FX News Today

European Outlook: Asian stock markets sold off overnight, oil prices are below USD 40 per barrel, and the USD continues to rise after hawkish Fed comments. The EUR is also up against most currencies, highlighting one of Draghi’s problems, which haven’t gone away after the last round of easing measures. US and UK stock futures are also down and it seems markets will be going into the Easter holidays with in a risk off mode, amid fresh uncertainties about the US rate outlook and geopolitical risks. EU Interior Ministers will meet today to talk about terror threats. The ECB publishes its monthly bulletin and the data calendar includes, French business confidence and UK retail sales.

US New Home Sales beat expectations: There was a 2.0% rise to a 512k rate in February after net upward revisions that left a 12.0% five-month climb from a 10-month low of 457k in September, though sales remain 6.1% below last February’s 545k cycle-high. Both inventories and median prices also beat estimates after upward revisions, with a 1.7% inventory rise to a six-year high in January and a 6.2% median price rise that leaves a 2.6% y/y increase. New home sales are poised for a 511k average in Q1 after disappointing 2015 rates of 510k (was 509k) in Q4, 488k in Q3 and 497k in Q2, but a higher 517k cycle-high rate in Q1 of last year. New home sales have risen 90% from the 273k record-low in February of 2011, alongside smaller cyclical climbs of 39% for pending home sales and 47% for existing home sales from lows in 2010. We saw big cyclical climbs of 146% for housing starts and 127% for permits from lows in 2009, and 142% for new home construction from a low in 2011.

Fed’s Bullard makes a case for April: In a Bloomberg TV interview, he has growing concerns about its guidance. He thinks policy is in reasonably good shape, but the odds the Fed falls behind the curve have increased modestly. There will likely be an overshoot on NAIRU near term, with the unemployment rate falling below 4.5% this year and that may force the FOMC to have to hike rates more rapidly later on, he acknowledged. Core PCE inflation should be over 2% in 2017. It’s unlikely the Fed will go to a negative rate policy. He also noted all meetings are “live.” Neither of those should be revelations, however, as the mix of data have indeed kept the door open for action next month (indeed, that was the surprise with the March FOMC, that it seemed to disregard the increase in inflation).

US VIX equity volatility has turned higher:  with the downdraft on stocks after the perverse terror-rally on Tuesday succumbed to a round of hawkish Fedspeak, dollar gains and a commodity downturn yesterday. The VIX closed 5.43% higher just shy of the psychologically important 15 at a day high of 14.94. Having roamed as low as 14.17 after basing at 13.79 2016 lows on Monday. That’s still well off 32.09 2016 highs set back in January, but the VIX keeps getting capped by central bank policy largesse as the BoJ followed the ECB into NIRP and the Fed took a dovish tack in its statement last week. Looks like the VIX is getting complacent again relative to global risks, which could put in a floor in the 12-14 zone before a run back over 20 if the S&P 500 retests its 2,017 200-day MA on the downside again.

 

Main Macro Events Today

• UK Retail Sales:

Expected to fall -0.7% from a rise in February of 2.3% It’s the primary gauge of consumer spending, which accounts for the majority of overall economic activity. If the fall is less than expected then this could be positive for GBP.

• US Durable Goods:

Durable goods orders expected to fall 2.0%., Shipments expected at -0.5%.Inventories expected to grow 0.1%.I/S ratio expected at 1.65 from 1.64 in January. Forecast risk: downward, as there was a decrease in Boeing orders in February.

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.

FX News Today

European Outlook: Asian stock markets were mostly slightly lower, U.S. and U.K. stock futures are also heading south. European markets managed to close with a slight gain yesterday, after recovering from the initial bout of risk aversion following the Brussel’s terror attacks. Today’s calendar is pretty empty, with a German 30-year Bund sale and comments from Bundesbank President Weidmann.

