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

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 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.

FOREX News Today

German GfK consumer confidence was much stronger than expected, with the July projection rising to 10.1 from 9.8. The full breakdown for June showed sharp increases in business and income expectations, but the willingness to buy still fell back as the willingness to save turned less negative with inflation expectations. Strong numbers overall, but already outdated in the light of the Brexit referendum, as the turmoil and the prolonged uncertainty will also cut back German growth expectations, even if consumers don’t realise it as yet.

The pound has remained steady for a second day, though we’re far, far from being out of a forest of uncertainty with Brexit proceedings. One thing that seems pretty clear is that the EU will not allow UK unfettered access to the single market with a closed border (can’t have the club’s bounty without the meeting the club’s obligations, to paraphrase many EU leaders at yesterday’s summit). This will remain a worry for investors, who will be anticipating lower growth potential in both the UK and Europe. We, like the consensus view, expect further declines in sterling and further bouts of crashing in non-multinational UK stocks.

The recovery on global stock markets continued in Asia with hopes of additional stimulus measures helping markets to bounce back after the Brexit sell off. BoJ Governor Kuroda said the central bank can add funds to the market as needed. ECB’s Nowotny meanwhile said the ECB is examining the impact of Brexit, but that its too early to act, after Draghi reportedly warned Brexit could shave 0.5% points off Eurozone growth. U.S. and U.K. stock futures are also higher as are oil prices, with the front end Nymex future above USd 48 per barrel. This still likely see bond futures under further pressure and yields moving off recent highs, although hopes of further policy action should limit gains in core yields. The European data calendar will likely be overlooked again as the focus remains on Brexit and the EU summit continues without Cameron, who told EU leaders yesterday that it was the EU’s immigration policy that triggered the Brexit vote. The calendar has German June inflation data, as well as the ESI economic confidence indicator and U.K. credit growth.

The June U.S. consumer confidence moved to 98.0, an eight-month high from 92.4 (was 92.6) in May and 94.7 in April, left confidence still below last year’s oddly-firm Q3 readings that included a 102.6 September figure, versus a 103.8 cycle-high in January of 2015. Confidence faces an ongoing lift from low gasoline prices, home price increases, and a likely Q2 GDP bounce as the inventory unwind and oil price hit to factories diminishes into mid-year despite the weak global economy. Confidence faces a political headwind from the high unfavorable ratings of both U.S. major party candidates and eerie U.S. parallels to the U.K.’s Brexit dynamic. We’ve seen small and divergent recent swings in available confidence gauges, though all remain below early-2015 levels.

Main Macro Events Today

• EU Leaders’ Summit
• UK Consumer Credit: UK May consumer credit is seen expanding to GBP 1.400B from GBP1.287B in the previous month.
• EU Consumer Confidence: EU June consumer confidence is expected to come in unchanged from the previous months -7.3.
• US Personal Income: Personal income is expected to grow 0.3% in May, while consumption should be 0.3%.
• US Bank Stress Tests: The stress test results on US banks will be published today at 20:30 GMT.

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 are mixed, with Japan outperforming and Nikkei and Topix posting solid gains. U.S. and U.K. stock futures are also moving higher, and oil prices are also higher, although the front end WTI future remains below USD 50 per barrel. The eyes of the world are on the U.K. today, although while the day of the U.K.’s EU referendum is finally here, polling stations won’t close until 21:00 GMT so the result won’t be known until the early hours of Friday. Brexit poll trackers suggest a very tight outcome that could either way, but it seems markets are running with bookmakers who are giving better odds for the “Bremain” camp. This makes a “Brexit” vote even more of a risk and while central banks have stressed that they stand ready to deal with any possible turbulence in markets, the longer term risks for the U.K., but also the rest of the EU are more difficult to predict. The data calendar focuses on preliminary PMI readings for the Eurozone, but will be overshadowed by the referendum datable. Meanwhile the ECB finally reinstated the waiver on Greek bonds once again last night, which means Greek banks will no longer have to rely on ELA funds.

