Daily Market Analysis by FxGrow
- Thread starter FxGrow Support
- Start date
- Watchers 2
Daily Market Analysis – 27th July, 2015
By FxGrow Research & Analysis Team
US Dollar weak ahead of FOMC Rate Decision
The US Dollar is weak ahead of the much awaited Federal Open Market Committee policy meeting this week on Wednesday.
According to the Analyst expectations 80% believe that Fed will hike interest rates in September and give a clear direction to the future rate hikes.
The Fed officials will meet on Tuesday and Wednesday and issue a statement at the conclusion of Wednesday’s meeting. Investors will be looking for directions as to whether the Fed is moving closer to raising interest rates in September this year.
Globally investors seem to be cautious if Fed fails to give any indication of a September rake hike in its policy meeting on Wednesday.
In the FOMC statement, look for only minor cosmetic changes to the post-meeting communique... do not expect policymakers to provide any new clues with regard to a potential rate hike in September - Deutsche bank.
In the minutes to the April meeting the FOMC had a discussion about whether or not to signal in the statements leading up to liftoff that a rate hike is likely coming in the near term. The Committee concluded that it would not signal a rate hike in the meeting prior to liftoff. Instead, the first hike would be decided on a meeting-by-meeting basis - JP Morgan.
The July FOMC statement should emphasize data dependence and eschew any overt signals about the timing of liftoff. We look for a cautiously optimistic assessment of the outlook as data have been somewhat more mixed since the June meeting. With the market pricing less than a 40% chance of a September hike, July communications should push those odds up slightly - Bank of America.
At issue is whether the FOMC will alter its forward guidance to prepare the markets explicitly for a near-term rate hike. If the Committee feels confident it can start normalizing policy in September, which has been our forecasted lift-off date, we believe it will adjust the language - Credit Suisse.
The Euro zone's manufacturing sector declined as the PMI for the Euro area came in at 52.2 for the month of July. German PMI fell to 52.2 while French PMI fell to 49.6 in the month of July.
"Eurozone economic growth lost only slight momentum in July amid the rollercoaster events of the Greek debt crisis during the month. The rate of expansion remained reassuringly robust to suggest that it was by-and-large 'business as usual' for the region as a whole" - Chris Williamson, chief economist at Markit.
Crude oil prices have moved lower to $47.87 due to a weak trend in Asia and slump in the manufacturing sector in China.
Gold has recovered its losses and is currently trading at 1099.57, while Silver is flat at 14.68
27th July 2015 – 09:55hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
By FxGrow Research & Analysis Team
US Dollar weak ahead of FOMC Rate Decision
The US Dollar is weak ahead of the much awaited Federal Open Market Committee policy meeting this week on Wednesday.
According to the Analyst expectations 80% believe that Fed will hike interest rates in September and give a clear direction to the future rate hikes.
The Fed officials will meet on Tuesday and Wednesday and issue a statement at the conclusion of Wednesday’s meeting. Investors will be looking for directions as to whether the Fed is moving closer to raising interest rates in September this year.
Globally investors seem to be cautious if Fed fails to give any indication of a September rake hike in its policy meeting on Wednesday.
In the FOMC statement, look for only minor cosmetic changes to the post-meeting communique... do not expect policymakers to provide any new clues with regard to a potential rate hike in September - Deutsche bank.
In the minutes to the April meeting the FOMC had a discussion about whether or not to signal in the statements leading up to liftoff that a rate hike is likely coming in the near term. The Committee concluded that it would not signal a rate hike in the meeting prior to liftoff. Instead, the first hike would be decided on a meeting-by-meeting basis - JP Morgan.
The July FOMC statement should emphasize data dependence and eschew any overt signals about the timing of liftoff. We look for a cautiously optimistic assessment of the outlook as data have been somewhat more mixed since the June meeting. With the market pricing less than a 40% chance of a September hike, July communications should push those odds up slightly - Bank of America.
At issue is whether the FOMC will alter its forward guidance to prepare the markets explicitly for a near-term rate hike. If the Committee feels confident it can start normalizing policy in September, which has been our forecasted lift-off date, we believe it will adjust the language - Credit Suisse.
The Euro zone's manufacturing sector declined as the PMI for the Euro area came in at 52.2 for the month of July. German PMI fell to 52.2 while French PMI fell to 49.6 in the month of July.
"Eurozone economic growth lost only slight momentum in July amid the rollercoaster events of the Greek debt crisis during the month. The rate of expansion remained reassuringly robust to suggest that it was by-and-large 'business as usual' for the region as a whole" - Chris Williamson, chief economist at Markit.
Crude oil prices have moved lower to $47.87 due to a weak trend in Asia and slump in the manufacturing sector in China.
Gold has recovered its losses and is currently trading at 1099.57, while Silver is flat at 14.68
27th July 2015 – 09:55hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
Daily Market Analysis – 28th July, 2015
By FxGrow Research & Analysis Team
China Slowdown worries Global Investors
In China growth has fallen to the lowest level since 2009 as Shanghai stocks plunged by 8.48% on Monday, in spite of government efforts as the world’s second largest economy is heading towards a slowdown.
Globally investors are worried that the slowdown in China will pull other major economies including the US and Japan as Europe is already under pressure from its member countries.
Major concerns are that the foreign trade between US and China may get affected and the slowdown will affect industries in USA. Many of US companies are involved in trade with China which may get affected.
As the economy of China is driven by debt, the slowdown will start a financial crisis which could spread to the other parts of the world.
"Even if China's economy maintained its growth rate, the main contribution would be from public investment, so the effect on Asian economies and Japan's exports warrants due attention. The slowdown in exports and output are likely temporary" - Bank of Japan Deputy Governor Hiroshi Nakaso.
Many U.S. consumer companies are brushing aside worries that China's weakening economy and sputtering stock market will dramatically damage their bottom lines even with early trouble signs in recent earnings reports - Reuters.
The Chinese economy has faced difficulties this year as decelerating growth in factory output, retail sales and domestic investment has been compounded by a slowing property market - Reuters.
A slowdown in China will have a spillover effect on many countries including USA, UK, Australia, India and Europe.
In China Manufacturing activity plunged in the month of July to 48.2 hitting a 15 month low showing signs of a slowdown in the world’s second largest economy.
Greek Prime Minister Alexis Tsipras seeks support of the Syriza party to tackle the new 86billion euro EU-IMF bailout.
"Collective, democratic regrouping procedures are called for. Our strategy must be clarified... The congress procedure must be set into motion as soon as possible" - Greek Prime Minister Alexis Tsipras.
Greek PM is aiming to strike a deal with its European creditors soon, before dealing with the internal conflicts in the party.
Crude Oil is trading lower at $47.13 on China stock market collapse and oversupply concerns.
Gold is trading lower in the Europe at 1094.60, while Silver is weak 14.57
28th July 2015 – 03:02hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
By FxGrow Research & Analysis Team
China Slowdown worries Global Investors
In China growth has fallen to the lowest level since 2009 as Shanghai stocks plunged by 8.48% on Monday, in spite of government efforts as the world’s second largest economy is heading towards a slowdown.
Globally investors are worried that the slowdown in China will pull other major economies including the US and Japan as Europe is already under pressure from its member countries.
Major concerns are that the foreign trade between US and China may get affected and the slowdown will affect industries in USA. Many of US companies are involved in trade with China which may get affected.
As the economy of China is driven by debt, the slowdown will start a financial crisis which could spread to the other parts of the world.
"Even if China's economy maintained its growth rate, the main contribution would be from public investment, so the effect on Asian economies and Japan's exports warrants due attention. The slowdown in exports and output are likely temporary" - Bank of Japan Deputy Governor Hiroshi Nakaso.
Many U.S. consumer companies are brushing aside worries that China's weakening economy and sputtering stock market will dramatically damage their bottom lines even with early trouble signs in recent earnings reports - Reuters.
The Chinese economy has faced difficulties this year as decelerating growth in factory output, retail sales and domestic investment has been compounded by a slowing property market - Reuters.
A slowdown in China will have a spillover effect on many countries including USA, UK, Australia, India and Europe.
In China Manufacturing activity plunged in the month of July to 48.2 hitting a 15 month low showing signs of a slowdown in the world’s second largest economy.
Greek Prime Minister Alexis Tsipras seeks support of the Syriza party to tackle the new 86billion euro EU-IMF bailout.
"Collective, democratic regrouping procedures are called for. Our strategy must be clarified... The congress procedure must be set into motion as soon as possible" - Greek Prime Minister Alexis Tsipras.
Greek PM is aiming to strike a deal with its European creditors soon, before dealing with the internal conflicts in the party.
Crude Oil is trading lower at $47.13 on China stock market collapse and oversupply concerns.
Gold is trading lower in the Europe at 1094.60, while Silver is weak 14.57
28th July 2015 – 03:02hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
Daily Market Analysis – 30th July, 2015
By FxGrow Research & Analysis Team
FOMC - September Rate Hike Remains Open
Federal Open Market Committee (FOMC) released its policy statement which showed that the members are locked in a debate on the timing of the rate hike as the US labor market continues to improve with solid job gains and declining unemployment.
The statement from the July meeting of FOMC suggests that September rate hike remains open as FOMC is on track to deliver a 25bp rate hike at the next meeting in September.
Information received since the Federal Open Market Committee met in June indicates that economic activity has been expanding moderately in recent months. The labor market continued to improve, with solid job gains and declining unemployment - FOMC.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators continuing to move toward levels the Committee judges consistent with its dual mandate - FOMC.
