Morning report 14/08/2015

Jobless claims continue to hold at historically low levels, at 274,000 in the August 8 week. The 4-week average is down 1,750 to 266,250 and is nearly 15,000 below the month-ago comparison in what is a positive indication for the August employment report

Continuing claims, which are reported with a week’s lag, rose 15,000 in data for the August 1 week to 2.273 million. The 4-week average is up 14,000 to a 2.254 million level that is about 10,000 lower than the month-ago comparison. The unemployment rate for insured employees is unchanged at a very low 1.7 percent.

Boosted by vehicles, retail sales proved strong in July and, with upward revisions, surprisingly solid in the two months of May and June. Vehicles and restaurants both showed strong July gains which points to an upbeat consumer. The day’s other data included business inventories which, due to a rise for vehicles, rose in June and together with the upward revisions to retail sales gave a boost to revision estimates for second-quarter GDP.

The EUR/USD pair trades lower in the European morning, having reached a daily high of 1.1171 on news that Greece’s Parliament has accepted the terms for a third bailout deal. I see all majors heading into a range over summer. Today we have Euro-Zone’s 2Q Gross Domestic Product (GDP) report may boost the appeal of the single currency and spur fresh monthly highs in EUR/USD as the growth rate is expected to increase 1.3% following the 1.0% expansion during the first three-months of 2015

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Morning analysis 12/09/2015

In the UK, we get the unemployment rate for June. Another decline in the rate and acceleration in the growth of average weekly earnings could support Gov. Carney’s recent comment that the timing for a rate rise is “drawing closer”. With UK inflation rate just above zero and expected to remain muted for some time given the recent drop in oil prices again, market participants will be closely watching the labor data for signs of demand-pull inflation. Therefore, another strong wage growth is likely to strengthen GBP.

In the US, only data of secondary importance are coming out. The Job Opening and Labor Turnover Survey (JOLTS) report for June is due out and the forecast is for a moderate decline in the number of job openings. This survey will also bring the “quit rate,” a closely watched indicator of how confident people are in getting another job and by deduction how confident they are in the job market. Also, New York Fed President William Dudley speaks today. Given that it takes two points to draw a line, investors are likely to pay a lot of attention to what Dudley, one of the most dovish members of the Committee, has to say. If even he is talking about a rate hike in September, then people will draw a line between him and Atlanta Fed President Lockhart and conclude that most other members are somewhere on that line and that there is probably a general consensus to hike next month.

 

 

morning reprot 11/08/2015

Reuters reported China devalued the yuan on Tuesday after a run of poor economic data, guiding the currency to its lowest point in almost 3 years.

The central bank described the move as a “one-off depreciation” of nearly 2%, based on a new way of managing the exchange rate that better reflected market forces.

The AUS and the NZD fell move than one percentage on the news over night, the euro has rallied and is hovering above 1.10. We will see how today’s zew survey come out today

The yield curve had steepened in the previous session after Fed’s Fischer’s comments carried a slightly dovish tone as he focused on the low inflation and global uncertainty. Fischer said he would like to see inflation return to levels that are “more normal. Fischser’s comments triggered losses in the 2-yr yield and pushed the USD lower across the board. However, the USD managed to take back part of its losses after Atlanta Fed President Dennis Lockhart offered a different view, saying he is “very disposed” to the possibility of a September liftoff

morning report 10/08/2015

  • NFP came in line with estimates
  • Dollar index found resistance at 98.00
  • retail sales and industrial production in focus this week

Last week the non-farm payrolls figure came in at 215,000, in line with expectations, but nothing great compares to the second half of 2014 average of 280,00 job per month. The unemployment rate held steady at 5.3% we also saw a slight uptick in average hourly earning coming in at 0.2%. there was also an upwards revision last month figures. This report confirmed the strength of the US labour market which is one of the key indicators on whether the FED will hike rates in September. The USD priced in the latest payrolls figure but then retraced the initial move and ended the week lower against the majors ex GBP

