FOREX News Today

European Outlook: Asian stock markets were mostly down. The Hang Seng surged after China allowed insurance companies to invest in Hong Kong’s stock markets via an exchange link with Shanghai. But Chinese CPI figures missed expectations at only 1.3%.   Japanese markets also managed slight gains, after yesterday’s dip, amid ongoing hopes that the BoJ will buy exchange-traded funds, although a stronger Yen and the North Korea nuclear test limited gains. U.S. and U.K. stock futures meanwhile are in the red and oil prices are down on the day, although the front end WTI future is still holding above USD 47 per barrel. Bund and Gilt futures headed south yesterday after Draghi not only left rates on hold, but also failed to deliver a particularly dovish press conference, which added to the raft of positive U.K. releases and dampened hopes of further central bank action in Europe, although the FTSE and Eurozone peripheral stock markets still managed to close with gains. Bund futures already managed to more slightly up from lows in after hour trade, but with markets still digesting Draghi market moves may be limited ahead of the weekend. The European calendar has trade data from Germany (see below) and the U.K., which is unlikely to change the overall outlook much. The U.K. also has Construction output and the BoE inflation expectations survey. Eurozone finance ministers meet in Bratislava with Greece high on the agenda.

German trade surplus narrows as exports slip. Germany posted a sa trade surplus of EUR 19.4 bln in July, down from EUR 21.4 bln in the previous month, with the decline reflecting a -2.4% m/m drop in exports that far outstripped to -0.7% m/m decline in imports. Data over the summer can be volatile, as school holidays in the states are staggered and the timing changes each year, which makes adjusting for seasonal variations difficult, as the timing of the holidays in the industrial centres can impact data. Still taken together with the dip in confidence numbers the data will add to concern that the manufacturing sector in particular is feeling the impact from the Brexit scenario and the stronger EUR.

Draghi Takes Off Dovish Hat – For Now: The ECB not only left policy on hold, but Draghi also refrained from an overtly dovish press conference. The central bank head left the door to further easing open, but it seems nothing is in the pipeline or has been discussed, aside from measures to ensure the smooth implementation of the QE program, which will have to face the question of how to get around the fact that at least in some countries the ECB will be running into supply constraints. Meanwhile the message to politicians to get their act together and implement urgently necessary growth enhancing structural reforms are getting louder. The euro has seen little follow through activity following the ECB’s announcement yesterday. The common currency was trading at modestly lower levels against the dollar in early European trade versus levels prevailing ahead of yesterday’s announcement, but firmer against the yen and the sterling.

Main Macro Events Today        

• UK Consumer Inflation Expectations & Trade Balance –  Last time the UK Consumer inflation expectations figure was 2%, little change is expected today (no pun intended).  The UK Trade balance is expected to improve from -12.4 billion GBP to -11.4 billion GBP.

• CAD Employment Change – No change is expected in the Unemployment Rate (6.9%) with a net increase in employment of 16,000.

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: Asian stock markets are mostly down (Nikkei closed below 17,000 down 0.32%) The Hang Seng is managing slight gains and mainland Chinese markets are narrowly mixed as volumes remain subdued amid official pressure on government backed funds to keep volatility down and limit sell offs. In Japan markets are assessing the prospects for further easing after better than expected GDP numbers. U.S. stock futures are higher after a narrowly mixed closed yesterday and FTSE 100 futures are also moving up. European stock markets already managed gains yesterday, led by Eurozone peripherals as markets hope for further easing from Draghi following weak German data this week. Eurozone yields fell going into the meeting and Bund futures are likely to remain supported ahead of Draghi, although the event risk is yet another disappointment if the ECB focuses mainly on dovish rhetoric and doesn’t rock the boat with extensive easing measures. Oil prices are higher and the front end WTI future is trading above USD 46 per barrel. Already released, the U.K. RICS house price balance came in much higher than anticipated and French non-farm payrolls were confirmed at 0.2%. The data calendar still has German labour cost data for Q2 ahead of tomorrow’s trade numbers.

BOE Governor Carney:  The BOE action helped to reduce recession risk. The BoE governor said the U.K. recession risk has receded due to BoE actions, which clearly is a defence of the central bank’s easing package from August, but could also be seen as a sign that the additional rate cut that most MPC members still felt might be necessary back in August may not be necessary. Especially after this months round of better than expected confidence data. Still, Carney stressed that the BoE still has options for further easing if necessary, including another rate hike. Meanwhile, BoE officials sounded pretty unanimous in their rejection of Helicopter money, with Carney saying that he personally has ruled out helicopter money, Cunliffe saying it is “outside” his thinking and Vlieghe adding that such a step would not be a decision to the MPC as its a fiscal operation.  However, quote of the day was Carney being “absolutely serene” about comments made by the central bank in the build-up to the Brexit vote. Cable closed the day at 1.3436 and currently trades down at 1.3330.

US JOLTS: The report showed job openings surged 228k to 5,871k in July, a new record high, following June’s 129 rebound to 5,643k (revised up from 5,624k). The rate edged up too, to 3.9% from 3.8%. Hirings increased 55k to 5,227k after the prior 125k jump to 5,227k (revised higher from 5,131k). The hire rate was steady at 3.6%. Quitters inched up 1k to 2,980k following the 37k June rise to 2,980k (revised up from 2,909k). The rate was unchanged at 2.1% (June revised up 2.0%). Fed Chair Yellen is a fan of the JOLTS report, and in particular the quit numbers, and though this report was better than expected, it is too backward looking to have much effect on the September rate decision, especially in the face of weaker, more contemporaneous numbers.