To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate. In determining how long to maintain this target range, the Committee will assess progress - both realized and expected - toward its objectives of maximum employment and 2 percent inflation - FOMC.
When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent. The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run - FOMC.
Following the FOMC statement US dollar rose against its major counterparts with EURUSD touching 1.0948 and GBPUSD 1.5593 in the European trading session today. USDJPY crossed the 124 handle to reach 124.20 while NZDUSD is trading at 0.6614
Global equity markets are up with the Dow Jones industrial average up by 121.12 points to close at 17,751.39; S&P 500 gained 15.32 points to close at 2,108.57; the Shanghai Composite index was up 0.7% to 3,819.27; the Nikkei Stock Average was up 1.1%; Australia’s S&P ASX 200 was up 0.6% today as Fed remains on track to hike interest rates later this year.
Greek PM Alexis Tsipras is facing opposition from Syriza party over the €86bn bailout deal and a series of economic reforms as demanded by its European creditors.
"I would be the last person to want elections, if I had the secured parliamentary majority to make it through to the end of the four-year term" - Greek PM Alexis Tsipras.
German consumer confidence index remained flat at 10.1 points amid uncertainty about Greece's financial stability.
"German consumers apparently assume that the hard-won solution in the debt dispute with Greece will have negative consequences on the German economy" - GfK analyst.
UK Retail sales growth slowed in the month of July according to a report by the Confederation of British Industry (CBI).
CBI Retail sales balance dropped to +21 in July while analysts expectations were for a rise to +30.
Crude oil prices have stabilized at $48.91 following the FOMC statement.
Gold is trading lower in the Europe at 1086.71, while Silver is flat at 14.67
30th July 2015 – 07:57hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
By FxGrow Research & Analysis Team
FOMC - September Rate Hike Remains Open
Federal Open Market Committee (FOMC) released its policy statement which showed that the members are locked in a debate on the timing of the rate hike as the US labor market continues to improve with solid job gains and declining unemployment.
The statement from the July meeting of FOMC suggests that September rate hike remains open as FOMC is on track to deliver a 25bp rate hike at the next meeting in September.
Information received since the Federal Open Market Committee met in June indicates that economic activity has been expanding moderately in recent months. The labor market continued to improve, with solid job gains and declining unemployment - FOMC.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators continuing to move toward levels the Committee judges consistent with its dual mandate - FOMC.
To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate. In determining how long to maintain this target range, the Committee will assess progress - both realized and expected - toward its objectives of maximum employment and 2 percent inflation - FOMC.
When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent. The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run - FOMC.
Following the FOMC statement US dollar rose against its major counterparts with EURUSD touching 1.0948 and GBPUSD 1.5593 in the European trading session today. USDJPY crossed the 124 handle to reach 124.20 while NZDUSD is trading at 0.6614
Global equity markets are up with the Dow Jones industrial average up by 121.12 points to close at 17,751.39; S&P 500 gained 15.32 points to close at 2,108.57; the Shanghai Composite index was up 0.7% to 3,819.27; the Nikkei Stock Average was up 1.1%; Australia’s S&P ASX 200 was up 0.6% today as Fed remains on track to hike interest rates later this year.
Greek PM Alexis Tsipras is facing opposition from Syriza party over the €86bn bailout deal and a series of economic reforms as demanded by its European creditors.
"I would be the last person to want elections, if I had the secured parliamentary majority to make it through to the end of the four-year term" - Greek PM Alexis Tsipras.
German consumer confidence index remained flat at 10.1 points amid uncertainty about Greece's financial stability.
"German consumers apparently assume that the hard-won solution in the debt dispute with Greece will have negative consequences on the German economy" - GfK analyst.
UK Retail sales growth slowed in the month of July according to a report by the Confederation of British Industry (CBI).
CBI Retail sales balance dropped to +21 in July while analysts expectations were for a rise to +30.
Crude oil prices have stabilized at $48.91 following the FOMC statement.
Gold is trading lower in the Europe at 1086.71, while Silver is flat at 14.67
30th July 2015 – 07:57hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
Daily Market Analysis – 31st July, 2015
By FxGrow Research & Analysis Team
Greek Bailout - IMF won't back Greek deal without reforms
The International Monetary Fund said after its board meeting on Wednesday that it cannot officially join the €86bn third bailout deal for Greece as the country’s debt levels are unsustainable.
"As we've said before, the IMF can only support a program that is comprehensive. What do we mean? We mean a program that ensures medium-term sustainability" - IMF spokesperson, Angela Gaviria.
"In order to ensure that sustainability, that medium-term sustainability, there's a need for difficult decisions on both sides and by both sides. I mean, difficult decisions in Greece regarding reforms, and difficult decisions for Greece's European partners about debt relief” - IMF spokesperson, Angela Gaviria.
“According to its own rules, the IMF cannot participate in any new bailout. I mean, they’ve already violated their rules twice to do so, but I don’t think they will do it a third time” - Greek finance minister.
Germany has insisted that IMF has to be involved in the new 86 billion euro bailout deal.
Greece needs to repay 3.2 billion euro to the European Central Bank on August 20 and with the recent IMF move will make it difficult for Greece to receive the new bailout funds in time.
"There is a need for difficult decisions on both sides... difficult decisions in Greece regarding reforms, and difficult decisions among Greece's European partners about debt relief" - IMF official.
Greece's talks with its International creditors for a €86bn third bailout deal continue with top officials from the European Union and International Monetary Fund meeting key ministers in Athens.
Greek Prime Minister Alexis Tsipras is seeking support from Syriza party for accepting the tough bailout as demanded by its European creditors.
“We are telling the Greek people loud and clear and with no remorse that this is the deal we managed to bring to them and if there is someone who thinks that they could have achieved a better deal, let them come out and say that” - Greek PM Alexis Tsipras.
US Economy grew by 2.3% in the second quarter of 2015 according to the Commerce Department. Initial jobless claims rose by 12K in the week ended July 25 according to the Labor Department.
In Japan household spending declined for the month of June showing signs of contraction in the world's third biggest economy. Annual core consumer inflation rose 0.1% in June.
"There's a risk the recent softness in exports and output may hurt corporate sentiment just when companies were beginning to turn more aggressive on investment" - Koji Ishida, Bank of Japan board member.
New Zealand Business Confidence declined to the lowest level in 6 years according to ANZ Business Outlook.
Crude oil prices fell to $47.66 on concerns of oversupply after OPEC indicated there would be no cuts in production.
Gold is trading lower in the Europe at 1083.44, while Silver is weak at 14.62
31st July 2015 – 12:23hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
By FxGrow Research & Analysis Team
Greek Bailout - IMF won't back Greek deal without reforms
The International Monetary Fund said after its board meeting on Wednesday that it cannot officially join the €86bn third bailout deal for Greece as the country’s debt levels are unsustainable.
"As we've said before, the IMF can only support a program that is comprehensive. What do we mean? We mean a program that ensures medium-term sustainability" - IMF spokesperson, Angela Gaviria.
"In order to ensure that sustainability, that medium-term sustainability, there's a need for difficult decisions on both sides and by both sides. I mean, difficult decisions in Greece regarding reforms, and difficult decisions for Greece's European partners about debt relief” - IMF spokesperson, Angela Gaviria.
“According to its own rules, the IMF cannot participate in any new bailout. I mean, they’ve already violated their rules twice to do so, but I don’t think they will do it a third time” - Greek finance minister.
Germany has insisted that IMF has to be involved in the new 86 billion euro bailout deal.
Greece needs to repay 3.2 billion euro to the European Central Bank on August 20 and with the recent IMF move will make it difficult for Greece to receive the new bailout funds in time.
"There is a need for difficult decisions on both sides... difficult decisions in Greece regarding reforms, and difficult decisions among Greece's European partners about debt relief" - IMF official.
Greece's talks with its International creditors for a €86bn third bailout deal continue with top officials from the European Union and International Monetary Fund meeting key ministers in Athens.
Greek Prime Minister Alexis Tsipras is seeking support from Syriza party for accepting the tough bailout as demanded by its European creditors.
“We are telling the Greek people loud and clear and with no remorse that this is the deal we managed to bring to them and if there is someone who thinks that they could have achieved a better deal, let them come out and say that” - Greek PM Alexis Tsipras.
US Economy grew by 2.3% in the second quarter of 2015 according to the Commerce Department. Initial jobless claims rose by 12K in the week ended July 25 according to the Labor Department.
In Japan household spending declined for the month of June showing signs of contraction in the world's third biggest economy. Annual core consumer inflation rose 0.1% in June.
"There's a risk the recent softness in exports and output may hurt corporate sentiment just when companies were beginning to turn more aggressive on investment" - Koji Ishida, Bank of Japan board member.
New Zealand Business Confidence declined to the lowest level in 6 years according to ANZ Business Outlook.
Crude oil prices fell to $47.66 on concerns of oversupply after OPEC indicated there would be no cuts in production.
Gold is trading lower in the Europe at 1083.44, while Silver is weak at 14.62
31st July 2015 – 12:23hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
Daily Market Analysis – 03rd Aug, 2015
By FxGrow Research & Analysis Team
US Consumer Sentiment declines to the lowest level in the last eight months
Consumer confidence slipped a bit in the July 2015 survey. A disappointing pace of economic growth was the main reason for the small decline in consumer confidence - University of Michigan.
