FOREX News Today

European Outlook: Asian stock markets are mostly down, with Japan a notable outperforming (closing up  and indices holding on to modest gains as the Yen continued to decline against the Dollar. U.S. and U.K. stock futures are also heading south as oil prices are down and the front end WTI future is trading below USD 50 per barrel, which has been hitting energy producers. Investors continue to watch earnings reports. ECB’s Draghi once again defended the ECB’s policy in a speech in Germany yesterday evening, while once again calling for support from the fiscal side. Nothing new there that would change the policy outlook.

German GfK consumer confidence: Dropped to 9.7 in November, from 10.0 in October. There is no breakdown for the November projections but the fall back was unexpected and disappointing, especially after the stronger than expected Ifo and PMI readings this week. The breakdown for October showed a marked improvement in business cycle expectations, which jumped to 13.0 from 6.8, the highest reading since June, which suggests that the Brexit shock was short lived. Despite this income expectations declined sharply as did the willingness to buy, although the willingness to save also slumped amid the low interest rate environment. Mixed messages then and at least in Germany it seems Draghi’s policy of easy money is not lifting consumption.

Australian CPI: The Australian dollar rallied following an above-forecast headline in Australian Q3 CPI, which rose 0.7% q/q, above the median expectation for a 0.5% rise. Most expect this should keep the RBA, which had cited concerns about disinflation as prime reasons for cutting rates in May and August this year, from any temptation to cut rates at its policy meeting next week. Core inflation painted a more benign picture, remaining unchanged at 1.5% y/y. AUDUSD lifted to a one-week high at 0.7708, which was a gain of just over 1%, before settling around 0.7690.

US Data reports: Revealed a larger than expected consumer confidence drop to 98.6 in October from a 103.5 (was 104.1) September figure that now sits marginally below the 103.8 cycle-high in January of 2015, alongside a Richmond Fed rise to -4.0 from -8.0 in September and a 3-year low of -11.0 August. We also saw big gains in two August home price indicators of 0.4% for Case-Shiller and 0.7% for the FHFA. The ISM-adjusted Richmond Fed rose to 51.5 from 50.8 in September and a 43-month low of 49.7 in August, as we’re seeing a renewed uptrend in producer sentiment with the bounce in oil prices and a recovery in mining and factory output as the big six-quarter inventory headwind reverses course. Confidence faces a headwind from the November elections, though we have an ongoing lift from low gasoline prices, stock market and home price gains, and an expected GDP bounce after a three-quarter string of lean 1% growth rates through Q2.

Main Macro Events Today                

• US Flash Services PMI  – Expectations are for a slight uptick to 52.4 from a positively revised 52.3 last time.

• US New Home Sales –  New home sales are expected to decrease 1.5% to a 600k unit pace in September from 609k in August. Forecast risk: upward, given the higher NAHB for the month. Market risk: downward, as a run of weak data could impact the path of further rate hikes.

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 stock markets are mostly down, as the positive confidence indicators out of Europe and the U.S. yesterday were overshadowed by weak GDP numbers from South Korea, which weighed on most markets. Topix and Nikkei outperformed, with a weaker Yen underpinning exporters. U.S. and U.K stock futures are also moving higher, oil prices are little changed, and the front end WTI future is trading at USD 50.51 per barrel. After the strong round of PMI readings for the Eurozone yesterday markets will be looking for upside surprises in the German Ifo and French business confidence data, which would keep pressure on Bund futures and continue to underpin Eurozone stocks. The FTSE 100 meanwhile seems set to recover some of yesterday’s losses as the Pound drops against USD and EUR, although Gilt futures should continue to outperform Bunds as strong confidence data fuels ECB tapering speculation.

BoC’s Poloz “Wait and See approach to rate cuts”:  saying that the bank’s “…best plan right now, we think, is to wait for the next 18 months or so.” A two track economy makes monetary policy more difficult, as it is challenging to speed up fast growing parts to offset the slower growing parts, he explained. He said the bank has to “weigh the risk of waiting longer against what are the costs associated with doing something more immediate.” He acknowledged that more easing would put the bank “very close to using unconventional tools. And that’s of course not a decision we take lightly.” As for last week, those uncertainties prevented a rate cut. The comments came in response to questions in his ongoing Q&A with the House of Commons Standing Committee on Finance. His comments appear to squash the prospects for a near term rate cut, which seemed to ramp up significantly with his dovish remarks following the announcement. The loonie firmed, as USDCAD backtracked from nearly 1.3400 to 1.3286 following his comments. Overnight the pair recouped the 1.3300 handle and currently trades at 1.3335.

