Posted on 5th March 2015 by barry norman in Stockpair Daily Insight

stockpair-dailytips (2)

Stockpair traders should keep an eye on these events today:

Cur. Event
  EUR German Industrial
  EUR GDP (QoQ) (Q4)
  USD Average Hourly
  USD Nonfarm Payrolls (Feb)
  USD Private Nonfarm
  USD Trade Balance (Jan)
  USD Unemployment Rate
  CAD Building Permits
  CAD Trade Balance (Jan)

 

Countdown to NFP

March 6 2015

Barry Norman

ecb logoAfter a brief rally, spurred by more optimistic growth expectations from the ECB for the coming years, the euro weakened slightly against the dollar, hitting an 11-year low of around $1.10–a move that reflects market confidence in the central bank’s lasting accommodative stance. The euro slumped on Thursday to record lows just above $1.10 and the U.S. dollar added to gains against an index of currencies after the European Central Bank said it will launch a massive bond-buying program next week meant to boost economic growth.

The Eurozone common currency, which has lost nearly 15 percent against the dollar in six months, was last off 0.4 percent at $1.1034 after striking a fresh 11-1/2-year low of $1.1007 during a news conference by ECB chief Mario Draghi.

Draghi spoke after the ECB, in its battle against euro zone economic sluggishness and low inflation, pushed up its 2015 and 2016 growth forecasts and fixed a March 9 start date for bond purchases of 60 billion euros a month.

Traders were also focused on Friday’s U.S. employment report for February, when harsh winter weather in large portions of the United States may have curbed hiring.. The labor market has been a central driver of America’s relatively bright economic outlook and the dollar’s rally. a government report Friday that will show U.S. employers added more than 200,000 jobs in February for the 12th consecutive month, according to economists surveyed by Bloomberg.

The Fed, which meets March 17-18, is considering when to raise interest rates after keeping them at virtually zero since 2008. Chair Janet Yellen told Congress last week policy makers will focus on data in making their decision on the timing of any increase.

eurusd stockpair

Posted on 4th March 2015 by barry norman in Stockpair Daily Insight

stockpair-dailytips (2)

Stockpair traders should keep an eye on these events today:

Cur. Event
  AUD Retail Sales (MoM)
  GBP Interest Rate Decision
  EUR Interest Rate Decision
  EUR ECB Press Conference
  CAD Ivey PMI (Feb)

  

ADP Has Huge Upward Revision To Last Month

March 5, 2015

Barry Norman

jobs 3ADP employment was nearly dead on expectations and triggered no strong directional move. Treasuries, if anything, drifted a few ticks higher. Chicago Fed Evans said that interest rate increases shouldn’t start until 2016, proving that he is one of the most dovish governors on the FOMC board. His main concern is inflation, which he expects only at 2% by the end of 2018. Therefore, delaying the lift‐off is critical to raise the US inflation rate. Core bond trading lurched further into the US non‐manufacturing ISM.

Sentiment on risk turned a bit more cautious, but it didn’t change much for currency trading. EUR/USD remains under pressure ahead of QE even as EMU eco data continue to show signs of improvement. USD/JPY is holding up fairly well. The loss of momentum in equities doesn’t affect the dollar much as US yields generally remain USD supportive.   Intraday, the final EMU services PMI were the first reference for currency trading. However, euro traders didn’t wait for the outcome. Upcoming QE apparently still scares euro longs. EUR/USD dropped to a new short‐term correction low below 1.1150. The EMU services PMI was OK but revised marginally lower from the preliminary reading. The reports from the likes of Italy and Germany were weaker than expected and provided a good excuse for further euro selling. A ruling of the EU court in Luxembourg on euro clearing outside the EMU area in favor of then UK weighed on the euro too. EUR/USD dropped to a new correction low in the 1.1116 area.

