resistance levels [IMG]
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Asian Market Wrap: Risk aversion is back and Asian stock markets headed south. After a sell off in the tech-heavy Nasdaq Thursday, technology stocks were also under pressure during the Asian session. Treasury yields meanwhile recovered some of the losses seen in the wake of the weakness in U.S. stocks yesterday, but after reaching a high of 2.479% have started to fall back to now 2.928%, still up 0.7 bp on the day. Asian yields are broadly lower, with 10-year JGBs down -0.2 bp at 0.037%. Stock indices meanwhile are a sea of red, with the Nikkei down -0.35%, the Hang Seng and CSI 300 down -1.35% and -1.37% after narrower than expected trade surplus out of China. China added to the risk off environment and the focus turns to the G7 meeting, which is likely to bring clashes over sanctions and trade. U.S. futures are down and the WTI crude oil is trading at USD 65.75 per barrel.
German trade surplus narrows as exports decline. Germany reported a sa trade surplus of EUR 18.4 bln for April, down from EUR 21.6 bln in the previous month. Meanwhile, German industrial production contracted -1.0% m/m. Expectations had been for a slight rise over the month, but after the unexpected slump in orders yesterday, the weak production number is not a total surprise. At the same time, March data were revised up to 1.7% m/m from 1.0% m/m reported initially, so the trajectory is not as weak as the headline suggests. Annual growth slowed to a still healthy 2.0%, but nevertheless the weakness in orders and surveys showing a markedly less optimistic view on the outlook confirm that the German cycle has peaked and that growth is slowing down. Capacity constraints are partly to blame, but worries about the export outlook amid an increasingly hostile trade environment are clearly also having an impact.
Charts of the Day
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Main Macro Events Today G7 Meeting Canadian Housing Starts – Expectations – to hold nearly steady at a 215.0k pace in May from 214.4k in April. Starts have been resilient, holding in a 215k to 230k range since December while existing home sales and prices tumbled beginning in January as new regulations took effect. The resilience in starts growth is consistent with firm underlying momentum in Canada’s housing market. Canadian Employment Data – Expectations – to rise 20.0k in May after the 1.1k dip in April. A gain in May would resume the gains seen in February (+15.4k) and Mach (+32.3k) that followed the 88.0k tumble in January. Support and Resistance Levels
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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Asian Market Wrap: Core yields moved higher and stock markets were underpinned as Trump tweeted enthusiastically about the summit with North Korea’s leader. The G7 turbulence was quickly shrugged off yesterday as the focus turned to the Trump/Kim meeting, which will be followed by three key central bank meetings this week. 10-year Treasury yields are up 0.6 bp at 2.957%, 10-year JGB yields rose 0.5 bp to 0.042%, Stock markets moved mostly higher across Asia with Topix and Nikkei up 0.40% and 0.44% respectively with a weaker yen adding support. Hang Seng and CSI 300 are up 0.48% and 0.39% so far, the ASX rose 0.15%. with a stronger currency weighing. US futures are also in the green, oil prices are up and the WTI is trading at USD 66.24 per barrel.
FX Action: The dollar traded moderately firmer heading into the London interbank open, led by a 0.3% gain in USDJPY, which logged a three-week high just shy of 110.50. Yen crosses also firmed up, reflecting broader softness in the yen as safe haven premiums unwound amid a cautious sense of optimism in global markets about the Trump-Kim summit, which has just ended. The summit produced a joint signing of an “important document,” though details about its content have not, so far, been made available. The summit produced images of cordiality and rhetoric (and tweets) of optimism — rhetoric emphasizing historical turning points and of new relationships and prospects for peace etc. Whether Kim actually it turns out that committed to team Trump’s demands for full and verifiable commitment to denuclearization remains to be seen, but, if he didn’t, whatever baby-step towards this grand goal Kim has offered looks to have been satisfactory to Trump. Assuming things remain upbeat, and global stock market direction remains tilted upwards, the yen would likely remain on a softening path, and USDJPY on a firming path. Among other pairings, EURUSD dipped to a two-session low of 1.1742 in the wake of the Tokyo fix before settling around 1.1770. Cable, which took a hit yesterday from big misses in UK production and trade data, posted a one-week low of 1.3341.
Charts of the Day
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Main Macro Events Today
UK Average Earnings – Expectations –ex-bonus average income to rise by 2.9% y/y in the three months to April, which would be unchanged from the March figure and affirm continued above-inflation pay growth. UK Unemployment Data – Expectations – at the 4.2% multi-decade low. German ZEW Economic Sentiment – Expectations – falling back to -14.0 from -8.2, with the number of those pessimistic about the outlook rising steadily. US CPI and Core – Expectations – CPI is expected to rise 0.2% for May, following a similar gain in April. Core prices are estimated to rise 0.2% as well after a tepid 0.1% April reading. Support and Resistance levels
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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Asian Market Wrap: Stock markets are mostly in the red as a lacklustre session in Asia draws to a close. Investors left G7 and North Korea summits behind and focused on major central bank decisions this week. Haven assets including the yen weakened amid hopes of diminishing geopolitical risks and a weaker yen helped Nikkei and Topix to outperform and post gains of 0.44% and 0.53% respectively. U.S. Treasury yields moved up from early lows and are now up 0.7 bp at 2.970%, while 10-year JGB yields corrected early gains and are down -0.2 bp at 0.041%. The Fed kicks off the round of CB decisions with a 25 bp rate hike pretty much a done deal, leaving the focus on the rate outlook and similar to the ECB meeting tomorrow, there could actually be good news for markets if the guidance is less hawkish than feared. U.S. stock futures at least are moving higher for now.
FX Update: Most currencies have been directionally dormant so far today, though USDJPY managed to claw out a fresh three-week high at 110.68. Yen crosses also remained underpinned, though most, such as EURJPY and AUDJPY, for instance, remained below recent highs. Global stock markets have lost upside traction, with risk appetite turning somewhat neutral as market participants anticipate “live” Fed and ECB meetings this week, with the former set, later today, to hike the Fed funds rate by 25 bp and the latter to announce, tomorrow, an end of QE. Attention will be on the respective guidance the central banks give. The Japanese currency has been under-performing as it loses some of its safe haven premium following all the bonhomie, feel-good glow of the Trump-Kim summit.
Charts of the Day
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Main Macro Events Today UK CPI and Core CPI – Expectations – to dip to a new cycle low of 2.4% y/y from 2.5% y/y in the month prior, and see core CPI to also remain unchanged, at 2.1% y/y. US PPI – Expectations – a 0.2% increase in headline PPI. The gain should be reflect a 0.3% increase in services prices and a more benign 0.1% rise in goods prices (related to a 0.8% increase in PPI gasoline). US Crude Oil Inventories – Expectations – crude supplies expected to decline by 1.4M barrels. FOMC Statement & Press Conference – Expectations – A 25 bp rate hike, a second for this year, is a fait accompli. So, what will be market moving will be the quarterly forecasts (SEP), including the dot-plot, a potential tweak in IOER, and any surprises from Powell. The key risk for the markets is with the dot plot, and whether the median dot remains at three tightenings this year, or is bumped up to four. With the markets concerned over an aggressive FOMC, maintaining the dots at three would be bond friendly. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Fixed Income Outlook: The 10-year Bund yield is down -0.1 bp at 0.477% in opening trade. Bond markets pretty quickly shrugged off the hawkish Fed during the Asian session as the PBOC failed to follow up and as stock markets headed south. The PBOC didn’t follow the Fed and tighten policy as had been speculated, but Trump said he will confront China “very strongly” over trade in coming weeks and a number of key data of of China, including retail sales and industrial output missed estimates, which added to concerns over a softening economy. Bond markets benefited from the sell off in stocks and the fact that the PBOC refrained from tightening and even Treasury yields fell back from earlier highs. 10-year Treasury yields are down -1.8 bp and at 2.948%, below the levels seen ahead of the Fed announcement. 10-year JGBs are down -0.6 bp. German final inflation data held no surprise and was confirmed at 2.2% y/y and the data calendar also has final French inflation readings as well as U.K. retail sales, but the focus is on the ECB, which is finally expected to confirm the end of QE, leaving the focus on the forward guidance.
FX Update: The dollar has more than given back gains seen in the immediate wake of the Fed’s rate hike and hawkish-tilting guidance. EURUSD recouped back above 1.1800 after dipping to a 1.1725 low, post Fed. The euro has been trading generally firmer over the last day, gaining against the pound, Swiss franc, among other currencies, with market narratives focusing on the successful Italian auction of 30-year bonds yesterday, with the appetite for the long-dated debt seen as a good litmus test of investor sentiment on the new Italian government. Market participants are also anticipating the ECB to announce an end of QE policy today. Elsewhere, USDJPY printed a three-day low of 110.04. The biggest movement out of the main currencies has been AUDJPY and is showing a loss of over 0.5%. The Aussie dollar has been under pressure following a sub-forecast Australian employment report. Ahead today, the ECB is expecting to announce the end of QE, while U.S. President Trump will reportedly decide whether to proceed with tariffs on Chinese goods later on Thursday — and his unabashed form this week suggests he won’t hold back.
Charts of the Day
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Main Macro Events Today UK Retail Sales – Expectations – to rise 0.5% m/m in May, which would affirm a continued recovery from sharp weather-affected weakness in March, although at a decelerated pace from the 1.6% m/m growth seen in April. SNB press conference ECB Rate Decision and Press Conference – Expectations – Comments from ECB officials suggest that the ECB is finally ready to formally announce the end of net asset purchases. The main question in recent months has been the actual timing of the announcement, not the policy change. So the announcement of a short taper through Q4 would not really come as a surprise, leaving intense focus on the forward guidance. Mr. Draghi expected to initially wrap the announcement in rather dovish language to keep markets from running away with rate hike speculation at a time when geopolitical risks are still hanging over markets. US Retail Sales and Unemployment Claims – Expectations – Retail sales are expected to rise 0.4% in May, following a 0.2% increase in April and a 0.7% gain in March. Initial jobless claims are estimated to be slightly changed at 224k for the week ended June 9. Support and Resistance levels
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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Fixed Income Outlook: 10-year Bund yields are down -0.9 bp at 0.41% in opening trade, as global bond markets remain supported by Draghi’s dovish tone yesterday, which was followed by a BoJ statement that left policy unchanged, but downgraded the inflation assessment. Global stock markets are trading mixed though, as the focus returns to trade risks. And for Europe, the weaker EUR may still add support to equity markets, but given that rate hike expectations had already been pushed out amid weak data releases, market reaction to the ECB’s commitment to keep rates steady through summer 2019 seems somewhat overdone. The European calendar has final inflation readings for the Eurozone as well as trade numbers for April, but after the ECB move yesterday these are unlikely to have much market impact.
FX Update: The dollar has traded broadly firmer so far today, with the ECB’s dovish-tilting guidance yesterday coupled with the BoJ lowering its prognosis on the inflation outlook (following a widely-anticipated decision to leave monetary policy unchanged) serving to emphasize the Fed’s relatively hawkish stance. EURUSD extended to a fresh 16-day low of 1.1555 in Asia trading. The pair had been trading above 1.1820 ahead of the ECB’s announcement yesterday, and the magnitude of losses are the sharpest over a day since October 26th-27th of last year. USDJPY, meanwhile, lifted to a 24-day high of 110.99. The BoJ’s downgraded CPI forecast underlines the chronic undershooting of the inflation target and points to ongoing ultra-accommodative policy — which includes pegging the 10-year JGB yield at near 0% — for the foreseeable future, certainly through to 2019. The dollar also posted gains against the dollar bloc currencies and sterling, and most other currencies, including emerging and newly-developed world currencies. Market participants will now be bracing for President Trump’s expected escalation of trade tariffs, as he will reportedly be confirming tariffs on China later today.
Charts of the Day
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Main Macro Events Today
Eurozone May HICP – Expectations – inflation is expected to be confirmed at 1.9% y/y with the final release today, up from 1.2% y/y in April. The impact of higher oil prices is partly to blame, as are higher food prices, but in the preliminary number core inflation also lifted. The headline rate is pretty much in line with the ECB’s definition of price stability and there is in fact a slight risk of an upside revision. However, with the ECB meeting out of the way, and Draghi confirming that rates won’t rise before the end of the summer 2019 the numbers are unlikely to have much market impact. Canada manufacturing Sales – Expectations – expected to reveal a 1.0% gain in April after the 1.4% rise in March. US Industrial production & UoM Consumer Sentiment – Expectations – Industrial production may rise 0.2% in May, following strong 0.7% readings in April and March and capacity utilization should edge up to 78.1% from 78.0%. Finally, the Michigan sentiment expected to be improved to 98.5 from 98.0. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
The FOMC tightened policy last week and followed with a more hawkish stance as it suggested two more hikes could be on the way this year. Additionally, the ECB finally announced a phase-out of QE asset purchases. But, a balanced press conference from Fed Chairman Powell and a dovish slant from President Draghi mitigated a bearish response in the markets. But trade tensions resurfaced Friday after President Trump’s announced tariffs on China, which responded in kind. Central banks remain in the spotlight and the BoE headlines, but there are also decisions from Switzerland, Taiwan, Thailand, and the Philippines, along with the ECB’s Sintra conference. OPEC meets while PMI data will provide timely clues global economies.
United States: The U.S. data calendar should support the more upbeat message on the economy delivered by the FOMC last week. Housing reports dominate and should show overall improvement. June PMI reports should also reveal still solid readings, even if they moderate slightly. And the leading economic index should rise for an 8th consecutive month. May housing starts (Tuesday) are estimated rising 0.6% to 1.295 mln following a 3.7% plunge in April to 1.287 mln. The June NAHB housing market index (Monday) is expected unchanged at 70. Also on tap is the FHFA home price index (Thursday) which should rise to 263.1 in April from 261.7. The Philly Fed index (Thursday)should fall 9.4 points to a still-strong 25.0 in June, after jumping 11.2 points to a 1-year high to 34.4 in May, with a concomitant slide in the ISM-adjusted Philly Fed to 59.7 from a 45-year high of 62.5 in May. Markit manufacturing and services PMIs are due Friday. The May leading economic index (Thursday) is expected to rise 0.3%, following gains of 0.4% in April and March. This would be an 8th consecutive increase, and the index hasn’t posted a decline since May 2016. The current account deficit (Wednesday) is expected to widen to -$129.0 bln in Q1, from -$128.2 bln in Q4. Initial jobless claims (Thursday) are seen edging up 1k to 219k in the week ended June 16, which coincides with the BLS employment survey week. Claims are oscillating around tight levels at multi-decade lows.
Canada: The calendar features two top tier data releases and an appearance by a Bank of Canada official. The week beings with Senior Deputy Governor Patterson (Monday), who speaks to the Investment Industry Association of Canada on “Rebooting Reference Rates.” In May, the Bank maintained the 1.25% rate setting and moved closer to hiking rates again, but assured that their approach remains gradual.
CPI (Friday) is expected to climb 0.4% in May (m/m, nsa) after the 0.3% gain in April, as further gains in gasoline prices boost the CPI. The CPI is projected to expand at a 2.5% y/y pace in May from 2.2% in April. A jump in the annual CPI growth rate should not alter the BoC’s gradualism — in the May announcement they noted that inflation will “likely be a bit higher in the near term than forecast in April” due mostly to gasoline prices.Retail sales (Friday) are anticipated to rise only 0.1% (m/m, sa) in April after the 0.6% gain in March, as a decline in vehicle sales weighs. The ex-autos aggregate is expected to improve 0.5% after the 0.2% drop in March. Wholesale shipment (Thursday) are seen rising 0.5% in April after the 1.1% gain in March, which would provide a welcome contrast to the 1.3% plunge in manufacturing shipment volumes revealed for April.
Europe: This week’s round of data releases, which include preliminary PMI readings, are unlikely to offer much comfort as we expect a further decline in confidence levels across both manufacturing and services sectors. With markets still adjusting to the latest policy twists, data releases may have limited impact.
The Eurozone June Manufacturing PMI (Friday) at 55.0, down from 55.5 in the previous month, as trade concerns continue to bite. The services reading is expected to hold up slightly better and fall back to 53.8 from 53.8 in the May. This could leave the overall reading at 53.6, down from 54.1 in the previous month. Again, still a robust number suggesting solid growth, but the ongoing decline in confidence readings in Q2 will likely lead to further downward revisions to growth estimate, as the slowdown in Q1 proved to be not quite as temporary as initially expected. So far labor markets continue to improve and wage growth is picking up, so only a small decline in the Eurozone preliminary consumer confidence number is expected (Thursday) to 0.1 from 0.2, although negative geopolitical headlines could have dented sentiment more than anticipated.
Other data releases include national French confidence numbers, as well as the final reading of French Q1 GDP, the latter too backward looking to have much impact. German PPI inflation is expected to jump to 2.5% from 2.0% thanks to higher oil prices, but at this juncture that won’t matter much as the ECB already lifted its inflation forecasts.
UK: The BoE’s MPC gathers for a policy meeting (announcing Thursday), where a no change in the 0.5% repo rate and QE totals are widely anticipated. The focus will fall on the statement and minutes for guidance, which will be of particular interest following a run of overall disappointing data so far available from April and May. Much will also depend on incoming data and how the worsening trade war evolves, in so far as it starts to have a material impact on global economies, thereby, and policymaker decision making. The UK’s data calendar features the June CBI industrial trends survey (Wednesday), which due to the reports limited breadth and short survey period tends to be overlooked by markets, and May government borrowing figures (Thursday).
Japan: The April all-industry index (Thursday) is estimated rising 0.8% m/m from the prior flat reading. The pace of inflation likely slowed slightly. May national CPI (Friday) should reveal a cooler 0.5% y/y pace overall from the prior 0.6% clip.
