FOREX News Today

European Outlook: Asian stock markets were mostly lower, with Japan outperforming and posting modest gains, as the Yen weakened across the board. Generally though risk aversion is picking up again after U.S. stock markets closed in the red, following the mixed performance in Europe yesterday. U.K. stock futures are also down, U.S. futures mixed. Oil prices are up on the day, but the front end WTI future is holding below USD 44 per barrel. The DAX, which managed to close with a slight gain yesterday is heading for a quiet end to the weak and the FTSE is likely to continue to underperform amid Brexit concerns. Bund and Gilt futures could recover some of yesterday’s sharp losses with the unexpected Riksbank easing sparking concerns that the general outlook is worse than feared and the ECB dampening hopes of further easing in the near future. The calendar focuses on Eurozone PMI readings for Aprils, where we look for a modest improvement in headline rates, but a confirmation that growth in core countries is slowing down.

More poor data from Japan: Japanese Tertiary Industry activity shrank m/m by -0.1%, but this was better than expectations of a -0.4% fall, previously the index stod at 0.7%.  Meanwhile Manufacturing PMI fell 1.1 to 48 its lowest levels since December 2012, following the two earthquakes around the southern island of Kyushu (a major area of manufacturing) outlook continue to look uncertain. The JPY weaken against EUR GBP and USD. USDJPY rose over 110 on the data releases its highest since April 6^th..

ECB In Wait and See Mode, Helicopter Money Off the Table: No big surprises from the ECB yesterday, with the central bank focused on implementing the March easing package and effectively in wait and see stance. The door to further easing remains open if necessary, but it is clear that for now nothing is in the pipeline and in our view September seems the earliest time for a serious policy review. However, even if the ECB might add additional measures in the future, Helicopter money certainly remains off the agenda.  The introductory statement explicitly stated that the focus at the central bank for now is the implementation of the measures announced in March. The overall assessment of the situation remains pretty much unchanged from the last meeting, with the risks to the growth outlook still seen on the downside and global headwinds and geopolitical risks seen as the main factors that could hit the still fragile recovery. Like the Bundesbank already said earlier in the week, inflation could fall back into negative territory in coming months, but the main scenario is still a pick up later in the year and a gradual rise through 2017 and 2018. No major changes to the central staff projections from March then .The EURUSD flirted with an attempt at 1.1400, but retreated to 1.1268 briefly, the pair currently trading at 1.1300.

 

Main Macro Events Today

•  EMU PMI:  PMI readings are likely to be more mixed than the clear improvement in ZEW investor confidence and highlight once again the renewed divergence between countries. France seems to remain stuck in contraction territory, even if today’s national business confidence numbers showed some improvement. German PMI numbers are still expected to improve, but only slightly. For the Eurozone as a whole, we are looking for an improvement in the manufacturing PMI to 51.7 (med 51.8) from 51.6 and a rise in the services reading to 53.3 (med same) from 53.1. Stronger growth in smaller countries is helping to compensate for the weakness in the core, but economic momentum is slowing down, which will also start to have an impact on the labour market.

• Canada CPI: We expect CPI, due today, to slow to a 1.1% y/y pace in March (median +1.2%) from the 1.4% clip in February. But CPI is seen rising 0.5% on a month comparable basis in March after the 0.2% gain in February. Gas prices jumped around 5% m/m in March after falling 6.9% m/m in in February and dropping 6.0% in January. Currency appreciation could restrain price growth. The BoC’s core CPI index is seen rising 0.4% m/m in March after the 0.5% gain in February, consistent with recent moves in this not seasonally adjusted index during March. Annual core CPI growth is expected to expand at a 1.8% y/y rate (median same at +1.8%) in March, down from the 1.9% pace in February and 2.0% clip in January.

Janne Muta

Chief Market Analyst

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Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FOREX News Today

European Outlook: Asian stock markets outside of mainland China rallied as risk appetite picked up with oil prices. The Nikkei is up 2.4% and US. and UK stock futures are also moving higher, which will likely see Bund and Gilt futures shedding some of yesterday’s gains. Improved risk appetite should also help to bring in Eurozone spreads ahead of the ECB meeting. Draghi is widely expected to stay put for now, but highlight uncertainty and keep the door open to further action down the line if necessary. The calendar also has U.K. retail sales and public finance data as well as French business confidence.

Oil producer meeting in Russia in May: This idea was fostered by remarks from the Iraqi Deputy Oil Minister, who also said Iraq expected to hold oil exports steady at 3.9 mln bpd in May and also forecast prices rising slowly despite the Doha impasse. This apparently was behind the sudden knee-jerk rebound in crude oil, despite the end of Kuwaiti strikes and reported build in EIA crude inventories. Overnight Russia said it had no plans to decrease output, however, and swing producers the Saudis and Russians remain key to the Gordian supply knot. Brent is currently trading over $46 per barrel and WTI over $44 per barrel after the EIA predicted the biggest fall in non-OPEC oil production in a generation.