US Data Reports: US flash Markit PMI jumped 1.7 points to 53.2 in October, after falling 0.5 points to 51.5 in September from 52.0 in August. This is the highest since last October’s 54.1 print. New orders rose to 54.7 from 51.1, though the employment component declined. The better than expected headline is consistent with expectations for a pick up in activity in Q4.

Fedspeak: Chicago Fed dove Evans was true to his leanings – the near-term growth outlook is relatively good, and the labor market improvement is solid. And though those should support higher inflation projections, he remains worried that inflation is still too low while the outlook is uncertain. That’s been his concern for some time, and he continues to stress the need for the Fed to show a commitment to its 2% inflation target. The FOMC should undershoot its employment projection, and overshoot on its inflation goal. Evans is not a voter this year, but he does vote in 2017, along with Harker, Kaplan and Kashkari. Fed’s Bullard reiterated one 25 bp rate hike is likely, though he gave no timing. He thinks that should be sufficient for now and expects the low rate environment to be the norm for the next several years. But he acknowledged that the St Louis Fed’s rate forecast is flatter than those of others on the Committee. That’s pretty much the market’s assessment, where implied Fed funds futures are pricing in about a 67% chance for one 25 bp rate increase in December, with the move not fully priced in until 2018.

Main Macro Events Today                

• German Ifo Business Climate – Expected to tick up slightly to 109.6 from 109.5 last time. A survey of 7,000 German businesses that has a strong track record of correlation to the German and wider Euro area economy. Other figures relate to current business Assessment and Expectations.

• US Consumer Confidence – September Consumer Confidence is expected to decrease to 101.0 from 104.1.This compares to a low of 25.3 in February of 2009. Forecast risk: downward, given the drop in the Michigan headline. Market risk: downward, as weaker data could impact rate hike timelines.

• Carney & Draghi  Speeches – The BOE Governor is up first at 14:30 in front of the House of Lords Economic Affairs committee around 14.30 GMT. He’s there to answer questions on “The economic consequences of the vote to leave the EU and the BOE’s response”. This will be one to keep an eye on as we might see Carney walking that fine line between politics and being an independent central bank.  The ECB President is scheduled at 15:30 for a lecture on stability, equity and monetary policy to the German DIW Economic Institute.

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 stock markets are narrowly mixed, with Japanese bourses managing marginal gains as the Yen falls against the Dollar. Stock futures in the U.S. are down, but U.K. futures are slightly in positive territory after the UK100 managed to close with a marginal gain on Thursday. Eurozone bond and stock markets outperformed yesterday after Draghi managed to dampen tapering fears, while postponing any decisions on future policy to December. Bund futures moved sideways in after hour trade, and oil prices are falling towards USD 50 per barrel, which will dampen investor appetite but Eurozone markets are likely to continue outperforming their U.K. counterparts in the wake of Draghi’s statement yesterday. The data calendar is relatively quiet, with only U.K. public finance data, but the ECB’s survey of professional forecasts will give clues about the inflation outlook and comments from Weidmann may add a more hawkish spin to Draghi’s message yesterday. The GER30 is awaiting earnings reports from Daimler as positive numbers from SAP are underpinning the index ahead of the official open.

Kuroda Speech: BOJ will evaluate appropriate yield curve at every meeting, “ideal” can change depending on economy, not immediately thinking of lowering 80tln yen goal and possible to revise reaching 2% inflation time frame (currently target is for Inflation to hit 2% during 2017) !! He also reemphasized that “buying, selling FX is under the jurisdiction of the Finance Ministry”.

ECB – Decisions on QE Postponed until December: Nothing new from the ECB, with major decisions postponed, pretty much as we expected. While Draghi initially spooked markets by saying that an extension to the QE program hasn’t been discussed today, he still managed to keep investors happy in the end, by adding that an abrupt halt to asset purchases is unlikely. With the current program, which runs until March, confirmed at EUR 80 bln per month, this implies an extension of the asset purchase schedule, even if it may come at somewhat reduced levels.