Fed’s Evans looks for 2016 growth of around 2% to 2.5%: The economic fundamentals are quite good, sharing the views of his FOMC colleagues, while adding that international developments have been a drag. But, he seems a little more cautious in terms of future rate hikes. And unlike Williams or Lockhart who underscored that April is a live policy meeting in recent comments, he said a “wait and see” approach is more appropriate so that risks can be assessed. Remember though, that he has been one of the more ardent doves (though so was Williams). The economic and financial risks in 2016 are somewhat higher than he had hoped. He also suggested 2 rate hikes this year is a decent assumption. The non-voter also said the Fed needs rates to go up organically, as a result of a stronger economy.

U.S. Markit flash manufacturing PMI up to 51.4: It rose 0.1 in March, after declining 1.1 points to 51.3 in February. However, this is a 5th straight month the index has held a barely expansionary 51, 52 handle. The index topped out last year at 55.7 in March and generally eroded from there. Both employment and new orders increased. The improvement is consistent with the trend in Eurozone PMI data earlier yesterday which mostly beat expectations.

Iraq plans to accept the oil freeze proposal: According to the Iraqi oil ministry they will accept the proposed freeze at January output levels. This followed news that marginal producer Libya did not plan to attend the Doha OPEC meeting in April. WTI crude oil (USOil) lost 1% overnight but remain close to three month highs, it is currently trading at $41.00. US weekly crude inventories are released later today and are expected to increase to 2.5m bbls.

 

Main Macro Events Today

• US New Home Sales

February new home sales are out later today and should reveal a 1.2% increase to a 500k (median 520k) pace from 494k in January and 544k in December. Other data for the month were mixed with the MBA purchase index down 4.9% after rising 1.4% in January and existing home sales dropping 7.1% to 5.080 mln from 5.470 mln in January. New Homes Sales are a leading indicator of economic activity due to its impact on other sectors such as mortgages, furniture and appliance sales and general confidence.

• Weidmann Speech

Jens Weidmann the President of the Deutsche Bundesbank is due to speak at the Liechtenstein Finance Forum. He is a full voting and very influential member of the ECB Governing Council. He is likely to remain critical of any further ECB activism.

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.

FX News Today

European Outlook: Asian stock markets were mixed, with Japan outperforming and posting robust gains as the Yen weakened following hawkish comments from Fed officials yesterday. U.S. stock futures are down, but U.K. stock futures are moving higher and with the EUR falling against the USD and the front end Nymex future holding above USD 41 per barrel, the DAX may take another attempt at clearing the 10000 mark. The calendar is full today, with Eurozone confidence data in the form of ZEW, Ifo and PMIs and U.K. inflation and public finance data.

Japan flash manufacturing PMI falls: Japan flash manufacturing PMI sank to 49.1 in March compared to 50.1 for the final February reading, registering the first contraction since April of 2015. New export orders shrank at the quickest pace in over 3-year as well, falling from 49.0 in February to 45.9. This stands in contrast to words of optimism Finance Minister Aso, who earlier said that underlying economic fundamentals were firm and there’s no need now for compiling economic stimulus steps. The Yen fell on the news with the USDJPY recovering the 112.00 level it last traded above on Thursday.

Fed’s Lockhart and Williams cautioned that a rate hike in April is possible: This echoes sentiment from Fed Chair Yellen last week, (remember too that Yellen indicated late last year that ALL meetings are live). So this sentiment should not be surprising. However, what is different in these remarks is that Williams has been one of the more dovish on the FOMC until sliding toward the hawkish side late last year, while Lockhart have been a dovish leaning centrist. Such comments, especially in the wake of last week’s policy meeting, where not only was there no further boosts in rates, but the Committee revised down its outlook for the Fed funds rate path for 2016. Such comments will only serve to keep the markets confused and anxious, and won’t help the FOMC’s credibility. June still seems like the better date for the next rate hike.

