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Canada CPI unchanged at 2.2%, matched expectations

    By
    ActionForex.com
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    Canada CPI was unchanged at 2.2% yoy in December, matched expectations. CPI common accelerated to 2.0% yoy, up from 1.9% yoy, beat expectation of 1.9% yoy. CPI median slowed to 2.2% yoy, down from 2.3% yoy, missed expectation of 2.4% yoy. CPI trimmed slowed to 2.1% yoy, down from 2.2% yoy, missed expectation of 2.2% yoy.

    Full release here.

    UK business optimism at highest since 2014, largest positive swing on record

      By
      ActionForex.com
      -

      According to CBI survey, UK business optimism jumped sharply to 23% in the three months to January, up from -4% in October. That’s the strongest level since April 2014. the 67% quarterly swing was also the largest on record since 1958.

      Anna Leach, CBI Deputy Chief Economist, said: “With business optimism improving at its fastest pace since 2014 and some of the squeeze on investment plans lifting, it’s clear manufacturers are entering the new year with a spring in their step. Firms are now planning to invest more in plants and machinery, which will ultimately help increase capacity and output.

      “However, this boost to sentiment belies poor trading conditions over the past quarter, with output and orders still declining. If we are to build on this rebound in optimism among UK manufacturers, it is crucial for the UK and EU to establish a trade deal that supports growth in this sector.”

      Full release here.

      Mnuchin: No deadline to phase 2 trade talks with China

        By
        ActionForex.com
        -

        US Treasury Secretary Steven Mnuchin said there is “no deadline” to phase 2 trade negotiation with China. “The first issue that we’re very focused on in the next 30 days is implementing phase 1, then we’ll start on phase 2. “If we get that done before the election, great, if it takes longer, that’s fine,” he said.

        Mnuchin also added, “we could easily have phase two A, two B, two C, it doesn’t need to be a big bang, and we’ll take tariffs off along the way, so there is a big incentive for the Chinese to continue to negotiate and conclude various additional parts of the agreement.”

        Trump to announce very big middle class tax cut over the next 90 days

          By
          ActionForex.com
          -

          US President Donald Trump told Fox Business that the administration is planning a “very big” middle-class tax cut. He said, “we are going to be doing a middle-class tax cut, a very big one. We’ll be doing that. We’ll be announcing that over the next 90 days.”

          On trade deals, “the China deal is amazing, we’ll be starting phase two very soon. The tariffs were left on Chinese goods because its good to negotiate for phase two.”

          At the same time, “the European Union is tougher to deal with than anybody. They’ve taken advantage of our country for many years,” said Trump. “Ultimately it will be very easy because if we can’t make a deal, we’ll have to put 25 percent tariffs on their cars.”

          UK to introduce digital tax in April, US threaten retaliation with auto tariffs

            By
            ActionForex.com
            -

            UK Chancellor of the Exchequer Sajid Javid insisted that UK will go ahead with the induction of digital tax in April. He said, at panel discussion at the Davos forum, “It is a proportionate tax, and a tax that is deliberately designed as a temporary tax. It will fall away when there is an international agreement.”

            At the same discussion, US Treasury Secretary Steven Mnuchin warned “We think the digital tax is discriminatory in nature… if people want to just arbitrarily put taxes on our digital companies we will consider arbitrarily putting taxes on car companies”. “We’re going to have some private conversations about that… and I’m sure the President and Boris will be speaking on it as well”.

            BoC to stand pat, CAD/JPY in consolidations

              By
              ActionForex.com
              -

              BoC rate decision is a major focus today, together with Canadian CPI. BoC is widely expected to keep policy rate unchanged at 1.75%. The central bank appeared to have downplayed some downside surprises in recent economic data. Risks of receded with US-China trade deal phase one and ratification of USMCA in US Congress. The test for resilience of the Canadian economy could be over for now, and need of insurance rate cut largely vanished. The next move would be very much data dependent.

              Suggested previews on BoC:

              CAD/JPY turned into consolidation after forming a short term top at 84.56 last week. At this point, further rally is still in favor as rise from 78.50 could extend to 85.23 resistance and above. However, structure of such rise is no clearly impulsive. 61.8% retracement of 78.50 to 83.55 from 81.28 was met without follow through buying. Upside momentum has been diminishing too as seen in daily MACD. Break of 82.80 support will suggest that such rise is completed, and turn outlook bearish for 81.28 support and below.