Australia: The minutes to the Reserve Bank of Australia’s May meeting (Tuesday) are the highlight of a thin week.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Asian Market Wrap: 10-year Treasury yields are up 0.5 bp at 2.9025, 10-year JGBs up 0. 1bp at 0.025%, both are down from session highs, but holding on to some of their gains as stock market sentiment settles ahead of key PMI readings in the Eurozone and the US today. Stock market sentiment remains muted, after yesterday’s sell off on Wall Street, but indices are up from early lows. Topix and Nikkei are still down -0.46% and -0.63% respectively, Hang Seng and CSI 300 managed to claw back some of yesterday’s losses and are up 0.19% and 0.40%. Trade concerns continue to linger and in Europe Italian political jitters remain a major concern, but US Stock Futures are improving. USOIL rallied and is at $66.26. OPEC and its allies reached a preliminary agreement to boost production despite opposition from Iran. The calendar had national CPI for Japan, which saw the annual reading rising to 0.7% from 0.6%. The Manufacturing PMI Index, meanwhile, rose to 53.1 from 52.8 and the All Industry Activity Index also improved.
FX Update: The Dollar has traded moderately softer so far today, extending a theme that has been seen since yesterday following the release of the Philly Fed index, which came in much weaker than expected. Amid this backdrop, the Euro has corrected some of its recent losses against most other currencies, which has likely reflected short covering, although in a market still wary about the Italian Government’s Eurosceptic bias. EURUSD has recovered back above 1.1600, posting a 3-day high at 1.1638. The pair had yesterday printed an 11-month low at 1.1508. USDJPY has settled near the 110.0 level, consolidating yesterday’s losses after the pair posted a 5-day high at 1110.75. Today, the focus will be on PMI survey data out of both Europe and the US, the evolving trade war, and the OPEC-plus-Russia meeting in Vienna, the run-in to which has exposed signs of discord among some members, which has pushed oil prices up.
Charts of the Day
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Main Macro Events Today
German PMI – Expectations – June Manufacturing PMI should fall at 56.2 from 56.9 in the previous month. The Services reading is expected to remain unchanged at 52.1 Eurozone PMI – Expectations – June Manufacturing PMI is expected at 55.1 down from 55.5 in the previous month, as trade concerns continue to bite. The Services reading is expected to hold up slightly better and fall back to 53.5 from 53.8 in the May. Canadian CPI and Retail Sales – Expectations – CPI is expected to grow 0.4% (m/m, nsa) in May after the 0.3% rise in April. The CPI is projected to grow at a 2.5% y/y pace in May, accelerating from the 2.2% clip in April. The Retail Sales are expected to rise only 0.1% in April after the 0.6% gain in March. US Services PMI – Expectations – is seen falling slightly to 56.4 in June. Support and Resistance Levels
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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Asian Market Wrap: Treasury yields moved back up from lows, 10-year JGBs are also slightly higher as the stock sell off started to fade during the Asian session. 10-year Treasury yields are now up 0.5 bp on the day at 2.886% and 10-year JGB yields are up 0.7 bp at 0.026%. The escalating round of trade and investment restrictions continue to hang over markets, but at least for now investors seem to be taking a breather. Japanese stock markets reversed early losses as gains in banks offset declines in technology and telecoms. Topix and Nikkei are up 0.25% and 0.12% respectively. The Hang Seng gained 0.21% and while the CSI 300 is still down -0.57%, the Shenzen Comp is up 0.66%. US stock futures are also moving higher after sharp losses on Wall Street yesterday. Oil prices are up and the WTI is trading at USD 68.30 per barrel.
FX Update: The main currencies are showing little net change ahead of the London interbank open. EURUSD edged a fresh 12-day high, at 1.1721, before ebbing back to near net unchanged levels nearer 1.1700. USDJPY has become directionally stuck near 109.50, above the 2-week low that was pegged yesterday at 109.37. The yen’s safe-haven bid of yesterday ran out of puff, while BoJ board member Sakurai said, also yesterday, (from Rome) that it remained “essential” for the central bank to conduct monetary policy “under the current framework for the time being.” By “current framework” he meant a short-time interest rate target of -0.1% and pegging of the 10-year JGB yield at near 0% (the curve control policy), alongside its QQE program. The stock market sell-off has abated in Asia. Japan’s Nikkei 225 managed to close with a fractional 0.2% gain, while S&P 500 futures are showing modest gains. President Trump’s trade advisor Navarro said that the Trump administration just wants “free, fair, and reciprocal trade…the mission here is to defend our technology and IP.”
Charts of the Day
Charts of the Day
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Main Macro Events Today
MPC Member Haskel and McCafferty Speech US CB Consumer Confidence – Expectations – to inch up to 128.5 in June, from 128.0 in May and close to a 17-year high of 130.0 in February. Additionally, S&P Case-Shiller home prices are seen rising to 211.2 in April from 208.0, while the Richmond Fed index may dip to 15 in June from 16. FOMC Member Bostic and Kaplan Speech NZ Trade Balance – Expectations – is seen narrowing to NZD100 mln in May from NZD263 mln in April.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Main Macro Events This Week The escalating trade war remained the dominant negative force in the markets the past couple of weeks, along with OPEC fine tuning its supply constraints. Heading into quarter-end, centrifugal forces on trade, immigration, policy, growth and inflation will continue to stretch investor patience. One last flurry of inputs and risks will be mulled as we cross the threshold into Q3.
United States: The US economic calendar will be highlighted by the Personal Income and Consumption Report, which should register solid growth in May. We’ll also get the final Q1 GDP reading, which is expected to show moderate improvement from the Q1 second estimate. Yet focus has shifted to the Q2 reading, which should show a strong rebound in spending and growth. Also of interest will be Consumer Confidence and Michigan Sentiment, which should confirm that consumers continue to perceive economic and market conditions as positive. Durable Goods orders may decline, while New Home Sales should show modest improvement in May. The following week’s calendar to kick off July will include key June data, with payrolls expected to record a solid 195k increase.
Fedspeak resumes with Dallas Fed hawk Kaplan (Tuesday) Q&A and Atlanta Fed dove Bostic in an armchair chat on civil rights. Fed VC for supervision Quarles will discuss “International Regulatory Participation and Cooperation” (Wednesday) and Boston Fed hawk Rosengren will mull “Is the Economy Too Sensitive to Economic Downturns?” St. Louis Fed dove Bullard will take part (Thursday) in a discussion on the US Economy and Monetary Policy.
Canada: BoC events dominate the docket this week: a speech by Governor Poloz to the Greater Victoria Chamber of Commerce (Wednesday) will be the final outing for a BoC official ahead of the July 11 rate announcement. An economy running near potential, 2% CPI and a 40-year low jobless rate are consistent with the Bank delivering on the signals from the May announcement and progress report that pointed to a near term rate hike. But recent data has undershot expectations, notably April retail sales and May CPI. We still expect a 25 basis point increase in July, but the likelihood has been trimmed in recent weeks due to the data. Another rate hike is penciled in this year (expected to happen in October) but uncertainty over NAFTA further clouds the policy outlook past July.
The Bank of Canada’s Business Outlook Survey for Q2 (Friday) is expected to show an economy still running near potential, with inflation expectations at well inside the Bank’s 1-3% target range and perhaps a downtick in the outlook for future sales due to trade uncertainty.
Europe: A busy week is in store that brings key confidence indicators as well as preliminary inflation data for June. At the same time, political uncertainties remain high with the immigration question dividing not just the German government, but turning into a test of the wider European Union just as heads of states prepare for the crucial June 29-30 summit on Brexit.
The recently revamped Ifo Business Climate Index (Monday) now also incorporates Services Sentiment, which is expected to help the overall Business Climate Index to remain stable at 102.0, unchanged from the previous month and with the expectations reading seen falling only marginally to 98.2 from 98.5. Similarly, the ESI Economic Confidence reading (Thursday) is expected to come in just slightly weaker at 112.0, down from 112.5 in May. Preliminary Consumer Confidence came in weaker than expected and together with an expected dip in industrial confidence is likely to draw the index down. Preliminary Inflation readings meanwhile are likely to see the Eurozone HICP rate (Friday) reaching 2.0% in June, the upper limit of the ECB’s definition of price stability. The German rate (Thursday) is expected to lift to 2.3% from 2.2%. PMI surveys seem to be backing this up and despite the recent slowdown, job creation continues and unemployment continues to decline. German Jobless numbers (Friday) are seen falling a further -5K, leaving the jobless rate at a very low 5.2%.
UK: Last week’s BoE policy meeting was unexpectedly impactful, with the minutes showing an increased rank of three MPC members calling for a 25 bp hike in the repo rate, more than the two expected. Although still outnumbered to the tune of six, the dissenters have put a rate hike as soon as November back on the table. The minutes showed that most members are overlooking the recent economic soft patch, although the majority still want to see more data. In its May Inflation Report, the BoE made it clear that declining spare capacity and low productivity growth meant that gradual and measured monetary tightening will be warranted.
The calendar this week brings the June CBI Retail Sales survey (Tuesday), and the June Gfk Consumer Confidence survey, 3rd release Q1 GDP, Q1 Current Account figures and the BoE’s monthly report on lending and monetary supply (all due on Friday).
Japan: The May Services PPI (Tuesday) is seen cooling to 0.8% y/y, after nearly doubling to 0.9% in April from 0.5% in March. May Retail Sales (Thursday) should be unchanged at 1.5% y/y overall, as they were in April. Friday’s heavy release schedule includes June Tokyo CPI, which is expected at an unchanged 0.4% y/y pace overall. May Unemployment is forecast at a steady 2.5%. Preliminary May Industrial Production is estimated to have fallen 0.8% versus the 0.5% increase in April, which would cap 3 months of solid gains. June Consumer Confidence should slip to 43.0 from 43.9, while May Housing Starts are set to post a 5.0% y/y contraction versus the prior 0.3% pace previously. May Construction Orders are also on tap.
Australia: The Reserve Bank of Australia’s Head of Payments Policy Tony Richards speaks (Tuesday) at the Australian Business Economists event on cryptocurrencies. The sparse data calendar has May private sector credit on Friday.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Asian Market Wrap: 10-year Treasury yields lost earlier gains and are unchanged at 2.877%, 10-year JGB yields are up 0.3 bp at 0.027%, while yields elsewhere mostly declined as stocks struggled for direction with trade concerns continuing to hang over markets. Japanese indexes moved up from lows and are at -0.21% and -0.07% respectively. The Hang Seng meanwhile is down -0.73% and the CSI 300 down -1.59% as the Yuan continued to weaken offshore amid fears that China’s liquidity squeeze will lead to corporate bond defaults in 2H, and the drive for deleveraging is limiting lending and pushing up borrowing costs. Energy companies were supported by an ongoing rise in oil prices. The front-end USOil future rose to a high of USD 70.98, and is currently at USD 70.71 per barrel, amid reports the US is pushing allies to halt imports of Iranian crude. US stock futures are also down.
FX Update: USDJPY has traded moderately lower, back under 110.00, after posting a three-session peak at 110.22. The pair was lifted by post-Tokyo fix demand, rising to 110.20, before selling overwhelmed and turned the Dollar lower. The Yen is also firmer against other currencies as stock markets ebb back again after yesterday’s reprieve. AUDJPY, a cross with relatively high beta characteristics that has been sensitive to the deepening trade spat, is down over 0.3%, earlier printing an eight-day low at 80.81. As for USDJPY, the pair is about at the halfway mark of the broadly sideways range that’s been seen over the last six weeks. USDJPY has Resistance at 110.20-22, levels which encompass recent daily highs. The net directionless path is illustrated by the flat profiles of both the 20- and 50-day moving averages, which are presently sandwiching prevailing levels, being respectively situated at 110.05 and 109.65. Fundamentally the picture would be a bullish one (divergent Fed versus BoJ policy paths) were it not for the safe-haven premium being installed in the Japanese currency amid the backdrop of rising trade protectionism.
Charts of the Day [IMG]
Main Macro Events Today BoE Governor Carney Speech – Scheduled Press Conference following the the publication of the Financial Stability Report at 08:30 GMT US Durable Goods Orders – Expectations – Likely to inch up to -1.0% in May from -1.6% in April. Core Orders expected to sink to 0.5% from 0.9% last time FOMC Members Quarles and Rosengren Speech BoC Governor Poloz Speech – Scheduled for 19:00 (text released 15 minutes earlier) speech regarding Transparency and Understanding RBNZ Interest Rate Decision & Statement – No Change to rates expected and “timing of any change dependent on how the economy develops” no change in statement Support and Resistance Levels [IMG]
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Stuart Cowell Senior Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Fixed Income Outlook: Asian stock markets traded mixed in Asia and trade jitters continue to weigh on sentiment after White House economic adviser Larry Kudlow said the decision to use less harsh measures on Chinese investment than feared did not represent a softer tone in the lingering trade tensions. Topix and Nikkei are mixed at -0.20% and +0.05% respectively. The Hang Seng is up 0.37% and the CSI 300 down -0.02%. US Stock Futures are moving higher, after a negative close on Wednesday and 10-year Treasury yields are up 1.1 bp at 2.836%, while 10-year JGB yields are up 0.1 bp at 0.024%. Emerging market currencies remained under pressure and oil prices are down on the day, but still trading above USD 72 per barrel.
Reserve Bank of New Zealand held rates at 1.75%, matching widespread expectations for no change. The bank said the cash rate will remain at 1.75% “for now.” But they “are well positioned to manage change in either direction — up or down — as necessary.” Recall that in May, Governor Orr said the rate would remain at its current setting “for some time to come.” The Bank remains on hold, with recent soft data delaying the start of rate hikes further into next year.
Charts of the Day
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Main Macro Events Today
German and Spanish Prelim CPI – Expectations – further acceleration in headline rates are expected, after both already reported y/y rates above 2% in May. The German rate is expected to lift to 2.3% from 2.2%, while Spanish HICP is seen at 2.3%, up from 2.1% y/y. EU Economic Summit – Expectations – The European Commission’s ESI Economic Confidence reading; is expected to come in just slightly weaker at 112.0, down from 112.5 in May. Preliminary consumer confidence actually declined and industrial confidence is also likely to have dipped again at the end of the second quarter, judging by PMI and Ifo readings. US Final GDP & Unemployment Data – Expectations – The final estimate of Q1 GDP is expected to be 2.4%, up from 2.2% in the second release, while initial jobless claims are estimated to rise 3k to 221k in the week ended June 23. MPC Member Haldane, Fed’s Bullard and FOMC Member Bostic Speeches
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Stuart Cowell Andria Pichidi HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Asian Market wrap: Stock Markets moved mostly higher during the Asian session, with Chinese Stocks outperforming after the Central Bank said in comments following the monetary policy committee that it will use comprehensive policy tools to keep economic developments steady and stabilize market expectations, thus underpinning hopes for a loosening of liquidity conditions. The CSI300 rallied 1.41%, Shenzen Comp and Shanghai Comp are up 1.53% and 2.52% respectively. The Hang Seng managed a 1.42% rise, while Nikkei posted more muted gains of 0.09%, as trade concerns continue to cloud over sentiment. The dovish Central Bank comments saw 10-year yields falling -4.6 bp in China, while elsewhere yields picked up as stocks improved. 10-year Treasury yields are up 1.8 bp at 2.855%, 10-year JGB yields gained 0.3 bp to 0.026%. US Stock Futures are also moving higher and the WTI Future is trading at USD 73.24 per barrel. UK Stock Futures are also moving higher. Data releases so far have not been stock friendly, with UK Consumer Confidence and German Retail Sales falling and German import price inflation rising sharply. Still to come are Eurozone HICP and German jobless numbers as well as UK lending data and the Swiss KOF leading indicator.
FX Update: Both the Dollar and Yen have weakened against most of the other main currencies, with the Yen underperforming, while the Euro outperformed on meeting some strong demand on news that EU members had thrashed out the deal on immigration. The deal aims to shore up external borders and create screening centres for migrants, which is seen as placating the Italian populist government. EURUSD flipped back above 1.1650, rallying by a big figure in total before capping out at two-day high of 1.1666, and most Euro crosses concurrently rallied, too. USDJPY lifted above Wednesday’s 110.49 high as global stock markets rebounded, causing an unwinding of the Japanese currency’s safe haven premium. EURJPY and AUDJPY, among other Yen crosses, also strengthened strongly. China’s PBoC said today it would use comprehensive policy tools to maintain positive economic developments and stabilize market expectations.
Charts of the Day [IMG]
Main Macro Events Today
German Unemployment – Expectations – German jobless numbers are seen falling a further -8K, leaving the jobless rate at a very low 5.2%. UK GDP Q1 & Current Account – Expectations – Q1 growth should go unrevised, at 0.1% q/q and 1.2% y/y. The Current Account is expected to come in with a deficit of GBP 18.0 bln in Q1. Eurozone CPI & Core CPI – Expectations – to reach 2.0% in June, the upper limit of the ECB’s definition of price stability. Canadian GDP – Expectations – to rise 0.1% in April after the 0.3% gain in March (m/m, sa). BoC Business Outlook Survey – Expectations – The Q2 survey is expected to reveal some trimming to the expansionary outlook, but one that is consistent with ongoing growth in 2018. The report should show further tightening of capacity, with labour shortages on the rise. Well contained inflation expectations are projected, but sentiment will remain in the upper half of the band. US PCE & Personal Income – Expectations – Personal Consumption Expenditures is expected to rise slightly to 1.9% in May. Personal Income is expected to rise 0.4% in May , following a 0.3% gain in the month prior. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Trade and tariffs remained in the headlines through Q2 and along with political jitters, caused global consternation. And with the US’s July 6 deadline for collection of additional duties on Chinese products, tariffs will remain the center of attention. Behind the scenes however, US growth has picked up steam as the stimulative effects from deregulation, tax reform and fiscal measures start to take hold and overshadow the noise. While it looks as though Q3 will start off on the same footing as Q2, the big questions for the markets will be whether the trade skirmishes escalate, and whether US momentum can support growth over the rest of the world.
United States: It’s an important week in the US. Along with the July 4 Independence Day holiday, there are the month’s key releases. Additionally, July 6 is the deadline for tariffs on 818 lines of about $34 bln of Chinese goods. The data slate is headlined by the June jobs report, as well as manufacturing and services PMIs, vehicle sales, and trade. The FOMC minutes of the June 12, 13 meeting will provide extra insight on the shift to a more hawkish stance.