 OPEC says it’s up to Iran:  The cartel said Monday that it is up to Iran whether it participates in the oil freeze, given some conditions it has placed on its output, though it may join in the future, said Secretary General El-Badri. He earlier said that all OPEC countries will be invited to the April 17 producer meeting, expressing optimism that the upward price trend will continue, though at this time the only problem is that the market has an overhang of 300 mln barrels. Well, that’s the producer side solved then. NYMEX crude (USOil) traded higher overnight at $41.50 bbl or about 1.5% higher on the session.

 

Main Macro Events Today

• Euro Data: Today brings an almost full round of Eurozone confidence indicators and overall we should see some stabilisation, with especially the ZEW expected to benefit from the prospect of further ECB stimulus. We are looking for a rise in the March ZEW to 4.5 (median 5.0) from 1.0. The Ifo Business Climate reading, meanwhile, is still expected to ease slightly to 105.6 (median 105.7) from 105.7, as future expectations remain depressed by weak orders inflow and falling exports. EMU PMIs on the other hand, could well be mixed again, and we expect the EMU Manufacturing PMI to recover somewhat and rise to 51.4 (median 51.3) from 51.2, while the services reading is seen unchanged at 53.3 (median same), which should leave the composite at 53.0 (median same) also unchanged from the previous month.

• UK CPI and PPI: UK CPI for March y/y is announced today with a expectations of and increase to 0.4% from 0.3% in February. This is the most important inflation data from the UK as it is used by the Bank of England as their inflation target. Later PPI input and output data will be release showing changes in the prices at the factory gate. Input prices are likely to rise 0.4% with output prices flat.

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.

FX News Today

German PPI falls 3% in February: The index of producer prices for industrial products fell by 3.0% compared with the corresponding month of the preceding year. In January 2016 the annual rate of change all over had been –2.4%.In February 2016 energy prices decreased by 9.4% compared with February 2015, prices of intermediate goods by 2.2%. In contrast prices of non-durable consumer goods rose by 0.2%, prices of capital goods by 0.7% and prices of durable consumer goods by 1.4%.The overall index disregarding energy decreased by 0.7% compared with February 2015.Compared with the preceding month the overall index fell by 0.5% in February 2016 (–0.7% in January 2016 and –0.5% in December 2015).

European Outlook: Asian stock markets moved broadly higher, with Japanese markets again the notable exception and weighed down by ongoing strength in the Yen. US and especially UK stock futures are also up and UK stock markets seem set to outperform again. Eurozone stocks failed to extend gains yesterday and especially the DAX was hit by the strength of the EUR, which climbed above 1.13 against the USD. With the round of central bank decisions out of the way markets can get down to closer evaluation of the measures and implications, but currency reactions already showed that the race to the bottom on rates doesn’t always have the desired effect. Oil continued to rally as WTI traded over $40 and the mood heading into the London session remains mostly risk-on, Brent crude prices have logged a three-month high at $41.69. The mood looks likely to continue with scheduled Fed speakers today being known doves.

BoE & SNB – Both in Wait and See Mode: BoE and SNB left policy on hold yesterday and the statements were if anything less dovish than some may have hoped for. The BoE left its implicit tightening bias in place, even if rate hike expectations have been pushed out into 2017 and the bank is effectively on hold. The SNB meanwhile noted a weaker growth environment and lowered its inflation projections, but argued that its current negative rate, coupled with ad hoc intervention on forex markets should be sufficient to cope with that.

 ECB’s Draghi “stands ready to use all instruments” in a timely repetition of last week’s dovish statements, arguing that the ECB’s package was very strong and will channel financing to the real economy, while interest rates will remain steady to lower for an extended time. Though he sees some signs of economy improvement, risks remain to the downside. The euro has pulled back from highs, though this merely confirms the FX games continue after BoJ’s Kuroda suggested rates could go as low as -0.5% under NIRP earlier this week and the BoJ made some inquiries into just what was driving the yen firmer yesterday.