              Canada Trudeau: Passing the new NAFTA is our priority

                By
                ActionForex.com
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                Canadian Prime Minister Justin Trudeau said he will unveil the legislation on January 29 to ratify the USMCA. He noted, “we are going to make sure we move forward in the right way and that means ratifying this new NAFTA as quickly as possible”. “Passing the new NAFTA is our priority,” said Trudeau. “There are too many businesses relying on access to the U.S. market … it’s extremely important that we move forward with ratification and it’s our intention to move forward with this.”

                However, the move by Trudeau’s minority Liberal government could be slowed down by main opposition. The Conservative Party spokesman Randy Hoback, “we definitely want to give it the proper due diligence to shine a light on some of the unique.” “I don’t think anybody has any intention of dragging anything out. We just want to make sure we do our job … there are some things in this deal that I think the business community isn’t aware of that we need to shine a light on.”

                S&P 500 retreated on China’s Coroanvirus, but up trend not threatened

                  By
                  ActionForex.com
                  -

                  US stocks closed broadly lower overnight on the arrival of China’s coronavirus. The Centers for Disease Control and Prevention confirmed the first case in the US. In China, a physician physician who investigated the outbreak said he has himself been infected. China’s Center for Disease Control and Prevention also warned that the new virus which killed nine people is adapting and mutating.

                  S&P 500 closed down -0.27% at 3320.79. Despite the pull back, there is no threat to the uptrend for now. As long as 3214.63 support holds, current up long term up trend is expected to extend to 100% projection of 1810.10 to 2940.91 from 2346. 58 at 3477.39 next.

                   

                  US Mnuchin to Italy and UK: Delay digital taxes or face tariffs

                    By
                    ActionForex.com
                    -

                    US Treasury Secretary Steven Mnuchin urged Italy and UK to suspend their plans to impose digital taxes. Or “if not they’ll find themselves faced with President Trump’s tariffs.” The warning came after France agreed to delay digital tax imposition through the end of the year, as US and France would work out a permanent resolution.

                    Mnuchin also said that the phase two trade deal may not be a “big bang” with all existing tariffs removed. Instead, “we may do 2A and some of the tariffs come off. We can do this sequentially along the way.”

                    EU to lose USD 10.8B exports due to US-China trade deal, Germany hardest hit

                      By
                      ActionForex.com
                      -

                      The Kiel Institute for World Economy warned that US-China trade agreement is “significantly damaging” to the EU. Germany is “particularly affected”, and among the sectors, especially “aircraft and vehicle manufacturing.”  Gabriel Felbermayr, Kiel President, said, “the additional imports of US goods promised by China will divert imports from other countries.”

                      As calculated by Felbermayr and trade expert Sonali Chowdhry, EU exports to China will probably be USD 10.8B lower in 2021 compared with a scenario in which the agreement and the tariff war between China and the USA would not have existed. The EU would then have to bear about a sixth of the overall trade diversion caused by the agreement.

                      In absolute terms, the biggest losers in the EU are the manufacturers of aircraft (USD -3.7B), vehicles (USD -2.4B), and industrial machinery (USD – 1.4B). In terms of relative changes, the largest relative losses would again be in the aircraft sector (-28%), vehicles (-7%), and pharmaceutical products (-5%). “The affected industries are mainly located in Germany, but France has also been hit considerably”, says Felbermayr.

                      Full release here.

                      German ZEW jumped to 26.7, highest since July 2015

                        By
                        ActionForex.com
                        -

                        German ZEW Economic Sentiment rose sharply to 26.7 in January, up from 10.7, beat expectation of 15.2. That’s also the highest reading since July 2015. Current Situation Index rose to -9.5, up from -19.9, beat expectation of -12.4. Eurozone ZEW Economic Sentiment rose to 25.6, up from 11.2, beat expectation of 16.3. Current Situation Index rose 4.8 pts to -9.9.

                        “The continued strong increase of the ZEW Indicator of Economic Sentiment is mainly due to the recent settlement of the trade dispute between the USA and China. This gives rise to the hope that the trade dispute’s negative effects on the German economy will be less pronounced than previously thought. In addition, the German economy developed slightly better than expected in the previous year. Although the outlook has improved, growth is still expected to remain below average.,” comments ZEW President Achim Wambach.

                        Full release here.

                        UK unemployment rate unchanged at 3.8%, employment rate hit record high

                          By
                          ActionForex.com
                          -

                          UK unemployment rate was unchanged at 3.8% in the three months to November, matched expectations. An estimated 1.31m people were unemployed. Employment rate increased jumped 0.5% on the quarter to 76.3%, a record high. Average earnings excluding bonus slowed to 3.4% 3moy, matched expectations. Average earnings including bonus was unchanged at 3.2% 3moy, missed expectations.