The June nonfarm payroll report (Friday) is expected to show a solid 200k increase in jobs after the 223k gain in May, while the jobless rate should hold steady at a low 3.8%. There’s ongoing controversy over the degree of slack in the system. On Monday, the ISM should slip to 58.0 in June, from May’s 58.7. Despite the expected decline, the index remains solid and not too far off from the 14-year high of 60.8 in February. The light vehicle sales (Tuesday) expected to rise to a 17.0 mln rate in June from 16.8 mln in May, with autos at 5.3 mln and trucks at 9.0 mln, versus respective rates of 5.2 and 8.9 mln in May. The May supply – disruption for truck assemblies from a fire at a parts supplier may disrupt truck sales in June and July, though more generally truck sales continue to drive vehicle sales. The May Trade Deficit (Friday) should narrow to -$43.5 bln, from -$46.2 bln in April and a cycle high -$55.5 bln in February, given the Advance Goods Trade Balance narrowing to -$68.2 bln.
Canada: Canada’s data docket contains two key reports that will inform the outlook for the Bank of Canada announcement next week. Employment (Friday) is seen rising 25.0k in June after the 7.5k drop in May and 1.1k dip in April. The unemployment rate is expected to hold at a 40-year low 5.8%. The trade deficit is expected to widen to -C$2.2 bln in May from -C$1.9 bln in April. The June Ivey PMI (Friday) is anticipated to slide to a still expansionary 61.0 from 62.5 in May. Employment and trade in line with estimates would support the expectation that the Bank of Canada will lift rates 25 basis points to 1.50% in the July 11 announcement. Markit Canada manufacturing PMI for June is due on Tuesday. The markets are closed Monday in observation of the Canada Day holiday.
Europe: With the ECB having effectively clarified the policy path well into the second half of next year, and the important June summit out of the way without the new Italian government blowing up the party, the markets should be settling into a slower summer mood in a week that includes largely secondary data releases. So for now, market volatility is likely to continue adding to pressures on the ECB to revamp the rules on re-investment as it prepares to phase out net asset purchases by the end of the year.
Data releases are unlikely to change the overall picture significantly. The final readings on June PMIs are expected to confirm preliminary readings of 55.0 for both the Manufacturing (Monday) as well as the Services reading (Wednesday), which should leave the composite on course to be confirmed at 54.8. Readings still point to ongoing robust growth across both sectors and Markit reported with the preliminary numbers that part of the recent slowdown was indeed due to capacity constraints with delivery times lengthening. Meanwhile, German manufacturing orders (Thursday) are expected to rebound 1.0% m/m from the 2.5% m/m decline in April and industrial production is seen to pick up 0.2% m/m, after -1.0% m/m.
Events include ECBspeak from Weidmann (Thursday) as well as Nouy (Friday) and bond auctions in Spain and France on Thursday.
UK: The calendar brings the June Markit PMI surveys, with the manufacturing PMI (Monday) anticipated at 54.0, down from 54.4 in May. Evidence suggests that the slowing in economic growth across the channel have been crimping export performance in the manufacturing sector. The construction PMI (Tuesday) is expected to arrive with an unchanged 52.5 headline reading, and anticipate the services PMI (Wednesday) to also hold unchanged, at 54.0. In-line data should keep the BoE on its gradualist tightening course, with markets looking for a 25 bp hike in the repo rate at the August MPC meeting.
Japan: The May personal income and PCE (Friday) should show spending contracting further to a -1.7% y/y clip, from the prior -1.3% outcome, another worrying sign from the region.
China: The June Caixin/Markit manufacturing PMI should slip slightly to 51.0 from 51.1. The June services PMI (Wednesday) is penciled in at 52.5 from 52.9. Again such results would add to worries over a slowdown and fears that tariff threats are weighing on sentiment.
Australia: The RBA’s meeting (Tuesday) casts a long shadow over a busy calendar. No change is expected to the current 1.50% setting for the cash rate target as inflation remains low. The rate has been unchanged since the 25 bp cut in August 2016. The economic data docket is full this week. Building permits (Tuesday) are projected to bounce 2.0% in May (m/m, sa) after the 5.0% drop in April. May retail shipment values (Wednesday) are expected to rise 0.2% (m/m, sa) following the 0.4% gain in April. The trade surplus (Wednesday) is seen at A$1.3 bln in May from A$1.0 bln in April.
[B]Always trade with strict risk management. Your capital is the single most important aspect of your trading business.[/B]
[B]Please note that times displayed based on local time zone and are from time of writing this report.[/B]
[B]Disclaimer:[/B] This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Fixed Income Outlook: A mixed picture on bond markets, while US stock futures recovered earlier losses and are moving higher, in tandem with UK100 futures after markets continued to struggle with trade angst during the Asian session. Germany’s Merkel managed to find a last minute compromise with Interior Minister Seehofer that will prevent a break up of the union parties – at least for now. The controversy over immigration meanwhile is likely to continue not just in Germany, but across Europe. Today’s calendar has Eurozone Retail Sales and PPI as well as the UK Construction PMI.
FX Update: The Dollar majors have remained in narrow ranges, overall, though there has still been some movement of note. USDJPY posted a fresh 6-week high of 111.13 before settling lower. Other Yen crosses also saw similar price action with the backdrop of steadying global stock markets seeing the Yen come under some pressure. China’s PBoC once again allowed the Yuan to weaken, with the USDCNY rate this time rising to an 11-month high above 6.6700. China’s central bank is responding to both the impact of US tariffs and broader weakness in emerging market currencies. The Australian Dollar rallied moderately, partly amid the rebound in stock markets and partly on RBA’s policy statement, which, while remaining distinctly neutral overall, was perhaps a little more sanguine than some market participants had expected regarding the risks stemming from a slower, tariff-afflicted Chinese economy. RBA left the cash rate at 1.50%, as had been widely anticipated. AUDUSD posted a high of 0.7365, a gain of over 30 pips from Monday’s closing levels. EURUSD has lifted back to the 1.1650 area, extending the rebound from yesterday’s 1.1591 low but so far remaining below yesterday’s high.
Charts of the Day
[IMG]
Main Macro Events Today UK PMI Construction – Expectations – an unchanged 52.5 headline reading. Canadian Markit Manufacturing PMI – Expectations – to fall to 55.4 in June after the 56.2 in May. US Factory Orders – Expectations – to rise to 0.1% m/m in May from the -0.8%m/m in April. ECB’s Praet Speech Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Asian Market Wrap: Treasury futures declined in thin volumes, while cash markets are shut for a US holiday. Japan’s 30 year yield dropped below 0.7% as Asian market remained shaky, with Chinese Indices continuing to underperform despite the commitment to a stronger Yuan, as the start of the first round of US tariffs on Friday weighs on sentiment. Most Indices managed to come up from lows in the later part of the session and the Nikkei is still down -0.13%, but also up from lows. Oil prices are higher on the day, with the WTI Future trading at USD 74.64 per barrel.
FX Update: The Dollar traded softer, led be declines against the Yen, Australian Dollar and most emerging world economies, which seemed to benefit from China’s steadying of the Yuan today. USDJPY opened in Asia at about 110.58-60, then dipped to a 4-session low of 110.27 before setting around 110.40. Stock markets in Asia mostly declined, following a tech-led drop on Wall Street yesterday. China’s Yuan steadied after declining notably last week, on Monday and Tuesday, amid reports that it was at the direction of Beijing. Most emerging market currencies also gained. AUDUSD posted a 7-session high at 0.7424. A record high reading in the Australian June Services PMI, which jumped 4 points to 63.0, gave the Aussie a bid, along with the firming in the Yuan. EURUSD meanwhile, clawed out a 2-session high of 1.1678. Conditions will be thin and direction commitment limited today with US Markets closed for the 4th of July holiday.
Charts of the Day [IMG]
Main Macro Events Today German Service PMI – Expectations – expected to confirm the preliminary reading of 53.9,which should leave the composite at 54.8. Eurozone Service PMI – Expectations –expected to remain unchanged at 22 ,which should leave the composite at 54.8, with a slight bias to the downside. UK Service PMI & BoE Speeches- Expectations –is seen steady at 54.0. Events include BoE speeches from Woods and Sarpota as Brexit pressure on the UK mount with May wedged between hard-line Brexiteers and warnings from Brussels that the time for a deal is running out. US Bank Holiday – Independence Day Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Asian Market Wrap: 10-year Bund yields are up 1.3 bp at 1.315% in opening trade, the 2-year is up 2.1 bp at -0.652%. 10-year Treasury yields are up 1.6 bp after returning from holiday and strong German manufacturing orders as well as Bloomberg source stories suggesting at least some ECB officials see a rate hike in September/October next year, i.e. earlier than current market pricing, will be adding to pressure especially at the short end this morning. Peripherals are outperforming slightly and GER30 and UK100 futures are higher in line with US futures in opening trade. After the release of German orders at the start of the session, the calendar still has Swiss CPI, BoE’s Carney, as well as ECB’s Weidmann and supply from Spain and France.
FX Update: The Euro is opening Europe firmly, with EURUSD testing the week’s highs at 1.1690-91, EURJPY posting two-day highs above 129.35 and EURCHF ascending into 3-week high territory. The Dollar, outside the case against the Euro, has been trading neutrally, including against most emerging world currencies. The PBoC continued to rein in the yuan, with the offshore USDCNY rate of 6.6478-80 holding below Tuesday’s 11-month low seen at 6.7344. USDJPY continued to orbit the 110.50 level. The stability in currencies belies a heightened state of concern about trade protectionism, with the US on Friday set to implement tariffs on $34 bln of Chinese imports, although equity market weakness, especially in China-focused issues, have taken a whack today.
Charts of the Day
[IMG]
Main Macro Events Today BOE Governor Carney and German Buda President Weidmann Speeches US ADP Employment Change – Expectations –expected to remain rise at 190K from 178K in May. US Non-Manufacturing PMI – should fall to 58.0 in June, from 58.6 in May and versus a 12-year high of 59.9 in January. Crude Oil Inventories FOMC Meeting Minutes Support and Resistance levels
[IMG]
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Main Macro Events This Week The US June jobs report was another “Goldilocks” set of numbers for the markets, drawing back in workers from the ranks of the long-term unemployed. Broadbased strength in employment not only helped Wall Street rally but the surge in the labor force and tame wage gain allowed Treasury yields to drift lower, since the report offered no incentive for the FOMC to deviate from its “gradual pace” of normalization. Looking forward, inflation data will dominate in the week ahead, with the Fed comfortably close to its 2% target now. The Fed will also release its Monetary Policy Report on Friday with Chairman Powell’s key follow-up semi-annual testimony on July 17.
United States: The US Economic calendar will zero in on inflation statistics for the week of July 9. Modest gains in the CPI and PPI are expected, with the y/y readings remaining above the Fed’s 2% target given hard comparisons. The Import Price Index may reveal weakness related to declining oil prices in the month, but export prices should post a modest gain. Consumer Credit (Monday) is projected to rise $12.0 bln in May, following a $9.3 bln gain in April. JOLTS job openings are due (Tuesday). Headline CPI (Wednesday) is expected to rise 0.2% in June, following a similar gain in May, while core prices are estimated to rise 0.2% as well, the same as in May. Wholesale inventories are expected to rise 0.5% in May (Wednesday), as revealed in the advance report, following a 0.1% gain in the prior month, and sales are estimated to rise 0.5% as well, after a 0.8% gain in April. CPI is forecast to rise 0.2% in June (Thursday), following a similar gain in May. Core prices are estimated to rise 0.2% as well, the same as in May. Initial jobless claims are estimated to fall 18k to 213k in the week ended July 7 (Thursday), reflecting an expected early-July drop related to auto retooling, and the Treasury budget gap may hit to -$133 bln in June. A 0.2% decline is expected in the Import Price Index in June (Friday), due to crude oil weakness, following a 0.6% gain in May, while export prices are expected to continue to move up 0.1%.
Fedspeak kicks back into gear with just a week to go before Chairman Powell’s semi-annual testimony, which will be preceded by the Monetary Policy Report (MPR) on Friday, July 13 at 11:00 ET.
Canada: Canada is focused squarely on the BoC meeting (Wednesday), which it is expected to result in a 25 basis point boost to a 1.50% rate setting. The accompanying monetary policy report should be consistent with additional rate increases, but at a gradual pace. The focus will be on Bank’s view on the ongoing trade/tariff issues, labor market slack and the inflation outlook. A housing-heavy data docket will be an afterthought this week. Housing starts (Tuesday) are expected to moderate to a 190.0k pace in June from 195.6k in May. Building permit values are seen dropping 2.0% in May after the 4.6% contraction in April. The New Home Price Index (Thursday) is projected to reveal a 0.1% dip (m/m, sa) in May after the flat reading in April. Existing home sales for June are expected on Friday. The Teranet/National Bank Housing Price Index for June is also scheduled for Thursday.
Europe: ECB tried to inject calm and prevent rate hike expectations from running ahead when it pledged to keep key rates steady through the summer of next year. But with growth indicators confirming that the recovery is not dead yet and inflation jumping higher, officials are now trying to regain control especially over the short end. ECB speakers will be important in this context. President Draghi will testify to the European Parliament in Brussels (Monday). It will be interesting to see whether he backs recent “source” stories suggesting ECB is eyeing the first rate hike in September/October next year, which would also be the last meetings for Draghi as President.
Final Eurozone June inflation data is expected to confirm the German HICP rate (Thursday) at 2.1% y/y. The French reading (Tuesday) also is at a 2.1% y/y rate which should leave the overall Eurozone number (due July 18) on course to be confirmed at 2.0% y/y. German data in particular bounced back strongly with May production and orders figures. Yet, while ongoing political uncertainty and risks of an escalating trade war have weighed on some confidence measures, there is some room for an upside surprise in German ZEW confidence (Tuesday). Still, this is investor confidence data which is more impacted by uncertainties and concerns about political events and at least the latest real sector numbers out of Germany have been very encouraging. Indeed, after German production growth was reported at 2.6% m/m in May, rebounds are expected in French (Tuesday), Italian (Tuesday) and Eurozone Production figures (Thursday). The calendar also has trade data for Germany.
UK: The calendar is fairly quiet in terms of economic releases, highlighted by the June BRC Retail Sales survey (Tuesday), and May Industrial Production and Trade data (also Tuesday).
The government has — after more than two years from vote-to-leave the EU — finally worked out what it wants from a post-Brexit deal with the EU. This was hammered out in a climactic Cabinet meeting on Friday, which saw the hard Brexiteers give up ground to reach a compromise. The government will seek a “EU-UK free trade area which establishes a common rule book for industrial goods and agricultural products,” which essentially means a single market for goods, along with a “facilitated customs arrangement” to address the need for a frictionless border in Ireland. It remains doubtful that the EU will agree to the free market for goods part, however, having maintained that the UK will not be able to cherry pick which parts of the single market to take part in. It also remains uncertain how effective the proposed frictionless customs arrangement will be. There are now only 5 negotiating weeks left until October, when both the EU and UK are looking to have an agreement in place.
Japan: The May Machine Orders (Wednesday) are seen contracting 5.0% m/m, essentially halving the April 10.1% climb. The May Tertiary Industry Index (Wednesday) is pencilled in slipping 0.1% after rising 1.0% in April. June PPI (Wednesday) should warm up to 2.9% y/y from 2.7%. Also slated is the final May reading on Industrial Production (Friday). It declined 0.2% in the preliminary report, after gains of 0.5% in April, 1.4% in March, and 2.0% in February.
China: It’s the June Trade Report (Friday) that will be the focal point. Inflation reports are also due with June CPI and PPI (Tuesday). CPI is expected to accelerate a bit to a 2.0% y/y pace versus 1.8% y/y previously, with PPI rising to 4.5% y/y from 4.1%. June loan growth and new Yuan loans are tentatively due Tuesday as well.
Australia: In Australia, Housing Investment (Wednesday) features on a thin data docket. A 3.0% drop is expected in May after the 1.4% gain in April. RBA Assistant Governor (Financial System) Bullock speaks at the 5th Bund Summit on Fintech from Shanghai, China (Sunday). The RBA held rates steady last week and maintained expectations for no change for an extended period.
New Zealand: Retail Card Spending (Tuesday) is the only release of note and it is expected at a 0.7% gain (m/m) in June after the 0.4% rise in May. At the June meeting, the RBNZ held rates at 1.75% and opened the door to a rate cut if necessary. The next move is expected to be a rate increase. The next meeting is on August 9.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Asian Market Wrap: Long yields continue to climb and 10-year Treasury yields are up 0.7 bp at 2.864%, 10-year JGBs up 0.6 bp at 0.032% as Stock Markets remained in risk on mode during the Asian session. Nikkei gained 1.09% after a strong close on Wall Street and with the earnings season starting to overshadow lingering trade jitters – at least for now. A weaker Yen added Support. The Hang Seng is up 0.36%, but CSI 300 and Shanghai Comp are down -0.20% and -0.11% respectively after their biggest rally in more than 2 years and as Inflation numbers came in higher than anticipated, but also reflecting lingering trade war concerns ahead of the next round of US tariffs due to be confirmed on July 20. Many expect markets to remain volatile ahead of July 20 – the date for the next set of US levies on Chinese imports. US stock futures are higher, however, and oil prices are up and the WTI future is trading at USD 74.29 per barrel.
FX Update: USDJPY has broken above recent range highs and printed a 7-week high at 111.14. EURJPY and other Yen crosses are also up, with EURJPY trading in 7-week high terrain and AUDJPY making 1-month highs. The driver of the yen’s underperformance is the continued rebound in global Stock Markets, although Chinese shares continue to underperform. The solid US jobs report last Friday and expectations for a strong corporate earnings season have been buoying equities, and while the shift toward trade protectionism remains at the top of the worry list of investors, the level of implemented tariffs so far is small in the scheme of things. BoJ Governor Kuroda yesterday repeated that the central bank will remain committed to ultra-accommodative monetary policy, including yield-curve control, until inflation hits the 2% target. USDJPY has Support at 110.88-90 while the May-21 high at 111.39, which is the highest level seen since mid January, provides an upside waypoint.