The Sentiment Index was 93.1 in the July 2015 survey, down from 96.1 in June. A disappointing pace of economic growth was the main reason for the small decline in consumer confidence. Importantly, consumers still anticipate that the expansion will continue - University of Michigan.
While expected changes in unemployment have been trendless at positive levels in the past year, the July survey was the first since last September that consumers on balance expected no significant change in the rate of joblessness during the year ahead - University of Michigan.
US economy growth has been low this year, with an annual rate of growth at just 0.6% from January to March 2015. Most of the economists still see that the Federal Reserve will raise its interest rates later this year.
Gold has opened the week lower with prices down as much as 7 percent after Federal Reserve indicated the prospects of raising its interest rates this year.
Investors are awaiting the US Non-Farm Payrolls data this week which will provide fresh clues on the timing of the rate hike and the strength of the US economy.
In China manufacturing activity declined to the lowest level in 2 years showing signs of a further slowdown in the later part of the year. Caixin manufacturing PMI declined to 47.8 in the month of July the weakest level seen since 2013.
Eurozone Consumer Inflation rose to 1.0%, while the unemployment rate remained at 11.1%
In Canada Economic output shrank 0.2% in May according to the data released by the Statistics Canada.
Greek Stock markets opened today after a 5 - week shutdown, with restriction put in place due to capital controls.
The Greek benchmark index slumped by 19 percent to 649.48 reaching the lowest levels seen since September 2012.
Greek Banking sector was in spotlight as their shares were down due to Recapitalization, Bad debts and they are not expected to make any profits this year.
Crude oil prices fell to $46.41 on weak China data and oversupply concerns.
Gold is trading lower in the Europe at 1092.90, while Silver is weak at 14.69
03rd Aug 2015 – 10:14hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
By FxGrow Research & Analysis Team
US Consumer Sentiment declines to the lowest level in the last eight months
Consumer confidence slipped a bit in the July 2015 survey. A disappointing pace of economic growth was the main reason for the small decline in consumer confidence - University of Michigan.
The Sentiment Index was 93.1 in the July 2015 survey, down from 96.1 in June. A disappointing pace of economic growth was the main reason for the small decline in consumer confidence. Importantly, consumers still anticipate that the expansion will continue - University of Michigan.
While expected changes in unemployment have been trendless at positive levels in the past year, the July survey was the first since last September that consumers on balance expected no significant change in the rate of joblessness during the year ahead - University of Michigan.
US economy growth has been low this year, with an annual rate of growth at just 0.6% from January to March 2015. Most of the economists still see that the Federal Reserve will raise its interest rates later this year.
Gold has opened the week lower with prices down as much as 7 percent after Federal Reserve indicated the prospects of raising its interest rates this year.
Investors are awaiting the US Non-Farm Payrolls data this week which will provide fresh clues on the timing of the rate hike and the strength of the US economy.
In China manufacturing activity declined to the lowest level in 2 years showing signs of a further slowdown in the later part of the year. Caixin manufacturing PMI declined to 47.8 in the month of July the weakest level seen since 2013.
Eurozone Consumer Inflation rose to 1.0%, while the unemployment rate remained at 11.1%
In Canada Economic output shrank 0.2% in May according to the data released by the Statistics Canada.
Greek Stock markets opened today after a 5 - week shutdown, with restriction put in place due to capital controls.
The Greek benchmark index slumped by 19 percent to 649.48 reaching the lowest levels seen since September 2012.
Greek Banking sector was in spotlight as their shares were down due to Recapitalization, Bad debts and they are not expected to make any profits this year.
Crude oil prices fell to $46.41 on weak China data and oversupply concerns.
Gold is trading lower in the Europe at 1092.90, while Silver is weak at 14.69
03rd Aug 2015 – 10:14hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
Daily Market Analysis – 04th Aug, 2015
By FxGrow Research & Analysis Team
Reserve Bank of Australia holds rates steady at 2 percent
At its meeting today, the Board decided to leave the cash rate unchanged at 2.0 percent - Reserve Bank of Australia.
The global economy is expanding at a moderate pace, but some key commodity prices are much lower than a year ago. Much of this trend appears to reflect increased supply, including from Australia. Australia's terms of trade are falling nonetheless - Reserve Bank of Australia.
The Federal Reserve is expected to start increasing its policy rate later this year, but some other major central banks are continuing to ease policy. Hence, global financial conditions remain very accommodative. Despite fluctuations in markets associated with the respective developments in China and Greece, long-term borrowing rates for most sovereigns and creditworthy private borrowers remain remarkably low - Reserve Bank of Australia.
In Australia, the available information suggests that the economy has continued to grow. Overall, the economy is likely to be operating with a degree of spare capacity for some time yet. Recent information confirms that domestic inflationary pressures have been contained. In such circumstances, monetary policy needs to be accommodative. Low interest rates are acting to support borrowing and spending - Reserve Bank of Australia.
Further information on economic and financial conditions to be received over the period ahead will inform the Board's ongoing assessment of the outlook and hence whether the current stance of policy will most effectively foster sustainable growth and inflation consistent with the target - Reserve Bank of Australia.
Following the news AUDUSD soared and is currently trading at 0.7382 in the European trading session.
The Euro zone manufacturing PMI came in at 52.4 for the month of July as the manufacturing sector continues to grow amid Greek debt crisis.
"Policymakers will be reassured by the robust growth rates seen in these countries and the resilience of the manufacturing sector as a whole, especially as growth is likely to pick up again now that Greece has jumped its latest hurdle in the ongoing debt crisis" - Chris Williamson, chief economist at Markit.
UK Manufacturing PMI rose to 51.9 for the month of July as the British economy continues to gain momentum.
"Although a tick higher in the headline PMI breaks the decelerating trend in UK manufacturing, growth in the sector remains near-stagnant and suggests that the sector is continuing to act as a drag on the economy" - Rob Dobson, Markit.
Crude oil is trading lower at $45.87 on slowdown in China and oversupply concerns.
Gold is trading lower in the Europe at 1092.85, while Silver is weak at 14.55
04th Aug 2015 – 09:50hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
By FxGrow Research & Analysis Team
Reserve Bank of Australia holds rates steady at 2 percent
At its meeting today, the Board decided to leave the cash rate unchanged at 2.0 percent - Reserve Bank of Australia.
The global economy is expanding at a moderate pace, but some key commodity prices are much lower than a year ago. Much of this trend appears to reflect increased supply, including from Australia. Australia's terms of trade are falling nonetheless - Reserve Bank of Australia.
The Federal Reserve is expected to start increasing its policy rate later this year, but some other major central banks are continuing to ease policy. Hence, global financial conditions remain very accommodative. Despite fluctuations in markets associated with the respective developments in China and Greece, long-term borrowing rates for most sovereigns and creditworthy private borrowers remain remarkably low - Reserve Bank of Australia.
In Australia, the available information suggests that the economy has continued to grow. Overall, the economy is likely to be operating with a degree of spare capacity for some time yet. Recent information confirms that domestic inflationary pressures have been contained. In such circumstances, monetary policy needs to be accommodative. Low interest rates are acting to support borrowing and spending - Reserve Bank of Australia.
Further information on economic and financial conditions to be received over the period ahead will inform the Board's ongoing assessment of the outlook and hence whether the current stance of policy will most effectively foster sustainable growth and inflation consistent with the target - Reserve Bank of Australia.
Following the news AUDUSD soared and is currently trading at 0.7382 in the European trading session.
The Euro zone manufacturing PMI came in at 52.4 for the month of July as the manufacturing sector continues to grow amid Greek debt crisis.
"Policymakers will be reassured by the robust growth rates seen in these countries and the resilience of the manufacturing sector as a whole, especially as growth is likely to pick up again now that Greece has jumped its latest hurdle in the ongoing debt crisis" - Chris Williamson, chief economist at Markit.
UK Manufacturing PMI rose to 51.9 for the month of July as the British economy continues to gain momentum.
"Although a tick higher in the headline PMI breaks the decelerating trend in UK manufacturing, growth in the sector remains near-stagnant and suggests that the sector is continuing to act as a drag on the economy" - Rob Dobson, Markit.
Crude oil is trading lower at $45.87 on slowdown in China and oversupply concerns.
Gold is trading lower in the Europe at 1092.85, while Silver is weak at 14.55
04th Aug 2015 – 09:50hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
Daily Market Analysis – 05th Aug, 2015
By FxGrow Research & Analysis Team
Greece in severe depression after third bailout
Greece is trapped in a prolonged and severe depression after securing the third bailout from its European creditors. The country will need a debt write-down of €95 billion to avoid a permanent recession according to the National Institute of Economic and Social Research (NIESR).
“We don’t see Greece getting back to the level it was when it joined the euro in 2001, let alone anywhere near where it was before this crisis struck, so this is a prolonged and severe depression for Greece” - Jack Meaning, NIESR.
“Certainly, as the prospects for Greece deteriorate while inside the euro area, questions over Greece remaining a member will persist” - NIESR.
Greek bank shares sold off sharply for the third day in a row on Wednesday with buyers yet to emerge on a scale large enough to counter continued dumping of the stocks - Reuters.
Greece's banks have seen deposits severely depleted as Greeks pulled out their euros for fear they would be forcibly converted into a new drachma outside the euro zone. The banks have been propped up by emergency money from the European Central Bank - Reuters.