Fedspeak: Hawkish Richmond Fed’s Lacker argues for a September hike for which the “case is strong,” he said in House testimony. He noted that the Fed needs to make up ground on interest rates. This follows like-minded remarks from hawkish dissenter George of the KC Fed earlier, who also testified and said that the US is at or near full employment. It would be a surprise if either didn’t reiterate their hawkish views.

Main Macro Events Today        

• ECB Rate Decision and Press Conference  –  11:45 GMT & from 12:30 GMT – Not an easy meeting for the ECB, with mixed confidence indicators since the Brexit referendum, ongoing uncertainty about the future relationship between the U.K. and the EU, but also the outlook for the U.S. economy and the Fed rate path. This week’s round of disappointing German data will have been too late for the updated set of staff projections, but will only add to the arguments of the doves. At the same time, however, the ECB doesn’t have many options left if it doesn’t want to rock the boat. So for now the most likely scenario is dovish talk from Draghi and at the very best an extension of the time frame for QE maybe coupled with some minor tweaks to the QE program, including a possible removal of the deposit rate as the lower limit for purchases, which would help to address the increasing shortage of bonds, but at the same time push short term rates even lower. What is certain is that Draghi and Co will once again highlight the need for structural reforms and help from politicians in the struggle to boost Eurozone growth. Officials have been trying to limit expectations ahead of today’s meeting, but yields still fell and stocks moved higher in anticipation of further easing, so the event risk is a correction on both bond and stock markets, at least initially.

• US Jobless Claims – 12:30 GMT – Initial Claims are expected to rise a little to 265K from 263k and Continuing claims are expected to fall to 2.153 million from 2.159 million.

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: Asian stock markets are mostly higher, with the ASX a notable exception as the Aussie strengthened following Bank of Australia’s decision to keep rates steady. Oil prices are higher on the day and the front end WTI future climbed further above USD 45 per barrel, but gains are capped by concerns that stocks indices may be approaching overbought levels. U.S. and U.K. stock futures are also moving higher, despite the fact that U.K. BRC retail sales came in much weaker than expected with the like-for-like reading down -0.9% y/y, against expectations for another marked rise. German factory orders disappointed and previous month revised down (see below) – EURUSD overnight lows 1.1140 currently 1.1150. The Eurozone also has the detailed reading of Q2 GDP, and elsewhere Switzerland releases Q2 GDP and August inflation data.

FX Summary: The dollar and euro traded softer against most other currencies, with markets taking Friday’s payrolls report as lowering the odds for the Fed to hike rates at its FOMC meeting later this month, while data left prospects for unchanged policy with dovish guidance at the ECB’s meeting this week. USD-JPY declined by over 0.5% to the 103s and EUR-JPY fell by 0.7%. Cable popped higher on the back of a record month-to-month rebound in the UK’s August services PMI, but gains failed to sustain as such an outcome had been well flagged by the stellar rebounds already seen in last week’s construction and manufacturing PMI reports. USD-CAD extended Friday’s post-U.S. jobs losses, with the Canadian dollar rallying concomitantly with oil prices. News that Russia and Saudi Arabia had signed an agreement to set up a “working group” to think of ways to curtail crude market volatility boosted crude. (see below)

Oil Update: Oil prices sprang higher on news of a Saudi-Russia agreement, signed on the sidelines of the G20 meetings, to set up a “working group” to discuss ideas about how to minimise market volatility. WTI crude was up nearly 5% at the $46.50 intraday peak, overnight it traded to $44.75 before recovering to $45.30.  A lack of specifics about how output might be restricted apparently led to the rally fizzing out, and prices retreating. Saudi Arabia’s oil minister, Falih, said that that Iranian production has now reached pre-sanctions levels, suggesting that there is scope for Tehran to agree to a production freeze.  The global supply glut remains and there will have to be some significant compromise in Algiers if the $50 is to be recovered.

German July manufacturing orders rose 0.2%: This was less than hoped and even with June revised marginally higher to -0.3% m/m from -0.4% m/m, the annual rate remained stuck in negative territory. Still, the -0.7% y/y reading is a clear improvement from the -3.0% y/y in the previous month, although looking at the dip in the manufacturing PMI, and the sharp downward revision to the German services PMI growth projections going ahead will have to be revised again and the weaker orders data will add to the arguments of the doves at the ECB. Interestingly though, the breakdown showed a marked rebound in foreign orders inflow, which suggests Brexit and the weaker Pound are not to blame. Domestic orders meanwhile dropped -3.0%.

Main Macro Events Today        

• US Non-Manufacturing PMI – 14:00 GMT – Forecast for a slight rise to 55.7 from 55.5. Last July’s spike to 59.6 set a new post-recession high. The ISM-adjusted figure for the ISM-NMI tends to track that of the Philly Fed. The August Philly Fed index rose to 2.0 from -2.9, but the ISM-adjusted measure fell to 47.2 from 51.3.

•  NZD GDT Price Index – The fortnightly Global Dairy Trade Index is published and with a strong recovery last time to 12.7% sparking a rally in the NZD, today’s data will be followed closely.

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.