Fed’s Yellen’s Testimony Day II: There were no fresh insights from yesterday’s testimony, which was largely centered on regulation and racial inequality issues rather than pure monetary policy. She remained cautiously optimistic on rising growth and inflation, but continued to note various headwinds too. The Fed is monitoring and assessing the recent loss of momentum in job growth and softness in business spending, as well as the weakness in productivity. On Brexit, the Fed is also monitoring and will act if necessary, but an emergency meeting has not been scheduled for Friday or Saturday. There’s been nothing in the two days of testimony, or last week’s FOMC to suggest the Fed will hike rates as soon as the July 26, 27 policy meeting. But if there are indications the recent slowdown in the economy and especially jobs has been an anomaly, we expect the Fed to tighten in September.

U.S. existing home sales rose 1.8% to a 5.530 mln in May: This was a third straight monthly gain, following April’s 1.3% increase to 5.430 mln (revised from 5.450 mln) and March’s 5.7% surge to 5.360 mln. And, it’s the fastest pace since February 2007. Single family sales were up 1.9%, with condo/coop sales rising 1.6%. The months’ supply of homes was steady at 4.7. It was as low as 3.9 in December. The median sales price climbed to a record high of $239,700 from $230,900 (revised down from $232,500), and is up 4.7% y/y.:

Canada retail sales grew 0.9% in April: As expected, after the revised 0.8% drop in March sales values (was -1.0%). The ex-autos sales aggregate expanded 1.3% in April, much better than projected (median +0.6%), after slipping a revised 0.1% in March (was -0.3%). Higher prices were the driver of nominal sales gains in April: total retail sales gained just 0.1% on a “real” (price adjusted) sales basis. But that is enough to not contradict our expectation for a modest growth resumption in April GDP. We expect April GDP to rise 0.1% after the 0.2% drop in March.

Main Macro Events Today

• UK EU Referendum Polling Day; One side likely to reach 50% by 04:00 GMT Friday 23rd – Official results expected between 06:00-08:00 GMT

• Eurozone Preliminary PMI’s No real change expected. French numbers, which continue to underperform, could improve slightly, but German readings continue to come off highs. This is expected to show the overall Eurozone manufacturing PMI falling to 51.5 (med 51.4) from 51.5 and the services reading steady at 53.2 (median same). Brexit concerns mean confidence indicators come with a wider error margin than usual and will in any case already been outdated, should the U.K. vote to leave the EU in today’s referendum.

European Outlook: Asian stock markets were mixed, with Japan underperforming amid Brexit jitters, with the Yen vulnerable to safe haven inflows. U.S. and U.K. stock futures are moving higher though and it seems markets are going with betting companies, which giver higher odds to a victory for the “Remain” camp than the polls. Bund and Gilt futures closed mixed yesterday, with Bunds outperforming, although the future already lost gains in after hour trade yesterday and with stock futures underpinned is likely to open lower. Today’s calendar only has Eurozone consumer confidence data, which we expect steady at -7.0 (median -7.1), leaving the focus fully on tomorrow’s vote on the U.K.

Fed’s Yellen’s Testimony: Fed Chair Yellen repeated the Fed will continue raising rates cautiously, in her prepared testimony before the Senate Banking Committee. She’s optimistic on further growth but noted there are still considerable uncertainties over the outlook. The Fed is monitoring the job market carefully to see whether the weakness in the May report was transitory, she said, and added it is important not to react to one or two reports (isn’t that what the FOMC did, however?). On the positive front, she said spending has picked up smartly while housing is recovering. But she cautioned that the Fed can’t dismiss the slow productivity growth. Brexit could have significant economic repercussions. Yellen cautioned the recent weakness in jobs is a loss of momentum, not an erosion in the labor market. She and the FOMC expect further improvement in the labor market in the coming year and look for other measures of unemployment to come down. And while the last couple of months of data were quite disappointing, it’s her hope and expectation that it is a temporary development. Other job metrics suggest improvement, including the unpublished LMCI numbers. She added though, that with the economy near full employment, job creation may naturally slow. The Fed will be monitoring the situation closely.