Greece's dismal economic prospects may also weigh on the market. The European Commission says the Greek economy will shrink by 2 to 4 percent this year, a return to the recession that plagued the country for six years until 2014 - Reuters.
EURUSD is down from the yesterday’s high of 1.0985 to trade at 1.0877 in the European trading session today.
US Dollar is stronger after comments from Atlanta Fed President Dennis Lockhart said that the US economy was ready for the first rate hike in September.
UK PMI services declined to 57.4 in the month of July. Investors are awaiting the Bank of England quarterly inflation report to know the central bank’s growth and inflation outlook.
UK construction PMI fell to 57.1 for the month of July amid weak demands. Shortage of new housing and increasing demand has pushed house prices upwards.
"Commercial activity was a key growth driver during July, which partly offset ongoing weakness in civil engineering and softer residential building trends" - Tim Moore, Markit.
New Zealand unemployment rate rose to 5.9% as the number of n ew jobs created could not meet the growing demand. It is expected that the Reserve Bank of New Zealand will consider further monetary policy easing.
"Despite lower quarterly growth, this is still the 11th consecutive quarter of employment growth, making it the second-longest period of growth since the period between 1992 and 1996" - Diane Ramsay, New Zealand.
In China services sector rose as Caixin services PMI surged to 53.8 in July, showing a positive sign in the world's second biggest economy.
Crude oil is trading lower at $46.20 after Iran’s oil minister said the country could boost output within a week of the lifting of international sanctions.
Gold is trading lower in the Europe at 1089.75, while Silver is flat at 14.61
05th Aug 2015 – 13:13hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
By FxGrow Research & Analysis Team
Greece in severe depression after third bailout
Greece is trapped in a prolonged and severe depression after securing the third bailout from its European creditors. The country will need a debt write-down of €95 billion to avoid a permanent recession according to the National Institute of Economic and Social Research (NIESR).
“We don’t see Greece getting back to the level it was when it joined the euro in 2001, let alone anywhere near where it was before this crisis struck, so this is a prolonged and severe depression for Greece” - Jack Meaning, NIESR.
“Certainly, as the prospects for Greece deteriorate while inside the euro area, questions over Greece remaining a member will persist” - NIESR.
Greek bank shares sold off sharply for the third day in a row on Wednesday with buyers yet to emerge on a scale large enough to counter continued dumping of the stocks - Reuters.
Greece's banks have seen deposits severely depleted as Greeks pulled out their euros for fear they would be forcibly converted into a new drachma outside the euro zone. The banks have been propped up by emergency money from the European Central Bank - Reuters.
Greece's dismal economic prospects may also weigh on the market. The European Commission says the Greek economy will shrink by 2 to 4 percent this year, a return to the recession that plagued the country for six years until 2014 - Reuters.
EURUSD is down from the yesterday’s high of 1.0985 to trade at 1.0877 in the European trading session today.
US Dollar is stronger after comments from Atlanta Fed President Dennis Lockhart said that the US economy was ready for the first rate hike in September.
UK PMI services declined to 57.4 in the month of July. Investors are awaiting the Bank of England quarterly inflation report to know the central bank’s growth and inflation outlook.
UK construction PMI fell to 57.1 for the month of July amid weak demands. Shortage of new housing and increasing demand has pushed house prices upwards.
"Commercial activity was a key growth driver during July, which partly offset ongoing weakness in civil engineering and softer residential building trends" - Tim Moore, Markit.
New Zealand unemployment rate rose to 5.9% as the number of n ew jobs created could not meet the growing demand. It is expected that the Reserve Bank of New Zealand will consider further monetary policy easing.
"Despite lower quarterly growth, this is still the 11th consecutive quarter of employment growth, making it the second-longest period of growth since the period between 1992 and 1996" - Diane Ramsay, New Zealand.
In China services sector rose as Caixin services PMI surged to 53.8 in July, showing a positive sign in the world's second biggest economy.
Crude oil is trading lower at $46.20 after Iran’s oil minister said the country could boost output within a week of the lifting of international sanctions.
Gold is trading lower in the Europe at 1089.75, while Silver is flat at 14.61
05th Aug 2015 – 13:13hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
Daily Market Analysis – 07th Aug, 2015
By FxGrow Research & Analysis Team
Bank of England maintains Bank Rate at 0.5% and the size of the Asset Purchase Programme at £375 billion
The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy in order to meet the 2% inflation target and in a way that helps to sustain growth and employment. At its meeting ending on 5 August 2015, the MPC voted by a majority of 8-1 to maintain Bank Rate at 0.5%. The Committee voted unanimously to maintain the stock of purchased assets financed by the issuance of central bank reserves at £375 billion, and so to reinvest the £16.9 billion of cash flows associated with the redemption of the September 2015 gilt held in the Asset Purchase Facility - Bank of England.
Robust private domestic demand is expected to produce sufficient momentum to eliminate the margin of spare capacity over the next year or so, despite the continuing fiscal consolidation and modest global growth. This is judged likely to generate the rise in domestic costs expected to be necessary to return inflation to the target in the medium term - Bank of England.
There had been a range of influences on international financial markets over the month, including: reactions to news on the progress of negotiations between the Greek government and its creditors; falls in global commodity prices; and large moves in Chinese equity prices. There had been some associated volatility in UK equity markets within the month - Bank of England.
Following the news GBPUSD plunged to a low of 1.5465 yesterday and is currently trading at 1.5517 in the European trading session.
"It would have been imprudent to push through a rate rise at this moment when our economic recovery remains in need of care and encouragement" - John Longworth, British Chambers of Commerce.
"Rates will eventually have to rise and when they do, it should be done slowly and steadily. Until that moment, the Bank of England is right to keep interest rates at current levels" - John Longworth, British Chambers of Commerce.
Globally Investors are awaiting the Non-Farm Payrolls report due to be released at 12:30 GMT today. US NFP is expected to come at 225K and Unemployment rate is expected to stay steady at 5.3%
This month Nonfarm Payroll release will decide the timing of the rate hike by the Federal Reserve this year.
A better than expected report will see US Dollar gaining ground and EURUSD is expected to touch 1.0800 on strong NFP data.
Crude oil is trading lower at $44.73 on oversupply concerns.
Gold is trading higher in the Europe at 1090.91, while Silver is up at 14.75
07th Aug 2015 – 10:51hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
By FxGrow Research & Analysis Team
Bank of England maintains Bank Rate at 0.5% and the size of the Asset Purchase Programme at £375 billion
The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy in order to meet the 2% inflation target and in a way that helps to sustain growth and employment. At its meeting ending on 5 August 2015, the MPC voted by a majority of 8-1 to maintain Bank Rate at 0.5%. The Committee voted unanimously to maintain the stock of purchased assets financed by the issuance of central bank reserves at £375 billion, and so to reinvest the £16.9 billion of cash flows associated with the redemption of the September 2015 gilt held in the Asset Purchase Facility - Bank of England.
Robust private domestic demand is expected to produce sufficient momentum to eliminate the margin of spare capacity over the next year or so, despite the continuing fiscal consolidation and modest global growth. This is judged likely to generate the rise in domestic costs expected to be necessary to return inflation to the target in the medium term - Bank of England.
There had been a range of influences on international financial markets over the month, including: reactions to news on the progress of negotiations between the Greek government and its creditors; falls in global commodity prices; and large moves in Chinese equity prices. There had been some associated volatility in UK equity markets within the month - Bank of England.
Following the news GBPUSD plunged to a low of 1.5465 yesterday and is currently trading at 1.5517 in the European trading session.
"It would have been imprudent to push through a rate rise at this moment when our economic recovery remains in need of care and encouragement" - John Longworth, British Chambers of Commerce.
"Rates will eventually have to rise and when they do, it should be done slowly and steadily. Until that moment, the Bank of England is right to keep interest rates at current levels" - John Longworth, British Chambers of Commerce.
Globally Investors are awaiting the Non-Farm Payrolls report due to be released at 12:30 GMT today. US NFP is expected to come at 225K and Unemployment rate is expected to stay steady at 5.3%
This month Nonfarm Payroll release will decide the timing of the rate hike by the Federal Reserve this year.
A better than expected report will see US Dollar gaining ground and EURUSD is expected to touch 1.0800 on strong NFP data.
Crude oil is trading lower at $44.73 on oversupply concerns.
Gold is trading higher in the Europe at 1090.91, while Silver is up at 14.75
07th Aug 2015 – 10:51hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
Daily Market Analysis – 10th Aug, 2015
By FxGrow Research & Analysis Team
US Non-Farm Payrolls support Fed Rate Hike in September
Total nonfarm payroll employment increased by 215,000 in July, and the unemployment rate was unchanged at 5.3 percent. Job gains occurred in retail trade, health care, professional and technical services, and financial activities - US Bureau of Labor Statistics.
Following the NFP data US Dollar rose to a 2 month high versus the Japanese Yen and to a 5 month high against the Swiss Franc. Towards the end of the trading session US dollar gave up its gains due to drop in long bond yields.
Non-Farm Payrolls supports the Fed outlook to begin raising Interest rates later this year in September.
"I don't think it's done any harm but I don't see anything here that screams that Sep hike chances have increased. The revision to June helps, as does the increase in working hours and the underemployment rate falling. Wages rose as expected but y/y only showed a small gain. There's reasons to be bullish but I don't see this report making the Fed's mind up for definite" - Janus Capital's Bill Gross.