adp REPORT

The EMU retail sales were much stronger than expected. There was no obvious reaction of the euro, but it might have helped to slow the decline of the single currency. USD/JPY lost a few ticks, but the losses were very limited as core bond yields held up very well. EUR/USD remained under pressure going into the US trading session. Was it euro weakness or USD strength? Probably both. The euro is trading at 1.1070 down 107 points as the US dollar surprised investors to break the 96 price and is holding at 96.03. The Japanese yen remained under the 120 level while the gold tumbled to trade at 1200 after falling to 1197.00

US DOLLAR

Posted on 3rd March 2015 by barry norman in Stockpair Daily Insight

stockpair-dailytips (2)

Stockpair traders should keep an eye on these events today:

Cur. Event
  AUD Building Approvals
  AUD Current Account (Q4)
  AUD Interest Rate Decision
  AUD RBA Rate Statement
  EUR German Retail Sales
  GBP Construction PMI

 

Countdown To ECB

March 4, 2015

Barry Norman

currencyEuropean equity markets couldn’t hang on to positive risk sentiment this morning. After reaching new intraday record highs, some profit taking occurred amid an empty eco calendar. Losses are contained to ‐0.35% though. Wall Street was modestly lower. Dallas Fed Fisher said “it would be wise to move gradually and earlier rather than to wait to see the whites of the eyes of full employment and then have to raise rates steeply”. Markets ignored the comments as Fisher will leave office on March 19 and will not attend the next FOMC meeting. The US dollar climbed to trade as high as 95.505 and drifted to 95.22 while the euro gained 20 points to reach 1.1204. Today, in a session devoid of important eco data, EUR/USD trades near opening levels following a brief pop up on strong German retail sales. The price action occurred in a tight range. New impetus is needed to give the pair new direction. In this respect, the ECB meeting on Thursday and the US payrolls on Friday are the events to watch for.

The European Central Bank meets Thursday, but that is just one of roughly a dozen global central bank meetings over the next 10 days.

The dollar retreated from an 11-year high against a group of six currencies as the greenback weakened against the yen after a top Japanese economic official said the dollar could not sustain more gains. The dollar index was last down 0.25% at 95.214, while the greenback was down 0.35% at ¥119.71.

The euro softened against the dollar and yen as higher US and Japanese yields overshadowed the upbeat German retail sales and upcoming details on the European Central Bank’s €1.1 trillion bond purchase program. It was down 0.03% at $1.1180 and 0.38% lower at ¥133,79.

german_retail_sales

With the impending start of the ECB’s effort to jumpstart the region’s economy, peripheral Eurozone yields hovered near record lows.

The Canadian dollar gained half a cent early Tuesday after the latest economic data showed the domestic economy slowed in the final quarter of 2014, but at a lesser pace than anticipated. The loonie was ahead 0.48 of U.S. cent to 80.26 cents US.

Statistics Canada reported that domestic economic growth slowed to a 2.4 per cent rate in the final three months of last year. Still, the data was stronger than economists had expected in a period where rapidly declining oil prices weighed heavily on growth. In December, gross domestic product moved up 0.3 per cent to beat economist expectations of 0.2 per cent.

canadian_dollar_stockpair

Posted on 2nd March 2015 by barry norman in Stockpair Daily Insight

Stockpair traders should keep an eye on these events today:

Cur. Event
  AUD Building Approvals (MoM)
  AUD Current Account (Q4)
  AUD Interest Rate Decision
  AUD RBA Rate Statement  
  USD FOMC Member Mester
  EUR German Retail Sales
  GBP Construction PMI (Feb)
  GBP BoE Gov. Carney Speaks
  CAD GDP (QoQ) (Q4)

 

US Dollar Continues To Rally

March 3, 2015

Barry Norman

 government-handoutsThis week is very important from both a data and central bank perspective. In the U.S. the data highlights are today’s PCE as well as Friday’s nonfarm. If core PCE stabilizes and nonfarm is close to the 235k expectation, than we would expect the risk to tilt in favor of a June Fed rate hike. From a central bank perspective, we will have rate decisions from the RBA – analysts expect a cut, the ECB and BoC are expected to take no action. Also this week is the China’s National People’s Congress.

