Market news and trade recommendations by FBS

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Market News

US GDP and the Fed in focus

Mark Jensen, FBS

Market volatility was pretty low at the beginning of the trading week: investors stayed cautious ahead of the news scheduled for the end of the week.

The US intrigue will be partially disclosed on Wednesday. Pay special attention to the nonfarm payrolls by ADP at 12:15 GMT. The April report is expected to show a solid 215K increase in private payrolls.

US will release its advance Q1 GDP (forecast: + 1.2%; Q4: revised down to 2.6%) at 12:30 GMT. The U.S. economy probably grew at the slowest pace in a year as the untypically cold winter weather lowered consumer and business confidence.

Later in the day FOMC will announce its monetary policy decision (18:00 GMT). The April meeting should provide few surprises: the QE taper is expected to continue at a pace of $10 billion. There will be no press conference or new projections in April. The market will likely focus on when interest rates might begin to rise and at what pace.

More:
http://www.fxbazooka.com/en/news/show/1226

 

[riki143]

Market News

Terrible US GDP

US published mixed statistics on Wednesday. Nonfarm payrolls by ADP came much better than expected: 220K versus forecasted 203K, March reading revised up to 209K.

However, the main event of the day was the US Q1 GDP. Data came out MUCH worse than expected: economy added only 0.1% vs. forecast 1.2% and 2.6% in Q4. EUR/USD jumped to $1.3870 on the news.

Waiting for the Fed monetary policy announcement at 18 GMT.

More:
http://www.fxbazooka.com/en/news/show/1228

 

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Market News

Apr. 30: American Session

Tatiana Norkina, FBS analyst

U.S. dollar today began to weaken against many world currencies before the publication of the report on inflation in the Euro zone. According to statistical data for the last month inflation was only 0.7% , instead of the expected 0.8%. In the focus of attention of investors today was also the statistics from the U.S. Thus, according to ADP data, change in the number of working places in the non-agricultural sector was 220 thousand, against expectations of 210 thousand, however quarterly U.S. GDP growth showed only 0.1% instead of the projected 1.2%. A little later, Fed 's statement on interest rates is expected . Rates are expected to remain at the same levels of 0.25%.

U.S. dollar index is currently losing 0.30%. Stock markets - about zero.

In currency markets, there is a revival. The pair EUR/USD rebounded to around 1.3870 mark after testing 1.3790 support. And GBP/USD pair finally resumed growth and has established a new maximum in the area of 1.6870 today. Bulls continue to tread.

Currency pair USD/CHF plummeted to around 0.8790 mark. The dollar weakened and against the yen: USD/JPY fell to a level of 102.20.

More:
http://www.fxbazooka.com/en/news/show/1229

 

[riki143]

Market News

May 1st: American session

Tatiana Norkina, an analyst at FBS


Statistical data on the U.S. economy was mixed today. So, weekly statistics on applications for unemployment benefits were much worse than expected: 344 thousand vs. 319 thousand. In the same time, personal expenses of Americans increased by 0.9 % instead of the expected growth of 0.6 %. This indicates a positive trend in the U.S. economy, which allowed to strengthen the dollar index. However, the main intrigue of the markets will persist until tomorrow, when it will be published non-farm payrolls for April. Very positive data is expected. Today, the percentage change of the dollar index is near zero. The stock market is also at zero level.

Currency pairs are waiting. Thus, the pair EUR/USD is consolidating in 1.3870, GBP/USD is again restored to the figure of 1.6900.


Currency para USD/CHF stopped at 0.8790 and USD/JPY slowly grew to 102.35 resistance.

More:
http://www.fxbazooka.com/en/news/show/1230

 

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Market News

May 5: Asian session

Asian markets took a turn lower on Monday as the HSBC survey showed China manufacturing fell for a 4th month in a row. The final reading for the HSBC Manufacturing PMI fell to 48.1 in April vs. expected 48.4 (reading below 50 indicates contraction). Markets are now concerned that the second largest world economy is losing momentum. The risk sentiment was generally positive before the China figure came out: investors were inspired by the Friday’s US labor report (+288K vs. 216K expected). The increased tensions in Ukraine keep gold and bonds well bid. Japan, South Korea and Thailand markets are closed for a holiday today.

USD/JPY hit a two-week low of 101.85 as demand for the safe currencies increased. The pair lost more than 100 pips from the Friday’s peak of 103.02 hit on the strong US labor report.