Charts of the Day
Main Macro Events Today UK Production Data – Expectations – Industrial production expected to rebound by 0.5% m/m after contracting by 0.8% m/m in the month prior, while we see the narrower manufacturing output figure rising 0.8% m/m after declining by 1.4% m/m in April. UK Trade Balance – Expectations – expected to fall to 11.9B from 14.0B last month . German ZEW – Expectations – July investor sentiment reading anticipated at -18.0 down from -16.1 in June, confirming that pessimists still outnumber optimists. Canadian Housing Starts – Expectations – expected to rebound to a 210.0k pace in June after falling to 195.6k in May from 216.8k in April. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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MACRO EVENTS & NEWS OF 22nd May 2018.
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FX News Today
Asian Market Wrap: 10-year Treasury yields dropped -0.5 bp to 3.054% overnight, 10-year JGB yields lost most of their earlier gains and are at 0.044% and elsewhere across Asia long yields are mostly down as stock markets struggled without fresh new on Sino-American trade in holiday hit trade. Hong Kong and South Korean markets were shut for Buddha’s Birthday and elsewhere across Asia markets yesterday’s recovery fizzled out. Nikkei lost -0.23% as the Yen strengthened and despite reassurance of ongoing monetary stimulus from the BoJ. U.S. stock futures are still slightly higher. Oil prices are up and the WTI future trading at USD 72.49 per barrel.European stock futures are mixed, with the GER30 outperforming in catch up trade after yesterday’s holiday and aided by a weaker EUR. The UK100 future meanwhile is heading south after a largely weaker session in Asia. Today’s calendar focuses on the U.K., which has public finance data, the CBI industrial trends survey as well as a number of BoE speakers.
FX Action: USDJPY has traded moderately softer during the Tokyo session, retreating below 111.00. This interrupts a run higher that yesterday left a four-month high at 111.39. EURJPY and AUDJPY, among other yen crosses, are also softer today. Stock markets in Asia have been mixed-to-lower today. BoJ-speak from the Governor Kuroda and Deputy Governor Wakatabe today reaffirmed commitment to monetary stimulus, with the former saying the central bank is aiming to lift CPI to the 2% target as soon as possible and the latter saying that target can be achieved with prevailing policy. The remarks follow Friday’s weak CPI data of Japan, where headline April CPI fell to 0.6% y/y from 1.1% y/y in March and core CPI ebbed to 0.7% y/y from 0.9% y/y. The outcomes undershot market expectations, and have maintained expectations for the BoJ’s ultra-accommodative monetary policy to sustain. A Reuters survey of market economists earlier last week found that over half of respondents were expecting the central bank to refrain from exiting stimulative policy until 2020.
Charts of the Day
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Main Macro Events Today
Speeches: MPC Member Vlieghe, MPC Member Saunders, BOE Gov. Carney and BOE Remsden
UK Public Sector Net Borrowing – Expectations – at 7.1B pounds deficit in April from the 0.3B surplus seen in March.
UK Inflation Report Hearings
Support and Resistance Levels
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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 23rd May 2018.
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FX News Today
Asian Market Wrap: Long yields declined as risk aversion picked up and stock market retreated in Asia. The 10-year Treasury yield is down -0.9 bp at 3.050%, the 10-year JGB down 0.4 bp at 0.037%. Stock markets headed south, with Japanese markets underperforming as the yen advanced and the focus returned global risks including the U.S.-North Korea summit and Turkey financial market stability. Nikkei and Topix are down -0.64% and -1.14% respectively. The Hang Seng lost -1.02%, the CSI 300 is down -0.84%. U.S. futures are also heading south and oil prices pulled back from highs over USD 72 per barrel and it is trading at USD 71.92. European stock futures are declining in tandem with U.S. futures after a largely negative session for equities in Asia overnight. The good news for the Eurozone is that peripherals have so far not been hit and the Italian 10-year yield is down -2.4 bp, the Spanish down -1.5 bp in early trade. The calendar has Eurozone PMI readings, as well as U.K. inflation data, a German Schatz auction and the U.K. CBI retailing survey.
FX Action: The yen outperformed as risk aversion flared up in global markets, while the dollar, outside the case of USDJPY, traded mostly firmer, gaining ground on the euro, sterling and dollar bloc currencies, for instance. EURUSD settled back in the mid 1.1700s after yesterday’s recovery gains stalled above 1.1800. EURJPY dropped sharply, to an eight-day low at 129.70, while USDJPY posted a four-session low of 110.37 in Tokyo, extending the correction from Monday’s four-month high at 111.39. A risk-off sentient, supportive of the yen in accordance with the typical correlative pattern, came amid a cocktail of geopolitical concerns. In the mix was U.S. President Trump saying that that there was a “very substantial chance” of the North Korean summit being delayed. The recent dive in the Turkish lira also mutated into a full nosedive in thin market conditions just ahead of the Tokyo session, posting fresh record lows. Concerns about excessive dictatorial control of Turkey’s economic policies have been negatively impacting the lira. In data, Japan’s March all industry activity index undershoot expectations at 0.0% m/m. The median had been for 0.1% m/m growth. Australian construction data also missed expectations.
Charts of the Day
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Main Macro Events Today
Eurozone PMIs – Expectations – Central bankers will watch this month’s round of confidence data with special interest and hopes that data will show signs that growth is recovering in the second quarter, after the slowdown in Q1 that was impacted by special factors. An effective stabilization is expected to be seen in Eurozone PMI readings for May and an improvement in the manufacturing reading to 56.4 from 56.2. The services reading meanwhile seen falling back to 54.5 from 54.7
RBA Gov Lowe Speech
UK CPI, PPI & Retail Index – Expectations – CPI at 2.5% y/y and core at 2.2% y/y, which would match the prior month’s figure, which itself had undershot both the market and BoE expectation. The PPI is expected at 1% in April from -0.1% seen last month, while Retail Price Index expected at 0.5% in April from 0.1% in March.
US Prel. PMIs – Expectations – Composite PMI for May expected at 55.0 from 54.9, while Services expected at 54.9 from 54.6.
FOMC Meeting Minutes
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
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Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 24th May 2018.
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FX News Today
European Outlook: 10-year Bund yields quickly recovered opening losses and are now up 0.7 bp at 0.510%, as peripheral bond markets rally led by Italy. The 10-year BTP yield is down -7.9 bp at a still high 2.310%. Spanish and Portuguese 10-year yields are also sharply lower. Reports that Five Star is considering an alternative finance minister to Savona, who promotes Italy’s exit from the euro may be helping. Stock futures meanwhile are mostly heading south in Europe, in tandem with U.S. futures and after a largely negative session in Asia. Released at the start of the session German Q1 GDP was confirmed at 0.3% q/q, and GfK consumer confidence fell back. Still to come the U.K. has retail sales data, ECB’s Praet and BoE’s Carney are scheduled to speak and the ECB publishes the latest Financial Stability Report.
FX Action: Yen out performance has once again been seen, driving USDJPY to a 10-day low of 109.33 and pushing EURJPY further into 10-month low territory. Belligerent rhetoric from North Korea and reports that the Trump administration is mulling a 25% levy on imported cars have provided some added fuel to risk aversion in global markets, which has maintained a safe haven bid for the Japanese currency. The dollar has also remained broadly buoyant, though has steadied off highs seen yesterday versus most currencies. EURUSD posted a fresh five-month low at 1.1675 during the New York PM session yesterday before recouping above 1.1700 following the release of the FOMC minutes to the early May meeting showed the Fed is in no hurry to tighten. Fed funds futures gained a little on the minutes, and were still fully pricing in a 25 bp rate hike in June while showing about odds of about 75% for a further quarter-point hike move in September. Italy will remain in the spotlight and the risk remains that we see further paroxysms in Italian markets as investors digest the formulating policies proposals of the anti-establishment and Eurosceptic coalition government.
German GDP & Consumer Confidence: German Q1 GDP was confirmed at 0.3% q/q as expected, leaving the working day adjusted annual rate at 2.3% y/y. The focus was on the breakdown, which was released for the first time and showed a clearer picture on why growth slowed so dramatically compared to the 0.7% q/q rate in Q4 last year. What the data showed were negative contributions from net exports, stock changes as well as government consumption, with the latter contracting -0.5% q/q in Q1, likely due partly to the political vacuum and the long period without a fully functioning government following the inconclusive election last year. Investment contributed 0.2% points to the quarterly growth rate, private consumption -0.2% points, net exports detracted -0.1% as export growth corrected -1.1% q/q, after rising a very strong 2.6% q/q in Q4 last year. The strong EUR may partly be to blame.
German GfK consumer confidence fell to 10.7 with the advanced reading for June, down from 10.8 in the previous month and the second consecutive dip. The index peaked at 11 in February, but remains at very high levels. Still, the full breakdown for May showed a marked decline in the willingness to buy despite an improvement in income expectations. The willingness to save meanwhile declined. Q1 GDP data today still showed a positive contribution from consumption to overall growth, but the GfK numbers at least signal some slowdown ahead.
Charts of the Day
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Main Macro Events Today
UK Retail Sales – Expectations – Likely to show a pick up (from 0.7% from a dire -1.2% in March) but questions remain this be sustainable through to the summer and remainder of Q2.
US Initial Claims – Expectations – A 2k decline to 220k is expected for new claims with continuing claims rising to 1.754 million.
Plethora of Speeches – Dudley, Carney, Praet, Bostic, & Harker – possibly of some surprises and volatility for USD, EUR and GBP simply from the number of speeches on tap today
Support & Resistance Levels
[IMG]
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
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Stuart Cowell
Senior Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 25th May 2018.
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FX News Today
Asian Market Wrap: Long yields broadly corrected across Asia, and 10-year JGB yields dropped 0.5 bp to 0.034%, as stock markets struggled with geopolitics back on the agenda after Trump cancelled the North Korea summit. Pyongyang seemed to offer an olive branch and Asian markets are up from earlier lows while U.S. futures are posting gains. Hang Seng and CSI 300 are still down -0.44% and -0.11%. Nikkei and Topix are up 0.22% and down -0.14% respectively, as a weaker yen added some support. Treasury yields gained 1.1 bp and are at 2.988%, still clearly below recent highs. Oil prices fell after Russia’s energy minister suggested that OPEC and its partners will discuss the phasing out of supply curbs at next month’s meeting and the WTI future is trading below USD 71 per barrel.
FX Update: The dollar has returned to form, nudging higher versus the euro and yen, and most other currencies. EURUSD is pressing on 1.1700 as the London interbank gets up an running, putting Wednesday’s six-month low at 1.1675 back in the crosshairs. The Fed remains on a tightening track while the sentiment towards the Eurozone is being marred by Italy. USDJPY has recovered to the 109.50 area from yesterday’s 17-day low at 108.95. The lift has reflected part broader dollar firmness and par broader yen weakness. Stock markets recovered some poise Asia, and U.S. equity index futures also lifted some following a shaky session on Wall Street yesterday when the Trump administration cancelled the planned summit with North Korea. Pyongyang said today that it would still be willing to meet with the U.S. There are also reports that Mexico has made an offer to the U.S. in a bid to seal the NAFTA renegotiation.
Charts of the Day
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Main Macro Events Today
German Ifo Business Climate – Expectations – expected to stabilize, but comes with a downside bias now after the weak PMI round. The forecasts had been for an unchanged headline reading of 102.1 versus 102.1 in the previous month, with expectations seen falling back slightly, but the current conditions indicator was expected to improve after the holiday related noise in previous months.
UK Second Estimate GDP – Expectations – Unchanged at 0.1% q/q and 1.2% y/y.
US Durable Goods – Expectations – A 4% decline is expected for April, down to -1.4% from 2.6% in March
Plethora of Speeches – RBA Assist Gov Bullock, BOE Gov Carney, Fed Chair Powell, FOMC Member Bostic, & German Buba President Weidmann – possibly of some surprises and volatility for AUD, USD, EUR and GBP simply from the number of speeches on tap today.
Support & Resistance Levels
[IMG]
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 28th May 2018.
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Main Macro Events This Week
Geopolitics reared its ugly head again, knocking core sovereign yields lower, while elevating those on the periphery especially in Europe. Mixed messages between Kim and Trump kept markets on their toes about the diplomatic climate between North Korea and the U.S., after the summit was called off, then possibly back on again. Along with worries over Korea and China, concerns about Turkey, Italy and now Spain, have resurfaced. Even against U.S. allies, a 25% tariff on auto imports was floated, leading to concerns that global growth could be compromised down the road.
United States: The week of May 28 will be a busy, holiday-shortened one in the U.S., with a slew of data releases after the return from the long Memorial Weekend. The focus will be squarely on the April jobs report after recent readings have fallen short of expectations, but in April the gain is expected to be in line with the year-to-date average. Front and center will be Nonfarm payrolls (Friday), expected to rise 195,000 in May, following a weaker-than-expected April gain of 164,000. The unemployment rate is estimated to be steady at 3.9%. Consumer confidence should be 128.0 in May (Tuesday), down only slightly from a strong 128.7 reading in April and the 17-year high of 130.0 in February. MBA mortgage market applications are due (Wednesday), along with the ADP employment survey seen rising 200k in May from 204k in April. Advanced trade indicators deficit may widen to -$70.5 in April (Wednesday) from $68.3 bln, along with a second update on Q1 GDP. Personal income is expected to rise 0.3% in April (Thursday), following a similar gain in the prior month, while PCE may rise 0.4%. Initial jobless claims are set to fall 8k to 226k in the week ended May 26, following the prior pop to 234k from 222k in the week of May 12. Chicago PMI is due, in addition to NAR pending home sales seen rising to 108.2 in April from 107.6 and delayed EIA inventory data (due to holiday).
Canada: The BOC’s announcement (Wednesday) is front and center this week. No change to the current 1.25% policy setting is expected alongside a maintenance of their gradualist tone, with a likely reiteration that they “will remain cautious with respect to future policy adjustments, guided by incoming data.” As for data that will guide the Bank of Canada, this week has real Q1 GDP (Thursday), March GDP also due Thursday, the current account and the industrial product price index on Wednesday, and the march average weekly earnings on Thursday.
Europe: The ECB is heading for difficult times as political jitters in Italy, and now Spain, threaten to destabilize markets, just as inflation is expected to finally move higher and vindicate the ECB’s move towards policy normalization. So far, the ECB taken the uptick in Italian yields with apparent calm, but if turbulence increases and deepens pressure on Draghi to try and step in with verbal intervention, volatility will intensify.
At the same time, this week’s round of preliminary may inflation data is expected to show an uptick in headline rates, that will back the ECB’s move towards a phasing out of QE. May numbers should bring us closer to “normal”. German HICP (Wednesday) is seen rising to 1.8% y/y from 1.4% y/y, the French rate (Wednesday) to 2.0% y/y from 1.8% y/y and the Italian headline rate (Thursday) to 0.9% y/y, which should bring the Eurozone HICP (Thursday) to 1.6% y/y – up from 1.2% y/y in the previous month. The ESI Economic Confidence (Wednesday) is seen falling back just slightly to 112.5 from 112.7 in the previous month, signalling a slowdown in growth momentum, but not to an extent that would worry the ECB unduly and partly due to capacity constraints in countries such as Germany. Final Markit Manufacturing PMI readings for May (Friday) expected to confirm preliminary numbers, leaving the Eurozone reading at a still robust 55.5. And even if preliminary numbers came in weaker than expected, they still showed that job creation continues and hence the German unemployment rate for May (Wednesday) expected unchanged at a very low 5.3%. The overall Eurozone rate for April meanwhile is seen falling to 8.4% from 8.5% in the previous month.
UK: The calendar this week brings the May Gfk consumer confidence report (Wednesday), where a fractional improvement is anticipated to a -8 reading after -9 in the month prior, April lending data from the BoE (Thursday), and the May manufacturing PMI survey (Friday), which it is anticipated to dip to 53.5 in the headline reading from the 53.9 reading of April.
Japan: The April unemployment (Tuesday) is expected unchanged at 2.5%, with the job offers/seekers ratio steady at 1.59. April retail sales (Wednesday) should rise to a 0.5% y/y growth rate from 0.1% for large retailers, and edge up to 1.1% y/y from 1.0% overall. April industrial production (Thursday) is penciled in at a 1.0% y/y rate, slightly slower than the prior 1.4%, while the contraction in April housing starts (Thursday) is expected to have deepened to -8.5% y/y from -8.3%. April construction spending is also due Thursday. Friday brings the Q1 MoF Capex survey, and the May manufacturing PMI. The preliminary reading came in at 52.5, the lowest since August. It was 53.1 last May.
China: The official CFLP manufacturing PMI (Thursday) is forecast edging up to 51.5, after having dipped 0.1 point to 51.4 in April. It was at 51.2 a year ago. The index has generally been on a downtrend from 52.4 in September, and the slippage has rung some alarm bells over growth. Also, the Caixin/Markit manufacturing PMI (Friday) should dip to 51.0 from 51.1, and is down from 51.6 in February (the highest since the same reading in August). It was 49.6 last May.
Australia: The Building permits (Wednesday) are expected to rise 2.0% in April after the 2.6% gain in March. Private capital expenditures (Thursday) are seen expanding 2.0% in Q1 after the 0.2% dip (q/q, sa) in Q4. The next Reserve Bank of Australia event is the policy meeting on June 5, where no change to the current 1.50% setting for the cash rate, is expected.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 29th May 2018.