                          Full release here.

                          BoJ Kuroda: Benefits of our policy still exceed the costs

                            By
                            ActionForex.com
                            -

                            In the regular post-meeting press conference, BoJ Governor Haruhiko Kuroda said for now “the benefits of our policy still exceed the costs”. And the central bank will “continue to pursue powerful monetary easing to achieve 2% inflation.” Though, he added, “BOJ must be mindful of the impact prolonged ultra-low rates could have on financial intermediation.”

                            Kuroda also noted that “progress in US-China trade talks and Brexit have led to an improvement in risk sentiment”. But “uncertainty remains on the “fate” of the US-China trade talks”. Plus, “there are also geopolitical risks in the Middle East”.

                            “If the economy accelerates dramatically, there could be some debate. But for now, it’s appropriate to maintain our current policy stance. Various overseas risks remain, so the current monetary policy with an easy bias will be sustained for some time,” he said.

                            BoJ stands pat, raises growth forecasts, lower inflation projections

                              By
                              ActionForex.com
                              -

                              BoJ left monetary policy unchanged as widely expected. Under the yield curve control framework, short-term policy interest rate is held at -0.1%. Annual pace of monetary base expansion is held at around JPY 80T, to keep 10-year JGB yields at around zero percent. Harada Yutaka and Kataoka Goushi dissented again in 7-2 vote.

                              In the new economic projections, fiscal 2020 growth forecast was raised from 0.7% to 0.9%. CPI core forecast (ex-sales tax hike) was lowered from 1.0% to 0.9%. For fiscal 2021, growth forecast was raised from 1.0% to 1.1%. CPI core forecast was lowered form 1.5% to 1.4%. BoJ added that risks to economic activity and prices are both “skewed to the downside”. Momentum toward achieving 2% inflation target is “maintained by is not yet sufficiently firm”.

                              BoJ statement, outlook for economic activity and prices.

                              Moody’s downgrades Hong Kong to Aa3 on weak government

                                By
                                ActionForex.com
                                -

                                Moody’s cut Hong Kong’s credit rating by one notch to Aa3 yesterday. The ratings agency also changed the outlook to “stable” from “negative.” In a statement, Moody’s said “the absence of tangible plans to address either the political or economic and social concerns of the Hong Kong population that have come to the fore in the past nine months may reflect weaker inherent institutional capacity than Moody’s had previously assessed.”

                                Protests in Hong Kong has now lasted for more than seven months. The first demand was met with the China extradition bill withdrawn after months of protests. Yet, there was no clear measures to address the rest of the “five demands” of the protesters. In particular, the government continuously refused to set up a commission of enquiry on policy brutality and corruption. In the meantime, there is increasing call for an independent and international inquiry into the Hong Kong police.

                                In response to Moody’s downgrade, the HKSAR government said: “Although Hong Kong has faced the most severe social unrest since its return to the Motherland in the past seven months or so, the HKSAR Government, with the staunch support of the Central Government, has firmly upheld the ‘one country, two systems’ principle and handled the situation in accordance with the law to curb violence on its own to restore social order as soon as possible”.

                                Asian stocks tumble on concern of coronavirus outbreak in China

                                  By
                                  ActionForex.com
                                  -

                                  Asian stocks tumble broadly today on concern of an outbreak of a coronavirus in China, as well as other countries in the region. China’s National Health Commission already confirmed that the virus which causes a type of pneumonia, can pass from person-to-person. That couldn’t come at the worst time as massive number of people are expected to travel within China before Lunar New Year.

                                  According to a report by London Imperial College’s MRC Centre for Global Infectious Disease Analysis, it’s estimated that there were already over 1700 cases in Wuhan city by January 12. Such estimate was not commented by the Chinese authorities yet. But there were already cases reported by Thailand, Japan and South Korea, involving people from from Wuhan or who recently visited the city.

                                  The virus is believed to be in the same family of Severe Acute Respiratory Syndrome (SARS), which killed nearly 800 people during an outbreak in 2003, starting in China and spread to Hong Kong. The World Health Organization (WHO) said yesterday that the primary source of the outbreak appeared to be an animal and some “limited human-to-human transmission” occurred between close contacts. WHO also called for an emergence committee on Wednesday to assess the situation.

                                  Hong Kong HSI is gaps lower today and is currently down more than -2%. Technically, a short term top is formed at 29174.92 and deeper pull back could be seen. Initial support is expected at around 55 day EMA (now at 27708). Rebound from 24899.93 could still extend higher. However, sustained break of the EMA would turn outlook bearish and HSI could head back towards 24899.93 support in that case.