"If I had to pick trigger for the Fed to act on jobs it would probably be the unemployment rate dropping to 5.0% or better, and/or a big uptick in wages. Get them up to 2.5%+ y/y and that might be enough for the Fed to pull the trigger" - Janus Capital's Bill Gross.
The US dollar remained supported against its major counterparts on Monday after Friday’s strong NFP report supported the Fed rate hike view.
In China Exports declined in the month of July due to a strong Yuan and weaker demand in the European Union.
"As global growth moderates and commodity prices remain depressed, it is unlikely to see China's trade growth pick up significantly in the remainder of the year" -ANZ Bank.
In Canada employment growth was better than expectations with creation of 6.6K Jobs in the month of July. The unemployment rate remained at 6.8%, while participation rate was at 65.7% according to a report by Statistics Canada.
German Industrial output declined for the month of June to 1.4% mainly due to risks in the Euro zone and a weak growth in the emerging market countries including China.
The British Deficit widened to 1.6 billion pounds in the month of June according to the Office for National Statistics.
Greek government is close to securing the third bailout deal of €86bn to prevent an economic collapse just a week before €3bn debt repayment to the European Central Bank is due.
"When the new bailout comes to parliament for a vote it will be one bill with two articles - one article will be the loan agreement and the MoU (memorandum of understanding) and the second article will be the prior actions" - Greek official.
"Efforts are being made to conclude the negotiations, the horizon is by Monday night or early Tuesday" - Greek official.
Crude oil is trading lower at $43.86 amid rising US rig count.
Gold is trading higher in the Europe at 1094.69, while Silver is up at 14.93
10th Aug 2015 – 10:13hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
By FxGrow Research & Analysis Team
US Non-Farm Payrolls support Fed Rate Hike in September
Total nonfarm payroll employment increased by 215,000 in July, and the unemployment rate was unchanged at 5.3 percent. Job gains occurred in retail trade, health care, professional and technical services, and financial activities - US Bureau of Labor Statistics.
Following the NFP data US Dollar rose to a 2 month high versus the Japanese Yen and to a 5 month high against the Swiss Franc. Towards the end of the trading session US dollar gave up its gains due to drop in long bond yields.
Non-Farm Payrolls supports the Fed outlook to begin raising Interest rates later this year in September.
"I don't think it's done any harm but I don't see anything here that screams that Sep hike chances have increased. The revision to June helps, as does the increase in working hours and the underemployment rate falling. Wages rose as expected but y/y only showed a small gain. There's reasons to be bullish but I don't see this report making the Fed's mind up for definite" - Janus Capital's Bill Gross.
"If I had to pick trigger for the Fed to act on jobs it would probably be the unemployment rate dropping to 5.0% or better, and/or a big uptick in wages. Get them up to 2.5%+ y/y and that might be enough for the Fed to pull the trigger" - Janus Capital's Bill Gross.
The US dollar remained supported against its major counterparts on Monday after Friday’s strong NFP report supported the Fed rate hike view.
In China Exports declined in the month of July due to a strong Yuan and weaker demand in the European Union.
"As global growth moderates and commodity prices remain depressed, it is unlikely to see China's trade growth pick up significantly in the remainder of the year" -ANZ Bank.
In Canada employment growth was better than expectations with creation of 6.6K Jobs in the month of July. The unemployment rate remained at 6.8%, while participation rate was at 65.7% according to a report by Statistics Canada.
German Industrial output declined for the month of June to 1.4% mainly due to risks in the Euro zone and a weak growth in the emerging market countries including China.
The British Deficit widened to 1.6 billion pounds in the month of June according to the Office for National Statistics.
Greek government is close to securing the third bailout deal of €86bn to prevent an economic collapse just a week before €3bn debt repayment to the European Central Bank is due.
"When the new bailout comes to parliament for a vote it will be one bill with two articles - one article will be the loan agreement and the MoU (memorandum of understanding) and the second article will be the prior actions" - Greek official.
"Efforts are being made to conclude the negotiations, the horizon is by Monday night or early Tuesday" - Greek official.
Crude oil is trading lower at $43.86 amid rising US rig count.
Gold is trading higher in the Europe at 1094.69, while Silver is up at 14.93
10th Aug 2015 – 10:13hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
Daily Market Analysis – 11th Aug, 2015
By FxGrow Research & Analysis Team
People's Bank of China Devalues Yuan to Increase Exports
China has devalued the Yuan to combat slowdown, which had ripple effects on the Forex markets as the People’s Bank of China cut its daily reference rate by 1.9 percent.
People's Bank of China depreciated Yuan by 1.9 percent against the US dollar to levels seen almost three years back, which came as a shock to the currency markets.
The statement that was released by the Central Bank said it had changed the way it calculated the currency's daily midpoint against the greenback, now taking the midpoint from market-makers quotes and the previous day's closing price.
Monetary policies in emerging market economies diverged and it was hard to make policies - People's Bank of China.
The Yuan dropped 1.8 percent to 6.32 per dollar as of 1:34 p.m. in Shanghai. It slid 2.3 percent in Hong Kong’s offshore trading.
The ECB reinforced its accommodative monetary policy. The euro area is confronted with the threat from persistent declining inflation and low growth potential. The Bank of Japan announced additional easing monetary policies. The Bank of England maintained its easing monetary policies - People's Bank of China.
The Federal Reserve ended the program of asset purchases. The world economy faces the challenge that the policy rate of the U.S. may rise. The global financial conditions may tighten and emerging market economies may be faced with the sudden reversal of capital flows if the Federal Reserve raises its policy rate earlier than expected - People's Bank of China.
"Since China's trade in goods continues to post relatively large surpluses, the Yuan’s real effective exchange rate is still relatively strong versus various global currencies, and is deviating from market expectations" - People's Bank of China.
The devaluation followed weekend data that showed China's exports tumbled 8.3 percent in July, hit by weaker demand from Europe, the United States and Japan, and that producer prices were well into their fourth year of deflation - Reuters.
The move by the People's Bank of China overnight could have a significant impact on whether the Federal Reserve decides to hike interest rates this year.
Greece has agreed a bailout deal with its European creditors according to the European Commission as it said a technical agreement had been reached with Greece, which now requires political approval.
In Germany Investor confidence dropped to 25.0 in the month of July according to a report released by the ZEW Center for European Economic Research.
Crude oil is trading lower at $44.07 on oversupply and weak global demands.
Gold is trading higher in the Europe at 1109.31, while Silver is up at 15.25
11th Aug 2015 – 11:41hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
By FxGrow Research & Analysis Team
People's Bank of China Devalues Yuan to Increase Exports
China has devalued the Yuan to combat slowdown, which had ripple effects on the Forex markets as the People’s Bank of China cut its daily reference rate by 1.9 percent.
People's Bank of China depreciated Yuan by 1.9 percent against the US dollar to levels seen almost three years back, which came as a shock to the currency markets.
The statement that was released by the Central Bank said it had changed the way it calculated the currency's daily midpoint against the greenback, now taking the midpoint from market-makers quotes and the previous day's closing price.
Monetary policies in emerging market economies diverged and it was hard to make policies - People's Bank of China.
The Yuan dropped 1.8 percent to 6.32 per dollar as of 1:34 p.m. in Shanghai. It slid 2.3 percent in Hong Kong’s offshore trading.
The ECB reinforced its accommodative monetary policy. The euro area is confronted with the threat from persistent declining inflation and low growth potential. The Bank of Japan announced additional easing monetary policies. The Bank of England maintained its easing monetary policies - People's Bank of China.
The Federal Reserve ended the program of asset purchases. The world economy faces the challenge that the policy rate of the U.S. may rise. The global financial conditions may tighten and emerging market economies may be faced with the sudden reversal of capital flows if the Federal Reserve raises its policy rate earlier than expected - People's Bank of China.
"Since China's trade in goods continues to post relatively large surpluses, the Yuan’s real effective exchange rate is still relatively strong versus various global currencies, and is deviating from market expectations" - People's Bank of China.
The devaluation followed weekend data that showed China's exports tumbled 8.3 percent in July, hit by weaker demand from Europe, the United States and Japan, and that producer prices were well into their fourth year of deflation - Reuters.
The move by the People's Bank of China overnight could have a significant impact on whether the Federal Reserve decides to hike interest rates this year.
Greece has agreed a bailout deal with its European creditors according to the European Commission as it said a technical agreement had been reached with Greece, which now requires political approval.
In Germany Investor confidence dropped to 25.0 in the month of July according to a report released by the ZEW Center for European Economic Research.
Crude oil is trading lower at $44.07 on oversupply and weak global demands.
Gold is trading higher in the Europe at 1109.31, while Silver is up at 15.25
11th Aug 2015 – 11:41hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
Daily Market Analysis – 12th Aug, 2015
By FxGrow Research & Analysis Team
Euro hits 2-week high after Greece reached third bailout deal with creditors
Greece and its international lenders reached an 85 billion euro bailout agreement on Tuesday after nailing down the terms of new loans needed to save the country from financial ruin - Reuters.
European Commission spokeswoman said that a technical deal has been reached between Greece, the International Monetary Fund, the European Central Bank, and the European Stability Mechanism.
The deal, which came after 23 hours of talks that continued through the night, must still be adopted by Greece's parliament and by euro zone countries - Reuters.
Following the news EURUSD reached a 2 week high of 1.1115 and is currently trading at 1.1142 in the European trading session.