[IMG]
FX News Today
Asian Market Wrap: 10-year Treasury yields fell below 2.9% for the first time this month before coming back from overnight lows to currently 2.902%, down -2.9 bp on the day. 10-year JGBs are down -0.4 bp at 0.028%. Italy angst triggered risk aversion in holiday thin markets and as the dip in yields weighed on the dollar, the strengthened yen put further pressure on Japanese stock markets. Topix and Nikkei are down -0.75% and -0.97% respectively. Hang Seng and CSI 300 both lost -0.65%, the ASX outperformed and is posting slight gains. Asian stock markets are also mostly down, although the NASDAQ managed to make some headway as U.S. markets prepare to come back from yesterday’s holiday. Overall risk aversion continues to dominate amid political turmoil in Europe and as the end U.S. exemptions on tariffs on steel and aluminium loom on the horizon. At hopes that the U.S. – North Korea summit will take place after all remains alive as a diplomacy seems to heat up. Oil prices remained under pressure as Saudia Arabia and Russia mull higher output to ease concerns over supply shortages. The WTI future is trading at USD 66.72 per barrel, after falling to a low of USD 65.80.
In Europe, the Italian 10-year meanwhile is already up a further 13 bp and at 2.788% set to overtake U.S. yields for the first time since 2014 as the ECB remains quiet on the sidelines and the impact of Draghi’s promise to do “all it takes”, starts to be priced out. Portuguese 10-year yields are also up 13 bp already this morning. In Italy 2-year bonds are selling even faster and the yield is up nearly 50 bp at 1.33%. There are a number of ECB speakers today and with the bond market rout widening pressure on the central bank to step in with some form of verbal intervention is mounting. Stock futures are also selling off and financial market turmoil will overshadow today’s data calendar, which includes Eurozone M3 as well as Italian confidence data.
Charts of the Day
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Main Macro Events Today
EU M3 Money Supply – Expectations – at 3.9% y/y from 3.7% y/y seen in April.
US S&P/CS Composite-20 HPI – Expectations – S&P/Case-Shiller Home Price Indices expected slightly lower at 6.5% y/y in March from 6.8% y/y in April.
US CB Consumer Confidence – Expectations – 128.0 in May, down only slightly from a strong 128.7 reading in April and the 17-year high of 130.0 in February.
RBNZ Financial Stability Report
Support and Resistance levels
[IMG]
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 30th May 2018.
[IMG]
FX News Today
Asian Market Wrap: Treasury yields moved up from yesterday’s lows and the 10-year is at 2.804%, up 2.3 bp on the day, but still firmly below 3% as confidence in the Fed rate path evaporates amid widening market turmoil. Yields in Asia remained under pressure as risk aversion dominated and 10-year JGB yields are down -0.5 bp at 0.016% while the sell off in stocks continued. The Nikkei is down -1.54%, Hang Seng and CSI 300 lost -1.63% and -1.29% respectively after the U.S. closed with broad losses.Spanish yields meanwhile are still jumping higher and gained 10.6 bp so far, suggesting special factors rather than a wider stabilisation of sentiment is at play in the case of Italy. The situation looks similar at the short end, where the Italian 2-year yield is down -47.3 bp. Italy’s political turmoil and renewed concern about trade tensions between China and the U.S. continued to weigh on sentiment and a stronger yen added to pressure on Japanese markets. U.S. futures are also heading south and the correction in stocks doesn’t seem to have run its course yet. The calendar still has the Swiss KOF, French consumer spending and Q1 GDP, German jobless numbers, ESI economic confidence data and most importantly preliminary German HICP inflation, with the latter expected to pick up to 1.8% y/y.
German retail sales jump 2.3% m/m in April. A much stronger rebound from the dip in March than anticipated. With March numbers revised up to -0.4% m/m from -0.6% m/m, the annual rate still fell back to 1.2% from 1.7% y/y in the previous month, although the timings of Easter are likely to still distort the annual comparison. The numbers are volatile and often subject to heavy revisions, but the rebound over the month is still a positive sign after a raft of disappointing data that cast a shadow over the German growth outlook.
Charts of the Day
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Main Macro Events Today
German Unemployment Change & HICP – Expectations – Unemployment change expected unchanged at 5.3% y/y in May, while German HICP is seen rising to 1.8% y/y from 1.4% y/y.
US ADP Non-Farm Employment – Expectations – seen rising 188k in May from 204k in April.
US Goods Trade Balance & Prelim. GDP – Expectations – Advanced trade indicators deficit may widen to -$70.5 in April from $68.3 bln, along with a second update on Q1 GDP, which anticipated to remain at 2.3%, unchanged from the initial release.
BOC Rate Statement – Expectations – no change to the current 1.25% policy setting alongside a maintenance of their gradualist tone, with a likely reiteration that they “will remain cautious with respect to future policy adjustments, guided by incoming data.”
Support and Resistance levels
[IMG]
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 31st May 2018.
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Asian Market Wrap: Treasury yields moved up from yesterday’s lows and the 10-year is at 2.804%, up 2.3 bp on the day, but still firmly below 3% as confidence in the Fed rate path evaporates amid widening market turmoil. Yields in Asia remained under pressure as risk aversion dominated and 10-year JGB yields are down -0.5 bp at 0.016% while the sell off in stocks continued. The Nikkei is down -1.54%, Hang Seng and CSI 300 lost -1.63% and -1.29% respectively after the U.S. closed with broad losses.Spanish yields meanwhile are still jumping higher and gained 10.6 bp so far, suggesting special factors rather than a wider stabilisation of sentiment is at play in the case of Italy. The situation looks similar at the short end, where the Italian 2-year yield is down -47.3 bp. Italy’s political turmoil and renewed concern about trade tensions between China and the U.S. continued to weigh on sentiment and a stronger yen added to pressure on Japanese markets. U.S. futures are also heading south and the correction in stocks doesn’t seem to have run its course yet. The calendar still has the Swiss KOF, French consumer spending and Q1 GDP, German jobless numbers, ESI economic confidence data and most importantly preliminary German HICP inflation, with the latter expected to pick up to 1.8% y/y.
German retail sales jump 2.3% m/m in April. A much stronger rebound from the dip in March than anticipated. With March numbers revised up to -0.4% m/m from -0.6% m/m, the annual rate still fell back to 1.2% from 1.7% y/y in the previous month, although the timings of Easter are likely to still distort the annual comparison. The numbers are volatile and often subject to heavy revisions, but the rebound over the month is still a positive sign after a raft of disappointing data that cast a shadow over the German growth outlook.
Charts of the Day
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Support and Resistance levels
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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 1st June 2018.
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FX News Today
European Fixed Income Outlook: 10-year Bund yields are up 4.5 bp at 0.378% in opening trade, 2-year yields gained 3.6 bp and are at -0.643%. The rise in rates at the long end mirrors moves in Treasury and JGB yields, which lifted, the latter after the BoJ cut purchases of some debt at its regular operations. Peripherals are outperforming and the Italian 10-year is down -10.1 bp at 2.644%, after a last minute agreement with President Mattarella cleared the way for a populist coalition government, with Giuseppe Conte set to be sworn in today. Spain’s Rajoy meanwhile seems on the way out with the Socialists preparing to take control after reportedly gaining sufficient votes to win a vote of no confidence against Rajoy today. Stock futures are moving higher in Europe and the U.S. on the day Trump’s long announced tariffs finally come into effect. The EU’s countermeasures will start with the May 18 list of duties in U.S. goods ranging from Whiskey to Jeans, hardly the top of EU imports from the U.S. and there is lingering hope that despite the harsh tones from all sides, the high stakes will bring them back to the negotiating table. Data releases today focus on manufacturing PMI readings for the Eurozone, the U.K. and Switzerland.
Trump administration’s announcement that it was proceeding with slapping tariffs on steel and aluminium imports from Canada. The U.S. also hit Mexico and the EU with the same tariff (even though Mexico is a net buyer of U.S. steel and aluminium), and all three rapidly responded with announcements of counter tariffs. This weighed on global stock markets and underpinned safe havens, including the yen. In the mix were a bag of perky U.S. data releases, including weekly initial claims, personal income and the latest Chicago PMI survey, a spike in Eurozone HICP to 1.9% y/y in the preliminary May estimate from 1.2% y/y in April, above-forecast China manufacturing PMI and a miss in Japanese production data for April.
Canada announced plans to challenge the U.S. tariffs via both NAFTA and the WTO, while Macron of France declared them “a mistake and illegal.” Macron said the decision on the metals tariffs “closes the door on other talks,” though he plans to speak with Trump later tonight. The German economic minister said that the tariffs decision was damaging both for Europe and the U.S., but the transatlantic relationship remains extremely important for Germany.
Charts of the Day
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Main Macro Events Today
EU Final Manufacturing PMI – Expectations – expected to confirm preliminary numbers, leaving the Eurozone reading at a still robust 55.5.
UK Manufacturing PMI – Expectations –anticipate to dip to 53.5 in the headline reading from the 53.9 reading of April.
US NFP – Expectations – expected to rise 188,000 in May, following a weaker-than-expected April gain of 164,000.
US ISM Manufacturing PMI – Expectations – estimated to tick up to 58.1 from 57.3 in April.
Support and Resistance levels
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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 5th June 2018.
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FX News Today
Asian Market Wrap: 10-year Treasury yields are down -0.5 bp at 2.937%, 10-year JGBs unchanged at 0.040%. After putting trade concerns aside and focusing on U.S. growth during the Monday session, stock markets struggled in Asia. The RBA left rates on hold as expected and maintained cautious optimism on the global and local growth outlook while suggesting that wage growth may have bottomed out, which saw the ASX underperforming and down -0.35%. Nikkei and Topix are up 0.20% and down -0.05% respectively, the Hang Seng gained 0.22% and the CSI outperformed with a 0.81% gain. A mixed picture, with markets appearing to take a wait and see stance. U.S. stock futures are slightly in the red, oil prices are slightly higher and the front end Nymex future is trading at USD 65.02 per barrel.
FX Action: EURUSD has steadied above the N.Y. low of 1.1677, though continues to find sellers ahead of the 1.1700 mark. The pairing has steadied well above last week’s 11-month low of 1.1508, largely as the worst of the European political meltdown appears to be behind us for now. This said, there may still be some political fissures yet to bubble up, so EURUSD is expected to remain in sell-the-rally mode.
Charts of the Day
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Main Macro Events Today
EU Markit Services PMI – Expectations – expected to be confirmed at 53.9, leaving the composite at 54.1, down from the previous month, but still pointing to a solid pace of expansionand at least for the manufacturing sector market reported ongoing job creation amid capacity constraints and an overall optimistic view on the outlook over the next 12 months.
UK Services PMI- Expectations – a dip is anticipated to 53.0 in the headline reading after 52.8 in April.
US May ISM non-manufacturing PMI – Expectations – will be of most interest given the timeliness of the release. A 0.7 point increase has been forecasted to 57.5, after falling 2.0 points to 56.8 in April, after hitting a 12-year high of 59.9 in January. The slight improvement will leave the service sector tracking the expected performance for the May factory surveys which are showing improvement. These readings remain robust, supported by fiscal stimulus as well as stronger global growth.
Canadian Q1 productivity – Expectations – projected to slip 0.1% (q/q, sa) following the 0.2% gain in Q4.
Speeches: UK MPC Member Cunliffe, German Buba President Weidmann, RBA Assist Gov Bullock
Support and Resistance levels
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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 6th June 2018.
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FX News Today
Asian Market Wrap: Risk appetite is back and stocks in Asia moved mostly higher in tandem with U.S. futures. Treasury yields picked up and the 10-year yield is at 2.939%, up 1.1 bp. 10-year JGB yields climbed 0.3 bp to 0.043%. Concerns about rising protectionism seem on hold for now, and Nikkei and Topix are up 0.39% and 0.12% respectively, the Hang Seng gained 0.52%. The CSI 300 meanwhile is down -0.20%, in tandem with Shanghai and Shenzen Comps amid lingering concerns about Sino-American relations. U.S. stock futures meanwhile are broadly higher and oil prices are set for a second day of gains and currently trading at USD 65.89 per barrel.
FX Update: Both the dollar and yen have traded softer against most other currencies. EURUSD has edged out a two-week high at 1.1734. EURJPY also posted a two-week peak, though the euro has traded more mixed (i.e. net neutral) versus other currencies, with euro crosses having flattened out for the most part out after rallying over the last week on the shifting Italian political situation. Concerns remain about how viable a government Italy’s unusual Five Star and League populist parties will make; about whether their anti-establishment, Eurosceptic colours will start to show through in policy. USDJPY has remained buoyant, near yesterday’s two-week high at 110.00, aided by AUDJPY strength following forecast-beating GDP data out of Australia, along with a backdrop of mostly higher stock markets in Asia. Strength in tech stocks helped lift stock markets, while Beijing said today that it would buy $70 worth of U.S. goods if the Trump administration lifts steel and aluminium tariffs. Cable built on gains seen yesterday, lifting into two-week high territory above 1.3400. AUDUSD, buoyed by solid Australian growth data, rallied over 0.5% in making a six-week high at 0.7672.
Charts of the Day
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Main Macro Events Today
Swiss CPI – Expectations – expected rising to a 0.3% m/m from 0.2% m/m in April.
MPC Member Tenreyro & MPC Member McCafferty Speech
US Trade Report & Non-Farm Productivity – Expectations – deficit should be unchanged at -$49.0 bln, and much narrower than a cycle-high -$57.7 bln in February. Revised Q1 nonfarm productivity is expected to slow to 0.7% versus the initial estimate of 0.7%.
Canadian Trade Balance & Building Permits – Expectations – the deficit expected to narrow to -C$2.8 bln in April from a -C$4.1 bln shortfall in March. Building permits are expected to fall 2.0% (m/m, sa) in April after the 3.1% rise in March values.
US Crude Oil Inventories
Support and Resistance levels
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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 7th June 2018.
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FX News Today
Asian Market Wrap: Stock markets continued to move higher during the Asian session on improving confidence in the world economy and despite the prospect of tensions at the G7 meeting over the future of trade relationships and U.S. sanctions. The fact that central banks remain on course to reduce stimulus seems to be seen as a sign that the recovery remains intact rather than a threat to equities, at least for now. 10-year Treasury yields are little changed at 2.968%, down -0.4 bp, 10-year JGBs gained 0.4 bp and are at 0.043% amid a broad move higher in yields across Asia. Nikkei and Topix gained 0.93% and 0.66% respectively. The Hang Seng is up 0.48%, the ASX 0.55%. Mainland China bourses meanwhile erased early gains and are in the red. with concerns about Sino-American trade relations continuing to weigh. U.S. futures are higher though – confirming that the overall mood in equity markets is improving. Oil prices have moved up from lows below USD 65 per barrel and are trading at USD 65.10.
German orders slumped -2.5% m/m in April, with the March reading revised down to -1.1% from -0.9%. The second months of contraction left the annual rate at -0.1%, down from 2.9% y/y in March and the first negative reading since July 2016. Expectations had been for a rebound from the dip in the previous month and while there may be some special factors still at play related to holiday’s and bridging days, the numbers are a worry and will add to concerns that the German recovery is slowing down much faster than feared. The breakdown showed domestic orders in particular weighing down the index, with a drop of -4.8% m/m. Again this may be due to special factors, but the fact that export orders rose for a second months and that Eurozone orders slumped -9.9% m/m, after already falling -2.9% m/m in March cast a shadow over the outlook. This won’t prevent the ECB from phasing out QE by the end of the month, but it highlights that the window of opportunity for the change in direction at the ECB is closing faster than previously thought.
Charts of the Day
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Main Macro Events Today
Eurozone GDP – Expectations – to be confirmed at 0.4% q/q , but comes with a slight downward bias, after the revision to the final French reading. The earlier timing of Easter and adverse weather conditions left their mark on growth in the first quarter and the data are too backward looking to really change the outlook.
US Jobless Claims – Expectations – are set to fall 11k to 223k in the week ended May 26, following the prior pop to 234k from 222k in the week of May 12.
BOC Gov Poloz and MPC Member Ramsden Speeches
Support and Resistance levels
[IMG]
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 8th June 2018.
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FX News Today
Asian Market Wrap: Risk aversion is back and Asian stock markets headed south. After a sell off in the tech-heavy Nasdaq Thursday, technology stocks were also under pressure during the Asian session. Treasury yields meanwhile recovered some of the losses seen in the wake of the weakness in U.S. stocks yesterday, but after reaching a high of 2.479% have started to fall back to now 2.928%, still up 0.7 bp on the day. Asian yields are broadly lower, with 10-year JGBs down -0.2 bp at 0.037%. Stock indices meanwhile are a sea of red, with the Nikkei down -0.35%, the Hang Seng and CSI 300 down -1.35% and -1.37% after narrower than expected trade surplus out of China. China added to the risk off environment and the focus turns to the G7 meeting, which is likely to bring clashes over sanctions and trade. U.S. futures are down and the WTI crude oil is trading at USD 65.75 per barrel.
German trade surplus narrows as exports decline. Germany reported a sa trade surplus of EUR 18.4 bln for April, down from EUR 21.6 bln in the previous month. Meanwhile, German industrial production contracted -1.0% m/m. Expectations had been for a slight rise over the month, but after the unexpected slump in orders yesterday, the weak production number is not a total surprise. At the same time, March data were revised up to 1.7% m/m from 1.0% m/m reported initially, so the trajectory is not as weak as the headline suggests. Annual growth slowed to a still healthy 2.0%, but nevertheless the weakness in orders and surveys showing a markedly less optimistic view on the outlook confirm that the German cycle has peaked and that growth is slowing down. Capacity constraints are partly to blame, but worries about the export outlook amid an increasingly hostile trade environment are clearly also having an impact.
Charts of the Day
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Main Macro Events Today
G7 Meeting
Canadian Housing Starts – Expectations – to hold nearly steady at a 215.0k pace in May from 214.4k in April. Starts have been resilient, holding in a 215k to 230k range since December while existing home sales and prices tumbled beginning in January as new regulations took effect. The resilience in starts growth is consistent with firm underlying momentum in Canada’s housing market.
Canadian Employment Data – Expectations – to rise 20.0k in May after the 1.1k dip in April. A gain in May would resume the gains seen in February (+15.4k) and Mach (+32.3k) that followed the 88.0k tumble in January.
Support and Resistance Levels
[IMG]
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 12th June 2018.