                                  IMF downgrade growth forecast, sentiments boosted not yet visible in data

                                    By
                                    ActionForex.com
                                    -

                                    In the update to World Economic Outlook, IMF lowered 2020 global growth forecast by -0.l% to 3.3%, and 2021 by -0.2% to 3.4%. Still, they represent pickup form 2019’s 2.9% growth. IMF also noted that the downward revision “primarily reflects negative surprises to economic activity in a few emerging market economies, notably India”.

                                    Meanwhile, market sentiment has been “boosted by “tentative signs that manufacturing activity and global trade are bottoming out, a broad-based shift toward accommodative monetary policy, intermittent favorable news on US-China trade negotiations, and diminished fears of a no-deal Brexit”. However, “few signs of turning points are yet visible in global macroeconomic data.”

                                    Here are some highlights:

                                    • World output: 2020 at 3.3% (revised down by -0.1%), 2021 at 3.4% (revised down by -0.2%).
                                    • Advanced economies: 2020 at 1.6% (-0.1%), 2021 at 1.6% (unchanged).
                                    • US: 2020 at 2.0% (-0.1%), 2021 at 1.7% (unchanged).
                                    • Eurozone: 2020 at 1.3% (-0.1%), 2021 at 1.4% (unchanged).
                                    • Germany: 2020 at 1.1% (-0.1%), 2021 at 1.4% (unchanged).
                                    • Japan: 2020 at 0.7% (+0.2%), 2021 at 0.5% (unchanged).
                                    • UK: 2020 at 1.4% (unchanged), 2021 at 1.5% (unchanged).
                                    • Canada: 2020 at 1.8% (unchanged), 2021 at 1.8% (unchanged).
                                    • China: 2020 at 6.0% (+0.2%), 2021 at 5.8% (-0.1%).
                                    • India: 2020 at 5.8% (-1.2%), 2021 at 6.5% (-0.9%).

                                    Full report here.

                                    Bundesbank: Increasing evidence of stabilization in manufacturing sector

                                      By
                                      ActionForex.com
                                      -

                                      In the monthly report, Bundesbank said domestic economy was strong even though the overall economy probably stagnated in Q4. There is still no sign of an end to the boom in construction, which benefited from positive income prospects and favorable financing conditions.

                                      Downward movement in the export-oriented industry continued. But there was increasing evidence of stabilization in the manufacturing sector. Industrial orders have not deteriorated further in the past few months. Goods export also increased significantly. Short-term export expectations recovered and returned to positive territory for the first time in six months.

                                      Full report here.

                                      France Le Maire: Strike has very limited impact on GDP

                                        By
                                        ActionForex.com
                                        -

                                        France Economy Minister Bruno Le Maire said the economic impact of strike, which is in its 46th day, will be limited. But still, it could cut Q3 GDP growth by -0.1%.

                                        He told LCI television: “There will be an impact but it will be, I think, limited. Today estimates available show that the impact would be of a 0.1 points on growth on a quarter. On the whole year, it is a very limited impact.”

                                        What to look for in a good Forex broker?

                                          By
                                          EagleFX
                                          -

                                          The internet is a wonderful tool. However, it can be a difficult beast to tame as it throws so many options at us daily.

                                          If you wish to buy groceries and have them delivered, you will be faced with a choice of dozens of supermarkets that will deliver right to your door. You may be looking for antivirus software online. You will quickly realize that there are so many on the market, offering slightly different packages for slightly different prices, and the sheer amount of choice can quickly give us a headache.

                                          Netflix. How many of us load up Netflix and spend so much time searching for something to watch, that when we finally pick something, we have gotten on our own nerves so much, we do not even feel like watching anything!?

                                          Choice can be a blessing and a curse.

                                          This article will explore different Forex broker features and what you as a trader, should look for when identifying a quality broker that you can not only trust but get the most satisfaction from.

                                          Trading conditions

                                          There are a few conditions that one should look for in a broker. These include:

                                          • Spread
                                          • Execution speeds
                                          • Leverage

                                          Spread

                                          The spread is the difference between the bid and the ask price. Look for a broker that offers tight spreads. The tighter the better.

                                          New STP broker, Eagle FX offers highly competitive spreads on all assets within their platform. The site uses an advanced pricing system to ensure all spreads closely follow the major global markets ensuring clients receive the best possible trading conditions.

                                          A great feature within the Eagle FX, is that you can review the Live Spreads of FX Majors and Crypto pairs directly through their site without being required to set up an account.