The US dollar continues to rally paying little attention to lackluster economics data. Most of the Fed speakers have indicated that they will support a rate increase in early summer, which means there should be a change to forward guidance at the March meeting. The US dollar is trading at 95.51 while the euro is weaker at 1.1183.

eurusd stockpair

The euro is off its lows, but still well within its month and a half long range of 1.1098 to 1.1542. There is some relief in markets as Eurozone CPI came in at –0.3%y/y on headline – slightly better than forecast and core stabilized at its lows of 0.6%. In addition, the unemployment rate dropped to 11.2%. Accordingly the fundamental picture is still weak but is showing ongoing signs of improvement.

 

eurozone unemployment

Even consensus GDP forecasts for 2016, have edged higher over the last two months; juxtaposed the consensus GDP U.S. forecast which has dropped back below 3.0%. This is partly what is keeping EUR contained within a range; stabilization and some signs of improvement in the fundamental backdrop juxtaposed against negative interest rates, EUR outflows and negative sentiment. This week the focus will be on Thursday’s ECB meeting, where policy is expected to remain on hold, but the focus to be on the updated staff forecasts and President Draghi’s press conference. In addition, this week will mark the first official bond purchases for QE.

us ism stockpair

Posted on 1st March 2015 by barry norman in Stockpair Daily Insight

stockpair-dailytips (2)

Stockpair traders should keep an eye on these events today:

Cur. Event
  CNY HSBC Manufacturing PMI (Feb)
  EUR German Manufacturing PMI (Feb)
  GBP Manufacturing PMI (Feb)
  EUR CPI (YoY) (Feb)
  USD ISM Manufacturing PMI (Feb)

 

A New Month – What Can Traders Expect

March 2, 2015

Barry Norman

march1There is an ongoing chorus of Fed members who are publically keeping the risk of a June interest rate hike open as an option. This includes Friday’s article in the WSJ on Lockhart recent comments this week by Bullard, Williams and Mester. Analysts see this risk fully based on the development of inflation and labor data, making the March 2nd PCE release and the March 6th nonfarm release important days for the USD.

The US dollar closed the month at 95.29 while the euro eased to 1.1195. The USD retains a broad-based strengthening bias on the back of underlying economic strength and a deep-market liquidity premium.

The EUR should resume a weakening path. Fragile relative growth, deflation forces, and monetary status quo weigh on the currency market. The GBP is expected to revalue versus EUR as the USD gathers strength in the top-tier G10 currency universe.

forexwords cycleA broad-based move in favor of the US dollar (USD) remains in place, and it remains the world’s preferred reserve asset in times of stability and distress. Analysts maintain a view that growth and interest rate differentials coupled with systemic liquidity provided by the deep US securities markets provide a powerful magnet to prolong the US dollarization of investment portfolios in the coming months. The USD has rallied, weighing on the earnings of multinationals and exports; however, the broad US economy is stronger and less reliant on exports than most. In addition, the drop in oil prices is simulative, helping to offset the weight of the USD, leaving the US in a unique position to withstand the impact.

The euro (EUR) has temporarily stabilized with the currency constrained by the offsetting forces of negative interest rates, the ECB’s bond buying program, and large outflows with an improvement in near-term growth indicators. The British pound (GBP) is expected to hold its own against the USD, as the fundamental picture is more encouraging than most and the BoE’s next policy action is likely to be a tightening. The pound closed the month at 1.5438.

Posted on 28th February 2015 by barry norman in Stockpair weekly Insights

Stockpair Weekly Insight

 The Week Ahead – March 2-6, 2015

 

Global Exchanges

February drew to an end as US traders saw more positive data and comments from Fed members seemed to start indicating that the March meeting will see a change in forward guidance spelling an interest rate increase in the near term.  European equities ended in positive territory after the approval of Greece’s bailout extension plan helped as U.S. Federal Reserve Chair Janet Yellen said it would be several months before the Fed expects to hike interest rates. Wall Street closed lower, but still closed out the best single-month performance since 2011.