ECB’s Draghi’s Testimony: ECB’s Draghi leaves door open to act again saying that policy makers, “stand ready” if necessary. Draghi highlighted Brexit risks saying “in particular the ECB is ready for all contingencies following the U.K.’s EU referendum”. The Brexit risk aside, which would clearly mean all forecasts for Europe have to be rewritten, Draghi was clearly eager to keep the door to further action wide open and assure markets that the ECB hasn’t run out of tools yet, but there was no sign of the need to act again if the U.K. decides to stay.

BOJ Kuroda: “FX, stock markets sometimes move too much” this could easily be interpreted as the BOJ are preparing for intervention. Many analysts assumed USDJPY below 105.00 would trigger this move, no evidence that this is the case so far.   He also empathized that the deflationary mindset was deeply rooted in the Japanese mindset and with a note of irony also said that both fiscal and monetary policy do not always turn out as expected.

Main Macro Events Today

• Canada Retail Sales: Retail sales values are expected to rise 0.7% in April (median +0.8%) after the 1.0% drop in March. The report is due Wednesday. The ex-autos sales aggregate is seen expanding 0.6% in April (median same at +0.6%) after dipping 0.3% in March. Gasoline prices increased 8.9% in April after expanding 5.7% in March, according to the CPI . Hence we should see the gasoline station sales component exert a boost to total and ex-autos sales. But vehicle sales remained elevated though April, so we may see another positive performance from the vehicle component. The consumer has been quite resilient in so far in 2016. An as expected gain April retail sales that is accompanied by a rise in the “real” (price adjusted) sales basis would further underpin our expectation for a rebound in April GDP. We expect April GDP to rise 0.1% after the 0.2% drop in March.

•  Yellen Testimony:  Fed Chair Yellen’s Monetary Policy Report to Congress continues today as she concludes her testimony.

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: Stock markets continued to move higher in Asia overnight, but outside of Japan gains were rather modest and U.K. stock futures are already heading south again, pointing to some correction in equity markets, after yesterday’s strong gains. The latest Brexit polls are pointing in different directions and will remind markets, that Thursday’s vote will be a very close call. It will also be decisive for the Eurozone outlook and today’s ZEW reading will come not only with a wider error margin, but also will be irrelevant if the U.K. votes to leave the EU. The European calendar also has U.K. public finance data and ECB’s Draghi is scheduled to speak to the European Parliament today.

Japan’s Industrial Activity picks up: Better than expected production from all sectors of the Japanese economy. PM Abe has also been speaking stressing that the government’s top priority is to completely exit deflation and grow the economy through negative interest rates. He also emphasized the need to protect low-income pensioners and raised the possibility of an extra budget once tax revenue estimate is completed. He also stated clearly that monetary policy methods were the responsibility of the BOJ and not the ministry of finance.

 Fedspeak: Minneapolis Fed’s Kashkari said capital rules may stifle lending in the U.S. in remarks to a symposium on Too Big to Fail. While he continued to agree that banking reforms and increased capital are essential in the wake of the 2008 financial crisis, if the pendulum swung to far back to regulation, that could come at the cost of lending and economic growth. That could also increase the risks taken by non-banks such as hedge funds and insurance companies.

US data reports: US Producer Sentiment Resumes Climb in June: The early-month producer sentiment measures reversed recent setbacks with June bounces, as disruptions from the May vehicle assembly rate plunge to an 11.4 mln clip are reversed. We expect the ISM-adjusted average of the major sentiment measures to rise to 50 in June from the 49 average in May that was also seen in January and February, though June sentiment still looks poised to undershoot the 53 recent-peak in March.