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FX News Today
Asian Market Wrap: Core yields moved higher and stock markets were underpinned as Trump tweeted enthusiastically about the summit with North Korea’s leader. The G7 turbulence was quickly shrugged off yesterday as the focus turned to the Trump/Kim meeting, which will be followed by three key central bank meetings this week. 10-year Treasury yields are up 0.6 bp at 2.957%, 10-year JGB yields rose 0.5 bp to 0.042%, Stock markets moved mostly higher across Asia with Topix and Nikkei up 0.40% and 0.44% respectively with a weaker yen adding support. Hang Seng and CSI 300 are up 0.48% and 0.39% so far, the ASX rose 0.15%. with a stronger currency weighing. US futures are also in the green, oil prices are up and the WTI is trading at USD 66.24 per barrel.
FX Action: The dollar traded moderately firmer heading into the London interbank open, led by a 0.3% gain in USDJPY, which logged a three-week high just shy of 110.50. Yen crosses also firmed up, reflecting broader softness in the yen as safe haven premiums unwound amid a cautious sense of optimism in global markets about the Trump-Kim summit, which has just ended. The summit produced a joint signing of an “important document,” though details about its content have not, so far, been made available. The summit produced images of cordiality and rhetoric (and tweets) of optimism — rhetoric emphasizing historical turning points and of new relationships and prospects for peace etc. Whether Kim actually it turns out that committed to team Trump’s demands for full and verifiable commitment to denuclearization remains to be seen, but, if he didn’t, whatever baby-step towards this grand goal Kim has offered looks to have been satisfactory to Trump. Assuming things remain upbeat, and global stock market direction remains tilted upwards, the yen would likely remain on a softening path, and USDJPY on a firming path. Among other pairings, EURUSD dipped to a two-session low of 1.1742 in the wake of the Tokyo fix before settling around 1.1770. Cable, which took a hit yesterday from big misses in UK production and trade data, posted a one-week low of 1.3341.
Charts of the Day
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Main Macro Events Today
UK Average Earnings – Expectations –ex-bonus average income to rise by 2.9% y/y in the three months to April, which would be unchanged from the March figure and affirm continued above-inflation pay growth.
UK Unemployment Data – Expectations – at the 4.2% multi-decade low.
German ZEW Economic Sentiment – Expectations – falling back to -14.0 from -8.2, with the number of those pessimistic about the outlook rising steadily.
US CPI and Core – Expectations – CPI is expected to rise 0.2% for May, following a similar gain in April. Core prices are estimated to rise 0.2% as well after a tepid 0.1% April reading.
Support and Resistance levels
[IMG]
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 13th June 2018.
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FX News Today
Asian Market Wrap: Stock markets are mostly in the red as a lacklustre session in Asia draws to a close. Investors left G7 and North Korea summits behind and focused on major central bank decisions this week. Haven assets including the yen weakened amid hopes of diminishing geopolitical risks and a weaker yen helped Nikkei and Topix to outperform and post gains of 0.44% and 0.53% respectively. U.S. Treasury yields moved up from early lows and are now up 0.7 bp at 2.970%, while 10-year JGB yields corrected early gains and are down -0.2 bp at 0.041%. The Fed kicks off the round of CB decisions with a 25 bp rate hike pretty much a done deal, leaving the focus on the rate outlook and similar to the ECB meeting tomorrow, there could actually be good news for markets if the guidance is less hawkish than feared. U.S. stock futures at least are moving higher for now.
FX Update: Most currencies have been directionally dormant so far today, though USDJPY managed to claw out a fresh three-week high at 110.68. Yen crosses also remained underpinned, though most, such as EURJPY and AUDJPY, for instance, remained below recent highs. Global stock markets have lost upside traction, with risk appetite turning somewhat neutral as market participants anticipate “live” Fed and ECB meetings this week, with the former set, later today, to hike the Fed funds rate by 25 bp and the latter to announce, tomorrow, an end of QE. Attention will be on the respective guidance the central banks give. The Japanese currency has been under-performing as it loses some of its safe haven premium following all the bonhomie, feel-good glow of the Trump-Kim summit.
Charts of the Day
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Main Macro Events Today
UK CPI and Core CPI – Expectations – to dip to a new cycle low of 2.4% y/y from 2.5% y/y in the month prior, and see core CPI to also remain unchanged, at 2.1% y/y.
US PPI – Expectations – a 0.2% increase in headline PPI. The gain should be reflect a 0.3% increase in services prices and a more benign 0.1% rise in goods prices (related to a 0.8% increase in PPI gasoline).
US Crude Oil Inventories – Expectations – crude supplies expected to decline by 1.4M barrels.
FOMC Statement & Press Conference – Expectations – A 25 bp rate hike, a second for this year, is a fait accompli. So, what will be market moving will be the quarterly forecasts (SEP), including the dot-plot, a potential tweak in IOER, and any surprises from Powell. The key risk for the markets is with the dot plot, and whether the median dot remains at three tightenings this year, or is bumped up to four. With the markets concerned over an aggressive FOMC, maintaining the dots at three would be bond friendly.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 14th June 2018.
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FX News Today
European Fixed Income Outlook: The 10-year Bund yield is down -0.1 bp at 0.477% in opening trade. Bond markets pretty quickly shrugged off the hawkish Fed during the Asian session as the PBOC failed to follow up and as stock markets headed south. The PBOC didn’t follow the Fed and tighten policy as had been speculated, but Trump said he will confront China “very strongly” over trade in coming weeks and a number of key data of of China, including retail sales and industrial output missed estimates, which added to concerns over a softening economy. Bond markets benefited from the sell off in stocks and the fact that the PBOC refrained from tightening and even Treasury yields fell back from earlier highs. 10-year Treasury yields are down -1.8 bp and at 2.948%, below the levels seen ahead of the Fed announcement. 10-year JGBs are down -0.6 bp. German final inflation data held no surprise and was confirmed at 2.2% y/y and the data calendar also has final French inflation readings as well as U.K. retail sales, but the focus is on the ECB, which is finally expected to confirm the end of QE, leaving the focus on the forward guidance.
FX Update: The dollar has more than given back gains seen in the immediate wake of the Fed’s rate hike and hawkish-tilting guidance. EURUSD recouped back above 1.1800 after dipping to a 1.1725 low, post Fed. The euro has been trading generally firmer over the last day, gaining against the pound, Swiss franc, among other currencies, with market narratives focusing on the successful Italian auction of 30-year bonds yesterday, with the appetite for the long-dated debt seen as a good litmus test of investor sentiment on the new Italian government. Market participants are also anticipating the ECB to announce an end of QE policy today. Elsewhere, USDJPY printed a three-day low of 110.04. The biggest movement out of the main currencies has been AUDJPY and is showing a loss of over 0.5%. The Aussie dollar has been under pressure following a sub-forecast Australian employment report. Ahead today, the ECB is expecting to announce the end of QE, while U.S. President Trump will reportedly decide whether to proceed with tariffs on Chinese goods later on Thursday — and his unabashed form this week suggests he won’t hold back.
Charts of the Day
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Main Macro Events Today
UK Retail Sales – Expectations – to rise 0.5% m/m in May, which would affirm a continued recovery from sharp weather-affected weakness in March, although at a decelerated pace from the 1.6% m/m growth seen in April.
SNB press conference
ECB Rate Decision and Press Conference – Expectations – Comments from ECB officials suggest that the ECB is finally ready to formally announce the end of net asset purchases. The main question in recent months has been the actual timing of the announcement, not the policy change. So the announcement of a short taper through Q4 would not really come as a surprise, leaving intense focus on the forward guidance. Mr. Draghi expected to initially wrap the announcement in rather dovish language to keep markets from running away with rate hike speculation at a time when geopolitical risks are still hanging over markets.
US Retail Sales and Unemployment Claims – Expectations – Retail sales are expected to rise 0.4% in May, following a 0.2% increase in April and a 0.7% gain in March. Initial jobless claims are estimated to be slightly changed at 224k for the week ended June 9.
Support and Resistance levels
[IMG]
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 15th June 2018.
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FX News Today
European Fixed Income Outlook: 10-year Bund yields are down -0.9 bp at 0.41% in opening trade, as global bond markets remain supported by Draghi’s dovish tone yesterday, which was followed by a BoJ statement that left policy unchanged, but downgraded the inflation assessment. Global stock markets are trading mixed though, as the focus returns to trade risks. And for Europe, the weaker EUR may still add support to equity markets, but given that rate hike expectations had already been pushed out amid weak data releases, market reaction to the ECB’s commitment to keep rates steady through summer 2019 seems somewhat overdone. The European calendar has final inflation readings for the Eurozone as well as trade numbers for April, but after the ECB move yesterday these are unlikely to have much market impact.
FX Update: The dollar has traded broadly firmer so far today, with the ECB’s dovish-tilting guidance yesterday coupled with the BoJ lowering its prognosis on the inflation outlook (following a widely-anticipated decision to leave monetary policy unchanged) serving to emphasize the Fed’s relatively hawkish stance. EURUSD extended to a fresh 16-day low of 1.1555 in Asia trading. The pair had been trading above 1.1820 ahead of the ECB’s announcement yesterday, and the magnitude of losses are the sharpest over a day since October 26th-27th of last year. USDJPY, meanwhile, lifted to a 24-day high of 110.99. The BoJ’s downgraded CPI forecast underlines the chronic undershooting of the inflation target and points to ongoing ultra-accommodative policy — which includes pegging the 10-year JGB yield at near 0% — for the foreseeable future, certainly through to 2019. The dollar also posted gains against the dollar bloc currencies and sterling, and most other currencies, including emerging and newly-developed world currencies. Market participants will now be bracing for President Trump’s expected escalation of trade tariffs, as he will reportedly be confirming tariffs on China later today.
Charts of the Day
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Main Macro Events Today
Eurozone May HICP – Expectations – inflation is expected to be confirmed at 1.9% y/y with the final release today, up from 1.2% y/y in April. The impact of higher oil prices is partly to blame, as are higher food prices, but in the preliminary number core inflation also lifted. The headline rate is pretty much in line with the ECB’s definition of price stability and there is in fact a slight risk of an upside revision. However, with the ECB meeting out of the way, and Draghi confirming that rates won’t rise before the end of the summer 2019 the numbers are unlikely to have much market impact.
Canada manufacturing Sales – Expectations – expected to reveal a 1.0% gain in April after the 1.4% rise in March.
US Industrial production & UoM Consumer Sentiment – Expectations – Industrial production may rise 0.2% in May, following strong 0.7% readings in April and March and capacity utilization should edge up to 78.1% from 78.0%. Finally, the Michigan sentiment expected to be improved to 98.5 from 98.0.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 18th June 2018.
[IMG]
THE ECONOMIC WEEK AHEAD
Main Macro Events This Week
The FOMC tightened policy last week and followed with a more hawkish stance as it suggested two more hikes could be on the way this year. Additionally, the ECB finally announced a phase-out of QE asset purchases. But, a balanced press conference from Fed Chairman Powell and a dovish slant from President Draghi mitigated a bearish response in the markets. But trade tensions resurfaced Friday after President Trump’s announced tariffs on China, which responded in kind. Central banks remain in the spotlight and the BoE headlines, but there are also decisions from Switzerland, Taiwan, Thailand, and the Philippines, along with the ECB’s Sintra conference. OPEC meets while PMI data will provide timely clues global economies.
United States: The U.S. data calendar should support the more upbeat message on the economy delivered by the FOMC last week. Housing reports dominate and should show overall improvement. June PMI reports should also reveal still solid readings, even if they moderate slightly. And the leading economic index should rise for an 8th consecutive month. May housing starts (Tuesday) are estimated rising 0.6% to 1.295 mln following a 3.7% plunge in April to 1.287 mln. The June NAHB housing market index (Monday) is expected unchanged at 70. Also on tap is the FHFA home price index (Thursday) which should rise to 263.1 in April from 261.7. The Philly Fed index (Thursday)should fall 9.4 points to a still-strong 25.0 in June, after jumping 11.2 points to a 1-year high to 34.4 in May, with a concomitant slide in the ISM-adjusted Philly Fed to 59.7 from a 45-year high of 62.5 in May. Markit manufacturing and services PMIs are due Friday. The May leading economic index (Thursday) is expected to rise 0.3%, following gains of 0.4% in April and March. This would be an 8th consecutive increase, and the index hasn’t posted a decline since May 2016. The current account deficit (Wednesday) is expected to widen to -$129.0 bln in Q1, from -$128.2 bln in Q4. Initial jobless claims (Thursday) are seen edging up 1k to 219k in the week ended June 16, which coincides with the BLS employment survey week. Claims are oscillating around tight levels at multi-decade lows.
Canada: The calendar features two top tier data releases and an appearance by a Bank of Canada official. The week beings with Senior Deputy Governor Patterson (Monday), who speaks to the Investment Industry Association of Canada on “Rebooting Reference Rates.” In May, the Bank maintained the 1.25% rate setting and moved closer to hiking rates again, but assured that their approach remains gradual.
CPI (Friday) is expected to climb 0.4% in May (m/m, nsa) after the 0.3% gain in April, as further gains in gasoline prices boost the CPI. The CPI is projected to expand at a 2.5% y/y pace in May from 2.2% in April. A jump in the annual CPI growth rate should not alter the BoC’s gradualism — in the May announcement they noted that inflation will “likely be a bit higher in the near term than forecast in April” due mostly to gasoline prices.Retail sales (Friday) are anticipated to rise only 0.1% (m/m, sa) in April after the 0.6% gain in March, as a decline in vehicle sales weighs. The ex-autos aggregate is expected to improve 0.5% after the 0.2% drop in March. Wholesale shipment (Thursday) are seen rising 0.5% in April after the 1.1% gain in March, which would provide a welcome contrast to the 1.3% plunge in manufacturing shipment volumes revealed for April.
Europe: This week’s round of data releases, which include preliminary PMI readings, are unlikely to offer much comfort as we expect a further decline in confidence levels across both manufacturing and services sectors. With markets still adjusting to the latest policy twists, data releases may have limited impact.
The Eurozone June Manufacturing PMI (Friday) at 55.0, down from 55.5 in the previous month, as trade concerns continue to bite. The services reading is expected to hold up slightly better and fall back to 53.8 from 53.8 in the May. This could leave the overall reading at 53.6, down from 54.1 in the previous month. Again, still a robust number suggesting solid growth, but the ongoing decline in confidence readings in Q2 will likely lead to further downward revisions to growth estimate, as the slowdown in Q1 proved to be not quite as temporary as initially expected. So far labor markets continue to improve and wage growth is picking up, so only a small decline in the Eurozone preliminary consumer confidence number is expected (Thursday) to 0.1 from 0.2, although negative geopolitical headlines could have dented sentiment more than anticipated.
Other data releases include national French confidence numbers, as well as the final reading of French Q1 GDP, the latter too backward looking to have much impact. German PPI inflation is expected to jump to 2.5% from 2.0% thanks to higher oil prices, but at this juncture that won’t matter much as the ECB already lifted its inflation forecasts.
UK: The BoE’s MPC gathers for a policy meeting (announcing Thursday), where a no change in the 0.5% repo rate and QE totals are widely anticipated. The focus will fall on the statement and minutes for guidance, which will be of particular interest following a run of overall disappointing data so far available from April and May. Much will also depend on incoming data and how the worsening trade war evolves, in so far as it starts to have a material impact on global economies, thereby, and policymaker decision making. The UK’s data calendar features the June CBI industrial trends survey (Wednesday), which due to the reports limited breadth and short survey period tends to be overlooked by markets, and May government borrowing figures (Thursday).
Japan: The April all-industry index (Thursday) is estimated rising 0.8% m/m from the prior flat reading. The pace of inflation likely slowed slightly. May national CPI (Friday) should reveal a cooler 0.5% y/y pace overall from the prior 0.6% clip.
Australia: The minutes to the Reserve Bank of Australia’s May meeting (Tuesday) are the highlight of a thin week.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 22nd June 2018.
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FX News Today
Asian Market Wrap: 10-year Treasury yields are up 0.5 bp at 2.9025, 10-year JGBs up 0. 1bp at 0.025%, both are down from session highs, but holding on to some of their gains as stock market sentiment settles ahead of key PMI readings in the Eurozone and the US today. Stock market sentiment remains muted, after yesterday’s sell off on Wall Street, but indices are up from early lows. Topix and Nikkei are still down -0.46% and -0.63% respectively, Hang Seng and CSI 300 managed to claw back some of yesterday’s losses and are up 0.19% and 0.40%. Trade concerns continue to linger and in Europe Italian political jitters remain a major concern, but US Stock Futures are improving. USOIL rallied and is at $66.26. OPEC and its allies reached a preliminary agreement to boost production despite opposition from Iran. The calendar had national CPI for Japan, which saw the annual reading rising to 0.7% from 0.6%. The Manufacturing PMI Index, meanwhile, rose to 53.1 from 52.8 and the All Industry Activity Index also improved.
FX Update: The Dollar has traded moderately softer so far today, extending a theme that has been seen since yesterday following the release of the Philly Fed index, which came in much weaker than expected. Amid this backdrop, the Euro has corrected some of its recent losses against most other currencies, which has likely reflected short covering, although in a market still wary about the Italian Government’s Eurosceptic bias. EURUSD has recovered back above 1.1600, posting a 3-day high at 1.1638. The pair had yesterday printed an 11-month low at 1.1508. USDJPY has settled near the 110.0 level, consolidating yesterday’s losses after the pair posted a 5-day high at 1110.75. Today, the focus will be on PMI survey data out of both Europe and the US, the evolving trade war, and the OPEC-plus-Russia meeting in Vienna, the run-in to which has exposed signs of discord among some members, which has pushed oil prices up.
Charts of the Day
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Main Macro Events Today
German PMI – Expectations – June Manufacturing PMI should fall at 56.2 from 56.9 in the previous month. The Services reading is expected to remain unchanged at 52.1
Eurozone PMI – Expectations – June Manufacturing PMI is expected at 55.1 down from 55.5 in the previous month, as trade concerns continue to bite. The Services reading is expected to hold up slightly better and fall back to 53.5 from 53.8 in the May.