“The crucial nature of the situation requires the immediate convening of parliament to proceed with the deal’s approval and allow disbursement of the first installment” - Greek PM Alexis Tsipras.
The Greek government has submitted a Draft bill in the Parliament today which contains an agreement with its European creditors for securing the third bailout funds. They are expected to pass the bill on Thursday with Euro group meeting scheduled on Friday.
According to the agreement, Greece will have to produce a primary budget deficit of 0.25 percent of GDP in 2015, followed by surpluses of 0.5 percent in 2016, 1.75 percent in 2017, and 3.5 percent in 2018.
"After this deal the prime minister should call for elections, so that the Greek people can vote on whether they approve the programme or want something else" - Greek Health Minister.
Global investors are awaiting the Germany’s IFO survey, which is likely to indicate Europe’s largest economy is on track to post a reasonable pace of growth.
Gold rose more than one per cent on Tuesday as the dollar cut gains and European stocks fell and investors assessed the impact of China’s move to devalue its currency and prop up its economy.
“Gold’s best moment this year came in the first few months when we saw various FX swings, lots of different central banks cutting interest rates or intervening in their monetary policy, so probably there is some element of that which has helped the rally from Monday continue a bit. Probably gold is benefiting from fears that this is a new round of currency war" - Matthew Turner, analyst at Macquarie.
Consumer confidence in Australia rose for the month of August by 7.8% to 99.5 points according to the Westpac-Melbourne Institute.
"Movements of the Index of this magnitude are unusual and generally associated with highly significant events such as interest rate moves or Commonwealth Budgets" - Bill Evans, Westpac chief economist.
Crude oil is trading lower at $43.45 due to a rapid decline in the value of Yuan.
Gold is trading higher in the Europe at 1116.20, while Silver is up at 15.31
12th Aug 2015 – 11:42hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
By FxGrow Research & Analysis Team
Euro hits 2-week high after Greece reached third bailout deal with creditors
Greece and its international lenders reached an 85 billion euro bailout agreement on Tuesday after nailing down the terms of new loans needed to save the country from financial ruin - Reuters.
European Commission spokeswoman said that a technical deal has been reached between Greece, the International Monetary Fund, the European Central Bank, and the European Stability Mechanism.
The deal, which came after 23 hours of talks that continued through the night, must still be adopted by Greece's parliament and by euro zone countries - Reuters.
Following the news EURUSD reached a 2 week high of 1.1115 and is currently trading at 1.1142 in the European trading session.
“The crucial nature of the situation requires the immediate convening of parliament to proceed with the deal’s approval and allow disbursement of the first installment” - Greek PM Alexis Tsipras.
The Greek government has submitted a Draft bill in the Parliament today which contains an agreement with its European creditors for securing the third bailout funds. They are expected to pass the bill on Thursday with Euro group meeting scheduled on Friday.
According to the agreement, Greece will have to produce a primary budget deficit of 0.25 percent of GDP in 2015, followed by surpluses of 0.5 percent in 2016, 1.75 percent in 2017, and 3.5 percent in 2018.
"After this deal the prime minister should call for elections, so that the Greek people can vote on whether they approve the programme or want something else" - Greek Health Minister.
Global investors are awaiting the Germany’s IFO survey, which is likely to indicate Europe’s largest economy is on track to post a reasonable pace of growth.
Gold rose more than one per cent on Tuesday as the dollar cut gains and European stocks fell and investors assessed the impact of China’s move to devalue its currency and prop up its economy.
“Gold’s best moment this year came in the first few months when we saw various FX swings, lots of different central banks cutting interest rates or intervening in their monetary policy, so probably there is some element of that which has helped the rally from Monday continue a bit. Probably gold is benefiting from fears that this is a new round of currency war" - Matthew Turner, analyst at Macquarie.
Consumer confidence in Australia rose for the month of August by 7.8% to 99.5 points according to the Westpac-Melbourne Institute.
"Movements of the Index of this magnitude are unusual and generally associated with highly significant events such as interest rate moves or Commonwealth Budgets" - Bill Evans, Westpac chief economist.
Crude oil is trading lower at $43.45 due to a rapid decline in the value of Yuan.
Gold is trading higher in the Europe at 1116.20, while Silver is up at 15.31
12th Aug 2015 – 11:42hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
Daily Market Analysis – 14th Aug, 2015
By FxGrow Research & Analysis Team
Greek parliament approves €85bn bailout deal
Greek parliament has approved the new €85bn rescue package following a debate and voting on the deal on Friday.
The new deal which seeks harsh austerity measures was approved with 222 votes for, 64 votes against and 11 absent in a 24 hour session in the Greek parliament.
Greek PM Alexis Tsipras is facing harsh criticism from his own party for accepting the demands of its European creditors, with several members showing dissent and threatening to split the party and call for early elections in Greece.
EURUSD was supported by the news that Greek parliament has approved the new bailout deal terms and is currently trading above the 1.1100 level at 1.1133 in the European trading session.
International Monetary Fund has welcomed the bailout deal but said that it will wait to see if there is a plan for reducing Greece's debt.
“The IMF will remain closely engaged with the Greek government and the European partners to assist in this process, and will make an assessment of its participation in providing any additional financing to Greece once the steps on the authorities’ program and debt relief have been taken” - Delia Velculescu, IMF.
“The IMF has been adopting a line of, not silence but, we try to be mindful of developments and not be excessive in our positions” - IMF managing director.
“There’s a need for difficult decisions on both sides and by both sides. I think everybody understands that the IMF can only be involved when these decisions on these two sides are taken.” - Senior IMF official.
Greek PM has called French president François Hollande, European Commission president, leader of European parliament members for approval of the rescue package by the Euro group.
Greece Economy has grown unexpectedly in the second quarter of the 2015 as its GDP rose 0.8% from the previous quarter.
“The surprise is partly explained by some consumption indices, such as retail sales, that were in positive territory in the second quarter and this was helped by some improvement in the labor market. There was also a very strong positive impact from tourism, which is having increasing knock-on effects on the economy” - Nikos Magginas, economist at National Bank of Greece.
The Peoples Bank of China put the Yuan's central parity rate at 6.4010 Yuan for US$1, a drop of 1.11% from the previous day.
“The central bank, if necessary, is fully capable of stabilizing the exchange rate through direct intervention in the foreign exchange market to avoid the herd mentality resulting in irrational movements of the rate” - Peoples Bank of China economist Ma Jun.
In New Zealand Retail sales fell short of analyst expectations. Retail sales in the second quarter of the 2015 grew by 0.1% while the expectations were for a 0.5% growth.
Weak economic data from New Zealand has increased the expectations for a further rate cut by the Reserve Bank of New Zealand.
Crude oil is trading lower at $41.92 on oversupply concerns and weak global demand.
Gold is trading higher in the Europe at 1117.34, while Silver is up at 15.46
14th Aug 2015 – 08:57hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
By FxGrow Research & Analysis Team
Greek parliament approves €85bn bailout deal
Greek parliament has approved the new €85bn rescue package following a debate and voting on the deal on Friday.
The new deal which seeks harsh austerity measures was approved with 222 votes for, 64 votes against and 11 absent in a 24 hour session in the Greek parliament.
Greek PM Alexis Tsipras is facing harsh criticism from his own party for accepting the demands of its European creditors, with several members showing dissent and threatening to split the party and call for early elections in Greece.
EURUSD was supported by the news that Greek parliament has approved the new bailout deal terms and is currently trading above the 1.1100 level at 1.1133 in the European trading session.
International Monetary Fund has welcomed the bailout deal but said that it will wait to see if there is a plan for reducing Greece's debt.
“The IMF will remain closely engaged with the Greek government and the European partners to assist in this process, and will make an assessment of its participation in providing any additional financing to Greece once the steps on the authorities’ program and debt relief have been taken” - Delia Velculescu, IMF.
“The IMF has been adopting a line of, not silence but, we try to be mindful of developments and not be excessive in our positions” - IMF managing director.
“There’s a need for difficult decisions on both sides and by both sides. I think everybody understands that the IMF can only be involved when these decisions on these two sides are taken.” - Senior IMF official.
Greek PM has called French president François Hollande, European Commission president, leader of European parliament members for approval of the rescue package by the Euro group.
Greece Economy has grown unexpectedly in the second quarter of the 2015 as its GDP rose 0.8% from the previous quarter.
“The surprise is partly explained by some consumption indices, such as retail sales, that were in positive territory in the second quarter and this was helped by some improvement in the labor market. There was also a very strong positive impact from tourism, which is having increasing knock-on effects on the economy” - Nikos Magginas, economist at National Bank of Greece.
The Peoples Bank of China put the Yuan's central parity rate at 6.4010 Yuan for US$1, a drop of 1.11% from the previous day.
“The central bank, if necessary, is fully capable of stabilizing the exchange rate through direct intervention in the foreign exchange market to avoid the herd mentality resulting in irrational movements of the rate” - Peoples Bank of China economist Ma Jun.
In New Zealand Retail sales fell short of analyst expectations. Retail sales in the second quarter of the 2015 grew by 0.1% while the expectations were for a 0.5% growth.
Weak economic data from New Zealand has increased the expectations for a further rate cut by the Reserve Bank of New Zealand.
Crude oil is trading lower at $41.92 on oversupply concerns and weak global demand.