                                          Execution speed

                                          This is how fast your order will be confirmed. Look for a broker that offers Straight Through Processing (STP) This means that your order will not go through a dealing desk and be filled right away. If a broker offers lightning-fast execution speeds, it is well worth taking a closer look at the other product features the broker offers. The quicker the execution, the less time waiting and running the risk of missing out on a crucial market movement.

                                          Leverage

                                          High leverage is an efficient and effective way to trade higher positions with less initial investment. Experienced traders like to benefit from high leverage, particularly in Forex trading as it allows making higher gains with less capital. Leverage is, in essence, a loan within a trading account.

                                          One of the many attractive features of high leverage is that it frees up additional capital enabling a trader to get involved in more trades, simultaneously. This is particularly useful when there is a busy schedule showing on the global economic calendar.

                                          To give an insight on the maths behind leverage: a leverage setting of 1:100 allows a trader the opportunity to trade with $5,000 from a $50 investment. Trading with high leverage can boost your earning potential without having to invest larger amounts of capital whilst enabling greater control of trades one may be involved in.

                                          Be wary, trading with higher leverage can maximize your earning potential but it can also magnify losses.

                                          Account Types

                                          If you are new to trading and especially new to trading with high leverage, it is worth developing a strategy before entering the market. This can be done in a variety of ways including doing your research, reading, watching seminars, etc but the most useful way to develop a strategy would be to make use of a demo account.

                                          Many brokers offer a free to use demo account within their site. This is especially useful if you are trading a volatile asset such as Cryptocurrency, practicing trading with leverage or getting to grips with a platform that you have never used before, whether that be MT4, MT5 or another unfamiliar platform to you. MT4 contains a vast amount of functions and features so it would be well worth having some practice on tools like this before depositing real money.

                                          Eagle FX is happy to keep things straight forward and offer one type of account. There are no set parameters or terms when setting up an account. The deposit minimum is $10.00 with no hidden clauses. Keeping one account type enables less experienced traders to share the same pristine trading conditions as ‘more experienced’ traders.

                                          Additionally, the site offers an affiliate program giving traders a chance to increase their earning potential and it’s completely free! All one has to do is refer a friend and start earning commission based on trades placed by the friend. Every trade carries a commission of $4 for every completed trade made by the person you referred. A great scheme and way to boost your earnings especially if you already have your online following.

                                          Deposits and Withdrawals

                                          This is massively important as this will determine how lucid your funds are. Moreover, how quickly can you get funds IN and OUT of a broker?

                                          A good place to start with this is to review what payment methods a broker offers. The more variety then, great! However, ensure the site offers Cryptocurrency as a deposit/withdrawal method. This will ensure rapid deposits and not having to wait days to wait for a deposit to land in your account using outdated wire transfers. Crypto trading is volatile so you may miss a market movement when waiting for a wire deposit to land and then not want to enter the market.

                                          Withdrawing via Bitcoin also ensures you will have the funds back in your wallet within an hour of being processed. Using Bitcoin ensures that you as a trader can have rapid access to trading your favorite digital assets.

                                          Account Security

                                          What can a broker do to ensure the safety of your funds? If you are trading Crypto and using Bitcoin as a deposit method you may feel uneasy that this ‘online money’ may be vulnerable to hackers… With the use of cold storage, this is not the case. If a broker does use cold storage then fantastic. It ensures that funds are kept completely offline away from potential online threats. It also shows that the broker cares about safety.

                                          Furthermore, look for a broker that keeps broker funds completely separate to client funds which will ensure that you will receive a requested withdrawal amount in full.

                                          Customer support

                                          Even the most seasoned traders and IT professionals all need a little support sometimes so look for a broker which will have a dedicated team of professionals available around the clock. A broker with a LiveChat feature is perfect to ask little questions whenever you need it. It certainly adds comfort knowing that there is support there should you need it.

                                          Conclusion

                                          If you are in the market for a new Forex broker or indeed searching for your first broker, do not feel that you have to sign up to the first broker you come across. Take your time, shop around and find the right broker that best suits your needs.

                                          Find a broker that will be available for you when you need assistance and ensure the broker offers straight-through processing. If a broker has additional features such as educational sections and economic calendars then even better. This will help you build on your existing knowledge and make you aware of the latest events around the globe which will affect the markets – giving you an added edge!

                                          Eagle FX offers its clients over 200 tradable assets including generous leverage on Forex and Cryptocurrencies. Sign up is free. Start trading your favorite digital assets today!

                                          Keep calm and choose the right broker for you!

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