FOREX News Today

RBA Governor Stevens: Very committed to inflation-targeting monetary policy, inflation very low and below the RBA’s target, inflation target is not rigid and the inflation target does not demand kneejerk responses. Inflation targeting will work well into the future and finally there is quite some years of fiscal repair work for the government in the period ahead. More Dovish tones from Governor Stevens,  AUDUSD down from overnight highs of 0.7256 to 0.7222 following his comments.

IMF “unconditional” debt relief for Greece: The conclusion of its debt sustainability analysis (it’s first one of Greece since mid last year). The 10-year Greek yield was down by 28 bp, putting yields at the lowest since last November, after the Greek parliament today passed the latest EUR 5.4 bln austerity-measures package, which will qualify it for a EUR 11 bln injection of bailout cash. This should make it a formality for Eurozone officials to sign-off on at today’s Eurogroup meeting. The IMF warns that Greek debt, which currently stands at 180% of GDP, would shoot to 300% of GDP without debt restructuring.

More Mixed US data : US Markit manufacturing PMI dipped to 50.5 in flash print for May, the lowest since September 2009. The index fell to 50.8 in April from 51.5 in March. It was 54.0 a year ago. The index hit a high of 57.9 in August 2014 and has generally been on a downward trajectory ever since. New orders declined versus April and are expanding at the slowest rate since December 2015, in large part thanks to weakness from foreign demand. But, input prices rose for a second straight month, though inflation remained moderate overall and was running at a slower overall pace than the series average. The recovery in producer sentiment from winter lows is proving more anemic than hoped, though sentiment has still increased on net since February despite May setbacks for the Empire State and Philly Fed headlines. The ISM-adjusted average of the major measures is poised to sustain the 51 April figure, following a 53 eight-month high in March, but much lower 49 averages in January and February. The employment components for both Empire State and Philly Fed increased, and we saw further gains in the Philly Fed price component as oil prices rebounded.

Fedspeak: Fed’s Williams repeated 2 to 3 rate hikes seem about right for 2016, with 3 or 4 in 2017. The timing will depend on economic data, he cautioned, adding the Fed will move slowly on removing accommodation he added. The FOMC will leave the balance sheet as it is for now. He forecasts about 2% growth for this year, though there are some headwinds from abroad, but it’s important that the Fed doesn’t overreact to financial market turmoil. He remains concerned about low inflation expectations, however. He sees encouraging signs that wages are picking up, though low wages remain a puzzle. There’s nothing new in these remarks from Williams, who is not a voter this year. Earlier, Bullard, a voter, speaking from Beijing, noted some data are supporting the FOMC’s views for rate hikes, while other reports are supporting the lesser views of the markets. There are some signs that U.S. growth is below trend, though the labor market’s performance has been very good.

Main Macro Events Today

• German Final Q1 GDP: German Q1 GDP, which is likely to confirm overall growth at 0.7% q/q. The quarterly growth rate is much stronger than initially expected, and the breakdown, which will be released for the first time, likely to confirm that overall expansion was boosted by strong consumption and domestic demand. Survey data already points to a slowdown in growth dynamics in the second quarter and the different timing of Easter this year may distort comparisons, so that the first half of the year may have to be seen as a whole.

• German May ZEW: German ZEW Economic Sentiment is seen improving to 11.4 from 11.2. Markets are starting to digest raised bets of a June Fed hike and with oil prices moving higher investor confidence seems to remain underpinned. Reduced Brexit bets may also help, but much will depend on when responses came in and there still is some risk of a negative surprise amid uncertainty as the period of ever easier monetary policies across the world is slowly coming to an end.

