FOREX News Today

European Outlook: Asian markets are mixed, with Japan closed for a holiday. Chinese markets and Hang Seng are posting modest gains, led by banks and insurers, as investors hope upcoming data will show that China’s economy is recovering. Markets were struggling for direction though, as the focus remains on central bank action. U.S. stock futures are higher, U.K. futures are little changed, while the front end WTI future is slightly down on the day at USD 41.52, after falling yesterday after a big EIA gas draw and crude build. Also overnight Reuters have reported that Kuwait has cut prices to key Asian customers. Most European markets closed in the red yesterday with the FTSE 100 outperforming after the BoE’s latest reverse auction was fully covered. Released overnight, the U.K. RICS house price balance fell to 5% in July, while June was revised down to 15% from 16%. Still to come are final inflation numbers for July from France and Italy as well as Swedish inflation data.

RBNZ Governor Wheeler: The Bank acted as expected and the statement and press conference were rather dovish. The NZD is “ defying the Banks expectations” The market is pricing in further easing in policy (more rate cuts) before the end of the year (November most likely).  The NZDUSD rallied on the announcement to break 0.7330 before returning to 0.7250 levels, again defying expectations. The RBNZ is still the most attractive for yield at 2.00%, the USD is weakening and the worries over China continue to ease.

The BoE still in focus: Yesterdays reverse auction may have been fully covered, but that doesn’t mean that there aren’t any supply constraints as today’s maturities were shorter than at yesterday’s auction. The BoE bought Gilts dated 2023 to 2030, Tuesday the focus was on durations of 15 years and more and that is where the BoE will likely continue to struggle, as demand at the very long end is high and not just fuelled by investors struggling to find some opportunities for returns, but mainly by insurers and pension funds, who have to hold on to the longer dated papers due to regulatory constraints. So a real test will come at next week’s auction for the Gilts of 15 years and more. Still, Monday’s good auction result, as well as yesterday’s result shows that while the BoE may struggle at the very long end, it still has sufficient supply in shorter dated Gilts to cover its QE program – at least for now and European yields are up from recent0 intraday lows, although the 10-year Gilt is still set to close at another record low. GBPUSD struggles with 1.3000.

US Data Reports: US JOLTS report showed job openings rose 110k to 5,624k in June, rebounding from a revised 331k drop to 5,514k (was 5,500k). That saw the JOLT rate rise to 3.8% from 3.7%. Hirings increased 84k to 5,131k after falling 38k to 5,047k (revised up from 5,036k). The hire rate also increased to 3.6% from 3.5%. Quitters declined, however, falling 33k to 2,909k from after a 33k increase to 2,942k (revised from 2,895k). The quit rate was unchanged at 2.0%. The quit numbers are a favorite of Fed Chair Yellen, so the drop is disappointing, but it’s only one month’s report. The overall data are generally consistent with the improving trends in the labor market, but are old news, however, and shouldn’t have much impact on the markets.

Main Macro Events Today        

• US Import and Export Prices –  July trade price data is out today and is expected to show import prices down 0.6% on the month while export prices remain unchanged. This follows respective June figures of 0.2% for imports and 0.8% for exports. The plunge in oil prices over the winter helped keep these measures in negative territory before the spring rebound allowed increases. However, oil prices eased in July which could pose downside risk to the release.

•  US Initial Job Claims – There were 269,000 new job claims last week; expectations vary between a rise to 272,000 and a fall to 265,000 this week. One to watch for at 12:30 GMT.    

Janne Muta

Chief Market Analyst

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

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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 stocks were mixed, with Hong Kong seeing the highest levels since November last year, amid hopes of a pick up in China’s economy. Nikkei and ASX close down, as did  China’s CSI 300, although other Chinese indices are higher. Oil prices are slightly down on the day and the front end WTI future is holding below USD 43 per barrel, U.K. and U.S. stock futures are down, which on balance points to opening losses in Europe, after broad gains yesterday, as a report from Niesr suggesting economic activity in the U.K. contracted in July with an even chance of a technical recession this year, saw bond futures rising in tandem with stocks on stimulus hopes. Today’s European calendar is pretty quiet, with only French production data as well as inflation numbers from Norway and Portugal.

RBA Stevens: Inflation still the banks major target: Undershooting inflation target with reasonable economic growth might be “least bad” option. Current inflation target regime has flexibility, still useful. Need realism on what monetary policy can do, including pushing up inflation quickly. Hard for monetary policy to revive demand when households so indebted and there is a case for governments to borrow for investment assets that yield economic return. He appears to calling for fiscal stimulus and a slower rates cutting path ahead. AUD continues to rise on comments AUDUSD broke 0.7700 before retracing to 0.7689.