Canadian CPI and Retail Sales – Expectations – CPI is expected to grow 0.4% (m/m, nsa) in May after the 0.3% rise in April. The CPI is projected to grow at a 2.5% y/y pace in May, accelerating from the 2.2% clip in April. The Retail Sales are expected to rise only 0.1% in April after the 0.6% gain in March.
US Services PMI – Expectations – is seen falling slightly to 56.4 in June.
Support and Resistance Levels
[IMG]
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 26th June 2018.
[IMG]
FX News Today
Asian Market Wrap: Treasury yields moved back up from lows, 10-year JGBs are also slightly higher as the stock sell off started to fade during the Asian session. 10-year Treasury yields are now up 0.5 bp on the day at 2.886% and 10-year JGB yields are up 0.7 bp at 0.026%. The escalating round of trade and investment restrictions continue to hang over markets, but at least for now investors seem to be taking a breather. Japanese stock markets reversed early losses as gains in banks offset declines in technology and telecoms. Topix and Nikkei are up 0.25% and 0.12% respectively. The Hang Seng gained 0.21% and while the CSI 300 is still down -0.57%, the Shenzen Comp is up 0.66%. US stock futures are also moving higher after sharp losses on Wall Street yesterday. Oil prices are up and the WTI is trading at USD 68.30 per barrel.
FX Update: The main currencies are showing little net change ahead of the London interbank open. EURUSD edged a fresh 12-day high, at 1.1721, before ebbing back to near net unchanged levels nearer 1.1700. USDJPY has become directionally stuck near 109.50, above the 2-week low that was pegged yesterday at 109.37. The yen’s safe-haven bid of yesterday ran out of puff, while BoJ board member Sakurai said, also yesterday, (from Rome) that it remained “essential” for the central bank to conduct monetary policy “under the current framework for the time being.” By “current framework” he meant a short-time interest rate target of -0.1% and pegging of the 10-year JGB yield at near 0% (the curve control policy), alongside its QQE program. The stock market sell-off has abated in Asia. Japan’s Nikkei 225 managed to close with a fractional 0.2% gain, while S&P 500 futures are showing modest gains. President Trump’s trade advisor Navarro said that the Trump administration just wants “free, fair, and reciprocal trade…the mission here is to defend our technology and IP.”
Charts of the Day
Charts of the Day
[IMG]
Main Macro Events Today
MPC Member Haskel and McCafferty Speech
US CB Consumer Confidence – Expectations – to inch up to 128.5 in June, from 128.0 in May and close to a 17-year high of 130.0 in February. Additionally, S&P Case-Shiller home prices are seen rising to 211.2 in April from 208.0, while the Richmond Fed index may dip to 15 in June from 16.
FOMC Member Bostic and Kaplan Speech
NZ Trade Balance – Expectations – is seen narrowing to NZD100 mln in May from NZD263 mln in April.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 25th June 2018.
[IMG]
Main Macro Events This Week
The escalating trade war remained the dominant negative force in the markets the past couple of weeks, along with OPEC fine tuning its supply constraints. Heading into quarter-end, centrifugal forces on trade, immigration, policy, growth and inflation will continue to stretch investor patience. One last flurry of inputs and risks will be mulled as we cross the threshold into Q3.
United States: The US economic calendar will be highlighted by the Personal Income and Consumption Report, which should register solid growth in May. We’ll also get the final Q1 GDP reading, which is expected to show moderate improvement from the Q1 second estimate. Yet focus has shifted to the Q2 reading, which should show a strong rebound in spending and growth. Also of interest will be Consumer Confidence and Michigan Sentiment, which should confirm that consumers continue to perceive economic and market conditions as positive. Durable Goods orders may decline, while New Home Sales should show modest improvement in May. The following week’s calendar to kick off July will include key June data, with payrolls expected to record a solid 195k increase.
Fedspeak resumes with Dallas Fed hawk Kaplan (Tuesday) Q&A and Atlanta Fed dove Bostic in an armchair chat on civil rights. Fed VC for supervision Quarles will discuss “International Regulatory Participation and Cooperation” (Wednesday) and Boston Fed hawk Rosengren will mull “Is the Economy Too Sensitive to Economic Downturns?” St. Louis Fed dove Bullard will take part (Thursday) in a discussion on the US Economy and Monetary Policy.
Canada: BoC events dominate the docket this week: a speech by Governor Poloz to the Greater Victoria Chamber of Commerce (Wednesday) will be the final outing for a BoC official ahead of the July 11 rate announcement. An economy running near potential, 2% CPI and a 40-year low jobless rate are consistent with the Bank delivering on the signals from the May announcement and progress report that pointed to a near term rate hike. But recent data has undershot expectations, notably April retail sales and May CPI. We still expect a 25 basis point increase in July, but the likelihood has been trimmed in recent weeks due to the data. Another rate hike is penciled in this year (expected to happen in October) but uncertainty over NAFTA further clouds the policy outlook past July.
The Bank of Canada’s Business Outlook Survey for Q2 (Friday) is expected to show an economy still running near potential, with inflation expectations at well inside the Bank’s 1-3% target range and perhaps a downtick in the outlook for future sales due to trade uncertainty.
Europe: A busy week is in store that brings key confidence indicators as well as preliminary inflation data for June. At the same time, political uncertainties remain high with the immigration question dividing not just the German government, but turning into a test of the wider European Union just as heads of states prepare for the crucial June 29-30 summit on Brexit.
The recently revamped Ifo Business Climate Index (Monday) now also incorporates Services Sentiment, which is expected to help the overall Business Climate Index to remain stable at 102.0, unchanged from the previous month and with the expectations reading seen falling only marginally to 98.2 from 98.5. Similarly, the ESI Economic Confidence reading (Thursday) is expected to come in just slightly weaker at 112.0, down from 112.5 in May. Preliminary Consumer Confidence came in weaker than expected and together with an expected dip in industrial confidence is likely to draw the index down. Preliminary Inflation readings meanwhile are likely to see the Eurozone HICP rate (Friday) reaching 2.0% in June, the upper limit of the ECB’s definition of price stability. The German rate (Thursday) is expected to lift to 2.3% from 2.2%. PMI surveys seem to be backing this up and despite the recent slowdown, job creation continues and unemployment continues to decline. German Jobless numbers (Friday) are seen falling a further -5K, leaving the jobless rate at a very low 5.2%.
UK: Last week’s BoE policy meeting was unexpectedly impactful, with the minutes showing an increased rank of three MPC members calling for a 25 bp hike in the repo rate, more than the two expected. Although still outnumbered to the tune of six, the dissenters have put a rate hike as soon as November back on the table. The minutes showed that most members are overlooking the recent economic soft patch, although the majority still want to see more data. In its May Inflation Report, the BoE made it clear that declining spare capacity and low productivity growth meant that gradual and measured monetary tightening will be warranted.
The calendar this week brings the June CBI Retail Sales survey (Tuesday), and the June Gfk Consumer Confidence survey, 3rd release Q1 GDP, Q1 Current Account figures and the BoE’s monthly report on lending and monetary supply (all due on Friday).
Japan: The May Services PPI (Tuesday) is seen cooling to 0.8% y/y, after nearly doubling to 0.9% in April from 0.5% in March. May Retail Sales (Thursday) should be unchanged at 1.5% y/y overall, as they were in April. Friday’s heavy release schedule includes June Tokyo CPI, which is expected at an unchanged 0.4% y/y pace overall. May Unemployment is forecast at a steady 2.5%. Preliminary May Industrial Production is estimated to have fallen 0.8% versus the 0.5% increase in April, which would cap 3 months of solid gains. June Consumer Confidence should slip to 43.0 from 43.9, while May Housing Starts are set to post a 5.0% y/y contraction versus the prior 0.3% pace previously. May Construction Orders are also on tap.
Australia: The Reserve Bank of Australia’s Head of Payments Policy Tony Richards speaks (Tuesday) at the Australian Business Economists event on cryptocurrencies. The sparse data calendar has May private sector credit on Friday.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 27th June 2018.
[IMG]
FX News Today
Asian Market Wrap: 10-year Treasury yields lost earlier gains and are unchanged at 2.877%, 10-year JGB yields are up 0.3 bp at 0.027%, while yields elsewhere mostly declined as stocks struggled for direction with trade concerns continuing to hang over markets. Japanese indexes moved up from lows and are at -0.21% and -0.07% respectively. The Hang Seng meanwhile is down -0.73% and the CSI 300 down -1.59% as the Yuan continued to weaken offshore amid fears that China’s liquidity squeeze will lead to corporate bond defaults in 2H, and the drive for deleveraging is limiting lending and pushing up borrowing costs. Energy companies were supported by an ongoing rise in oil prices. The front-end USOil future rose to a high of USD 70.98, and is currently at USD 70.71 per barrel, amid reports the US is pushing allies to halt imports of Iranian crude. US stock futures are also down.
FX Update: USDJPY has traded moderately lower, back under 110.00, after posting a three-session peak at 110.22. The pair was lifted by post-Tokyo fix demand, rising to 110.20, before selling overwhelmed and turned the Dollar lower. The Yen is also firmer against other currencies as stock markets ebb back again after yesterday’s reprieve. AUDJPY, a cross with relatively high beta characteristics that has been sensitive to the deepening trade spat, is down over 0.3%, earlier printing an eight-day low at 80.81. As for USDJPY, the pair is about at the halfway mark of the broadly sideways range that’s been seen over the last six weeks. USDJPY has Resistance at 110.20-22, levels which encompass recent daily highs. The net directionless path is illustrated by the flat profiles of both the 20- and 50-day moving averages, which are presently sandwiching prevailing levels, being respectively situated at 110.05 and 109.65. Fundamentally the picture would be a bullish one (divergent Fed versus BoJ policy paths) were it not for the safe-haven premium being installed in the Japanese currency amid the backdrop of rising trade protectionism.
Charts of the Day
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Main Macro Events Today
BoE Governor Carney Speech – Scheduled Press Conference following the the publication of the Financial Stability Report at 08:30 GMT
US Durable Goods Orders – Expectations – Likely to inch up to -1.0% in May from -1.6% in April. Core Orders expected to sink to 0.5% from 0.9% last time
FOMC Members Quarles and Rosengren Speech
BoC Governor Poloz Speech – Scheduled for 19:00 (text released 15 minutes earlier) speech regarding Transparency and Understanding
RBNZ Interest Rate Decision & Statement – No Change to rates expected and “timing of any change dependent on how the economy develops” no change in statement
Support and Resistance Levels
[IMG]
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
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Stuart Cowell
Senior Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 28th June 2018.
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FX News Today
European Fixed Income Outlook: Asian stock markets traded mixed in Asia and trade jitters continue to weigh on sentiment after White House economic adviser Larry Kudlow said the decision to use less harsh measures on Chinese investment than feared did not represent a softer tone in the lingering trade tensions. Topix and Nikkei are mixed at -0.20% and +0.05% respectively. The Hang Seng is up 0.37% and the CSI 300 down -0.02%. US Stock Futures are moving higher, after a negative close on Wednesday and 10-year Treasury yields are up 1.1 bp at 2.836%, while 10-year JGB yields are up 0.1 bp at 0.024%. Emerging market currencies remained under pressure and oil prices are down on the day, but still trading above USD 72 per barrel.
Reserve Bank of New Zealand held rates at 1.75%, matching widespread expectations for no change. The bank said the cash rate will remain at 1.75% “for now.” But they “are well positioned to manage change in either direction — up or down — as necessary.” Recall that in May, Governor Orr said the rate would remain at its current setting “for some time to come.” The Bank remains on hold, with recent soft data delaying the start of rate hikes further into next year.
Charts of the Day
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Main Macro Events Today
German and Spanish Prelim CPI – Expectations – further acceleration in headline rates are expected, after both already reported y/y rates above 2% in May. The German rate is expected to lift to 2.3% from 2.2%, while Spanish HICP is seen at 2.3%, up from 2.1% y/y.
EU Economic Summit – Expectations – The European Commission’s ESI Economic Confidence reading; is expected to come in just slightly weaker at 112.0, down from 112.5 in May. Preliminary consumer confidence actually declined and industrial confidence is also likely to have dipped again at the end of the second quarter, judging by PMI and Ifo readings.
US Final GDP & Unemployment Data – Expectations – The final estimate of Q1 GDP is expected to be 2.4%, up from 2.2% in the second release, while initial jobless claims are estimated to rise 3k to 221k in the week ended June 23.
MPC Member Haldane, Fed’s Bullard and FOMC Member Bostic Speeches
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Please note that times displayed based on local time zone and are from time of writing this report.
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Stuart Cowell
Andria Pichidi
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 29th June 2018.
[IMG]
FX News Today
Asian Market wrap: Stock Markets moved mostly higher during the Asian session, with Chinese Stocks outperforming after the Central Bank said in comments following the monetary policy committee that it will use comprehensive policy tools to keep economic developments steady and stabilize market expectations, thus underpinning hopes for a loosening of liquidity conditions. The CSI300 rallied 1.41%, Shenzen Comp and Shanghai Comp are up 1.53% and 2.52% respectively. The Hang Seng managed a 1.42% rise, while Nikkei posted more muted gains of 0.09%, as trade concerns continue to cloud over sentiment. The dovish Central Bank comments saw 10-year yields falling -4.6 bp in China, while elsewhere yields picked up as stocks improved. 10-year Treasury yields are up 1.8 bp at 2.855%, 10-year JGB yields gained 0.3 bp to 0.026%. US Stock Futures are also moving higher and the WTI Future is trading at USD 73.24 per barrel. UK Stock Futures are also moving higher. Data releases so far have not been stock friendly, with UK Consumer Confidence and German Retail Sales falling and German import price inflation rising sharply. Still to come are Eurozone HICP and German jobless numbers as well as UK lending data and the Swiss KOF leading indicator.
FX Update: Both the Dollar and Yen have weakened against most of the other main currencies, with the Yen underperforming, while the Euro outperformed on meeting some strong demand on news that EU members had thrashed out the deal on immigration. The deal aims to shore up external borders and create screening centres for migrants, which is seen as placating the Italian populist government. EURUSD flipped back above 1.1650, rallying by a big figure in total before capping out at two-day high of 1.1666, and most Euro crosses concurrently rallied, too. USDJPY lifted above Wednesday’s 110.49 high as global stock markets rebounded, causing an unwinding of the Japanese currency’s safe haven premium. EURJPY and AUDJPY, among other Yen crosses, also strengthened strongly. China’s PBoC said today it would use comprehensive policy tools to maintain positive economic developments and stabilize market expectations.
Charts of the Day
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Main Macro Events Today
German Unemployment – Expectations – German jobless numbers are seen falling a further -8K, leaving the jobless rate at a very low 5.2%.
UK GDP Q1 & Current Account – Expectations – Q1 growth should go unrevised, at 0.1% q/q and 1.2% y/y. The Current Account is expected to come in with a deficit of GBP 18.0 bln in Q1.
Eurozone CPI & Core CPI – Expectations – to reach 2.0% in June, the upper limit of the ECB’s definition of price stability.
Canadian GDP – Expectations – to rise 0.1% in April after the 0.3% gain in March (m/m, sa).
BoC Business Outlook Survey – Expectations – The Q2 survey is expected to reveal some trimming to the expansionary outlook, but one that is consistent with ongoing growth in 2018. The report should show further tightening of capacity, with labour shortages on the rise. Well contained inflation expectations are projected, but sentiment will remain in the upper half of the band.
US PCE & Personal Income – Expectations – Personal Consumption Expenditures is expected to rise slightly to 1.9% in May. Personal Income is expected to rise 0.4% in May , following a 0.3% gain in the month prior.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 02nd July 2018.[/B]
[IMG]https://analysis.hotforex.com/wp-content/uploads/2017/07/Week-Ahead-20170724.jpg[/IMG]
[B]THE ECONOMIC WEEK AHEAD[/B]
Trade and tariffs remained in the headlines through Q2 and along with political jitters, caused global consternation. And with the US’s July 6 deadline for collection of additional duties on Chinese products, tariffs will remain the center of attention. Behind the scenes however, US growth has picked up steam as the stimulative effects from deregulation, tax reform and fiscal measures start to take hold and overshadow the noise. While it looks as though Q3 will start off on the same footing as Q2, the big questions for the markets will be whether the trade skirmishes escalate, and whether US momentum can support growth over the rest of the world.
United States: It’s an important week in the US. Along with the July 4 Independence Day holiday, there are the month’s key releases. Additionally, July 6 is the deadline for tariffs on 818 lines of about $34 bln of Chinese goods. The data slate is headlined by the June jobs report, as well as manufacturing and services PMIs, vehicle sales, and trade. The FOMC minutes of the June 12, 13 meeting will provide extra insight on the shift to a more hawkish stance.
The June nonfarm payroll report (Friday) is expected to show a solid 200k increase in jobs after the 223k gain in May, while the jobless rate should hold steady at a low 3.8%. There’s ongoing controversy over the degree of slack in the system. On Monday, the ISM should slip to 58.0 in June, from May’s 58.7. Despite the expected decline, the index remains solid and not too far off from the 14-year high of 60.8 in February. The light vehicle sales (Tuesday) expected to rise to a 17.0 mln rate in June from 16.8 mln in May, with autos at 5.3 mln and trucks at 9.0 mln, versus respective rates of 5.2 and 8.9 mln in May. The May supply – disruption for truck assemblies from a fire at a parts supplier may disrupt truck sales in June and July, though more generally truck sales continue to drive vehicle sales. The May Trade Deficit (Friday) should narrow to -$43.5 bln, from -$46.2 bln in April and a cycle high -$55.5 bln in February, given the Advance Goods Trade Balance narrowing to -$68.2 bln.
