Sun, Jul 28, 2024 @ 18:27 GMT
Facebook Mail RSS Twitter
Live Comments Page 656

Live Comments

Latest

France denied that Trump told Macron on Iran deal decision

    By
    ActionForex.com
    -

    Just earlier today, the New York times reported that Trump told French President Macron of the withdrawal of the Iran deal. And the report was “according to a person briefed on the conversation.”

    Then Reuters reported that Macron’s office denied the New York Times story.

    In the same report, Reuters said “one senior European official closely involved in Iran diplomacy told Reuters that U.S. officials had indicated late on Monday that Trump would withdraw from the agreement but it remained unclear on what terms and whether sanctions would be reimposed”.

    Again, unnamed source. Who to trust? When the President of the US can say something that overturn it completely the next day, you know what it’s like in the post-truth world.

    ECB: Corporate bond purchases sharply lowered bond spreads

      By
      ActionForex.com
      -

      In a report published today, ECB said that it’s corporate bond purchases sharply lowered bond spreads. It said that “in the subsequent period …(to) the end of December 2017, the CSPP accounted for a decline in corporate bond spreads of, on average, 25 basis points for eligible bonds, 10 basis points for ineligible investment-grade bonds and 20 basis points for all ineligible bonds.”

      Also, “for eligible bonds, the CSPP can be credited with almost the entire decline in spreads since the announcement of the programme.”

      Full article here.

      Fed Powell: Market expectations on monetary policy reasonably aligned with policymakers’

        By
        ActionForex.com
        -

        Fed chair Jerome Powell devliered a speech on “Monetary Policy Influences on Global Financial Conditions and International Capital Flows” in a conference in Zurich today. Powell said that “Fed policy normalization has proceeded without disruption to financial markets, and market participants’ expectations for policy seem reasonably well aligned with policymakers’ expectation.” And because that “markets should not be surprised by our actions”. And, even though there could be spillovers of Fed’s actions to other economies, the role of Fed’s monetary policy is “often exaggerated”.

        Regarding emerging market economies, Powell said that Fed and other advanced economies “played a relatively limited role” in the surge capital flow to these markets in recent years. Hence, “there is good reason to think the normalization of monetary policies in advanced economies should continue to prove manageable for” emerging economies.”

        In to US session: A look at AUDUSD and EURCHF

          By
          ActionForex.com
          -

          Heading into US session, CHF and JPY are notably higher against others. Commodity currencies are the weakest, together with EUR.

          The surge in USD/CAD earlier in European session first caught out attention. As mentioned earlier, it’s on course for 1.3124 resistance.

          Selling of AUD and EUR came in later. AUD/USD traders should have finally made up them mind to push the pair through 0.7500 key support level. Such development should confirm medium term reversal in the pair and should pave the way to 0.7328 support next.

          Also, the steep fall in EUR/CHF suggests that it’s finally being rejected by 1.2 key handle. Break of 1.1888 support will confirm near term reversal. And deeper pull back should be seen to 38.2% retracement of 1.1445 to 1.2004 at 1.1790 next.

           

          Australia plans to return to budget surplus earlier, but S&P said risks are significant

            By
            ActionForex.com
            -

            In the 2018 Budget announced today, Australian Treasurer Scott Morrison plotted the path to return to balance in fiscal 2019/20, and turn into AUD 22b surplus in fiscal 2020/21. The move is welcomed by S&P Global Ratings. But the negative outlook on Australia’s AAA sovereign ratings is maintained.

            S&P said in a statement after the budge release that “the budgetary position has improved over the past year, aided by strength in the Australian and global economies. ” Also, “the government has also shown a commitment to fiscal prudence with its plan to return a balanced budget earlier than previously announce.” Such developments helped “ease the negative pressures on the Australian sovereign ratings.”

            However, “risks to the country’s fiscal outlook remain, including increasing external economic uncertainties in recent months. Global trade tensions, coupled with rising investor aversion to emerging markets in recent months, may dampen economic growth among Australia’s key trading partners.”

            And, “risks to the government’s plan for an earlier return to budget surpluses are significant. The outlook on the long-term Australian sovereign ratings remains negative for now to reflect these uncertainties.”

            CAD tumbles broadly, EURCAD threatens bullish reversal

              By
              ActionForex.com
              -

              Canadian dollar tumbles broadly as the break of 1.2913 resistance in USD/CAD spills over to other pairs. There is no apparent trigger for the selloff but markets could be positioning ahead of Trump’s announcement on Iran deal.