The BoE will make a statement at 8 GMT to explain the shortfall at yesterday’s reverse auction. The Old Lady had attempted to buy GBP 1.17 bln of long-dated Gilts, but only managed to purchase GBP 1.12 bln. Officials have already emphasized that the shortfall was small and occurred in a thin summer market, and Reuters and other media are reporting that The BoE will make a statement at 8 GMT to explain the shortfall at yesterday’s reverse auction. The Old Lady had attempted to buy GBP 1.17 bln of long-dated Gilts, but only managed to purchase GBP 1.12 bln. Officials have already emphasized that the shortfall was small and occurred in a thin summer market, and Reuters and other media are reporting that the central bank is expected to proceed today with the next GBP 1.17 bln tranche of Gilt purchases with 7-15 maturities..the central bank is expected to proceed today with the next GBP 1.17 bln tranche of Gilt purchases with 7-15 maturities.  Low demand not good for GBP.

US Data Reports: US reports revealed robust June wholesale trade figures but a weak Q2 productivity report that was good news on net. For wholesale trade, we saw a 1.9% June sales surge and a firm 0.3% inventory rise after upward May revisions that beat estimates. We still expect a downward Q2 GDP growth revision to 1.0% from 1.2%, but with a $3 bln boost in wholesale inventories that mostly offsets a $4 bln downward factory inventory bump, followed by a 2.6% growth clip in Q3. We saw a surprising 0.5% Q2 productivity contraction rate thanks to firmness in Q2 hours-worked, after revisions back to 2007 that lifted productivity growth in recent years but with hits to productivity, output, and compensation growth in recent quarters.

Main Macro Events Today        

• US JOLTS Job Openings   Expected to rise to 5.52 million from 5.50 million. An important data point as it was created by Governor Yellen whist she was deputy Governor and is close to her heart and one she follows.  JOLTS – (Job Openings and Labor Turnover Summary).

• RBNZ Rate Decision  21:00 GMT – Widely expected to reduce rates by 25 bps to 2.00%, Policy Statement and Press Conference to follow.

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, led by another rise in Japan (+0.69%), where volumes were low, and hopes of BoJ support and the bounce back in oil prices underpinned markets. U.S. and U.K. stock futures are also trending higher and the front end WTI future is above highs, but remains above USD 42 per barrel. Released overnight, U.K. BRC retail sales came in much stronger than expected (see more below). This should continue to underpin risk appetite, together with hope of further central bank action not just from the BoE, but also the ECB, which has been put under pressure by the BoE’s bold action. Spanish, Italian and Portuguese bond yields are all at record lows as the ECB heads for a policy review in September. Today’s European calendar still has German trade data as well as U.K. production data for June.

BOE  McCafferty: “Bank rate can be cut further, closer to zero, and quantitative easing can be stepped up” should the UK economic outlook worsen. He believes a more gradual approach should be taken towards monetary policy as information of how the economy has reacted to the June 23 referendum is still very limited. McCafferty has previously opposed raising the target for quantitative easing government bond purchases. Cable broke the key psychological level of 1.3000 on the release of his comments.

Data Reports: Chinese inflation fell to 1.8% from 1.9% last time but better than the expected 1.7%, PPI figures were also a beat coming in at -1.7% from -2.6% last time.

UK July BRC retail sales unexpectedly rose 1.1% y/y in the like-for-like measure, with consumers wallets sharply contrasting to what consumers mouths were saying after the GfK consumer confidence figure for the same month fell by a series record in the wake of the late-June referendum on EU membership. The BRC noted that nothing materially changed for households in the month after the Brexit vote, while summer sales helped entice consumers to spend after a weather-affected 0.5% drop in sales in June. The BRC cautioned that “the big question for retailers is whether that success can be carried forward into full price sales.”

Germany posted a trade surplus of EUR 21.6 bln in June, down from EUR 22.1 bln in the previous month, as exports rose a modest 0.3% m/m after falling -1.1% m/m in May, while imports rose 1.1% m/m. June data meant the sa trade surplus widened to EUR 67.8 bln the second quarter of the year from EUR 61.9 bln in the first quarter. This is nominal data of course, which also reflects exchange rate and oil price developments, but nevertheless, the numbers point to a positive contribution from net exports to overall growth in the second quarter, which should help to compensate for the disappointing production drop.

Main Macro Events Today        

US Productivity – The first release on Q2 productivity is out today and should reveal a 0.6% annualized pace for the headline after a -0.6% figure in Q1. Unit labour costs are expected to be 1.4%  from 4.5% in Q1. The first release on Q2 GDP revealed a subdued headline of 1.2% but this was still stronger than the 0.8% pace in Q1.

US Wholesale Trade – June wholesale trade data is also out today and should show a 0.8% increase for headline sales while inventories remain unchanged on the month. This would follow respective May figures of 0.5% for sales and unchanged for inventories. Data in line with this forecast would leave the I/S ratio ticking down to 1.34 from 1.35 in May and 1.36 in the three months prior to that.

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.