FOREX News Today

European Outlook: The global stock market rally, which was underpinned by further ECB stimulus measures yesterday and a rise in oil prices, continued in Asia overnight, with most markets moving higher. The Nikkei 225 briefly broke 19,000, closing a strong week and up again on the day 1.23% at 18,996. The Hang Seng dipped as Macau Casino shares came under pressure, but FTSE 100 futures are also up as are U.S. stock futures. The Dow30 and S&P500 again closed at record highs last night. The front end WTI futures contract is trading above USD 51 per barrel, with Gold under $1170 again. European yields spiked with stock markets yesterday as the ECB settled for “less for longer” although the 10-year Bund contract was up from session lows at the close and extended gains slightly in after hour trade. Eurozone spreads widened but peripheral stock markets outperformed, so somewhat of a split reaction to the central bank’s easing package, but things should continue to settle down today. ECB officials are out en masse explaining and defending the central banks steps and the calendar has German trade data at the start of the session, as well as French production numbers and Norwegian inflation data.

China CPI & PP: CPI higher at 2.3% expectations was for 2.2% from 2.1% last time. PPI was a big beat coming in at 3.3% up from 1.2% last time and well over expectations which were 2.3%.  The PPI is at it highest level in 5 years and reflects the increase in both demand in the economy and recent rises in commodity prices. AUDUSD popped on the news to 0.7475 before drifting lower to 0.7465.  

German trade surplus narrows as imports surge: Germany posted a trade surplus of EUR 20.5 bln in October, down from EUR 21.1 bln in the previous month, as exports rebounded slightly over the month, but were overshadowed by a 1.3% m/m jump in imports. The three month trend rate improved though, so some indication that net exports, which detracted from growth in Q3 will help to underpin overall growth again in the last quarter of the year. Unadjusted data show a current account surplus of EUR 18.4 bln, down from EUR 21.7 bln in October last year, although accumulated data for the first ten months of 2016 still show a surplus of EUR 216.5 bln, up from EUR 202.1 bln in the corresponding period last year, so pressure on Germany to reduce its current account surplus remains in place.

ECB Statement: Draghi left rates unchanged, as widely expected and the extended QE program settled on a compromise of less for longer, with monthly purchases scaled back, but the overall time frame of the program extended by 9 months rather than the expected 6, which means the total of asset purchases on the cards is higher than markets had been expecting. Indeed, Draghi’s main message  was that the ECB will remain active in markets for the foreseeable future and can still step up its support again if and when market and economic conditions warrant such a move. In the press conference he was very adamant that it was NOT tapering. The ECB announced a further extension of the QE program today and while monthly purchase volumes were cut to EUR 60 bln from EUR 80 bln, the length of the program extension is 9 months rather, which means the total program amounts to asset purchases of EUR 540 bln. This is more than the EUR 480 bln a 6 months extension at EUR 80 bln per months would have amounted to and the ECB actually left the door to a further increase of monthly purchases volumes and the overall program length open, depending on actual developments.

Main Macro Events Today                

• U.S. Michigan Consumer Sentiment The first release on Michigan Consumer Sentiment is out later and should post an increase to 94.5 for the month after rising to 93.8 in November from 87.2 in October. The already released IBD/TIPP Poll for the month revealed an increase to 54.8 from 51.4 and expectations are for the Bloomberg Consumer Comfort measure to remain steady with a 45.1 average in December.

• US Wholesale Trade October wholesale trade data is also out today and should reveal a 0.6% sales headline with inventories down 0.4% for the month as indicated by the advance October figures. Data in line with our forecasts would leave the I/S ratio at 1.31 from 1.32 in September.

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: The global stock rally continued in Asia overnight, with broad gains following on from rallies on Wall Street and in Europe on Thursday. The Nikkei 225 closed up 1.45% at 18, 765. FTSE 100 and U.S. stock futures are also moving up, but oil prices dipped and the front end WTI future is trading below USD 50 per barrel. Hopes that the ECB will extend its asset purchase program at current levels have been underpinning markets and some seem to hope also for an abolition of the deposit rate floor for purchases or even a foray into stocks to ensure sufficient supply. But while improved economic fundamentals may not prompt the ECB to withdraw from markets at a time when political uncertainty remains high and high debt countries remain reliant on the ECB to keep yields down, the risk is that an ECB compromise proposal could spark disappointment and a correction of inflated markets. The calendar also has French non-farm payrolls as well as Bank of France business sentiment.

Bank of Canada Policy: Steady for an Extended Period; The Bank of Canada delivered the expected lack of change in the policy rate alongside acknowledgement of recent positive developments domestically and internationally. Yet a still cautious tone on the growth and inflation outlook remained, which kept a wait-and-see approach to policy firmly in place. The outlook remains for no change in the currently accommodative policy setting for an extended period of time.

A light has been shone on sterling’s flash crash of October 7 by an FT report citing unnamed officials with knowledge of the BoE’s Prudential Regulation Authority investigation into the incident, in addition to market traders. To recall, the pound dove from 1.2600 to 1.1400 in the space of 40 seconds in the early hours of Asian trading of Friday, October 7. The suggested catalyst seemed pretty innocuous by the standards of post-Brexit discourse, being remarks from France PM Hollande saying that “it is not possible … to leave the EU and get the advantages without the obligations.” The FT’s sources pinpoint the source of the flash crash, which occurred after an initial flurry of selling, to a trader at Citigroup, who placed a large number of rapid-fire sell orders placed in Tokyo using an electronic tool known as “Aggregator.” The sell orders met with zero buying interest due to “extremely illiquid” market conditions and a prevailing extreme bearishness about the pound in the wake of the Brexit vote. Safety nets to prevent a “looping” of sell orders didn’t kick in, apparently. The FT’s BoE source said that human error and the use of a “poorly calibrated execution algorithm” were among the possible reasons for the sell-off.