              USD/CAD should now be heading to retest 1.3124 resistance next. And outlook will stay bullish as long as 1.2802 minor support holds.

              Also, it looks like EUR/CAD’s corrective fall from 1.6151 could be completed with three waves down to 1.5315, ahead of 61.8% projection of 1.6151 to 1.5461 from 1.5712 at 1.5286, the target we mentioned here. Immediate focus is now on 1.5461 support turned resistance. Break there will affirm this case of bullish reversal and target 1.5712 resistance next.

              Chinese Vice Premier Liu He to visit Washington next week for trade talk with US

                By
                ActionForex.com
                -

                White House spokesperson Sarah Sanders told reports that trade talks between US and China will resume in Washington next week.

                She said that “we are working on something that we think will be great for everybody”

                And, “China’s top economic adviser, the vice premier (Liu He), will be coming here next week to continue the discussions with the president’s economic team.”

                China trade surplus at USD 28.8B, YTD imports from EU jumped 20.1%

                  By
                  ActionForex.com
                  -

                  In USD term, China’s exports rose 12.9% yoy to USD 200.4B in April. Imports rose 21.5% yoy to USD 171.6B. That gave to USD 28.8B in trade surplus. Year-to-date, exports rose 13.7% yoy to USD 745.7B, imports rose 19.6% to USD 668.9B, resulting in USD 76.8B in trade surplus.

                  Year-to-date, exports to the US rose 13.9% yoy to USD 135.9B while imports rose 11.6% yoy to USD 55.6B, resulting in USD 80.3B in surplus. That is, comparing with same period in 2017, China’s trade surplus to the US rose 15.6% yoy.

                  Year-to-date, exports to the EU rose 12.9% yoy to USD 121.9B while imports rose 20.1% yoy to USD 86.3B, resulting in USD 35.6B in surplus. That is, comparing with same period in 2017, China’s trade surplus to the EU dropped -1.4% yoy.

                  Also, year-to-date from January through April, total trade with the US rose 13.2% to USD 191.6B. Total trade with the EU rose 15.8% to USD 208.2B.

                  Details in this page. In simplified Chinese, but google translate can do the job on tables pretty well.

                  ECB Smets: Economic expansion continuing at a robust pace

                    By
                    ActionForex.com
                    -

                    Despite a soft batch of Eurozone data ECB Governing Council member Jan Smets remained optimistic. He said in a WSJ interview that “the latest data remain pretty consistent with the story of the economic expansion continuing at a robust pace.”

                    And the central bank would be ready to phase out the EUR 30b per month asset purchase program later this year. Instead, Smets said ECB would turn the policy focus toward communicating on interest rates.

                    Reuters reported sources saying the ECB policy would not want to upset market expectations. That is, investors are expecting the asset purchases to end this year and there would be finally a rate hike towards the middle of 2019.

                    Richmond Fed Barkin: Economy is remarkably strong

                      By
                      ActionForex.com
                      -

                      Thomas Barkin delivered his first speech as Richmond Fed President overnight and expressed his support for more rate hikes ahead. But he declined to comment on how many hikes this year he expects.

                      He noted that “monetary policy is still pretty accommodative”. And, “when unemployment is low and inflation is effectively at our target, we probably ought to go to neutral in that environment.” Also, “the economy’s performance as we sit here today is remarkably strong: above trend growth, low unemployment, inflation at target.”

                      But Barkin also warned on the risks from the trade tensions between US and other countries. He said it’s “not clear what’s going to be implemented in the end” regarding tariffs. But “there is an issue on business confidence and the business people that I talk to who were almost euphoric in January are now nervous. And they’re nervous about where the macroeconomy is going.”

                      ECB Praet blamed easter for negative surprise in Eurozone core inflation

                        By
                        ActionForex.com
                        -

                        ECB chief economist Peter Praet said in Geneva today:

                        • “This negative surprise in core inflation is mainly attributable to a decrease in services inflation, which is likely to be related to developments in volatile items, also reflecting the timing of Easter this year.”
                        • “On the basis of current futures prices for oil, inflation is likely to hover around 1.5 percent in the coming months,”

                        Released last week, Eurozone CPI flash slowed to 1.2% yoy in April, down from 1.3%. Core CPI was worse, slowed to 0.7% yoy, down from 1.0% yoy.