Demand for the commodity currencies is subdued. AUD/USD opened the week with a bullish gap at $0.9285, dipped to $0.9250 later in the session and now recovered to $0.9275. Australia building approvals fell by 3.5% in March. Reserve Bank of Australia holds a policy meeting tomorrow. NZD/USD is trading under pressure around $0.8250. Gold opened with a gap up and hit to $1309.4 in Asia (highest since April 15).

EUR/USD consolidates in the $1.3885/65 range after a volatile Friday, while GBP/USD hovers in the $1.6885/68 band. UK markets are also closed.

More:
http://www.fxbazooka.com/en/news/show/1231

 

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Market News

CFTC: USD shorts declined

Here are the essentials of the latest Commitments of Traders (COT) report, released on May 2 by the Commodity Futures Trading Commission (CFTC) for a week ended on April 29. According to the report, large traders and speculators decreased their overall bearish bets of the US dollar from $1.6 billion on April 22 to $0.7 billion on April 29. The USD position has been on the bearish side for the past three weeks.

http://www.fxbazooka.com/en/news/show/1232

 

[riki143]

Market News

Opinion: US labor data not so good
5 May 2014

According to UBS, even though the US employment figures were much better than expected, the drop in unemployment rate was mainly due to falling participation, showing the continued slack in the US labor market. Economists don't think the figures will have a long-playing positive effect for the market.

“The US labor market report showed on Friday, that hiring in the US has been much stronger in April than markets had expected. 288K jobs had been created in April, compared to a 210K expected", analysts remind. "Also the unemployment rate dropped from 6.7% in March to 6.3% in April. However, a lot of this drop came on the back of a falling participation. Also wage growth has been flat, showing the continued slack in the US labor market”.

http://www.fxbazooka.com/en/news/show/1233

 

[riki143]

Market News

May 5: American Session

Tatiana Norkina, analyst at FBS

Optimistic data on business activity in the U.S. over the past month has supported the U.S. dollar index today, which has managed to keep over the 79.50 support. Stock markets, on the contrary, have started the week with a significant gapdown but are trying to make up the losses at the moment. Thus, DJIA is losing slightly less than in the morning - around 0.32%, S&P500 - 0.12%.

Currency markets are consolidating after the Friday's rally. The EUR/USD pair has beed trading under 1.3880 all day long, while GBP/USD - in the 1.6860 area.

The range of trading for the USD/CHF pair has reached only 10 pips today: 0.8765-0.8775. At the moment, the bulls are trying to break forward. The USD/JPY pair has set a new low for the past two weeks, dropping to the 101.85 mark, but oversaleness are preventing the bears from winning total control over the market.

More:
http://www.fxbazooka.com/en/news/show/1234

 

[riki143]

Market News

May 6: Asian session

Asian stock markets were mixed on Tuesday with MSCI Asia Pacific index adding 0.1%. Trading volumes remain low as markets in Japan, Hong Kong and South Korea are closed for holidays. Yesterday the markets were cheered up by the strong US ISM manufacturing PMI. USD/JPY weakened from the session high of 102.20 to 102.00.

AUDUSD jumped up from $0.9283 to $0.9316, but failed to fix at these highs. The Reserve Bank of Australia left monetary policy unchanged and came with a neutral statement. The bank, however, has once again referred to the overvalued currency. Australia trade surplus came below the forecast. NZD/USD touched $0.8715. Gold consolidates around $1309 – slightly below the yesterday’s 3-week high of $1315.

EUR/USD consolidates below the yesterday’s high of $1.3885, while GBP/USD touched $1.6895. Euro zone and Great Britain will release service PMIs later in the session.

More:
http://globalforextalk.com/forums/showthread.php/14444-Company-news?p=49412#post49412

 

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Market News

May 6th: American session

Tatiana Norkina, an analyst at FBS

Last month retail sales increase to 0.3% in Europe ( forecast : -0.2 %) contributed to today strengthen of EUR, while weakening of the U.S. dollar index at the same time, which is currently losing about 0.50 %, falling to around 79.10. Trading has been negatively opened on major U.S. stock exchanges. S & P500 is losing about 0.30% and the DJIA - 0.55%. The negative data on the U.S. trade balance was the main driver of decline. According to the report, the deficit rose to 40.38 billion dollars, against expectations of $ 40.30 billion.

Consolidation was completed on the currency markets. The EUR/USD soared to around 1.3950 today, but corrected to 1.3930 in early U.S. session. British currency was supported by the positive statistics: business activity in the services sector in the UK rose unexpectedly - the index was 58.7, against expectations of 57.6. GBP/USD pair reached a high of 1.7000 figure, but now corrected at 1.6980.

Currency pair USD/CHF has issued a low in the area of ​​0.8720 - it's almost March lows. USD/JPY dropped pretty much as well, today its rate fell to around 101.50 .

