FOREX News Today

European Outlook: Asian markets outside of mainland China headed south, led by a sharp drop in Japanese markets, as the Yen gained on fresh Brexit fears. Oil prices are up from lows, but the front end WTI future remains below USD 47 per barrel and U.S. and U.K. stock futures are also down. More support then for Bund and Gilt futures, with core European yields continuing to head for ever new lows, while peripheral Eurozone markets are under pressure and spreads widen as risk aversion flares up again. Italian banking sector concerns and Spanish and Portuguese budget woes also remain in focus. The calendar today as German orders data at the start of the session, which should rebound from the slump in April, but will be too backward looking to ease growth concerns. Germany sells 2-year Schatz notes and there is ECB speak from Villeroy and Draghi.

German manufacturing orders fail to rise in May. Expectations had been for a rebound from the slump in April, which was only marginally revised higher to -1.9% m/m from -2.0% m/m reported initially. The stagnation over the month left the annual rate down -0.2% y/y and this is data preceding the Brexit referendum, which will only add to growth concerns for the Eurozone’s largest economy.

Brexit Aftermath: A THIRD UK commercial property fund, M&G suspended withdrawals yesterday. This caused worries that there could be a crash in UK commercial property values and therefore impacts on the wider economy. Sterling collapsed again overnight sinking as low as $1.2798 – more than 15% below the levels seen on referendum day – in Asian trading before recovering slightly to $1.2897, down 1%. Against the euro, which is a better proxy of the pound’s trade-weighted value, the loss is 13.5%, while the high-to-low decline against the outperforming yen is 19.5%, a staggering magnitude of movement for a currency pairing in the space of less than 10 trading days. GBPJPY today dove over 1.5% to new 43-month lows, while USDJPY clocked at low at 100.58, since recouping to the low 101.0s but remaining over 0.5% lower. EURUSD fell to one-week lows under 1.1050. Commodity currencies joined sterling in the underperforming lane.

Fedspeak: Fed’s Williams says a 2016 rate hike is appropriate if his forecasts hold, he noted in a Bloomberg interview. Underlying job growth is “still pretty favorable” and he believes Brexit risks are still “relatively modest.” China concerns in late 2015 and early 2016 were more significant. He hasn’t changed his outlook much in the aftermath of the UK vote. The unemployment rate should dip to 4.5% by the end of the year. A lower for longer posture risks a more aggressive tightening path later. He won’t comment on the timing of action, however. He is not a voter this year, and has taken on a decidedly more hawkish tone this year. He was one of the more dovish Fed presidents through most of his tenure. Fed’s Dudley said the U.S. economy is doing ok, on average, a projects 1H growth just below 2%. Investment spending has been weaker than expected. In the early days of Brexit, it’s hard to understand the fallout. It will be significant if it spurs financial contagion. He reiterated the FOMC’s data dependency and will see how things go, and added that the low inflation rate allows policymakers to take a patient approach. His remarks at a roundtable discussion on business conditions aren’t surprising as he maintains his dovish posture.

Main Macro Events Today

• ECB Draghi Speech – ECB President Draghi is due to speak at the 8^th ECB statistics conference 07:00 GMT

• FOMC Minutes –  Minutes of the June 15-16 meeting are due to be published at 18:00 GMT. Jobs growth slowed, but economy was sen to be picking up but inflation still running below target.  The Fed expects economy to warrant gradual increases actual rate path still data dependent. More details from the minutes.

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

European Outlook: Asian stock markets outside of mainland China headed south US and UK stock futures are also down. A stronger Yen weighed on Japanese markets and lower oil prices saw energy companies retreating. The front end WTI future fell below USD 49 per barrel as global growth concerns flare up again. That the U.K’s departure from the EU will hit growth on both sides of the channel is becoming clear and global growth concerns are also flaring up again. Growth indicators are starting to move back in focus and fresh concerns about Italy’s banking system are weighing on the Eurozone, while the political chaos in the U.K. continues. The main players of the “Leave” campaign now have both resigned and both major political parties seem in disarray, which only adds to the confusion about the long term relationship between the U.K. and the rest of the EU.

AUD leaves cash rate unchanged at 1.75%: Keys points from Governor Stevens’s statement include: Global markets have been volatile, but inflation low and likely to remain so. Australian growth set to continue, low interest rates are encouraging domestic demand and a rising AUD could complicate economic adjustments. The impact of Brexit to global economy remains to be seen. Statement viewed as less dovish than expected. Key data will be CPI figures due July 27 to inform their August decision.  Earlier Retail sales were much weaker than expected, the AUDUSD spiked to 0.7543 before falling back to 0.7500 and is currently trading at 0.7520..

UK Business Expectations drops sharply following Brexit:  UK business pessimism doubles in the week following Brexit with 49% of surveyed businesses pessimistic on the economic outlook for the next 12 months compared to 25% pre-Brexit. An index published by YouGov and the Centre for Economics and Business Research also fell from 112.6 to 105 in the three days following the referendum.  Cebr Director Scott Corfe commented to Bloomberg. “Not only are businesses feeling much more pessimistic in general about the state of the economy, but their own expectations for domestic sales, exports and investments over the next 12 months have gone off a cliff.” Bloomberg also reported that over 75% of economists that they surveyed expect the UK to slip into recession.

Australian Retail Sales miss: Low 0.2% growth in Retail sales missed expectations of 0.3% and the previous month was revised down to 0.1% from 0.2%. Deflation remains a potential problem and adds weight to the hawks on the RBA wanting to see an interest rate rise. Retail sales topped AUD290 billion last year and the sector is Australia’s second largest employer with 1.25 million workers. John Durkan, managing director of the giant Coles supermarket chain said recently. “I anticipate we’ll be dropping prices over the course of the next 5 years, and I don’t see prices increasing during that period.”

 

Main Macro Events Today

• BOE Carney Speech   Governor Carney is due to speak and hold a press conference following the publication of the BOE’s Financial Stability Report. The report is published at 09:30 GMT with the press conference following 30 minutes later at 10:00 GMT.

• UK Services PMI  We expect a slight fall to 53.1 from last month’s 53.5 (which was well above expectations at 52.5 and well above the previous month at 52.3. However, the post Brexit effect could have a serious impact on the figure moving forward. Services accounts for close to 80% of UK (and most High Income Countries) GDP so this figure (and the coming months figures) will be watched with great interest.

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.