OctaFX.Com - Financial News and Analysis

[OctaFX_Farid]

Ten-year yields decline in Europe and US

FXStreet (Mumbai) - The concerns of global economic slowdown triggered by the disappointing International Monetary Fund (IMF) forecasts and by the shockingly weak German economic data has pushed the benchmark bond yields in the US and Europe lower.

The ten-year yield in Germany is trading one basis point lower at 0.878, after having hit a record low of 0.859 yesterday. On similar lines, the French ten-year bond yield is trading weak at 1.245, which has been acting as a strong support for the last 7 sessions. Meanwhile, the ten-year yield in the UK is down two basis points to 2.20%.

In the US, the ten-year treasury yield is trading near August lows of 2.3, after hitting a high of 2.348. Interestingly, the two-year treasury yield has gained 1.75% to trade at 0.46. The two year note yield, a barometer of short term expectations, is up indicating that markets are pricing-in an early interest rate hike after the hawkish statement of Fed official Bullard.

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Oct 10, 2014

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[OctaFX_Farid]

USD/CHF climbs above 0.9560

FXStreet (Córdoba) - Greenback gained momentum across the board and pushed USD/CHF to the upside, back to the levels it had before FOMC minutes. The pair rose above 0.9550 and printed a fresh daily high at 0.9579.

Afterwards pulled back and it was trading at 0.9567, up 0.25% for the day so far as stocks fall around the world, with Dow Jones futures down 2%.

USD/USD still down for the week

From Thursday's lows the pair has risen more than a hundred pips, but despite the recovery it still trading below the level it had a week ago. On Monday reached a fresh 1-year high at 0.9685 but then moved with a downside bias and bottomed on Thursday at 0.9468, the lowest since September 26.

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Oct 10, 2014

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[OctaFX_Farid]

USD/CHF climbs above 0.9560

FXStreet (Córdoba) - Greenback gained momentum across the board and pushed USD/CHF to the upside, back to the levels it had before FOMC minutes. The pair rose above 0.9550 and printed a fresh daily high at 0.9579.

Afterwards pulled back and it was trading at 0.9567, up 0.25% for the day so far as stocks fall around the world, with Dow Jones futures down 2%.

USD/USD still down for the week

From Thursday's lows the pair has risen more than a hundred pips, but despite the recovery it still trading below the level it had a week ago. On Monday reached a fresh 1-year high at 0.9685 but then moved with a downside bias and bottomed on Thursday at 0.9468, the lowest since September 26.

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Oct 10, 2014

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[OctaFX_Farid]

Spread of Ebola would hurt airline and hospitality industries - Deutsche Bank

FXStreet (Łódź) - Andrew Zarnett, Research Analyst at Deutsche Bank looks at the possible consequences of a wider Ebola outbreak.

Key quotes

"History has shown us that should the Ebola epidemic spread domestically, it will have a significant impact on the airline and the entire hospitality sector."

"While, at this juncture, the risk of an outbreak is low, it is still prudent to understand the impact that could occur should the disease begin to spread. Further, it would not just be the physical spread that would have negative connotations but the FEAR from an outbreak that could and would have a larger negative impact on the hospitality sector."

"Fear of contagion, very early, would lead to a reduction in people’s willingness to travel, eat in restaurants, drink in bars, and quite frankly do anything social. The addition of masks would become a much-wanted clothing item by many."

"Concerns have not affected passenger volume so far. On October 2, 2014, the International Air Transport Association (IATA) stated that there is no evidence that suggest that concerns related to Ebola have been affecting passenger volumes. As per IATA, the worldwide international passenger traffic increased 5.9% yr/yr in August, following a 5.4% gain in July. Demand for North American airlines increased 3.2% in August."

"So far, so good. Nevertheless, believe more cases of Ebola or the perception of more cases could lead to an increase in the public fear of contagion."

"From an investment perspective we would advise investors to maintain positions in moderate leverage credits with strong liquidity (including cash positions) and long dated maturities. Those credits with weak liquidity and high leverage are clearly at greater risk."

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Oct 10, 2014

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[OctaFX_Farid]

Spread of Ebola would hurt airline and hospitality industries - Deutsche Bank

FXStreet (Łódź) - Andrew Zarnett, Research Analyst at Deutsche Bank looks at the possible consequences of a wider Ebola outbreak.

Key quotes

"History has shown us that should the Ebola epidemic spread domestically, it will have a significant impact on the airline and the entire hospitality sector."

"While, at this juncture, the risk of an outbreak is low, it is still prudent to understand the impact that could occur should the disease begin to spread. Further, it would not just be the physical spread that would have negative connotations but the FEAR from an outbreak that could and would have a larger negative impact on the hospitality sector."

"Fear of contagion, very early, would lead to a reduction in people’s willingness to travel, eat in restaurants, drink in bars, and quite frankly do anything social. The addition of masks would become a much-wanted clothing item by many."