Main Macro Events Today

• German ZEW: ZEW Economic Sentiment comes with a wider error margin than usual, as very much will depend on when the responses came in as market sentiment swung widely over the past week, amid the changes in Brexit polls. We expect the Brexit debate to overshadow the survey that focuses on investor confidence and forecast a decline in the June headline reading to 6.0 (median 7.4) from 6.4 in May. If the U.K. votes to leave forecasts will have to be rewritten also for the Eurozone, as the fallout will clearly impact the economic outlook even if it takes at least 2 years before the U.K. can actually leave the EU.

• Yellen Testimony: Fed Chair Yellen’s Monetary Policy Report to Congress highlights in the U.S. though her comments will be anticlimactic after last week’s FOMC. We don’t expect any significant changes from the dovish tone set last week where there was surprisingly large downward revisions in the official GDP estimates for 2016, along with downward bumps across the forecast horizon, which in turn made for a much shallower path of normalization. While she’ll try to present cautiously optimistic front in her verbal sparring with Congress, she’ll have to acknowledge the downside risks manifest in the Fed’s forecasts.

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: Stock markets in Asia rebounded, (Nikkei 225 closed up 1.07% at 15,599) following on from gains on Wall Street yesterday and as the Yen fell back from the highs seen in the wake of the BoJ decision yesterday. U.S. and U.K. stock futures are also higher as are oil prices although at USD 46.63 per barrel the front end WTI future remains far below recent highs. With this week’s round of central bank meetings out of the way the focus is fully on the Brexit referendum on June 23 and markets are likely to continue to be jumpy ahead of the result. Today’s data calendar is pretty empty and only holds Eurozone current account and BoP data, which usually are not market moving.

Brexit campaigning suspended: Following the tragic murder of UK MP and Remain supporter Jo Cox on the streets of her constituency yesterday, the campaign has been suspended for at least today. GBPUSD initially fell to lows of 1.400 before rallying to 1.4250, the news appearing to give the moral high ground to the remain camp.

BoE and SNB Waiting for Brexit Vote: BoE and SNB left policy on hold yesterday, with the Brexit referendum clearly forcing the central bank’s hand and the uncertainty making any interpretation of economic data more and more difficult. The BoE left its implicit tightening bias in place, but highlighted that the last Inflation Report was based on the assumption that the U.K. votes to remain in the EU. In case of a vote in favour of Brexit all bets are off again, as the central bank will have to balance the impact of likely higher imported inflation with the likely slowdown in output growth. Although taking the wider implications for the rest of the EU into account, relative growth and bank rate projections may end up not looking fundamentally different after all.

US data reports: U.S. NAHB homebuilder sentiment index rose 2 points to 60 in June, a little better than forecast, from 58 over the past four months. This is the highest since 61 in January. The prior 58 was the lowest since May 2015. The single family sales index edged up 1 point to 64 versus 63 in April and May. The future sales index jumped to 70 from 65. The index of prospective buyer traffic improved 3 points to 47 from 44.

Main Macro Events Today

• Canada CPI : We expect total CPI, due today, to expand at a 1.7% annual pace in May following an identical 1.7% y/y gain in April. But total CPI is seen jumping 0.6% m/m in May after the 0.3% gain in April, as higher gasoline prices and depreciation of the Canadian dollar both conspire to drive the index higher relative to April. The Bank of Canada’s core CPI index is projected to expand at a 2.2% y/y pace in May, matching the 2.2% rate in April. But here too we see acceleration in the monthly growth rate, with core CPI seen expanding 0.5% m/m in May after the 0.2% gain in April.

• Draghi Speech: The ECB president Mario Draghi will be speaking at 15:00hrs. Although he is unlikely to repeat the famous “whatever it takes” stance, expect some positive words on the euro project. The occasion of the speech is in honour of Theodor Waigel, (a former German Finance Minister) who is often referred to as the “father of the euro”. Definitely one to watch today.