Main Macro Events Today

• CAD CPI: We expect CPI, to slow to a 1.3% y/y pace in February (median +1.5%) after the 2.0% y/y growth pace in January that was the fastest annual CPI growth rate since November of 2014. CPI is seen rising 0.1% on a month comparable basis in February (median +0.2%) after the 0.2% gain in January. The BoC’s core CPI index is seen rising 0.7% m/m in February, consistent with recent moves in this not seasonally adjusted index during February, after the 0.3% gain in January. Annual core CPI growth is expected to expand at a 2.2% y/y rate in February (median 2.1%), up from the 2.0% pace in January. The expected core CPI figure would, of course, leave the measure above the BoC’s 2.0% midpoint. Governor Poloz has maintained that the elevated core CPI growth rates are transitory and not reflective of a tightening in supply conditions.
• US Michigan Consumer Sentiment: U.S. Michigan Consumer Sentiment Preview: The first release on Michigan Sentiment is out Friday and should show a rise to 92.0 (median 92.2) from 91.7 in February. Current conditions should be 106.9 from 106.8 in February and expectations should be 82.0 from 81.9 in February. The IBD/TIPP Poll for the month rose to 46.8 from 47.8 and we expect the Bloomberg Consumer Comfort survey to average 44.0 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.

FX News Today

European Outlook: Asian stock markets outside Japan moved higher overnight, following on from gains in the U.S. after the FOMC trimmed its dot plot to imply just two tightening’s in 2016, which aligns the Fed’s view with the market. Japanese markets were weighed down by renewed strength in the Yen, following the dovish Fed statement. U.S. and U.K. stock futures are also up and oil prices are starting to eye USD 39 per barrel. So good leads for European stock markets, but also bond futures and with the Fed statement out of the way the focus shifts to BoE and SNB meetings today.

Fed Trims Dots and Remains Cautious: The FOMC statement reflects ongoing caution on global economic and financial developments, though optimism was maintained on the domestic front, and especially with regard to the labor market. The Fed also raised the profile of inflation, which “picked up” but remains shy of its target. The Fed’s mostly downward forecast revisions for the dot-plot and GDP, along with steadier inflation and job outlooks, left the markets taking a dovish cue from the proceedings, though Yellen left open the door for a move as early as April. She also the Fed is “not activity debating or considering negative rates,” or looking into other methods of accommodation. The Fed still has a range of tools it can use if it finds itself back in that situation of needing to add more stimulus. The adoption and impact of negative rates by other central banks is being studied.

UK Chancellor Osborne announced GBP 3.5 bln in spending cuts as he presents the government’s 2016-17 budget. He said that cuts would be implemented towards the end of the current parliament, in 2019-20. On the Brexit issue, he argued that the UK is “better off” inside a “reformed” EU and that the official UK growth forecasts from the independent Office for Budget Responsibility were based on the country remaining within the union. UK growth was revised down to 2.0% for 2016, down from 2.4% forecast in November, and 2.2% in 2017, down from 2.5% previously envisaged. He quoted the OBR’s view that leaving the EU would “usher in an extended period of uncertainty.”

CPI better than expected. The 0.168% February US. CPI drop was upstaged by a sturdy 0.283% core price rise, as the expected 6.0% energy price drop and 0.2% food price rise accompanied hefty gains of 1.6% for apparel prices that extended a 0.6% January rise, a second consecutive 0.5% rise for medical care service prices, and a 0.3% rise for owners’ equivalent rent after four consecutive 0.2% increases. We saw 0.2% gains for new vehicle and tobacco prices.