Gold is trading higher in the Europe at 1117.34, while Silver is up at 15.46
14th Aug 2015 – 08:57hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
Daily Market Analysis – 21st Sept, 2015
By FxGrow Research & Analysis Team
Greek Elections - Alexis Tsipras secures clear victory
Alexis Tsipras’s has secured a clear victory in Sunday’s Greek general election, with more than 90 percent of the votes counted.
Syriza party got 35.5 per cent of the vote, giving it 145 seats in the 300 member parliament, well ahead of the conservative New Democracy party which is on 75 seats.
This is the third time Greeks have voted this year after the January elections which saw Alexis Tsipras coming to power, a referendum in July which was to reject the reform proposals of its European creditors and this time.
Turnout in this poll was just over 55%, down from 63% in January and low by Greek standards.
"This result does not belong to Syriza. This result belongs to the working classes of this country, the people who fight for a better tomorrow, who dream of a better tomorrow and this is something that we will achieve through a lot of hard work" - Alexis Tsipras.
"The mandate that the Greek people have given is a crystal clear mandate to get rid of the regime of corruption and vested issues. We will show how effective we will be. We will make Greece a stronger place for the weak and vulnerable, a fairer place" - Alexis Tsipras.
Eurozone officials have welcomed the re-election of Mr. Tsipras as the PM of the country after he secured third bail-out deal for Greece in five years.
"Now a solid government ready to deliver is needed quickly" - President of the European parliament, German Martin Schulz.
"From Monday, we are ready to collaborate to implement the programme to reform the Greek economy" - Italy's La Stampa.
"Given how challenging the bail-out agenda is between now and year-end, a return of the previous coalition isn't great news" - Mujtaba Rahman, head of Europe practice at the Eurasia Group.
US Dollar has staged a strong recovery post FOMC after Fed decided to keep its interest rates unchanged. Fed showed increasing concerns over the negative impacts of the recent global financial market volatility, as well as rapid slowdown in China and other emerging markets, on growth and inflation outlook.
EURUSD is trading at 1.1310 in the early Asian trading session while USDCHF is stable at 0.9683
Asian Stocks have dropped on Monday as a ripple effect of the Fed's decisions to hold its interest rates. Investors are worried about the strength of the Chinese economy.
Hong Kong's Hang Seng index dropped 1.39% to 21,638.22 points shortly after the opening bell, while mainland China's benchmark Shanghai Composite fell 0.64% to 3,077.97 points.
The Australian S&P/ASX 200 index dropped 2.44% to 5,044.40 points in Sydney, with almost all 200 stocks on the index trading lower for the day.
Crude oil is trading lower at $45.03 amid ongoing concerns over sluggish global growth.
Gold is trading higher in the Europe at 1137.24, while Silver is stable at 15.11
21st Sept 2015 – 03:53hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
By FxGrow Research & Analysis Team
Greek Elections - Alexis Tsipras secures clear victory
Alexis Tsipras’s has secured a clear victory in Sunday’s Greek general election, with more than 90 percent of the votes counted.
Syriza party got 35.5 per cent of the vote, giving it 145 seats in the 300 member parliament, well ahead of the conservative New Democracy party which is on 75 seats.
This is the third time Greeks have voted this year after the January elections which saw Alexis Tsipras coming to power, a referendum in July which was to reject the reform proposals of its European creditors and this time.
Turnout in this poll was just over 55%, down from 63% in January and low by Greek standards.
"This result does not belong to Syriza. This result belongs to the working classes of this country, the people who fight for a better tomorrow, who dream of a better tomorrow and this is something that we will achieve through a lot of hard work" - Alexis Tsipras.
"The mandate that the Greek people have given is a crystal clear mandate to get rid of the regime of corruption and vested issues. We will show how effective we will be. We will make Greece a stronger place for the weak and vulnerable, a fairer place" - Alexis Tsipras.
Eurozone officials have welcomed the re-election of Mr. Tsipras as the PM of the country after he secured third bail-out deal for Greece in five years.
"Now a solid government ready to deliver is needed quickly" - President of the European parliament, German Martin Schulz.
"From Monday, we are ready to collaborate to implement the programme to reform the Greek economy" - Italy's La Stampa.
"Given how challenging the bail-out agenda is between now and year-end, a return of the previous coalition isn't great news" - Mujtaba Rahman, head of Europe practice at the Eurasia Group.
US Dollar has staged a strong recovery post FOMC after Fed decided to keep its interest rates unchanged. Fed showed increasing concerns over the negative impacts of the recent global financial market volatility, as well as rapid slowdown in China and other emerging markets, on growth and inflation outlook.
EURUSD is trading at 1.1310 in the early Asian trading session while USDCHF is stable at 0.9683
Asian Stocks have dropped on Monday as a ripple effect of the Fed's decisions to hold its interest rates. Investors are worried about the strength of the Chinese economy.
Hong Kong's Hang Seng index dropped 1.39% to 21,638.22 points shortly after the opening bell, while mainland China's benchmark Shanghai Composite fell 0.64% to 3,077.97 points.
The Australian S&P/ASX 200 index dropped 2.44% to 5,044.40 points in Sydney, with almost all 200 stocks on the index trading lower for the day.
Crude oil is trading lower at $45.03 amid ongoing concerns over sluggish global growth.
Gold is trading higher in the Europe at 1137.24, while Silver is stable at 15.11
21st Sept 2015 – 03:53hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
Daily Market Analysis – 22nd Sept, 2015
By FxGrow Research & Analysis Team
Chinese economy weaker, but far from collapse
In China economy is not as weak as it looks according to a survey done by a New York research group. In a report published by the CBB International in the aftermath of the Stock market plunge in China and its currency devaluation Capital expenditure has rebounded and services sector is showing signs of growth.
"Perceptions of China may be more thoroughly divorced from facts on the ground than at any time in our nearly five years of surveying the economy” - CBB President Leland Miller.
“Global sentiment on China has veered sharply bearish — too bearish. While we have long cautioned clients against relying on rosy official views of the Chinese economy, we believe sentiment has swung substantially too far in the opposite direction” - CBB President Leland Miller.
"The best situation for most economies is stable and low inflation. China appears to be enjoying exactly that, notwithstanding the widespread fear of deflation” - CBB International.
Asian shares rose on Tuesday and the dollar held steady as U.S. markets bounced back and the European Central Bank said it was prepared to ease monetary policy further - Reuters.
European markets are seen steady, with financial spread betters expecting Britain's FTSE 100 (FTSE) and France's CAC 40 (FCHI) to open flat and Germany's DAX (GDAXI) to start the day up 0.1 percent - Reuters.
MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) was up 0.4 percent at 0039 EDT. Australia (AXJO) advanced 0.3 percent and South Korea (KS11) almost 1 percent, but most Southeast Asian markets retreated. Japanese markets are shut through Wednesday - Reuters.
In Switzerland’s trade balance fell to 2.869B, from 3.579B in the preceding month according to a report released by the Federal Statistical Office.
Global investors are awaiting Septembers Manufacturing PMI data from China and Europe today as markets in Japan are closed for the next three days.
European Central Bank and Bank of Japan dovish bias is expected to provide support to the markets. If ECB will extend its QE program beyond September 2016 EUR will come under pressure and slip below 1.1000
Crude oil is trading higher at $46.01 as investors are waiting for the weekly stockpiles report.
Gold is trading higher in the Europe at 1135.02, while Silver is up at 15.22
22nd Sept 2015 – 07:34hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
By FxGrow Research & Analysis Team
Chinese economy weaker, but far from collapse
In China economy is not as weak as it looks according to a survey done by a New York research group. In a report published by the CBB International in the aftermath of the Stock market plunge in China and its currency devaluation Capital expenditure has rebounded and services sector is showing signs of growth.
"Perceptions of China may be more thoroughly divorced from facts on the ground than at any time in our nearly five years of surveying the economy” - CBB President Leland Miller.
“Global sentiment on China has veered sharply bearish — too bearish. While we have long cautioned clients against relying on rosy official views of the Chinese economy, we believe sentiment has swung substantially too far in the opposite direction” - CBB President Leland Miller.
"The best situation for most economies is stable and low inflation. China appears to be enjoying exactly that, notwithstanding the widespread fear of deflation” - CBB International.
Asian shares rose on Tuesday and the dollar held steady as U.S. markets bounced back and the European Central Bank said it was prepared to ease monetary policy further - Reuters.
European markets are seen steady, with financial spread betters expecting Britain's FTSE 100 (FTSE) and France's CAC 40 (FCHI) to open flat and Germany's DAX (GDAXI) to start the day up 0.1 percent - Reuters.
MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) was up 0.4 percent at 0039 EDT. Australia (AXJO) advanced 0.3 percent and South Korea (KS11) almost 1 percent, but most Southeast Asian markets retreated. Japanese markets are shut through Wednesday - Reuters.
In Switzerland’s trade balance fell to 2.869B, from 3.579B in the preceding month according to a report released by the Federal Statistical Office.
Global investors are awaiting Septembers Manufacturing PMI data from China and Europe today as markets in Japan are closed for the next three days.
European Central Bank and Bank of Japan dovish bias is expected to provide support to the markets. If ECB will extend its QE program beyond September 2016 EUR will come under pressure and slip below 1.1000
Crude oil is trading higher at $46.01 as investors are waiting for the weekly stockpiles report.