We also had super Thursday last week when the BOE realised a string of data. The key points where inflation is forecasted to stay lower for longer, and they don’t expect their first rate hike until mid-2016. We also had an 8-1 vote for an interest rate hike. The GBP ended lower across the board last week with industrial production also coming in lower than estimates. We may see the GBP trend lower this week on last week report as the market was expecting a more bullish statement.
As the FED is data dependent so is the market, so expect wild swings in global markets as we head into September. As we have stated watch all employment, consumer and inflation related indicators. This will set the market sentiment on whether the FED will hike rates or not. Currently USD positioning vs G7 is at all time high (COTR)

This week the main event will be retail sales. This July report is hard to anticipate as weekly chain store sale figures coming in lower WoW throughout July but auto sales data breaking highs for this year, so we will wait and see. If the report comes in lower than estimates I will expect USD to fall heavily due this being an indication on consumers are not spending which will have a negative effect on growth and inflation which is already subdued with the low oil prices.

Morning analysis 07/08/2015

Yesterday was called super Thursday due to all the data realised by the BOE. The BoE left its monetary policy unchanged at its meeting today with an 8-1 vote which was below market expectations of 7-2 we also had the Quarterly inflation report which stated that inflation will be lower for longer. Targeting inflation at 2% within two years due to subdued energy prices. The BoE now sees the first rate hike at some point during the first half of 2016: 1.0% by end 2016 and 1.5% at year-end 2017 we saw the pound fall in value across the board but ended the day above the 1.55 level vs the dollar. We will see the NFP figures that are realised today to give GBPUSD a direction.

In the US market trading was slow. But we had another very favourable jobless report which continues to point to unusually low levels of claims. Markets are now awaiting the NFP report today we stronger except broad dollar strength if weaker expect weakness.

Below we have the AUDUSD long term chart is this the start of a rally?

AUD

Morning analysis 06/08/2015

Signals are mixed going into Friday’s employment report with ADP calling for big trouble but ISM calling for a big gain. And it was ISM’s non-manufacturing sample that took the day’s headlines, showing the greatest strength in 10 years including an outsized gain for its employment index.

Friday’s employment report will be a flop, based on ADP’s estimate for private payrolls which it sees rising only 185,000 the markets will watch initial jobless claims today and will position accordingly for NFP tomorrow.

ISM’s non-manufacturing sample reports a giant surge of strength, to 60.3 for the July index and the highest reading in 10 years. The rise in export orders underscores the strength of the nation’s trade surplus in services which, despite strength in the dollar, is getting a boost from foreign demand for technical and management services. The service sector appears to be rolling along fine and will likely continue to offset weakness in manufacturing and industrial services. For Friday’s jobs report outlook, the employment index in this report will help offset this morning’s very weak ADP estimate.

Looking forward, today will be a huge day for the GBP. We have massive amount realises from the BOE; the rate hike vote, BOE minutes, inflation report and lastly BOE governor Mark Carney will hold a press conference. The market is expecting to 7-2 vote for a rate hike some analysts are calling for a 6-3 vote. If the consensus is correct then I will expect the GBP to strengthen across the board.

Morning analysis 05/08/2015

Yesterday, we had a quiet European trading session with light data. Factory orders rose nearly as expected in June, up 1.8 percent for only the second gain in the last 11 months. The durable goods component initially released last week, is unrevised at plus 3.4 percent in again distorted by aircraft orders but one that does reflect a pop higher for capital goods. The non-durables component, data released with yesterdays report, rose 0.4 percent on order gains for oil and chemicals.

In the US session we saw extreme volatility as voting member of the Fed’s policy-setting committee Dennis Lockhart moved markets, he said to the wall street journal ‘’it would take a sharp turn for the worst in economic data to change his view in support of a rate hike after the mid-September meeting.’’ The euro fell sharply against dollar crashing through the 1.09 support level.