US Data Reports: Revealed firm Philly Fed component data despite a small headline drop to 9.7 in October from a 19-month high of 12.8, alongside a 13k bounce in initial claims in the BLS survey week to a still respectable 260k that remains consistent with a remarkably lean 253k October average. We also saw a 3.2% September existing home sales rise to a 5.47 mln rate that beat estimates, alongside a 0.2% September leading indicators bounce that reversed a 0.2% August drop. The monthly data appear poised for an upturn into Q4, as the bounce in oil prices is allowing a mining and factory output recovery just as the big six-quarter inventory headwind comes to a close.

Main Macro Events Today                

• Canada Retail Sales – Retail sales are expected to rise 0.3% in August after the 0.1% dip in July. The ex-autos sales aggregate is seen expanding 0.4% in August following the 0.1% dip in July. Gasoline prices dipped just 0.9% in August after the 5.6% plunge in July, according to the CPI . Hence we should see the gasoline station sales component exert a very slight drag on total and ex-autos sales. Vehicle sales downshifted to a slower pace in July, and that modest slowing persisted in August according to industry sales figures. Sales volumes grew 0.3% in July, suggestive of some awaking in the consumer after spending declines from March to June.

• Canada CPI – CPI is also expected to rise 0.2% m/m in September after the 0.2% drop in August. Total CPI is seen accelerating to a 1.4% y/y pace in September from the 1.1% rate in August. A pick-up in gasoline prices is expected to drive the gain in total CPI during September relative to August, contrasting with the hefty gasoline price declines that were a drag on total CPI in July and August. The Bank of Canada’s core CPI is seen rising 0.2% m/m in September after the flat reading in August, leaving a 1.8% y/y pace that is identical to the growth rate in in August.

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

European Outlook: Asian stock markets mostly moved higher, as the Dollar strengthened in the wake of the last U.S. presidential debate. The weaker Yen helped to underpin Japanese markets and the most recent rise in oil prices is also helping to underpin investor demand. The front end WTI future has come off highs but is holding comfortably above USD 51 per barrel. In Europe the focus is on the ECB meeting and even if policy is likely to remain on hold today, Draghi will hope to keep his options sufficiently open to avoid a temper tantrum as markets focus on further stimulus beyond the current QE program, which ends in March next year. The European calendar also has U.K. retail sales, BoP and current account data from the Eurozone and Swiss trade data at the start of the session.

BOC Rate Decision: Governor Poloz said they actively discussed adding more monetary stimulus before deciding to leave the policy rate unchanged. He said the Governing Council “actively discussed the possibility of adding more monetary stimulus at this time, in order to return to the economy to full capacity.” Yet, they “identified a number of uncertainties in the current framework that are serving to widen the zone of balance within our risk-management framework.” Those uncertainties include “the macroeconomic effects of the new mortgage rates, the likely path of our exports; the impact of the federal government’s fiscal measures…and the effects on business confidence of the U.S. election.” The revelation that they “actively discussed” the possibility of adding more stimulus is not exactly a surprise. Given where the domestic and global economy currently sit, expectations are that this will continued to be discussed but with the same result (no change in rates) to be the same.

Poor Australian Labour Data: The number of jobs fell last month by 9,800, expectations were for an increase of 15,200, also the previous month was revised down to a fall of 8,600 from a fall of 3,900.  Fulltime employment for September showed a dramatic fall of 53,000 and August was revised down to 10,500 from 11,500. AUD/USD dropped from around 0.7725 to under 0.7700, spent a few minutes chopping in a small range before slipping further and its under 0.7665 currently. Just as doubts were raised after big employment gains in the past, doubts were raised on big employment losses on today’s figures, the -53K for full time jobs in the month result in particular was greeted with questions.