The Dow Jones Industrial Average fell 82 points, or 0.45 per cent, at 18,132.38. The S&P 500 slipped 6 points, or 0.30 per cent, at 2,104.48, while the tech-rich Nasdaq Composite Index lost 24.36 points, or 0.49 per cent, at 4,963.53.

Frankfurt and London hit new records, rounding off a successful week for European indices thanks to a deal on Greece’s bailout and positive company results.

global equities stockpair

Currency Markets

The US dollar has edged higher against the euro, building on the prior day’s sharp rally and closing February with its eighth consecutive month of gains. The greenback found support from the latest government estimate of economic growth in the fourth quarter. Though revised lower, to 2.2 per cent from 2.6 per cent, the pace was better than expected. ‘There was more good news than bad in the second estimate of fourth-quarter US GDP,’ said Moody’s Analytics Friday.

The situation in the Crimean peninsula has not yet resolved itself, but markets seem to have shifted focus, with news out of central banks the main movers last night. The euro strengthened to a two-month high against the dollar with the European Central Bank (ECB) keeping rates on hold. ECB president Mario Draghi announced that new inflation forecasts show that the Euro region should approach its target by the end of 2016 and that money markets are under control at the moment, lessening the need for emergency liquidity measures. The BoE also met last night, keeping rates unchanged at 0.5% as expected, and continuing their economic stimulus now running into its 6th year. Like the EUR, the GBP also rallied off this news.

global currency stockpair

Commodity Markets

Oil prices have rebounded at the end of a volatile week of trading as dealers weighed the global supply glut and slow growth in the world economy. West Texas Intermediate advanced $1.59 on Friday to close at $49.76 a barrel on the New York Mercantile Exchange, a day after WTI lost almost $US3. Brent North Sea crude surged to $62.58 a barrel, up a hefty $2.53 from Thursday’s closing level.

Gold ended another tough week in better shape than it started it, but the mood remained cautious. Gold closed at 1212.90. Since climbing briefly above $1,300 in January, the price has been drifting steadily and February was heading for the biggest loss since September as markets opened Friday.

Posted on 26th February 2015 by barry norman in Stockpair Daily Insight

stockpair-dailytips (2)

Stockpair traders should keep an eye on these events today:

Cur. Event
  NZD Building Consents & Business Confidence
  JPY Monthly data dump
  AUD Private Sector Credit
  EUR German CPI (MoM) (Feb)
  USD GDP (QoQ) (Q4)
  USD Chicago PMI (Feb)
  USD Michigan Consumer
  USD Pending Home Sales

US Dollar Skyrockets

February 27, 2015

Barry Norman

bigstock-American-Economy-Growth-4407565-232x300European shares jumped higher today, reaching new highs, supported by a sharp decline in EUR/USD. Stronger European data and an upward surprise from US core inflation helped, too. US durable goods orders rose in January for the first time in three months and the rebound was substantially stronger than expected. The details show that strength was mainly based in aircraft orders, while durables ex transportation rebounded by only a meager 0.3% three consecutive monthly declines.

US initial jobless claims rose by 31 000 to a total of 313 000 in the week ending the 21st of February, its strongest monthly rise since December 2013. The week under review however included the President’s Day holiday, which might have distorted the data. At the same time, the BLS said average hourly earnings rose by 1.2%, the best post-crisis result.

At this writing the US dollar is trading at 95.22 and climbing steadily while the euro is down 149 points to 1.1213 touching its lowest level in February at 1.1199. The euro touched 1.1098 for a few seconds on January 26th when Mario Draghi announced the ECB stimulus plan.

Gold seem unfazed by the US dollars climb, trading at $1210.40 up for close to $9 at this time.