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: The recovery in stock markets didn’t last long and markets headed south again in Asia overnight, with U.S. and U.K. stock futures also under pressure. Fed and BoJ kept policy on hold and while this was largely expected, there were some lingering hopes that at least the BoJ would add further stimulus but with the statement maybe a tad less dovish than expected, the Yen strengthened and Japanese equities sold off, with the Nikkei down -2.98%. The Hang Seng is down -2.20%. The focus now shifts to BoE and SNB meetings today. Again no changes are expected, but with Brexit risks looming the tone of the statements will be watched carefully. Event risks continue to overshadow data releases, which today include U.K. retail sales and the final reading of Eurozone May HICP numbers.

The FOMC left the funds rate unchanged: The Fed again did not define a “balance of risks” and didn’t give any clear indication of the timing of the next hike, though it still expects two more this year. “Growth in economic activity appears to have picked up,” said the statement, but the “pace of improvement in the labor market has slowed.” This contradiction was the opposite in the previous statement, though it also noted that household spending has improved and the drag from net exports has lessened, while business investment has been soft. The Fed again indicated that inflation is running below target. There was no dissent this time from Esther George, (long time hawk), compounding the more dovish interpretation. Likewise, the dot-plot was significantly lowered, growth outlook trimmed and inflation outlook tweaked just slightly higher despite the rebound in energy prices. FOMC forecast revisions released with the policy statement show surprisingly large downward revisions in the official GDP forecasts for 2016, followed by downward bumps across the forecast horizon, leaving a distribution of 2016 Fed estimates that lie almost entirely below our own 2.2% forecast.

BOJ: The Bank of Japan refrained from expanding monetary stimulus as Governor Haruhiko Kuroda and his board continues to gauge the economic impact of their unpopular negative-rate policy ahead of an election next month. With the uncertain outlook for global markets also giving reason for pause, the BOJ held its key interest rate at minus 0.1 percent and kept the annual target for expanding the monetary base at 80 trillion yen ($764 billion). Dollar and GBP weakness and yen strength continued following the announcement USDJPY traded as low at 104.04 and GBPJPY as low as the 147.30.

US data reports: Revealed a welcome June Empire State bounce to 6.0 that reversed the May plunge to -9.0, though industrial production underperformed in May with a 0.4% drop led by a 7.0% drop in the vehicle assembly rate to an 11.4 mln clip. The vehicle sector pullback explains May weakness in other payroll and sentiment data, and a likely vehicle sector rebound into the shifting summer retooling period should support a June factory sector bounce as seen with Empire State. We also saw a 0.4% May PPI rise with a firm 0.3% core price increase, as US inflation measures continue to document both a rebound in commodity prices and a firm 2016 core price path.

Main Macro Events Today

• Swiss National Bank  The official view from SNB remains that prolonged period of low interest rates carries risk for global financial stability.  Rates are currently -0.75% and no change is expected.  Prolonged period of low interest rates carries risk for global financial stability.  The SNB’s baseline scenario assumes that economic conditions for the Swiss banking sector improve. Economic growth picks up moderately in the euro area, but unemployment remains high in many member states. In the US, growth remains robust. Growth in China slows further and some major emerging markets remain in recession. In Switzerland, the recovery continues and unemployment begins to decline slowly after peaking in the second half of 2016.

 

•  UK Interest  Rate decision  No change expected UK rates with a week to the UK Referendum on membership of the EU. CPI has been under pressure and there is a very low probability of interest rate hikes before 1Q 2017.  The press conference is always of interest.