Fedspeak: Dallas Fed moderate (and non-voter) Kaplan sees inflation firming while GDP growth for 2016 will likely average 1.75%, sufficient to drive down unemployment and take some slack out of the labor force. He sees political uncertainty likely affecting capital spending, but once the election is out of the way focus needs to shift to entitlement reform and infrastructure spending. Kaplan also notes that the Fed needs to be “humble” about the limits of monetary policy. Fed’s Potter says the Fed should be prepared to sell MBS, in comments at a Minneapolis Fed conference. Potter is head of the Fed’s Markets Group, so he has a lot of authority behind his words. Though “current FOMC guidance states that the sale of agency MBS is not anticipated…it is prudent for the Desk to be prepared for a wide variety of scenarios, including sales or the need to purchase additional agency MBS.” The large size and structure of the agency MBS market makes it a “desirable choice for conduction operations of the magnitude necessary t have a meaningful impact on financial and macroeconomic conditions.” However, the Fed’s experience with selling MBS is much more limited than purchasing agency paper, he noted. The Fed’s portfolio and possible manipulations of such has been in the news lately, especially after a “twist” operation was broached by Boston Fed’s Rosengren last week.

Main Macro Events Today                

• ECB Rate Announcement & Press Conference –  Even if the ECB more likely to postpone any major decisions until December Draghi will be facing a difficult balancing act at today’s press conference, especially since a Reuters reported suggested that the planned tweaks to the asset purchase program designed to address looming supply shortages could already be discussed this week. At the same time, the question is whether the ECB will extend the QE program beyond March next year, when the current schedule of EUR 80 bln purchases per month is set to end. With growth indicators suggesting ongoing economic expansion and inflation starting to move higher, the ECB clearly is reluctant to add even more stimulus to an already very expansionary policy but the doves at the council will press for a follow up program with the end result likely a gradual phasing out of asset purchases. It will depend on Draghi’s delivery whether this will spook markets as the dreaded “tapering” or whether he can sell it as the further expansion of monetary policy it actually is. For now Draghi will be keeping all his options open and try to deliver a statement that keeps markets guessing and hoping and thus avoids a temper tantrum.

• US Philly Fed Index – October Philly Fed should reveal a headline dip to 6.3 after the September bounce to 12.8 from 2.0 in August. The Empire State Index for October is already out and declined to -6.8 from -2.0 in September. Broadly, expectations are for producer sentiment to trend sideways in October with the ISM-adjusted average of all measures holding at 50 from August and September.

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

European Outlook: Better earnings reports from the likes of Goldman Sachs, Bank of America, Netflix, and Johnson & Johnson bolstered Wall Street overnight. European bourses rallied upwards of 1.25% as well, expecting no let up anytime soon of central bank stimulus. Also, U.S. CPI data was a touch light on the core reading, which was likely a positive outcome for stocks too, though it had little impact on Fed rate hike thinking overall. Bonds rallied too, and Treasury yields slipped from earlier highs after the launch Saudi Arabia’s $10-15 bln multi-tranche bond offering. Strong demand for the paper saw hedges easily unwound. The 1.80% level on the 10-year also capped the upside. The dollar stumbled some, leaving USDJPY under 103.90 into the NA close. Stock markets in Asia have followed the NA session and are generally higher. Gold remains in a tight range at USD 1261 and WTI remains north of USD 50.

Chinese Data: Year on Year GDP confirmed at 6.7% with 3Q QoQ also in line at 1.8. Retail sales for September crept up to 10.7% (expectations and previous 10.6%). However, industrial production fell to 6.1% from 6.3% with expectations had been for a slight rise to 6.4%. The details show weaker exports and investments but a growing housing market and rising consumption.  New home sales grew by 43.2% in the first nine months of the year (2015 the growth was 18.25) – credit continues to roll in China.

US Data Reports: The September overall-CPI was 0.3% (median 0.3%), while the core index was 0.1% (median 0.2%). Year over year growth accelerated to 1.5% from 1.1% in September, and the core y/y growth rate was 2.2% from 2.3%. Plunging oil prices kept inflation measures depressed through last winter but we are now seeing a rebound. U.S. NAHB homebuilder sentiment index dipped 2 points to 63 in October, as expected, after surging 6 points to 65 in September. The latter was the strongest reading since October 2015 (and for this business cycle). The present single family index fell 2 points too, to 69 following the 6 point jump to 71 previously. The future index rose 1 point to 72 after the 5 point September rise to 71. The index of prospect buyer traffic slipped 1 point to 46 from 47 (revised down from 48).