                        Atlanta Fed Bostic: Some overshoot in inflation is fine

                          By
                          ActionForex.com
                          -

                          Altlanta Fed President Raphael Bostic said in an interview:

                          • “We have seen some upward pressure” on inflation.
                          • “We don’t have the ability to stop trends on a dime. Some overshoot is fine,”
                          • If current trends continue, “we are going to see wages start to go up because we will truly have a scarcity of labor,”
                          • “I am not sure there is a big signal” in that on inflation.

                          BoC Lane: Still a significant degree of uncertainty around the trade situation

                            By
                            ActionForex.com
                            -

                            Bank of Canada (BoC) Deputy Governor Timothy Lane said earlier today there are still a significant degree of uncertainty around the trade situation. While news on steel has changed a lot in the last few days, it’s still a fluid situation, not a situation of calling all clear. And even though BoC doesn’t need to stay on hold until there is more clarity, the lack of clarity has dampening effect on outlook.

                            Lane also noted that during rate decision discussion, trade uncertainty is definitely a risk to outlook, but that’s just one of a number of factors. And for BoC, one of the reasons to be on hold is that policymakers are very cautious to make sure there is adequate taking stock of what rates are doing to households.

                            A look at GBP/CHF long opportunity

                              By
                              ActionForex.com
                              -

                              Heading into US session, GBP and USD are trading as the strongest one for today. CHF franc is the weakest, followed by AUD and then EUR. USD’s strength is a bit more convincing as USD/CHF has already took out last week’s high as well as key resistance level at 1.0037. EUR/USD has also just breached last week’s low. GBP/USD is kept below 1.3588 minor resistance, maintaining near term bearishness.

                              GBP’s strength today is generally seen as corrective in near nature. Except that, EUR/GBP’s near term outlook is not overwhelmingly bullish. And, indeed, GBP/CHF is an interest cross to look at. The W row of GBP/CHF action bias showed that it was in a brief up trend. Totally neutral D row (latest 9 bars) indicates that it has been in consolidation. Some 6H red bars indicates that consolidation was in form a a pull back whether sideway trading. But as the 6H bars have turned neutral, downside momentum in the pull back has diminished. And, there are indeed a string of blue H bars, arguing that the correction could be finished and GBP/CHF is ready for rise resumption.

                              The above could also be seen clearly, in the D, 6H and H Action Bias charts.

                              Now back to the regular GBP/CHF bar chart. The break of 1.3600 supported turned resistance is the first sign of completion of pull back from 1.3854 at 1.3507. The structure of the fall supports that it’s a correction. And it’s also held above 38.2% retracement of 1.2861 to 1.3854 at 1.3475, which indicates healthy near term bullishness. Intraday bias is now on the upside for channel resistance (now at 1.3732). Firm break there should confirm this bullish view and send GBP/CHF through 1.3854 high to 61.8% projection from 1.2861 to 1.3854 from 1.3507 at 1.4121 as the first target. Though, break of 1.3507 will invalidate this bullish view and extend the fall from 1.3854 instead.

                              This is the kind of setup that one can just buy at the current level at around 1.3600, with a stop at 1.3500 (below 1.3507 support), targeting 1.4121. Risk/reward ratio is good enough for position trading.

                              ECB research: Significant increase in protectionism could have material impact on global trade and output

                                By
                                ActionForex.com
                                -

                                In article titled “Implications of rising trade tensions for the global economy“, ECB researcher Lucia Quaglietti warned of the impact of escalation of trade tensions.

                                Based on simulations carried out by ECB staff, in event of a significant increase in protectionism, “the impact on global trade and output could be material.” In particular, if US increases tariffs “markedly” on imported goods from all trading partners that “retaliate symmetrically”, the outcome for the world economy would be “clearly negative. And, “the impact could be particularly severe in the United States”

                                For other countries, those with “closest trade relations” with the US would be most negatively affected. And, “only a few open economies with little exposure to the tariff-imposing country may benefit from trade diversion effects, as they would gain competitiveness in third markets.”

                                In addition, the impact of trade tension escalation could be “felt via a number of channels. Higher import prices would lead to higher production costs and lower household purchasing power. Consumption, investment and employment will also be affected. Moreover, there will be economic uncertainty that leads to delay and consumer spending and business investment. Credit supply could be reduced with requirement for higher compensation. And there could be broad spill over to the global financial markets.