Janne Muta

Chief Market Analyst

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FOREX News Today

Stock markets started to stabilise overnight, as the Yen weakened and helped exporters to bounce back ahead of today’s Fed decision. The BoJ is due to follow and some speculation of further central bank action has also underpinned the first improvement in Topix and Nikkei in five days. Chinese reversed early losses and jumped higher, sparking speculation that state-backed funds may be supporting the market, after MSCI Inc. refused to add China’s domestic equities to the benchmarks indexes. U.S. stock futures are still in the red ahead of the Fed, but FTSE 100 futures are moving higher. Oil prices are down, with the front end Nymex future trading below USD 48 per barrel. Nervousness remains ahead of the round of central bank decisions this week and next week’s Brexit referendum. The events will likely overshadow the data calendar once again, which has U.K. labour market data and European trade numbers.

FOMC began its meeting and announces its policy stance this afternoon at 14:00 ET. While a hike today is off the table, the policy statement and Fed forecasts will be scrutinized for clues on the rate path going forward. Outside of the weak May employment report, most pieces of data have been consistent with GDP growth of 2.6% this quarter. Price pressures have also been on the rise. And these factors support expectations that the FOMC will look to normalize further, and perhaps as soon as July, as is out view, as well as the Median estimate from last week’s Survey. The Fed’s dot plot is likely to again show 2 tightenings this year, though the median rate might be revised slightly lower. We also expect Fed Chair Yellen will be cautiously optimistic on the economy in her press conference, while still acknowledging the downside risks, as she did in her June 6 speech.

Canada Household Leverage Remains Near Record High: Canada’s household leverage remained elevated in Q1, as the ratio of household credit market debt to disposable income slipped ever so slightly to 165.3% from a record high 165.4% in Q4. The historically elevated debt to income ratio continues to highlight a prominent risk associated with the current policy setting. However, the Bank of Canada’s focus is growth and inflation, so rising leverage amid the current ultra accommodative rate environment will continue to be taken in stride by policymakers.

Atlanta Fed’s GDPNow was lifted to 2.8% in Q2 from 2.5% previously in the wake of the gain in May retail sales: “The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2016 is 2.8 percent on June 14, up from 2.5 percent on June 9. After this morning’s retail sales release from the U.S. Census Bureau, the forecast for second-quarter real personal consumption expenditures growth increased from 3.5 percent to 3.9 percent. The next GDPNow update is Friday, June 17.”

Yesterday’s US reports revealed the expected May strength in retail sales and surprisingly large trade prices increases, though we also saw restrained business inventory gains that lowered our Q1 GDP growth estimate to 1.1% from 1.2%, versus the 0.8% prior reported pace. For retail sales, we saw only small prior revisions that had no net impact on our GDP forecasts, with expected May gains for gasoline station and auto dealer sales. For trade prices, we saw big increases in oil import and food export prices, but also big core price gains, and with boosts in prior import price gains that trimmed the skewing of recent trade price strength toward exports.

Main Macro Events Today

• Canada Manufacturing: We expect manufacturing shipments, due Wednesday, to grow 1.0% in April (median same at +1.0%) after the 0.9% m/m drop in March and 4.0% plunge in February. A 1.5% gain in export values after the 4.1% drop in March and 6.8% plunge in February provides a compelling reason to forecast a gain in manufacturing shipment values during April.

• US NY Fed “Empire State” Index: June producer sentiment kicks off with the release of the Empire State Index on Wednesday. We expect the headline to climb to -1.0 (median -4.0) after a tumble to -9.0 in May from 9.6 in April. Producer sentiment as settled back near recent lows with the ISM-adjusted average of all measures hitting 49 again in May after a spike to 53 in March and subsequent dip to 51 in April.

• US Industrial Production: May industrial production is out Wednesday and should reveal a 0.2% (median unchanged) headline decline following a 0.7% increase in April and a 0.9% decrease in March. Capacity utilization should fall to 75.2% (median 75.3%) from 75.4% in April. Factory and mining employment both declined in the May employment report which could indicate downside risk for the release.

• US FOMC: We expect no rate hike today but the policy statement and Fed forecasts will be scrutinized for clues on the rate path going forward.

• Bank of Canada: Governor Poloz speech.

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.