Germany’s Schaeuble wants ESM to take over as fiscal watch-dog. That the Stability and Growth Pact is not worth much more than the paper it is written on is pretty evident considering that even the ECB is calling on Germany to use “its fiscal room” to boost growth, even though Germany, may be doing better than other countries, but is also facing a debt burden that is far exceeding the 60% originally laid down in the Maastricht Treaty. The European Commission, which is officially charged with overseeing the implementation of the pact and with issuing fines if necessary, has been very lenient amid intense political pressure. Against that background, German Finance Minister Schaeuble is now proposing that the ESM should take over from the politically dominated Commission to take over as fiscal watchdog. Applying the Pact to the latter may help to make the Eurozone more stable, but seems unlikely to meet with much support even though former ECB chief economist Issing warned that current levels of moral hazard are likely to lead to the failure of the single currency.

Main Macro Events Today                

• BOC Policy Report and Rate Statement – No change to the current 0.50% rate setting is expected at the announcement. A cautiously constructive outlook for growth and inflation is expected which will be consistent with no change in rates for an extended period. The growth and inflation outlook should be trimmed, but recent firm economic data suggest that any reductions from the BoC will be modest. September’s announcement contained the surprise shift that risks to the inflation profile have “tilted somewhat to the downside since July.” August’s CPI confirmed this view.

• UK Earnings and Employment data – Expectations are for average earnings to remain unchanged at 2.3%, claimant count to rise by 3,400 for last month and Unemployment rate also to remain unchanged at 4.9%.

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

European Outlook: Asian stock markets are broadly higher, with Hong Kong outperforming as developers and casinos rebound. Japanese markets are slightly higher after fluctuating through the session as investors mull the U.S. rate outlook and await corporate earnings reports. A disappointing Empire State Index in the U.S. and a weaker Yen helped to underpin Japanese markets, and U.S. and U.K. stock futures are also moving higher. Oil prices are up on the day and the front end WTI future is holding above USD 50 per barrel. The recent uptick in oil prices coupled with a weak Pound are fuelling inflation concerns in the U.K. in particular and contributed to the underperformance of Gilt futures and the concomitant rise in yields that went hand in hand with a steepening of the yield curve. In this context investors will keep a close eye on today’s releases of Sep U.K. inflation data, although pressure especially on retailers not to pass on the rise in import prices at least for now is high. In the Eurozone all eyes are on the ECB’s council meeting on Thursday and today’s latest lending survey is unlikely to shed any light on the immediate outlook.

RBA Meeting’s Minutes: Holding rates steady “at this meeting” consistent with inflation, growth targets, Reasonable prospect of sustaining economic growth, gradual rise in inflation, Considerable uncertainty remained about momentum in labour, housing markets, An appreciating AUD could complicate economic rebalancing.  Q3 GDP growth looked to have run at similar pace to Q2, Rising commodity prices likely lifted terms of trade in Q3. Growth in China seemed to have stabilised, but debt a source of concern. AUDUSD rallied to 0.7680 following release of the minutes.   

US Data Reports: Revealed some modestly disappointing factory figures, though there is an emerging uptrend for the sector as the inventory and petro-headwind diminishes. For the October Empire State report, we saw a headline drop to a 5-month low of -6.8 from -2.0 in September and -4.2 in August, though this still allowed a slight rise in the ISM-adjusted measure after an outsized September hit, to 46.3 from an 8-month low of 45.1. A 0.1% September industrial production rise matched estimates, though it followed downward revisions that left a slightly bigger August unwind of a slightly smaller June-July spike. Yet, industrial production grew at a 1.8% pace in Q3, and expectations are for  a 0.5% rise in Q4 that leaves the first two-quarter rise since 2014.

Fedspeak: VC Fischer – Low rates could threaten financial stability and leave the US economy more vulnerable to adverse shocks. Low rates partly compromise the FOMC’s ability to fight recessions. But he said there is currently no evidence now of heightened instability risks. On the various causes of lower interest rates, he noted lower productivity growth (which implies higher savings and reduced investment), demographic changes weighing on growth, weak investment, and developments. Interestingly, he didn’t include monetary policy per se and said it is “not that simple” for the Fed to influence short and long term rates (hum). Though he did not address the policy stance specifically, the tone of his comments suggest he’d be supportive of a rate hike this year and rather contrary to Mrs. Yellens more dovish tones on Friday.  