USD_EUR_Stockpair

St.‐Louis Fed Bullard sounded hawkish again. He repeated that he expects the unemployment rate to drop below 5% in H2 2015. Earlier this year he indicated that it’s reasonable to except a rate rise in June or July. Today he added that the Fed should remove “patient” from the statement in March. Yellen said that once the “patient” guidance is removed, the Fed can hike rates at any meeting. Bullard believes that there’s too much focus on the first move of the Fed instead of on the path of rate increases. On inflation, the Fed governor said that the Fed can only control inflation in the medium‐term indicating that the Fed should look through short term oil‐driven volatility. Finally, the dollar’s value shouldn’t inhibit growth.

Inflation dropped sharply over the last few months, the underlying picture clearly indicates that downward price pressures are mainly based in energy, due to the sell‐off in the oil price. Inflation in the services sector remains however substantially higher at 2.4% Y/Y, supported by strong domestic demand. For the Fed, it is an indication that the sharp slowdown in inflation is only energy‐related with no signs of second‐round effects for now.

Durable_Goods

Posted on 25th February 2015 by barry norman in Stockpair Daily Insight

stockpair-dailytips (2)

Stockpair traders should keep an eye on these events today:

Cur. Event
  EUR German employment
  GBP GDP (QoQ) (Q4)
  USD Core CPI (MoM) (Jan)
  USD Core Durable Goods
  CAD Core CPI (MoM) (Jan)

Traders Reconsider Yellen’s Comments

February 26, 2015

Barry Norman

art6The US dollar dipped today to trade at 94.39 down by 0.23% as Federal Reserve Chair Janet Yellen continues her second day of testimony. On Tuesday Yellen said that interest rates were on the Fed’s list but the Fed will decide meeting by meeting, but nothing is expected to be decided in the next few meetings. Federal Reserve Chairwoman Janet Yellen suggested the central bank isn’t ready to raise interest rates just yet.

“Answering a question about inflation, she concluded that she cannot see any evidence that inflation will rise anytime soon. So the June rate hike is off the table, especially if tomorrow’s CPI slows any further,” said Nour Al-Hammoury, chief market strategist at ADS Securities in Abu Dhabi, in an investor note.

The view of a dovish Federal Reserve helped push gold prices back above $1,200 an ounce. The dollar was little-changed as Yellen began her semiannual testimony to the House Financial Services Committee. On Tuesday, Yellen said the Fed wouldn’t raise interest rates until inflation was on track to hit the central bank’s target level of 2%, which pushed back the market’s expectation for the timing of the first interest-rate increase since 2006 and weighed on the buck.

The Fed confirmed that the US economy is improving, but also noted the lack of inflation in the system as well as slack in global growth demand. In short the message from Ms. Yellen was — ‘We are close to normalization, but not quite yet.

While Janet Yellen prepares the markets for higher interest rates and Mario Draghi rolls out European-style quantitative easing, U.S. monetary policy remains three times more expansive than the euro areas, says the global head of economics at Societe Generale SA.

The London-based economist at the French bank used a Taylor rule, a tool designed to show the suitable level of interest rates given the economic environment, to conclude that it’s going to take quite a while for the ECB to truly bypass the Fed on easy street.

Yellen said the Fed wouldn’t raise interest rates until inflation was on track to hit the central bank’s target level of 2%, which pushed back the market’s expectation for the timing of the first interest-rate increase since 2006 and weighed on the buck.

Yellen summed up everything in a few short statements. The FOMC’s assessment that it can be patient in beginning to normalize policy means that the Committee considers it unlikely that economic conditions will warrant an increase in the target range for the federal funds rate for at least the next couple of FOMC meetings. If economic conditions continue to improve, as the Committee anticipates, the Committee will at some point begin considering an increase in the target range for the federal funds rate on a meeting-by-meeting basis. Before then, the Committee will change its forward guidance. However, it is important to emphasize that a modification of the forward guidance should not be read as indicating that the Committee will necessarily increase the target range in a couple of meetings. Instead the modification should be understood as reflecting the Committee’s judgment that conditions have improved to the point where it will soon be the case that a change in the target range could be warranted at any meeting.

eurusd stockpair

Posted on 24th February 2015 by barry norman in Stockpair Daily Insight

stockpair-dailytips (2)

Stockpair traders should keep an eye on these events today:

Cur. Event
  CNY HSBC Manufacturing PMI
  USD Fed Chair Yellen Testifies
  USD New Home Sales (Jan)
  EUR ECB President Draghi

 

Yellen Remains A Cautious Hawk

February 25, 2015

Barry Norman

us growthJanet Yellen started her testimony telling US lawmakers that an interest rate increase will be determined meeting by meeting. The dollar remained strong as Yellen’s stance assured markets that an interest rate increase was coming in the next few months. The US dollar is trading at 94.67.