Canada: Canada’s data docket contains two key reports that will inform the outlook for the Bank of Canada announcement next week. Employment (Friday) is seen rising 25.0k in June after the 7.5k drop in May and 1.1k dip in April. The unemployment rate is expected to hold at a 40-year low 5.8%. The trade deficit is expected to widen to -C$2.2 bln in May from -C$1.9 bln in April. The June Ivey PMI (Friday) is anticipated to slide to a still expansionary 61.0 from 62.5 in May. Employment and trade in line with estimates would support the expectation that the Bank of Canada will lift rates 25 basis points to 1.50% in the July 11 announcement. Markit Canada manufacturing PMI for June is due on Tuesday. The markets are closed Monday in observation of the Canada Day holiday.
Europe: With the ECB having effectively clarified the policy path well into the second half of next year, and the important June summit out of the way without the new Italian government blowing up the party, the markets should be settling into a slower summer mood in a week that includes largely secondary data releases. So for now, market volatility is likely to continue adding to pressures on the ECB to revamp the rules on re-investment as it prepares to phase out net asset purchases by the end of the year.
Data releases are unlikely to change the overall picture significantly. The final readings on June PMIs are expected to confirm preliminary readings of 55.0 for both the Manufacturing (Monday) as well as the Services reading (Wednesday), which should leave the composite on course to be confirmed at 54.8. Readings still point to ongoing robust growth across both sectors and Markit reported with the preliminary numbers that part of the recent slowdown was indeed due to capacity constraints with delivery times lengthening. Meanwhile, German manufacturing orders (Thursday) are expected to rebound 1.0% m/m from the 2.5% m/m decline in April and industrial production is seen to pick up 0.2% m/m, after -1.0% m/m.
Events include ECBspeak from Weidmann (Thursday) as well as Nouy (Friday) and bond auctions in Spain and France on Thursday.
UK: The calendar brings the June Markit PMI surveys, with the manufacturing PMI (Monday) anticipated at 54.0, down from 54.4 in May. Evidence suggests that the slowing in economic growth across the channel have been crimping export performance in the manufacturing sector. The construction PMI (Tuesday) is expected to arrive with an unchanged 52.5 headline reading, and anticipate the services PMI (Wednesday) to also hold unchanged, at 54.0. In-line data should keep the BoE on its gradualist tightening course, with markets looking for a 25 bp hike in the repo rate at the August MPC meeting.
Japan: The May personal income and PCE (Friday) should show spending contracting further to a -1.7% y/y clip, from the prior -1.3% outcome, another worrying sign from the region.
China: The June Caixin/Markit manufacturing PMI should slip slightly to 51.0 from 51.1. The June services PMI (Wednesday) is penciled in at 52.5 from 52.9. Again such results would add to worries over a slowdown and fears that tariff threats are weighing on sentiment.
Australia: The RBA’s meeting (Tuesday) casts a long shadow over a busy calendar. No change is expected to the current 1.50% setting for the cash rate target as inflation remains low. The rate has been unchanged since the 25 bp cut in August 2016. The economic data docket is full this week. Building permits (Tuesday) are projected to bounce 2.0% in May (m/m, sa) after the 5.0% drop in April. May retail shipment values (Wednesday) are expected to rise 0.2% (m/m, sa) following the 0.4% gain in April. The trade surplus (Wednesday) is seen at A$1.3 bln in May from A$1.0 bln in April.
[B]Always trade with strict risk management. Your capital is the single most important aspect of your trading business.[/B]
[B]Please note that times displayed based on local time zone and are from time of writing this report.[/B]
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[URL=https://analysis.hotforex.com/][B]Click HERE to READ more Market news.[/B][/URL]
[B]
Andria Pichidi
Market Analyst
HotForex
[/B]
[B]Disclaimer:[/B] This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 3rd July 2018.
[IMG]
FX News Today
European Fixed Income Outlook: A mixed picture on bond markets, while US stock futures recovered earlier losses and are moving higher, in tandem with UK100 futures after markets continued to struggle with trade angst during the Asian session. Germany’s Merkel managed to find a last minute compromise with Interior Minister Seehofer that will prevent a break up of the union parties – at least for now. The controversy over immigration meanwhile is likely to continue not just in Germany, but across Europe. Today’s calendar has Eurozone Retail Sales and PPI as well as the UK Construction PMI.
FX Update: The Dollar majors have remained in narrow ranges, overall, though there has still been some movement of note. USDJPY posted a fresh 6-week high of 111.13 before settling lower. Other Yen crosses also saw similar price action with the backdrop of steadying global stock markets seeing the Yen come under some pressure. China’s PBoC once again allowed the Yuan to weaken, with the USDCNY rate this time rising to an 11-month high above 6.6700. China’s central bank is responding to both the impact of US tariffs and broader weakness in emerging market currencies. The Australian Dollar rallied moderately, partly amid the rebound in stock markets and partly on RBA’s policy statement, which, while remaining distinctly neutral overall, was perhaps a little more sanguine than some market participants had expected regarding the risks stemming from a slower, tariff-afflicted Chinese economy. RBA left the cash rate at 1.50%, as had been widely anticipated. AUDUSD posted a high of 0.7365, a gain of over 30 pips from Monday’s closing levels. EURUSD has lifted back to the 1.1650 area, extending the rebound from yesterday’s 1.1591 low but so far remaining below yesterday’s high.
Charts of the Day
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Main Macro Events Today
UK PMI Construction – Expectations – an unchanged 52.5 headline reading.
Canadian Markit Manufacturing PMI – Expectations – to fall to 55.4 in June after the 56.2 in May.
US Factory Orders – Expectations – to rise to 0.1% m/m in May from the -0.8%m/m in April.
ECB’s Praet Speech
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 4th July 2018.
[IMG]
FX News Today
Asian Market Wrap: Treasury futures declined in thin volumes, while cash markets are shut for a US holiday. Japan’s 30 year yield dropped below 0.7% as Asian market remained shaky, with Chinese Indices continuing to underperform despite the commitment to a stronger Yuan, as the start of the first round of US tariffs on Friday weighs on sentiment. Most Indices managed to come up from lows in the later part of the session and the Nikkei is still down -0.13%, but also up from lows. Oil prices are higher on the day, with the WTI Future trading at USD 74.64 per barrel.
FX Update: The Dollar traded softer, led be declines against the Yen, Australian Dollar and most emerging world economies, which seemed to benefit from China’s steadying of the Yuan today. USDJPY opened in Asia at about 110.58-60, then dipped to a 4-session low of 110.27 before setting around 110.40. Stock markets in Asia mostly declined, following a tech-led drop on Wall Street yesterday. China’s Yuan steadied after declining notably last week, on Monday and Tuesday, amid reports that it was at the direction of Beijing. Most emerging market currencies also gained. AUDUSD posted a 7-session high at 0.7424. A record high reading in the Australian June Services PMI, which jumped 4 points to 63.0, gave the Aussie a bid, along with the firming in the Yuan. EURUSD meanwhile, clawed out a 2-session high of 1.1678. Conditions will be thin and direction commitment limited today with US Markets closed for the 4th of July holiday.
Charts of the Day
[IMG]
Main Macro Events Today
German Service PMI – Expectations – expected to confirm the preliminary reading of 53.9,which should leave the composite at 54.8.
Eurozone Service PMI – Expectations –expected to remain unchanged at 22 ,which should leave the composite at 54.8, with a slight bias to the downside.
UK Service PMI & BoE Speeches- Expectations –is seen steady at 54.0. Events include BoE speeches from Woods and Sarpota as Brexit pressure on the UK mount with May wedged between hard-line Brexiteers and warnings from Brussels that the time for a deal is running out.
US Bank Holiday – Independence Day
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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HERE to register for FREE!
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Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 5th July 2018.
[IMG]
FX News Today
Asian Market Wrap: 10-year Bund yields are up 1.3 bp at 1.315% in opening trade, the 2-year is up 2.1 bp at -0.652%. 10-year Treasury yields are up 1.6 bp after returning from holiday and strong German manufacturing orders as well as Bloomberg source stories suggesting at least some ECB officials see a rate hike in September/October next year, i.e. earlier than current market pricing, will be adding to pressure especially at the short end this morning. Peripherals are outperforming slightly and GER30 and UK100 futures are higher in line with US futures in opening trade. After the release of German orders at the start of the session, the calendar still has Swiss CPI, BoE’s Carney, as well as ECB’s Weidmann and supply from Spain and France.
FX Update: The Euro is opening Europe firmly, with EURUSD testing the week’s highs at 1.1690-91, EURJPY posting two-day highs above 129.35 and EURCHF ascending into 3-week high territory. The Dollar, outside the case against the Euro, has been trading neutrally, including against most emerging world currencies. The PBoC continued to rein in the yuan, with the offshore USDCNY rate of 6.6478-80 holding below Tuesday’s 11-month low seen at 6.7344. USDJPY continued to orbit the 110.50 level. The stability in currencies belies a heightened state of concern about trade protectionism, with the US on Friday set to implement tariffs on $34 bln of Chinese imports, although equity market weakness, especially in China-focused issues, have taken a whack today.
Charts of the Day
[IMG]
Main Macro Events Today
BOE Governor Carney and German Buda President Weidmann Speeches
US ADP Employment Change – Expectations –expected to remain rise at 190K from 178K in May.
US Non-Manufacturing PMI – should fall to 58.0 in June, from 58.6 in May and versus a 12-year high of 59.9 in January.
Crude Oil Inventories
FOMC Meeting Minutes
Support and Resistance levels
[IMG]
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 9th July 2018.
Main Macro Events This Week
The US June jobs report was another “Goldilocks” set of numbers for the markets, drawing back in workers from the ranks of the long-term unemployed. Broadbased strength in employment not only helped Wall Street rally but the surge in the labor force and tame wage gain allowed Treasury yields to drift lower, since the report offered no incentive for the FOMC to deviate from its “gradual pace” of normalization. Looking forward, inflation data will dominate in the week ahead, with the Fed comfortably close to its 2% target now. The Fed will also release its Monetary Policy Report on Friday with Chairman Powell’s key follow-up semi-annual testimony on July 17.
United States: The US Economic calendar will zero in on inflation statistics for the week of July 9. Modest gains in the CPI and PPI are expected, with the y/y readings remaining above the Fed’s 2% target given hard comparisons. The Import Price Index may reveal weakness related to declining oil prices in the month, but export prices should post a modest gain. Consumer Credit (Monday) is projected to rise $12.0 bln in May, following a $9.3 bln gain in April. JOLTS job openings are due (Tuesday). Headline CPI (Wednesday) is expected to rise 0.2% in June, following a similar gain in May, while core prices are estimated to rise 0.2% as well, the same as in May. Wholesale inventories are expected to rise 0.5% in May (Wednesday), as revealed in the advance report, following a 0.1% gain in the prior month, and sales are estimated to rise 0.5% as well, after a 0.8% gain in April. CPI is forecast to rise 0.2% in June (Thursday), following a similar gain in May. Core prices are estimated to rise 0.2% as well, the same as in May. Initial jobless claims are estimated to fall 18k to 213k in the week ended July 7 (Thursday), reflecting an expected early-July drop related to auto retooling, and the Treasury budget gap may hit to -$133 bln in June. A 0.2% decline is expected in the Import Price Index in June (Friday), due to crude oil weakness, following a 0.6% gain in May, while export prices are expected to continue to move up 0.1%.
Fedspeak kicks back into gear with just a week to go before Chairman Powell’s semi-annual testimony, which will be preceded by the Monetary Policy Report (MPR) on Friday, July 13 at 11:00 ET.
Canada: Canada is focused squarely on the BoC meeting (Wednesday), which it is expected to result in a 25 basis point boost to a 1.50% rate setting. The accompanying monetary policy report should be consistent with additional rate increases, but at a gradual pace. The focus will be on Bank’s view on the ongoing trade/tariff issues, labor market slack and the inflation outlook. A housing-heavy data docket will be an afterthought this week. Housing starts (Tuesday) are expected to moderate to a 190.0k pace in June from 195.6k in May. Building permit values are seen dropping 2.0% in May after the 4.6% contraction in April. The New Home Price Index (Thursday) is projected to reveal a 0.1% dip (m/m, sa) in May after the flat reading in April. Existing home sales for June are expected on Friday. The Teranet/National Bank Housing Price Index for June is also scheduled for Thursday.
Europe: ECB tried to inject calm and prevent rate hike expectations from running ahead when it pledged to keep key rates steady through the summer of next year. But with growth indicators confirming that the recovery is not dead yet and inflation jumping higher, officials are now trying to regain control especially over the short end. ECB speakers will be important in this context. President Draghi will testify to the European Parliament in Brussels (Monday). It will be interesting to see whether he backs recent “source” stories suggesting ECB is eyeing the first rate hike in September/October next year, which would also be the last meetings for Draghi as President.
Final Eurozone June inflation data is expected to confirm the German HICP rate (Thursday) at 2.1% y/y. The French reading (Tuesday) also is at a 2.1% y/y rate which should leave the overall Eurozone number (due July 18) on course to be confirmed at 2.0% y/y. German data in particular bounced back strongly with May production and orders figures. Yet, while ongoing political uncertainty and risks of an escalating trade war have weighed on some confidence measures, there is some room for an upside surprise in German ZEW confidence (Tuesday). Still, this is investor confidence data which is more impacted by uncertainties and concerns about political events and at least the latest real sector numbers out of Germany have been very encouraging. Indeed, after German production growth was reported at 2.6% m/m in May, rebounds are expected in French (Tuesday), Italian (Tuesday) and Eurozone Production figures (Thursday). The calendar also has trade data for Germany.
UK: The calendar is fairly quiet in terms of economic releases, highlighted by the June BRC Retail Sales survey (Tuesday), and May Industrial Production and Trade data (also Tuesday).
The government has — after more than two years from vote-to-leave the EU — finally worked out what it wants from a post-Brexit deal with the EU. This was hammered out in a climactic Cabinet meeting on Friday, which saw the hard Brexiteers give up ground to reach a compromise. The government will seek a “EU-UK free trade area which establishes a common rule book for industrial goods and agricultural products,” which essentially means a single market for goods, along with a “facilitated customs arrangement” to address the need for a frictionless border in Ireland. It remains doubtful that the EU will agree to the free market for goods part, however, having maintained that the UK will not be able to cherry pick which parts of the single market to take part in. It also remains uncertain how effective the proposed frictionless customs arrangement will be. There are now only 5 negotiating weeks left until October, when both the EU and UK are looking to have an agreement in place.
Japan: The May Machine Orders (Wednesday) are seen contracting 5.0% m/m, essentially halving the April 10.1% climb. The May Tertiary Industry Index (Wednesday) is pencilled in slipping 0.1% after rising 1.0% in April. June PPI (Wednesday) should warm up to 2.9% y/y from 2.7%. Also slated is the final May reading on Industrial Production (Friday). It declined 0.2% in the preliminary report, after gains of 0.5% in April, 1.4% in March, and 2.0% in February.
China: It’s the June Trade Report (Friday) that will be the focal point. Inflation reports are also due with June CPI and PPI (Tuesday). CPI is expected to accelerate a bit to a 2.0% y/y pace versus 1.8% y/y previously, with PPI rising to 4.5% y/y from 4.1%. June loan growth and new Yuan loans are tentatively due Tuesday as well.
Australia: In Australia, Housing Investment (Wednesday) features on a thin data docket. A 3.0% drop is expected in May after the 1.4% gain in April. RBA Assistant Governor (Financial System) Bullock speaks at the 5th Bund Summit on Fintech from Shanghai, China (Sunday). The RBA held rates steady last week and maintained expectations for no change for an extended period.
New Zealand: Retail Card Spending (Tuesday) is the only release of note and it is expected at a 0.7% gain (m/m) in June after the 0.4% rise in May. At the June meeting, the RBNZ held rates at 1.75% and opened the door to a rate cut if necessary. The next move is expected to be a rate increase. The next meeting is on August 9.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Andria Pichidi
Market Analyst
HotForex
MACRO EVENTS & NEWS OF 10th July 2018.
FX News Today
Asian Market Wrap: Long yields continue to climb and 10-year Treasury yields are up 0.7 bp at 2.864%, 10-year JGBs up 0.6 bp at 0.032% as Stock Markets remained in risk on mode during the Asian session. Nikkei gained 1.09% after a strong close on Wall Street and with the earnings season starting to overshadow lingering trade jitters – at least for now. A weaker Yen added Support. The Hang Seng is up 0.36%, but CSI 300 and Shanghai Comp are down -0.20% and -0.11% respectively after their biggest rally in more than 2 years and as Inflation numbers came in higher than anticipated, but also reflecting lingering trade war concerns ahead of the next round of US tariffs due to be confirmed on July 20. Many expect markets to remain volatile ahead of July 20 – the date for the next set of US levies on Chinese imports. US stock futures are higher, however, and oil prices are up and the WTI future is trading at USD 74.29 per barrel.
FX Update: USDJPY has broken above recent range highs and printed a 7-week high at 111.14. EURJPY and other Yen crosses are also up, with EURJPY trading in 7-week high terrain and AUDJPY making 1-month highs. The driver of the yen’s underperformance is the continued rebound in global Stock Markets, although Chinese shares continue to underperform. The solid US jobs report last Friday and expectations for a strong corporate earnings season have been buoying equities, and while the shift toward trade protectionism remains at the top of the worry list of investors, the level of implemented tariffs so far is small in the scheme of things. BoJ Governor Kuroda yesterday repeated that the central bank will remain committed to ultra-accommodative monetary policy, including yield-curve control, until inflation hits the 2% target. USDJPY has Support at 110.88-90 while the May-21 high at 111.39, which is the highest level seen since mid January, provides an upside waypoint.
Charts of the Day
Main Macro Events Today
UK Production Data – Expectations – Industrial production expected to rebound by 0.5% m/m after contracting by 0.8% m/m in the month prior, while we see the narrower manufacturing output figure rising 0.8% m/m after declining by 1.4% m/m in April.
UK Trade Balance – Expectations – expected to fall to 11.9B from 14.0B last month .
German ZEW – Expectations – July investor sentiment reading anticipated at -18.0 down from -16.1 in June, confirming that pessimists still outnumber optimists.
Canadian Housing Starts – Expectations – expected to rebound to a 210.0k pace in June after falling to 195.6k in May from 216.8k in April.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi
Market Analyst
HotForex
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