Main Macro Events Today                

• UK Sept. Inflation – CPI to tick up to a new cycle high of 0.9% from 0.6% in August. Core CPI is also seen rising to a new cycle peak, of 1.4% y/y, from 1.3%. Such a rise in inflation will be consistent with BoE projections. Higher oil prices and ongoing Sterling weakness will push up inflation and the question is for how much and how long. In the meantime rising inflation is underpinning a pick up in yields and a steepening of the yield curve, as the BoE signals that it is willing to accommodate a higher inflation trajectory.

•  US Sept. CPI  – The September headline CPI is expected to grow 0.3%, while the core index rises 0.2%. YoY expected at 1.5%. Forecast risk: upward, as oil prices rebounded slightly in September. Market risk: downward, as inflation undershoots may affect the timing of additional rate hikes.

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

US Data Reports: Revealed weak August data for existing home sales and leading indicators, but a tight initial claims report for the BLS survey week of September that left mixed signals that were positive on net, with aid from a 0.5% July rise in the FHFA home price index. The 0.9% August existing home sales drop to a 5.33 mln rate left a Q3 trimming of Q2 gains, though the median price decline to $240,200 was largely seasonal and left that figure close to the $247,600 all-time high in June. The 0.2% August leading indicators drop tracked estimates, with weakness that reflects declines in the factory sensitive sectors. Most importantly, an 8k initial claims drop to 252k in the BLS survey week left that measure just above the 42-year low of 248k in mid-April, as claims tighten into the end of Q3 to signal upside risk for the 170k September nonfarm payroll estimate.

U.S. VIX equity volatility slumped 10%: It fell below 12.0 after the Fed on Wednesday and that’s put the VIX within a hair of 11.65 September lows compared to highs of 20.51 earlier in the month when the ECB held rates pat rather than easing again as expected (nothing to see here, no correlation). Year lows of 11.02 appear to be within reach, while life lows of 8.2 lie below as the markets continue to disbelieve the “cry wolf” hawkish Fedspeak, though 3 dissenters would suggest the Fed is very close to a second hike. Should the pendulum swing back again, that could put the 26.72 Brexit high back on the radar. Meanwhile, after bottoming at 2,119.1 in September, the S&P 500 looks poised to take another stab at 2,193.81 life highs set on August 15, barring a swing in the polls ahead of November elections.

European Outlook: Asian stock markets are mostly slightly down (Nikkei closed -0.32%) . Australia’s ASX outperformed, as mining and energy stocks and especially gold led the way. U.S. and FTSE 100 futures meanwhile are also slightly in the red and oil prices are down from highs of over USD 46 per barrel. Consolidation after yesterday/s celebration of the Fed’s steady hand policy, seems to be the order of the day, but while European stocks are likely to see some correction investors seem to be breathing more easily now. The 10-year Bund future already moved off highs in after hour trade yesterday and yields, which dropped sharply in Europe yesterday, are likely to pick up somewhat. The European calendar focuses on preliminary PMI readings for September, which we expect to stabilise after the mixed August numbers. The final reading for French Q2 GDP meanwhile is not expected to hold any surprise.

FX Update: The dollar has firmer back some following yesterday’s underperformance as the fizz of the post-FOMC risk-on theme abated. EURUSD has ebbed back to the 1.1200 area after peaking yesterday at an eight-day at 1.1257, and Cable has breached below yesterday’s low in making 1.3030. The yen also recouped from weakness, with the currency following its usual inverse correlative pattern with global stock market performance. USDJPY clocked a two-session high at 101.24 earlier in Tokyo, and has since ebbed back to the 100.90 area. EUR-JPY and other yen crosses are also softer. Commodity and emerging market currencies have also given back some of the gains seen in the wake of the FOMC announcement. Not much near-term downside potential in the dollar as market participants will, like the Fed, be data dependent in forming their commitment.

Main Macro Events Today        

• Eurozone PMI – After the mixed August numbers, expectations are for a stabilization in September with only a slight dip in the manufacturing PMI to 51.5, from 51.7 in the previous month, which should partly be compensated by the expected uptick in the services reading to 52.9 from 52.8 and thus leave the Composite PMI broadly stable at 52.8, versus 52.9 in August.

• Canadian Inflation and Retail Sales – July Retail Sales are expected to pick up from -0.1% reading in June to 0.1% (MoM) whilst CPI YoY for August is also expected to tick up to 1.4% from 1.3%. The MoM figure should rise to 0.1% for August from -0.2% in July.