More:
http://www.fxbazooka.com/en/news/show/1236

 

[riki143]

Forex Analytics

T. Norkina: trade signals (May 7)

T.Norkina, FBS analyst

EUR/USD: buy – 1.3910; stop – 1.3890; target1 – 1.3950; target2 - 1.3975.

USD/JPY: buy – 101.40; stop – 101.20; target1 – 101.80; target2 – 102.00.

More:
http://www.fxbazooka.com/en/analitycs/show/1472

 

[riki143]

Market News

May 7: American Session

Tatiana Norkina, FBS analyst

The U.S. dollar weakened somewhat during today's speech of the head of U.S. Federal Reserve Dzh.Yellen. The correction stopped, and the index fell to the morning values in the area of 79.15, but the positive trend continues. Major U.S. stock markets opened in different directions. So, DJIA - in positive area, about 0.12%, while the S&P500 - in the red zone, a little more than 0.15%.

Currency pairs again in the outset today. EUR/USD pair is trading at the lower edge of today's range 1.3910-1.3930. GBP/USD moderately reduced in 1.6960 area. Not excluded a deeper correction after yesterday's growth.

The currency pair USD/CHF has adjusted to the level of 0.8760. But the pair USD/JPY, after testing the recent support of 101.40, moved up to the figure of 102.00. But the bulls are not yet able to maintain their advantage and the rate dropped to 101.65 area.

More:
http://www.fxbazooka.com/en/news/show/1237

 

[riki143]

Forex Analytics

BNP Paribas lowered EUR/USD forecast

Strategists at BNP Paribas have revised down their Q2 EUR/USD forecast from 1.3700 to 1.3500.

"Consistent with our economists’ forecasts for a deposit rate cut in June and acknowledging that the ECB’s recent FX rhetoric has limited EURUSD’s near-term upside, we have revised down our Q2 forecast to 1.35 from 1.37," BNPP outlines the rationale behind this revision.

"In the absence of further ECB action, EURUSD weakness towards 1.30 is likely to materialise gradually, in line with the improvement in the US economy and the shift to a less accommodative Fed policy," BNPP argues.

"However, our base case is that the ECB delivers QE in Q3 which should bring about an acceleration in the pace of the EURUSD’s decline, pushing it below 1.30," they add.

"We continue to see EURUSD at 1.26 by year-end," BNPP forecasts.

More:
http://www.fxbazooka.com/en/analitycs/show/1474

 

[riki143]

Forex Analytics
7 May 2014
EUR/USD: what to expect?

Kira Iukhtenko, FBS
EUR/USD made another bullish move on Tuesday, hitting $1.3950. The greenback lost most of its shine on the back of the falling US yields. On Wednesday the market is consolidating the yesterday’s growth and waiting for the major events – Fed’s Yellen speech tonight and the ECB meeting tomorrow.

In our view, Mrs. Yellen is unlikely to influence the trade direction today. She is expected to repeat the dovish comments about the low inflation and weak labor market (supportive for EUR/USD). As for the ECB on Thursday, monetary policy will stay unchanged. A rate cut is widely expected in June, so Mr. Draghi may start preparing the investors for that. However, dovish rhetoric is not enough to impress the euro-bullish market.

What to expect from the pair in the coming days? Given the euro’s resilience – the currency simply ignores all the negative news – we see room to test $1.4000 this week. Strong resistance for the pair lies at $1.3967 (the 2014 high). Note that the market is overbought, however. There is a MACD divergence on a daily chart. We still put long-term bullish prospects of the pair on doubt. Support lies at $1.3800/3780 and $1.3660.

Chart. Daily EUR/USD

More:
http://www.fxbazooka.com/en/analitycs/show/1473

 

[riki143]

Market News

May 8: Asian session

Asian stock markets rose on Thursday, supported by the Fed’s Yellen dovish comments and upbeat Chinese trade data that suggest some signs of stabilization economy. China trade surplus increased from 7.7B to 18.5B in April. There are signs of tensions in Ukraine easing: Russian President Vladimir Putin called on pro-Moscow separatists to postpone a secession vote.

AUD/USD strengthened to $0.9375, supported by the upbeat Australia labor market data and a better-than-expected China trade balance. The number of people employed in Australia rose by 14.2K in April (forecast: 7.5K), while the jobless rate held unchanged at 5.8% (forecast: 5.9%). NZD/USD consolidates 30 pips above the session low of $0.8640 following the yesterday’s sharp selloff. USD/JPY faced resistance at the 102 figure and retraced to 101.70.