US Existing Homes Sales Rise: The 5.1% March US. existing home sales bounce to a 5.33 mln clip mostly reversed the February drop to a disappointing 5.07 (was 5.08) mln pace to leave an in-line report, with additional expected gains of 5.0% for the median price that initiated the usual Spring increase, and 5.9% for inventories to a still-lean 1.98 mln level. Existing home sales have largely defied an assumed winter lift from mild weather, and remain below the 5.48 mln cycle-high pace last July. We still have only a moderate and erratic housing recovery, and we expect a restrained 5% 2016 existing home sales increase after a 6.5% 2015 rise, but a 2.9% 2014 post “taper-tantrum” drop. We have cyclical increases of only 54% for existing home sales and 43% for pending home sales, versus larger cyclical gains of 90% for new home sales, 128% for housing starts, and 112% for permits.

BoE MPC hawk McCafferty hints he may vote for a hike: McCafferty had previously voted for a quarter point rate hike from August 2015 through to January this year, before returning to the fold from February, voting to leave the repo rate unchanged at 0.5% in every meeting since. In a speech today he cited “fears about the global economy” and “disappointingly weak growth in nominal wages and other domestic prices” as causing him to stop arguing for tightening. Now, however, he says that while “the appropriate timing for starting the process of policy normalisation has been delayed, the benefits of a gradual rise in interest rates once we start remain, to me, convincing,” and, “I still anticipate having to return to a vote to tighten monetary policy at some stage, although I cannot offer a firm date as to when that might occur.”

 

Main Macro Events Today

•   ECB Outlook: Draghi is widely expected to keep monetary policy unchanged at today’s council meeting. Indeed, with officials stressing that helicopter money may be an interesting academic idea but is not under serious consideration and the ECB focused on implementing the measures already announced the central bank is seen on hold for an extended period. With growth slowing down in core countries and the Brexit referendum adding to uncertainties, hopes of further action down the line remain, even if helicopter money may be too much of a leap. For now though the ECB remains on hold and at the moment September seems the earliest for a serious policy review.

 

• US Initial Jobs Claims: Claims data for the week of April 16th are out Thursday and should reveal a 252k (median 264k) headline that remains about unchanged from last week’s 253k. Claims look poised to average a slightly stronger 263k in April, compared to 264k in March. We expect April employment to post a 210k headline versus a 215k figure for March with the unemployment rate ticking down to 4.9% from 5.0% in March.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FOREX News Today

European Outlook: The global stock market recovery run out of steam in Asia, with bourses mixed. Chinese equities retreated and Japan managed only slight gains as oil prices retreated. The front end WTI future fell towards USD 40 per barrel, after Kuwait workers said they would end the strike that has disrupted output. A stronger Yen weighed on Japanese markets and US and UK stock futures are also down, indicating that bond futures could recover some of their recent losses in Europe. The calendar has UK labour market and earnings data and a German Bund sale. Markets will be looking ahead to tomorrow’s ECB meeting, with Draghi seen on hold for an extended period, but hopes of further action down the line remain, even if helicopter money may be too much of a leap. And like ECB officials BoJ Governor Kuroda also played down the idea, citing legal issues.

BoJ Governor Kuroda rejects idea of helicopter money, saying that he isn’t thinking about helicopter money and that the version that tries to inject cash into the economy by permanently monetising fiscal deficits would be blurring the line of fiscal and monetary policy and contradicts the current legal framework. Kuroda told lawmakers that “unless the existing legal framework changes, helicopter money isn’t possible, and we at the Bank of Japan aren’t thinking about it at all”.

German PPI -3.1% In March 2016 the index of producer prices for industrial products fell by 3.1% compared with the corresponding month of the preceding year. In February 2016 the annual rate of change all over had been –3.0%. In March 2016 energy prices decreased by 9.2% compared with March 2015, prices of intermediate goods by 2.3% and prices of non-durable consumer goods by 0.3%. In contrast prices of capital goods rose by 0.6% and prices of durable consumer goods by 1.4%. The overall index disregarding energy decreased by 0.9% compared with March 2015.

BoC Governor Poloz: His opening statement provides a summary of the MPR, as is typically the case in these appearances before the House and Senate. He listed the three negative developments for the growth outlook that have emerged since January, which were more than offset by the fiscal measures put forth in the Federal budget in March. The growth outlook is 1.7% in 2016, 2.3% in 2017 and 2% in 2018, as seen in the MPR. Cautious optimism remains in place: economic data have been “encouraging on balance”, but also “quite variable.” There has not been “concrete evidence of higher investment or strong firm creation.

 

Main Macro Events Today

• US Existing Home Sales: March existing home sales data is out later today and should reveal a 4.3% rebound to a 5.300 mln (median 5.236 mln) pace from 5.080 mln in February and 5.470 mln in January. The month’s housing starts release revealed a drop to a 1.089 mln pace from 1.194 mln in February. Secondary measures of housing data were stronger in March with the MBA purchase index up by 4.2% and the NAHB composite holding steady.

• Draghi & Poloz: Speeches are scheduled today by the ECB’s Mario Draghi at the ECB Generation Euro competition, in Frankfurt; and the BOC’s Poloz who will continue his testimony to the Finance Committee at the Canadian parliament.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.