Yesterday’s US Data Reports: U.S. JOLTS report showed job openings fell 97k to 5,534k in October after climbing 178k to 5,631k in September (revised higher from 5,486k). The job openings rate also rose to 3.7% from 3.6% (revised down from 3.7%). Hirings slid 22k to 5,099k following a 147k drop to 5,121k previously (revised from 5,081k). That resulted in a steady 3.5% hiring rate. Quitters declined 66k to 2,986kk after September’s 43k increase to 3,052k (revised from 3,070k). The rate was unchanged at 2.1%. This report on October jobs won’t impact the FOMC or the markets.

Main Macro Events Today                

• ECB Outlook – That the ECB will announce an extension of its asset purchase program is pretty clear, but the question for today is whether monthly purchase volumes will be tapered and what additional steps the ECB will take to ensure a sufficient amount of supply. While there will be updated staff projections, this is ultimately a decision that will be based not so much on economic data, but on the question whether Eurozone peripheral markets can withstand a withdrawal of support and changing the EUR 80 bln into an upper limit rather than a monthly target may be a compromise in times of heightened uncertainty, with a 6 months program extension and a change of the EUR 80 bln monthly purchases from a “target” to an “upper limit”.

•  US Initial Job Claims – Initial claims data for the week of December 3 is out later and expectations are for the headline to fall to 255k from 268k last week and 251k in the week before that. Claims have been striking a remarkably tight path of late and look poised to average 251k in November, down from 258k in October.

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.

FOREX News Today

European Outlook: Asian stock markets moved broadly higher overnight, following on from gains on Wall Street and in Europe yesterday. U.S. and U.K. stock futures are also posting gains. A weaker Yen and stimulus hopes ahead of tomorrow’s ECB meeting are underpinning markets and gains in banks, exporters and telecoms helps to compensate for the lack of impulses from energy produces as oil prices dip. The front end WTI future is trading at USD 50.76 per barrel amid doubts over compliance with the OPEC deal on production cuts. Gold also closed below USD 1170.00   The European calendar has production data out of the U.K. and even if the German number is likely to surprise on the upside after much stronger than expected orders data yesterday, it is unlikely to derail hopes of a QE extension from Draghi tomorrow.

German production data came in weaker than expected, with a modest 0.3% m/m rebound from the drop in September that was revised up to -1.6% m/m from -1.8% m/m reported initially. After the stronger than expected orders number yesterday it looked like production would also surprise on the upside, but a contraction in energy and intermediate goods production held back the overall number. Still, the three months trend rate jumped sharply and together with the strong manufacturing orders data yesterday and robust survey data the numbers still back expectations for an acceleration in overall growth in the last quarter of the year.

Australian GDP: Australia’s economy contracted by 0.5% in the September quarter, ending five years of uninterrupted growth. The slowdown is mainly attributed to cutbacks in spending by businesses, consumers and the government. This is the first shrinkage in the economy since early 2011. Interestingly the previous quarter was revised upwards to 0.65 from 0.5% and some analysts are optimistic that this may be an outlier in data terms and that growth will pick up in subsequent quarters. The mining boom and high demand for Australia’s commodities have kept the economy recession-free for the past 25 years. The Australian dollar fell by half a US cent after the data, to$0.7420.

Masayoshi Son of Softbank agreed to a $50 bln investment in the U.S. businesses: To create 50k in new jobs, according to DJ Trump Tweets and now confirmed by Son on CNBC. Trump said that Son said he would never have done this had Trump not won the election. Trump is continuing his run as CEO of the United States well before his inauguration as president. Look for activity in telecom shares (particularly Sprint, T- Mobile (merger?)  AT&T and Verizon) based upon this revelation. U.S. equities firmed to close at record highs and Softbank shares closed up 6% in Tokyo trading.

Yesterday’s US Data Reports: Revealed slight undershoots for October factory goods and trade, along with an unrevised Q3 productivity figure that undershot expectations of a small boost thanks to a hike in the Q3 hours-worked figure that offset the output hike implied by the last GDP report. We did see the big Q2 and Q3 compensation boosts implied by the last set of income data, and the  figures remain consistent with an assumed 1.8% growth rate for Q4 GDP after a Q3 growth boost to 3.3% from 3.2%, though with some downside risk given the surprisingly slow rate of recovery for inventories as we enter Q4 alongside October export weakness.

Main Macro Events Today                

• BOC Outlook –  Downside risks may feature in the announcement later, as export volumes tumbled 0.9% in October after the 1.7% plunge in September. The growth trajectory has progressed roughly as expected since October, with the 3.5% rebound in Q3 GDP and strong hand-off to Q4 GDP tilting the outlook for 2016 and 2017 slightly higher. But the lack of growth in exports is a persistent source of uncertainty going forward, and the recent appreciation in the loonie adds to the uncertainty around the trade outlook. Granted, oil prices have driven the improvement in the loonie, and higher oil prices are, of course, good news for Canada. With second half growth on track to run roughly as expected, crude oil back at $50 and the U.S. economy continuing to improve, the December announcement seems unlikely to warrant a repeat of October’s “close call” between a cut and no change. Expectations are for no change in rates well into 2018.     

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.

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.