I will expect the dollar to be bid across the board today early in the European session as traders await the ADP figures which will give an insight into the eagerly awaited non-farms report on Friday. We also have US trade and the non-manufacturing PMI data.

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Long term USD index chart if it breaks 98.00 the next target will be 100.00

Morning analysis 04/08/2015

Yesterday we had the ISM manufacturing PMI come in lower then consensus at 52.7 vs. a consensus of 53.5. Continued contraction in exports held down the manufacturing index which slipped 0.8 tenths in July to a lower-than-expected 52.7 to indicate slowing monthly activity for ISM’s sample. Employment growth slowed nearly 3 points to 52.7 while new export orders fell 1.5 points to 48.0 for the 5th sub-50 contractionary reading of the last 7 months. Read more

Morning analysis 03/08/2015

Last week in the markets we had the FOMC minutes that gave us insight into whether they will start the rate hiking cycle this year they also gave forward guidance to what indicators they will be following which are employment, inflation and growth indicators. The dollar ended the week higher on that note. In the Euro area, we had the latest CPI reading and the monthly unemployment rate.  Core inflation, which strips out the prices of food, energy, alcohol and tobacco, was estimated to have risen 1.0% on a year earlier, Eurostat said. The forecast-beating result is a significant acceleration on June’s figure of 0.8% and the quickest rate since April 20. The jobless rate held at 11.1% in June. Unemployment was mixed across the euro area’s largest economies in June, with rates holding at 4.7% in Germany and 10.2% in France, while rising to 12.7% in Italy and falling to 22.5% in Spain. Germany had the lowest unemployment rate at 4.7% while Greece had that highest at 25.6% in April. A total of 17.756 million people were registered as unemployed in the month, up slightly from 17.725 million in May.14.

This week is a big week we have Nonfarm payrolls on Friday and the BOE minutes, Inflation report flowed by a press conference with BOE chair chairman Mark carney on Thursday. We also have key risk events today which is the ISM PMI report. This report gives us the first indication into the health of the US economy throughout July. It will be closely watched by investors because the ISM PMI’s give outlooks for the business condition this report also gives insights into inflation and employment trends. (Which could give us an indication for where NFP is heading) After following wild swings in the market last week, the EURUSD closed below the key 1.10 level which keeps sentiment is favour of dollar strength

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Short term uptrend

 

Morning Analysis 30.07.2015

 

The market has now digested the highly anticipated FOMC minutes released yesterday and at the time of this release the dollar is bid higher across the board. There were some notable changes made to the statement from the prior minutes released in June.

The FOMC left the federal funds rate between 0-0.25%. However, the statement provided guidance into the FED’s thinking here are the key points – ‘The economy has seen solid job gains and declining unemployment.’ ‘The underutilization of labour resources has diminished since earlier this year.’ They dropped ‘slower growth in the year’ and replaced it with ‘economic growth has been growing moderately throughout the year.’ Lastly ‘The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the labour market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term.’

Our main takeaway from the minutes is that the FED is data dependent to raise rates and they will be closely watching employment indicators, inflation indicators and growth indicators over the summer Click here for the full statement

The market will now be turning its focus to the Q2 GDP first estimate released today and revisions from Q1 GDP. Also, we have initial jobless claims figures that will be closely watched. I will expect the dollar will be trading higher today before the release, especially against the euro and jpy. If the data comes in better than consensus expects the USD to test 98.00 over the coming days.

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  • Support- 97.00, 96.50
  • Resistance- 98.00, 99.00, 100.00

Untitled1USD/JPY may test 125 over the coming weeks after holding the weekly trend line support.

  • Support- 123.30, 122.00, 122.50
  • Resistance- 124.00, 124.20, 124.50

UntitledEUR/USD broke the short term hourly trend line support may heading to test 1.07

  • Support- 1.09, 1.08
  • Resistance- 1.10, 1.1050