EUR/USD and GBP/USD consolidate slightly below the recent highs, waiting for the ECB and BoE policy meetings.

More:
http://www.fxbazooka.com/en/news/show/1238

 

[riki143]

Forex Analytics

Danske Bank: trade signals (May 8)

EUR/USD: Long at 1.3910 with a target of 1.4005 and a stop at 1.3863

USD/JPY: Look to sell at 102.10/15

GBP/USD: Long at 1.6700 with a target of 1.7044 and a stop at 1.6880

USD/CHF: Short at 0.8824 with a target of 0.8698 and a stop at 0.8785

AUD/USD: Long at 0.9322 with a target of 0.9461 and a stop at 0.9261

USD/CAD: Short at 1.0980 with a target of 1.0858 and a stop at 1.0940

More:
http://www.fxbazooka.com/en/analitycs/show/1475

 

[riki143]

Market News

May 8th: American session

Tatiana Norkina, an analyst at FBS

Today the ECB kept interest rates at 0.25 %. This is generally consistent with the expectations of analysts. Therefore, the currency pair EUR/USD soared to new highs in the 1.3990 area. However, the subsequent statement of M.Dragi about the possibility of summer rate cuts collapsed the market. Moreover, the head of the ECB firmly stressed the undesirability of the strong euro. U.S. dollar began to strengthen against the euro. The pair is currently trading at 1.3850. Opposite situation occurred in the pair USD/CHF, the rate of which tested new lows of 0.8700, but recovered to the 0.8800 figure for now.


U.S. stock markets opened on the positive . So , DJIA continues yesterday's recovery, going up to 0.35 % today, and the S & P500 - more than 0.40 %.

More:
http://www.fxbazooka.com/en/news/show/1240

 

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Market News
8 May 2014

BTMU: it is still hot in Ukraine

Despite the yesterday's risk appetite improvement, the BTMU economists remark the geopolitical risks fom Ukraine as a relevant factor for global markets.

"Investors were encouraged yesterday by comments from Russian President Putin which appeared to strike a more conciliatory tone. President Putin asked “representatives of south-east regions of the Ukraine and federalisation supporters to reschedule the referendum scheduled for the 11th May”, in order to create the necessary conditions for dialogue between current Kiev authorities and representatives of south-east Ukraine."

"President Putin also backed the Ukraine’s plans to hold presidential elections on the 25th May which he described as a “step in the right direction”, but added that the Ukraine government must first hold talks with separatists in the east and suspend its military operation against pro-Russian groups. However, Nato and the Pentagon have stated that there has been no sign of a pullback in Russian troops from the Ukraine border. The Russian rouble and other local currencies strengthened in a knee-jerk manner following the comments from President Putin, with USD/RUB falling back below the 35.00-level."

What's important, the Ukrainian separatists disagreed to delay the referendum - so the topic will remain in the center of attention over the weekend.

 

[riki143]

Market News
8 May 2014

Draghi dropped EUR/USD

EUR/USD hit a 2.5-year high of $1.3990 as the European Central Bank left monetary policy unchanged with a minimum bid rate at 0.25%.

Euro plummeted by 100 pips $1.3890 as the ECB president Draghi hinted on a rate cut in June on the press-conference that followed the policy announcement.

Key points of the press-conference:

1. ECB open to cut rates in June if needed;
2. Euro’s impact on inflation is a serious cause for concern;
3. Inflation is expected to remain around present low levels for month ahead, rising in 2015 and reaching target only in 2016;
4. Economic risks remain to the downside, so the bank will closely monitor the geopolitical and exchange rate risks.

 

[riki143]

Market News

May 12: Asian session

Capital markets are cautious as the Ukraine crisis remains in focus. Investors are ready for a possible escalation in Ukraine's civil conflicts after anti-Kiev rebels declared victory in the separation referendum. Russia president Putin didn’t give any comments on the situation so far.

Chinese shares were boosted by hopes of capital market reform, while Indian shares jumped to record high on the prospect of a more business-friendly government winning India's general election, with exit polls later coming out later in the day. MSCI Asia-Pacific stock index outside Japan added 0.6% during the session.

USD/JPY was the most active currency in the session, opening the week with a bullish gap. Gains were capped by the 102.05 mark so far. AUD/USD added 30 pips, but holds below the $0.9400 mark, while NZD/USD consolidates around $0.8620. Both EUR/USD and GBP/USD are well-bid following the last week’s sharp selloff.

There is a lack of major economic releases on Monday. On Tuesday watch the industrial production and retail sales in China and the retail sales in the US.

More:
http://fxbazooka.com/en/news/show/1242