The Eurogroup approved today the list of reform measures presented by the Greek authorities. The deal still needs to be approved by several parliaments of euro zone countries. The approval means that the €240 bailout won’t expire at the end of this month, but run until the end of June. IMF Chairwoman Lagarde agreed that the list is a valid starting point, but is not very specific. The euro traded late in the session at 1.1308 as the greenback held strong.

eurusd stockpair

Foreign Ministers of Ukraine, Russia, France and Germany agreed today to seek a reinforcement of the international monitoring mission in Ukraine and renewed their calls for the ceasefire agreement to be respected. Rebels said they have started a full-scale pull-out of heavy weapons from the frontline of their fight with government troops. Gold continued to decline to trade at 1192.00 down by $8.80 as most supporting factors moved passed the markets. Sentiment in trading this afternoon moved to a more risk on mode.  The pound recovered earlier losses to trade at 1.5448.

The rest of the week should be all about data events as the month draws to a close and Thursday and Friday’s calendar are chocked full.

The commodity currencies are trading mixed with the New Zealand dollar falling steadily to trade at 0.7466 while the Aussie gained to reach 0.7810.

gold stockpair

Posted on 23rd February 2015 by barry norman in Stockpair Daily Insight

Stockpair traders should keep an eye on these events today:

Cur. Event        
  EUR German GDP (QoQ)
  EUR CPI (YoY) (Jan)
  EUR ECB President Draghi
  USD CB Consumer
  USD Fed Chair Yellen        
  CAD BoC Gov. Poloz

 

Binary Option Traders Should Keep An Eye On Gold & The US Dollar

February 24, 2015

Barry Norman

greek flagHeadline watchers sit with bated breath waiting on the Greek reform plans while speculators just move forward. Gold fell below $1200 today as traders are now expecting a hawkish Janet Yellen as her testimony begins before US lawmakers. The US dollar continued to gather momentum moving to 94.60 ignoring lackluster housing data.

Greece has a midnight Monday deadline to present its economic reform to seal a Eurozone financial lifeline, but the government drew criticism from a veteran leftist and ruling party member that the deal let voters down. Germany, the biggest contributor to Greece’s two bailouts totaling 240 billion euro, said any extra spending on Athens’s list of reforms had to be offset by savings or higher taxes. Rumor say the proposal from Greece is just 5 simple pages which will most likely be turned down by the EU Ministers as being incomplete. “The list will include a series of reforms that the Greek government will propose – and I underline that,” said government spokesman Gabriel Sakellaridis. “Above all, they will be socially just reforms that aim to fight tax evasion, to fight corruption,”

Saying the list would go to Brussels before the end of Monday, Sakellaridis made clear Athens was anxious to avoid any last-minute hitches in securing the funding needed to keep Greece afloat and avoid an exit from the euro zone. The euro is trading at 1.1343 down by 40 points.

janet_yellen_federalreserve_mgnChairwoman Janet Yellen’s testimony to Congress this week may surprise investors by keeping alive the idea of a June rate hike, which would be seen as a tilt toward the hawkish side.

In testimony on Tuesday and Wednesday, Yellen may remove the market’s “false sense of security [that] the Fed is blinking on raising rates,” said Eric Green, head of U.S. economic research at TD Securities, in a note to clients.

Green is referring to the expectation that the Fed’s first rate hike since 2007 might come later in 2015, if at all this year, which was supported by the minutes of the January Fed policy meeting that were released last week.

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