Main Macro Events Today

• BoE Decision: There is a strong consensus for the BoE to stand pat on policy this week, and we expect the minutes to reveal a unanimous vote to maintain the repo rate at 0.5% (median same). This would make it exactly seven years the repo has been at its historic low. Weakness in the February PMI surveys and the benign inflation backdrop should ensure a dovish-tilted tone in the minutes, though still keeping the door open to an eventual rate hike, which markets are now discounting to be in Q1 next year. It will be interesting to see if there is any mention of “Brexit” risks, which kicked into gear following the PM Cameron’s renegotiated membership terms and consequence setting of a referendum data (June 23).September.
• SNB Decision: The SNB will have eyed the ECB’s move carefully and especially the fact that the deposit rate cut was rather modest and so far the impact on the CHF proved temporary, could allow the Swiss central bank to hold off with another rate cut at its policy meeting on Thursday. Much will depend on developments in forex markets and even if rates are on hold this week, the SNB has shown before that it can always act at short notice and outside its quarterly policy meetings.

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.

FX News Today

The improvement in stocks has run out of steam, which should keep bond futures supported. Asian stock markets are mostly slightly down, stock futures in the UK and the US are also heading south, after the BoJ kept policy on hold, while offering a somewhat bleaker picture of the economy and highlighting that inflation expectations are weakening. The door to further easing remains open then, but the BoJ’s decision to stay pat for now, is likely to be mirrored by other central banks this week. The Fed starts its two day meeting today and SNB and BoE will announce their policy decisions on Thursday, with policy expected to be kept on hold, leaving the focus on statements.

RBA – Upbeat on jobs but does not rule out rate cut. The Minutes from the last RBA meeting show that it does not rule out another rate cut. Employment has stalled in January, following a very strong end to 2015. “Nevertheless, conditions in the labour market had clearly improved since early 2015,” the RBA said. “Leading indicators of employment had increased further and were consistent with employment growth in the months ahead. “But the central bank said low inflation will allow it to cut the cash rate if jobs growth flattens out or the global economy goes into meltdown. “Continued low inflation would provide scope to ease policy further, should that be appropriate to lend support to demand,” the minutes said.

BoJ kept policy on hold, but signalled an implicit easing bias, by painting a bleaker picture of the economy and warning that inflation expectations are falling. The bank also announced that it will exempt around USD 90 bln in money-reserve funds (MRFs) – short term funds – from negative rates, after warnings that investment money would be driven into bank deposits. The pledge to increase base money at an annual rate of JPY 80 trillion was left in place. The BoJ said that while “Japan’s economy continues to recover moderately as a trend”, the pick up in exports, which was still seen in January, has paused, mainly due to slowing growth in emerging market economies. At the same time it said inflation expectations weakened recently. So the door to further easing is left open.

ECB ups pressure on governments to implement structural reforms. Bank of France head Villeroy stressed that monetary policy alone cannot revive the economy and said France needs reforms to boost conference. ECB’s Rimsevics also said that monetary policy can only buy time and that politicians need to act on reforms. Hardly anything new, but with the ECB effectively removing market pressure on governments Draghi finds that verbal pressure alone is a blunt tool.

 

Main Macro Events Today

• US PPI: February PPI is expected to decline by 0.3% (median -0.2%) in its Tuesday release with the core figure down -0.1% (median -0.2%). This compares to January figures which had the headline up 0.1% and the core up 0.4%. Data in line with our forecasts would result in a flat y/y headline with a 1.1% y/y pace of growth for the core. Oil price declines have tapered off but are still likely to weigh on the release.

• US Retail Sales: February retail sales data is out on Tuesday and the headline should decline 0.2% (median -0.1% with the ex-autos figure down 0.3% ( median -0.2%) for the month. This follows January figures of 0.2% for the headline and 0.1% for the ex-autos figure.

• US NY Fed Empire State Manufacturing Index: The March Empire State Index is out Tuesday and should reveal a headline increase to -12.0 (median -12.0) from -16.6 in February and -19.4 in January. Producer sentiment was strong over the course of the fall but weakened into the new year. We expect the ISM-adjusted average of all measures of sentiment to hold at 49 for a third month.

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.