Gold is trading higher in the Europe at 1135.02, while Silver is up at 15.22
22nd Sept 2015 – 07:34hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
Daily Market Analysis – 23rd Sept, 2015
By FxGrow Research & Analysis Team
China manufacturing PMI falls to lowest in more than 6 years
Activity in China's manufacturing sector unexpectedly shrank to a 6½-year low in September, indicating a sharper slowdown in the world's second-largest economy that could spell more turmoil for financial markets.
The preliminary Markit China Manufacturing Purchasing Managers' Index (PMI) fell to 47.0 in September, the worst since March 2009 and below market expectations of 47.5 and August's final 47.3. Levels below 50 signify a contraction.
Global investors and policymakers are on edge over China after the U.S. central bank last week held off from raising interest rates, saying it was unsure if international problems and China's slowdown in particular, will hurt the U.S. recovery - Reuters.
"The weaker-than-expected PMI suggested domestic and external demand remained sluggish. It's almost certain China's economic growth will slide below 7 percent in the second half of this year" - Minsheng Securities.
"The principle reason for the weakening of manufacturing is tied to previous changes in factors related to external demand and prices" - Chief economist at Caixin Insight Group.
"Fiscal expenditures surged in August, pointing to stronger government efforts on the fiscal policy front. Patience may be needed for policies designed to promote stabilization to demonstrate their effectiveness" - Chief economist at Caixin Insight Group.
The Asian Development Bank has cut its estimate for China's growth to 6.8 percent for 2015. It expects the growth rate of the world's second largest economy will fall to 6.7 percent in 2016.
Mario Draghi, European Central Bank President, will speak on monetary policy before the European Parliament’s Economic and Monetary Committee providing insight into whether the central bank is contemplating expanding its bond buying and if so, when.
The Eurozone continues to experience extremely low levels of inflation and unemployment is very high.
The UK manufacturing sector growth stalled for the first time in more than two years, with a stronger Pound and weak exports weighing on the sector's margins and volumes.
The trade surplus in Switzerland contracted in August, as the strength of the Swiss Franc hit demand in the European Union and China.
Crude oil is trading higher at $46.80 as market survey points to fall of crude oil stocks.
Gold is trading lower in the Europe at 1127.06, while Silver is up at 14.79
23rd Sept 2015 – 09:00hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
By FxGrow Research & Analysis Team
China manufacturing PMI falls to lowest in more than 6 years
Activity in China's manufacturing sector unexpectedly shrank to a 6½-year low in September, indicating a sharper slowdown in the world's second-largest economy that could spell more turmoil for financial markets.
The preliminary Markit China Manufacturing Purchasing Managers' Index (PMI) fell to 47.0 in September, the worst since March 2009 and below market expectations of 47.5 and August's final 47.3. Levels below 50 signify a contraction.
Global investors and policymakers are on edge over China after the U.S. central bank last week held off from raising interest rates, saying it was unsure if international problems and China's slowdown in particular, will hurt the U.S. recovery - Reuters.
"The weaker-than-expected PMI suggested domestic and external demand remained sluggish. It's almost certain China's economic growth will slide below 7 percent in the second half of this year" - Minsheng Securities.
"The principle reason for the weakening of manufacturing is tied to previous changes in factors related to external demand and prices" - Chief economist at Caixin Insight Group.
"Fiscal expenditures surged in August, pointing to stronger government efforts on the fiscal policy front. Patience may be needed for policies designed to promote stabilization to demonstrate their effectiveness" - Chief economist at Caixin Insight Group.
The Asian Development Bank has cut its estimate for China's growth to 6.8 percent for 2015. It expects the growth rate of the world's second largest economy will fall to 6.7 percent in 2016.
Mario Draghi, European Central Bank President, will speak on monetary policy before the European Parliament’s Economic and Monetary Committee providing insight into whether the central bank is contemplating expanding its bond buying and if so, when.
The Eurozone continues to experience extremely low levels of inflation and unemployment is very high.
The UK manufacturing sector growth stalled for the first time in more than two years, with a stronger Pound and weak exports weighing on the sector's margins and volumes.
The trade surplus in Switzerland contracted in August, as the strength of the Swiss Franc hit demand in the European Union and China.
Crude oil is trading higher at $46.80 as market survey points to fall of crude oil stocks.
Gold is trading lower in the Europe at 1127.06, while Silver is up at 14.79
23rd Sept 2015 – 09:00hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
Daily Market Analysis – 29th Sept, 2015
By FxGrow Research & Analysis Team
Stocks fall on weak Chinese data
In China Industrial profits dropped 8.8% last month, showing the world’s biggest consumer of commodities is struggling with excess capacity, sluggish investment and weaker manufacturing, according to data released by China’s National Bureau of Statistics.
Following the weak Chinese data Major Stock indexes ended in loss yesterday. The S&P 500 and NASDAQ finished modestly in the red and strong gains for Nike (NKE) keeping the Dow Jones in the black.
Euro climbed up against the US Dollar and is presently trading at 1.1277 in the European trading session today.
In China a combination of lower sales, higher costs and weak prices as a result of soft demand has been weighing on the manufacturing sector’s earnings power. The pressure is particularly notable in the mining sector, offsetting modest gains elsewhere. China and the Fed have been the market’s primary pre-occupations lately, and this report adds to those worries.
The Australian dollar has fallen after weak Chinese industrial data added to evidence that the Chinese economy is slowing down. AUDUSD is trading at 0.6949 in the European trading session.
European stocks also declined on Monday as more disappointing Chinese data and downbeat analyst comment weighed on the stocks.
London's benchmark FTSE 100 index ended the day down 2.46 per cent to 5,958.86 points compared with Friday's close. In the Eurozone, Frankfurt's DAX 30 finished 2.12 per cent lower at 9,483.55 points and the Paris CAC 40 plunged 2.76 per cent to 4,357.05.
"Both the Australian and Canadian dollars fell sharply today as profits fell by the largest amount in four years. Earnings in the resource sector have been hit particularly hard and this put additional pressure on commodity prices. There are major economic headwinds in China and this will limit growth in countries that rely on Chinese demand" - BK Asset Management.
In the US, New York Fed President William Dudley noted that the Fed is still on track to increase interest rates in this year. He, however, stressed that the decision would be depend on the health of US economy and financial conditions, as well as global economic development.
In an interview with Wall Street Journal, Dudley suggested that "if the economy continues on the same trajectory it’s on…and everything else suggests that’s likely to continue…then there is a pretty strong case for lifting off".
"I am starting to see signs of imbalances emerge in the form of high asset prices, especially in real estate, and that trips the alert system. Given the progress we've made and continue to make on our goals, I view the next appropriate step as gradually raising interest rates, most likely starting sometime later this year" - San Francisco Fed President John Williams.
Crude oil is trading lower at $44.43 ahead of the estimates of U.S. crude stockpiles report.
Gold is trading lower in the Europe at 1127.87, while Silver is weak at 14.54
29th Sept 2015 – 06:42hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
By FxGrow Research & Analysis Team
Stocks fall on weak Chinese data
In China Industrial profits dropped 8.8% last month, showing the world’s biggest consumer of commodities is struggling with excess capacity, sluggish investment and weaker manufacturing, according to data released by China’s National Bureau of Statistics.
Following the weak Chinese data Major Stock indexes ended in loss yesterday. The S&P 500 and NASDAQ finished modestly in the red and strong gains for Nike (NKE) keeping the Dow Jones in the black.
Euro climbed up against the US Dollar and is presently trading at 1.1277 in the European trading session today.
In China a combination of lower sales, higher costs and weak prices as a result of soft demand has been weighing on the manufacturing sector’s earnings power. The pressure is particularly notable in the mining sector, offsetting modest gains elsewhere. China and the Fed have been the market’s primary pre-occupations lately, and this report adds to those worries.
The Australian dollar has fallen after weak Chinese industrial data added to evidence that the Chinese economy is slowing down. AUDUSD is trading at 0.6949 in the European trading session.
European stocks also declined on Monday as more disappointing Chinese data and downbeat analyst comment weighed on the stocks.
London's benchmark FTSE 100 index ended the day down 2.46 per cent to 5,958.86 points compared with Friday's close. In the Eurozone, Frankfurt's DAX 30 finished 2.12 per cent lower at 9,483.55 points and the Paris CAC 40 plunged 2.76 per cent to 4,357.05.
"Both the Australian and Canadian dollars fell sharply today as profits fell by the largest amount in four years. Earnings in the resource sector have been hit particularly hard and this put additional pressure on commodity prices. There are major economic headwinds in China and this will limit growth in countries that rely on Chinese demand" - BK Asset Management.
In the US, New York Fed President William Dudley noted that the Fed is still on track to increase interest rates in this year. He, however, stressed that the decision would be depend on the health of US economy and financial conditions, as well as global economic development.
In an interview with Wall Street Journal, Dudley suggested that "if the economy continues on the same trajectory it’s on…and everything else suggests that’s likely to continue…then there is a pretty strong case for lifting off".
"I am starting to see signs of imbalances emerge in the form of high asset prices, especially in real estate, and that trips the alert system. Given the progress we've made and continue to make on our goals, I view the next appropriate step as gradually raising interest rates, most likely starting sometime later this year" - San Francisco Fed President John Williams.
Crude oil is trading lower at $44.43 ahead of the estimates of U.S. crude stockpiles report.
Gold is trading lower in the Europe at 1127.87, while Silver is weak at 14.54
29th Sept 2015 – 06:42hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
Similar threads