Chief Market Analyst

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FOREX News Today

The FOMC: No change and no surprise the result was a bit of a tangled web of contradictions. The Fed said the case for a rate hike had strengthened, though policymakers for the “time being” decided to hold off and allow the economy “some room to run.” Yet there were three dissents (Mester, George and Rosengren) in favour of an immediate hike, indicating acrimony beneath the surface as on the other side three members see the possibility of no rate increase this year. The Fed’s own economic and policy projections were mostly downgraded, seemingly at odds with their hair-trigger outlook. Amidst the contradictions, the Fed has maintained that it is not politically motivated, which could ruffle more than a few feathers in the event of a hike as soon as November. In her press conference MRs Yellen maintained that all meetings were “live” and the move to keep interest rates on hold “does not reflect a lack of confidence in the economy” but was due to a slow uptake of labour-market slack and inflation below the 2% target. CMEGroup’s federal funds futures now shows a 60% chance of a rate rise in December.

RBNZ: Also no change and suggested a decline in the NZD is needed, monetary policy to remain accommodative and “further easing will be required”. Weak global growth and low rates continues to put upward pressure on NZD and makes it difficult for the RBNZ to reach its 2% inflation target. Strong domestic growth supported by high levels of migration (which is also keeping earnings growth down) tourism and construction. House price inflation remains “excessive”.  Outlook for the key Dairy season remains “uncertain”. NZDUSD rose to 0.7370 before falling back to 0.7330.

FX Update: USDJPY extended into one-month low territory under 100.10 as markets digest yesterday’s Fed and BoJ policy decisions and guidance of yesterday. To recap, the BoJ overhauled its policy framework, introducing “QQE with yield curve control” and an “inflation-overshooting commitment,” but the main policy rate and the -0.1% rate on selected reserves, and other policy variables, were left unchanged — there was no actually increase in stimulus. As for the Fed, while saying the case for tightening had increased, leaving the door open to a hike by year-end, the pace of tightening envisaged in 2017 was reduced relative to guidance given in June. USDJPY has duly reacted with a downward shift. The August-16 low at 99.54 provides the next downside target, and below here is the post-Brexit vote low at 98.98. Japanese policymakers won’t be liking the appreciation of the yen, so we can expect more rhetorical warnings, but it will hard for them to justify actual interventions while yield differentials are moving in favour of further USDJPY declines. Outside the case of USDJPY, the dollar is broadly lower, showing about an average 0.3% decline versus the euro, sterling, Swiss franc and Canadian dollar currently. GBPUSD formed a tweezer bottom on last night’s daily candle.

European Outlook: Asian stocks rallied (Japan was closed for a holiday), following on from gains on Wall Street after the Fed left rates unchanged yesterday. The FOMC said the case for a hike “has strengthened”, but decided to stay put for the time being, FTSE 100 futures are also moving higher, but U.S. stock futures are already in the red again. Bund futures managed to recover losses in after hour trade and in the wake of the Fed decision and could see some early gains, after yesterday’s sell off, although stock moves and the realization that neither BoJ nor ECB are eager to delve further into negative interest rate territory, should keep a lid on gains. Gilts are likely to continue to outperform as the BoE keeps the door open to another cut. Oil prices are higher, with the front end WTI future currently trading at USD 45.77 per barrel. The European calendar starts to pick up with French national business confidence numbers, the U.K’s CBI industrial Trends survey and preliminary Eurozone consumer confidence numbers in the afternoon. The ECB releases its latest economic bulletin, although the articles have already been published in advance this week so there shouldn’t be big surprises.

Main Macro Events Today        

• US Initial Jobless claims –  Initial claims data for the week of September 17 is out later and should show the headline holding at 260k (median 262k), steady from last week and just above 259k in the week of September 3. Claims look poised to average 260k in September from 262k in August and 260k in July. Expectations for  nonfarm payrolls to be up 170k in September with the unemployment rate steady from 4.9%.

• Draghi and Carney speeches –  Both central bank heads are due to speak later today. First up is President Draghi at 13:00 GMT at the ESRB in Frankfurt and later Governor Carney (17:00 GMT) in Berlin.

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.