"Concerns have not affected passenger volume so far. On October 2, 2014, the International Air Transport Association (IATA) stated that there is no evidence that suggest that concerns related to Ebola have been affecting passenger volumes. As per IATA, the worldwide international passenger traffic increased 5.9% yr/yr in August, following a 5.4% gain in July. Demand for North American airlines increased 3.2% in August."

"So far, so good. Nevertheless, believe more cases of Ebola or the perception of more cases could lead to an increase in the public fear of contagion."

"From an investment perspective we would advise investors to maintain positions in moderate leverage credits with strong liquidity (including cash positions) and long dated maturities. Those credits with weak liquidity and high leverage are clearly at greater risk."

OctaFX.Com - Please click here to see Financial News/Forex News on OctaFx official page

Oct 10, 2014

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[OctaFX_Farid]

Spread of Ebola would hurt airline and hospitality industries - Deutsche Bank

FXStreet (Łódź) - Andrew Zarnett, Research Analyst at Deutsche Bank looks at the possible consequences of a wider Ebola outbreak.

Key quotes

"History has shown us that should the Ebola epidemic spread domestically, it will have a significant impact on the airline and the entire hospitality sector."

"While, at this juncture, the risk of an outbreak is low, it is still prudent to understand the impact that could occur should the disease begin to spread. Further, it would not just be the physical spread that would have negative connotations but the FEAR from an outbreak that could and would have a larger negative impact on the hospitality sector."

"Fear of contagion, very early, would lead to a reduction in people’s willingness to travel, eat in restaurants, drink in bars, and quite frankly do anything social. The addition of masks would become a much-wanted clothing item by many."

"Concerns have not affected passenger volume so far. On October 2, 2014, the International Air Transport Association (IATA) stated that there is no evidence that suggest that concerns related to Ebola have been affecting passenger volumes. As per IATA, the worldwide international passenger traffic increased 5.9% yr/yr in August, following a 5.4% gain in July. Demand for North American airlines increased 3.2% in August."

"So far, so good. Nevertheless, believe more cases of Ebola or the perception of more cases could lead to an increase in the public fear of contagion."

"From an investment perspective we would advise investors to maintain positions in moderate leverage credits with strong liquidity (including cash positions) and long dated maturities. Those credits with weak liquidity and high leverage are clearly at greater risk."

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Oct 10, 2014

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[OctaFX_Farid]

Fed's Plosser: Policy moves should depend on data

FXStreet (Łódź) - Philadelphia Fed president Charles Plosser said on Friday that the FOMC should cease referring in its statements to specific time brackets in which certain policy moves could be made. The actions should rather be dependent on data, such as inflation.

Plosser also urged the US Congress to eliminate employment from the Fed's mandate so that it could concentrate on the inflation target. He also suggested that comprehensive policy reports should be presented to Congess on a quarterly basis instead of just twice a year.

"Differing views are more transparent than a false consensus," Plosser added finally, which in the opinion of JAmie Coleman from FXBeat might mean that " there might be a bit more division on the FOMC than is apparent."

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Oct 10, 2014

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[OctaFX_Farid]

Fed's Plosser: Policy moves should depend on data

FXStreet (Łódź) - Philadelphia Fed president Charles Plosser said on Friday that the FOMC should cease referring in its statements to specific time brackets in which certain policy moves could be made. The actions should rather be dependent on data, such as inflation.

Plosser also urged the US Congress to eliminate employment from the Fed's mandate so that it could concentrate on the inflation target. He also suggested that comprehensive policy reports should be presented to Congess on a quarterly basis instead of just twice a year.

"Differing views are more transparent than a false consensus," Plosser added finally, which in the opinion of JAmie Coleman from FXBeat might mean that " there might be a bit more division on the FOMC than is apparent."

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Oct 10, 2014

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[OctaFX_Farid]

Expect further rate cuts in Poland – Danske Bank

FXStreet (Edinburgh) - Analysts at Danske Bank assessed the recent decision of the NBP to cut the repo rate by 50 bps, taking it to 2.0%.

Key Quotes

“Polish rates and yields dropped on the decision while the Polish zloty has lost a bit; however, the move in the zloty was quite limited, in our view”.

“We have been calling for monetary easing in Poland for a long time. There were clear signs that the economy has been slowing down while inflation dropped below zero and Poland faces the deepest deflation pressures among other CEE countries”.

“Despite the NBP being very reluctant to acknowledge that further easing is needed, the dovish wording has strengthened within the RPP over the past two months and after the September RPP meeting, the central bank clearly signalled that it is ready to cut in October”.

“We think that more easing is needed and we expect the NBP to ease monetary policyfurther in the coming months”.

“However, given the larger rate cut today, the NBP might take a breather before it cuts again”.