                                China FX reserves dropped to five month low in USD term

                                  By
                                  ActionForex.com
                                  -

                                  According to the latest data from People’s Bank of China, the country’s foreign exchange reserves dropped to a five month low in April. Reserves dropped USD 17.97B in April from USD 3.143T to USD 3.125T. In SDR terms, Foreign currency reserves rose 11.3 B from 2.162T to 2.173T.

                                  Gold reserves was unchanged at 59.24 Million oz.

                                  Total reserves dropped from USD 3.240T to USD 3.221T. In SDR terms, total reserves rose from 2.229T to 2.240T.

                                  Full official table here.

                                  Eurozone Sentix investor confidence dropped to 19.2, lowest since Feb 2017

                                    By
                                    ActionForex.com
                                    -

                                    Eurozone Sentix investor confidence dropped to 19.2 in May, down from 19.6, missed expectation of 21.0. That’s the 4th decline in a row, and hit the lowest level since February 2017. Current situation index dropped 0.2 to 42.8, lowest since October 2017. Expectations dropped to -2, lowest since October 2014.

                                    Quotes from the release:

                                    “Uncertainties about the introduction of punitive US tariffs and the danger that this could lead to an expansion of protectionist measures are weighing on us.”

                                    Overall Germany investor confidence index dropped 0.9 to 24.4, lowest since September 2016. Current situation index dropped 2.2 to 59.8, lowest since April 2017. Expectation index was unchanged at -7.8.

                                    Full release here

                                    Eurozone retail PMI at 48.6, Italy sales decline accelerated sharply

                                      By
                                      ActionForex.com
                                      -

                                      Eurozone retail PMI dropped to 48.6 in April, down from 50.1. Weakness was driven by sharp decline in Italy which hit 21 month-low at 42.7. Germany retail PMI dropped to 9-month low at 51.0. France continued to outperform with retail PMI hit 2 month high at 50.1.

                                      Quotes from Alex Gill, economist at IHS Markit:

                                      “The latest data highlighted a disappointing month for the eurozone retail sector. Monthly sales were down for the first time for over a year as signs of restricted consumer demand and increased uncertainty begin to show. This was particularly evident in Italy, where the rate of decline in like-for-like sales accelerated sharply and was the most marked for the better part of two years.

                                      “Forward-looking indicators add to the dull picture, with falls in purchasing activity and stocks of goods suggesting retailers are taking an increasingly cautious approach to their business operations. The one shining light was a further rise in staffing numbers. That said, without a rebound in customer demand we may see employment slip back into contraction territory in the coming months as well.”

                                      Full release here.

                                      Swiss CPI rose 0.2% mom, 0.8% yoy. Foreign currency reserves rose to CHF 757B

                                        By
                                        ActionForex.com
                                        -

                                        Swiss CPI rose 0.2% mom, 0.8% yoy in April, below expectation of 0.3% mom, 0.9% yoy.

                                        Core CPI rose 0.3% mom, 0.5% yoy. Domestic products CPI rose 0.0% mom, 0.4% yoy. Imported products CPI rose 0.9% mom, 2.1% yoy.

                                        Also from Swiss, foreign currency reserves rose to CHF 757B in April, up from CHF 738B.

                                        BoE to stand pat, eyes on new forecasts and voting

                                          By
                                          ActionForex.com
                                          -

                                          BoE is widely expected to keep bank rate unchanged at 0.50%. Asset purchase target will also be maintained at GBP 435B. The expectation of a May hike waned after recent batch of weak data. UK CPI grew merely 0.1% qoq in Q1. April PMIs showed that rebound at the start of Q2 was weak. And, UK CPI also slowed more than expected to 2.5% yoy in March, giving BoE less pressure to hike immediately.

                                          It’s now seen that BoE would delay the gradual tightening of of monetary policy. But interest rates are still on the path of going up. Markets are pricing in around 50% chance of hike by August. But we’d argue that November is a better timing until there is a drastic turn in momentum in the latter half of Q2.

                                          But such market expectations could shift drastically. Firstly, BoE will release the quarterly Inflation Report and we’ll see how the data released in the past three months affect the growth and inflation projections. Secondly, it would be interesting to see if the two known hawks, Ian McCafferty and Michael Saunders, would change their mind and refrain from voting for rate hike again. And turn in the two could trigger steep selloff in the Pound.

                                          Load more

                                          ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for over a decade. Empowering the individual traders was, is, and will always be our motto going forward.

                                          Contact us: contact@actionforex.com

                                          © ActionForex.com © 2024 All rights reserved.