FOREX News Today

Asian stock markets are mixed, with Japanese markets moving higher and oil producers gaining as oil prices moved higher, with the front end Nymex future trading above USD 50 per barrel. Chinese trade data showed imports beating estimates and saw the CSI move off earlier lows. US and UK stock futures are lower though, so overall positive leads for European bond markets, which moved higher yesterday, despite broad gains in equities. Gilt and FTSE 100 underperformed as Sterling bounced back from Monday’s drop. The European calendar has Swiss inflation data and UK production numbers. The ECB will start its corporate bond purchase program today, although officials this week indicated that buying may not amount to much.

The World Bank made a sizeable 0.5% cut on its 2016 global growth forecast from January estimation of 2,9% to 2.4%. The cut was made due to persistently low commodity prices, slow demand in advanced economies, weak trade and declining capital flows. Emerging market countries that live from commodity exports have found it hard to adapt to lower prices for oil, metals, and other commodities. According to the bank these economies are accounting for half of the downward revision.  The World Bank expects emerging economies to grow at a meager 0.4 percent pace in 2016, a downward revision of 1.2 percentage points from the January outlook.  Low commodity prices help the commodity-importing emerging market countries that are doing better. However, the benefits of lower prices on energy and other goods have been slow to show up. The World Bank now expects growth in commodity-importing countries will reach 5.8% which represent a downgrade of 0.1% from the January forecast.

Canada’s Ivey PMI fell to 49.4 in May from 53.1 in April on a seasonally adjusted basis, undershooting forecasts for a decline that would have left the index above 50.0 (median was 52.0). The pull-back leaves the Ivey at the weakest level of the year, and is below the most recent foray into contractionary (sub-50) territory in December of 2015 that saw the index fall to 49.9. But while the magnitude of the decline in May was unexpected, it was not shocking given the Fort McMurray fires during the month, and the concerns about the outlook for the region and the impact of stopped oil production on the national economy. Notably, the unadjusted Ivey PMI rose to 58.4 in May from 50.6 in April, revealing the typical move in this series between April and May. However, the index was well below the not seasonally adjusted 65.2 seen last May.

US consumer credit rose $13.4 bln in April following the $28.4 bln March surge (revised from $29.7 bln). Nonrevolving credit continued to pace the strength, posting an $11.8 bln increase versus the prior $17.9 bln jump (revised from $18.6 bln). Revolving credit was up $1.6 versus $11.1 bln (revised from $10.4 bln).

Main Macro Events Today

• UK Industrial Production: The YoY Industrial Production numbers for April are released today and are expected to come in slightly worse than in previous month (-0.4% vs. -0.2). Industrial production in the UK has been contracting since the cycle high in December 2013.

• Canada Housing Starts: We expect housing starts, due today, to slow modestly to a 190.0k unit rate in May from 191.5k in April, as starts continue to unwind from the 219.4k year high rate in February.

• RBNZ Interest Rate Decision: The Reserve Bank of New Zealand is expected to ease rates further. The Governor Wheeler said in a policy note that further easing may be required to ensure that future average inflation settles the middle of the target range. He has also expressed his wish for a lower dollar.

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

UK retail numbers rebounded. According to the Confederation of British Industry’s monthly retail sales rebounded to +7 on CBI’s index. This was in line with expectations in a Reuters poll and up from -13 in April. April number was the lowest reading since the beginning of 2012. At the same time expectations for June fell to -5, the weakest month-ahead reading since mid-2013. According to the CBI orders placed with suppliers fell at the fastest pace since March 2009.

RBA remained put. The Reserve Bank of Australia keeps the rates at record low levels at 1.75% as it sees sustainable growth in the economy. The bank regards the current policy consistent with the economic situation. The decision was widely expected but still AUD rallied against all the major counterparts except CAD. While Australian dollar lost 0.1% against CAD it gained 2% against JPY. In the light of this wording from the central bank it appears that further rate cuts aren’t likely. However, should the economic conditions worsen RBA surely will consider further rate cuts.

The UK “Remain” campaign that supports the idea of staying in the European Union has a narrow one-point lead over the “Leave” campaign, according to a YouGov poll for the Times posted Monday. According to the latest YouGov poll 43% of respondents intend to vote to keep Britain in the EU, while 42% support an exit vote in the referendum. Britons will vote on June 23 on whether to remain in the 28-member bloc.

Chair Yellen didn’t provide any fresh insight on the timing of the next rate hike, leaving the door open for action over the next several months. Fed Chair Yellen reiterated gradual funds rate hikes are likely appropriate if conditions met, including labor market strengthening and rising inflation. Giving a nod to Friday’s employment report, she warned “one should never attach too much significance to any single monthly report.” Nevertheless, it’s still an important indicator and the Fed needs to monitor the conditions carefully, she added. Generally she noted that overall labor market developments have been quite positive, though she also cited several negatives, including high unemployment rates among various minority groups. Elsewhere, she believes foreign financial and economic conditions have stabilized. That she sees positives outweighing the negatives, the FOMC will remain on course for more normalization this year, and we still see July very much on the table. Fed takes its mandate and objectives from Congress, she said, in answering a question on whether the FOMC’s primary concern is GDP growth and the unemployment rate over the next few quarters, relative to the degree the Fed looks at the negative effects of low rates (including risk taking behavior). She also stressed the Fed not only looks at the near term, but at the medium and longer terms as well.

Main Macro Events Today

• Euro Area GDP: Eurozone Gross Domestic Product numbers are out today and are expected to come in unchanged from the previous numbers. The QoQ GDP change is expected to come in at 0.5% and YoY at 1.5%.

• US Non-Farm Productivity: The report on the US Non-Farm productivity for the first quarter 2016 is due today and is expected to improve from -1.0 to -0.6. Over the recent years productivity has improved towards the year end after a decline in the first half of the year.

• Canada Ivey PMI: A slight decline is expected in Canada May Ivey Purchasing Managers Index. The numbers are expected to ease from 53.1 in April to 52 in May.

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.