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: Data today includes the EMU current account, UK CBI industrial trends and German PPI which is expected to rise to 0.2% from 0.0%. Overnight Asian stock markets managed to stabilise in tandem with oil prices. Crude prices rose to a seven month high and the front end WTI future has broken USD 49 per barrel. Japanese stocks are heading for a second weekly gain after recovering earlier losses with a weaker Yen helping to put a floor under markets as investors weigh the impact of a June rate hike in the U.S. on the global economy. The Nikkei is currently up 0.54%, the Hang Seng 1.20%, the CSI 300 up 0.105 and the ASX up 0.44%. U.S. stock futures are also moving higher.

Japanese Sales-Tax should be delayed: So says Etsuro Honda adviser to PM Abe the comments reported by Bloomberg says the sales tax hike planned from April 2017 should be postponed until the economy is completely free from deflation also that any economic package cannot offset the impact of the sales tax hike. This is in stark contrast to a senior member of the ruling party  (mr Yamamoto who says the economy will not recover if sales tax delay is just for show. The continued uncertainty and public disagreements by people close to PM Abe leaves a rather negative impact.  USDJPY remains north of 110.00.   

Mixed US data : The US data yesterday revealed a disappointing Philly Fed downtick to -1.8 from -1.6 that accompanied Monday’s Empire State plunge to -9.02 from 9.56, alongside a restrained 16k initial claims reversal of last week’s 20k pop that left a still-elevated 278k figure. Yet, we still have an improvement in producer sentiment since the bleak readings over the six months ending in February, and a claims rise in May after lean April data that mostly reflects seasonal adjustment difficulties from the early-Easter, the New York spring break, and the Verizon strike. We also saw a welcome 0.6% April leading indicators rise, as the index rebounds with an assumed bounce in GDP growth to 2.0% in Q2 from an upwardly-revised 1.0% (was 0.5%) in Q1.

Fedspeak – Fischer (Vice Chair) nothing revealing in his speech on policy or the economy. Dudley (3^rd most significant opinion) a hike in June or July is reasonable if the data conform to his outlook, said the Fed dove, who also noted June is “definitely” a live meeting. Of course the markets got that from the FOMC minutes yesterday, and he’s pleased with that outcome. The Q1 slowing in growth was a bit of a surprise and Q2 is shaping up to see stronger growth. The strength in retail sales helped bolster his view on the Q2 rebound. He thinks the economy is growing above trend with a tighter labor market. Brexit is another variable in the policy mix, he added. He didn’t give a time frame for the next rate hike, but rather reiterated that policy is still data dependent. He did acknowledge that it is important for the markets to grasp the FOMC’s thinking. Chair Yellen has a speech scheduled for June 6^th.

Main Macro Events Today

• US Existing Home Sales: April existing home sales data is out on todayy and should reveal a 1.3% headline increase to a 5.400 mln (median 5.390 mln) pace from 5.330 mln in March and 5.070 mln in February. Housing starts for April have already been released and posted an improvement to 1.172 mln from 1.099 mln in March and the NAHB housing sentiment index managed to hold steady at 58 from March.

• Canada CPI:  We expect CPI, due today, to accelerate to a 1.9% y/y pace in April (median +1.7%) from the 1.3% y/y pace in March. CPI is seen rising 0.5% on a month comparable basis in April (median +0.4%) after the 0.6% bounce in March. Gas prices shot 9% m/m higher in April after expanding 5.7% in March. Hence, gas prices should again provide a hefty lift to month comparable CPI. Of course, the currency appreciated further, with USD-CAD 5.0% to an average 1.256 in April. With the loonie also making headway in February and March, the exchange rate is expected to restrain price growth. The BoC’s core CPI index is seen rising 0.2% m/m in April after the stunning 0.7% gain in March. Annual core CPI growth is expected to expand at a 2.1% y/y rate in April (median +2.1%), matching the 2.1% pace in March. The BoC was sanguine about the pick-up in total and core CPI through the end of 2015, as they continued to lean on indicators suggestive of ongoing slack to make the case that the spike in core CPI was transitory. Another month of elevated core CPI will not shake the BoC’s view on the price backdrop. Notably, inflation remains on the backburner as growth is the focus.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

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.