“Hence, the NBP might pause in November but it might deliver 25bp in December and more next year”.

“When we look at our inflation model, we expect deflation to deepen further in the coming months while economic growth should slow further. This clearly strengthens the case for further easing”.

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Oct 10, 2014

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[OctaFX_Farid]

Expect further rate cuts in Poland – Danske Bank

FXStreet (Edinburgh) - Analysts at Danske Bank assessed the recent decision of the NBP to cut the repo rate by 50 bps, taking it to 2.0%.

Key Quotes

“Polish rates and yields dropped on the decision while the Polish zloty has lost a bit; however, the move in the zloty was quite limited, in our view”.

“We have been calling for monetary easing in Poland for a long time. There were clear signs that the economy has been slowing down while inflation dropped below zero and Poland faces the deepest deflation pressures among other CEE countries”.

“Despite the NBP being very reluctant to acknowledge that further easing is needed, the dovish wording has strengthened within the RPP over the past two months and after the September RPP meeting, the central bank clearly signalled that it is ready to cut in October”.

“We think that more easing is needed and we expect the NBP to ease monetary policyfurther in the coming months”.

“However, given the larger rate cut today, the NBP might take a breather before it cuts again”.

“Hence, the NBP might pause in November but it might deliver 25bp in December and more next year”.

“When we look at our inflation model, we expect deflation to deepen further in the coming months while economic growth should slow further. This clearly strengthens the case for further easing”.

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Oct 10, 2014

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[OctaFX_Farid]

EUR/JPY bounced off near 136.00

FXStreet (Edinburgh) - EUR/JPY is now looking to regain part of the deep pullback during the European morning, finding quite decent support around 136.00 the figure.

EUR/JPY capped at 138.00

The cross is coming down from recent peaks in the boundaries of the key handle at 138.00, following the increasing risk appetite in the wake of the FOMC minutes. However, a sustainable break above the 138.00 mark still remains elusive, thus leaving the trade between 136.00 and 138.00.

EUR/JPY key levels

The cross is now losing 0.36% at 136.35 with the next support at 135.82 (low Sep.8) and then 135.73 (2014 low Aug.8). On the upside, a break above 137.06 (high oct.10) would open the door to 137.51 (cloud top).

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Oct 10, 2014

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[OctaFX_Farid]

EUR/JPY bounced off near 136.00

FXStreet (Edinburgh) - EUR/JPY is now looking to regain part of the deep pullback during the European morning, finding quite decent support around 136.00 the figure.

EUR/JPY capped at 138.00

The cross is coming down from recent peaks in the boundaries of the key handle at 138.00, following the increasing risk appetite in the wake of the FOMC minutes. However, a sustainable break above the 138.00 mark still remains elusive, thus leaving the trade between 136.00 and 138.00.

EUR/JPY key levels

The cross is now losing 0.36% at 136.35 with the next support at 135.82 (low Sep.8) and then 135.73 (2014 low Aug.8). On the upside, a break above 137.06 (high oct.10) would open the door to 137.51 (cloud top).

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Oct 10, 2014

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[OctaFX_Farid]

Morgan Stanley: USD remains relatively resilient - eFXnews

FXStreet (Łódź) - The eFXnews team remark that Morgan Stanley sees the USD as very resilient in the light of the recent sharp drop in US yields.

Key quotes

"'Indeed, USD’s correction has been moderate, given the extent and pace of gains seen recently, and underlines the strength of the bullish trend, in our view. We would also suggest that this robust performance is a function of USD establishing itself as an asset currency, MS argues."

"'As a result, we expect USD behavior to change, and this is likely to be most emphasized in its relationship with yields. Lower yields would not necessarily be seen as a USD negative in this scenario, as was the case with EUR in the past two years through to this May. Relative asset valuations are once again the driver of this change, favoring USD and attracting inflows,' MS clarifies."

"'The post-FOMC reaction aside, the recent decline in US yields is likely a reflection of inflows and consistent with a higher USD. The fact that these flows are the result of relative fundamentals and not a geopolitical shock – portfolio allocation to the US rather than a safe-haven flow – also implies that these trends are likely to be sustainable, in our view,' MS adds."

"'Hence, we think the medium-to-longer-term structural USD bullish trend is set to stay in place despite recent US yield developments,' MS adds."

"In line with this view, MS maintains a short EUR/USD in its strategic portfolio from 1.2920 with a revised profit-stop at 1.2840 and a target at 1.20."

'This content has been provided under specific arrangement with eFXnews.'

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Oct 10, 2014

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[OctaFX_Farid]

Morgan Stanley: USD remains relatively resilient - eFXnews

FXStreet (Łódź) - The eFXnews team remark that Morgan Stanley sees the USD as very resilient in the light of the recent sharp drop in US yields.

Key quotes

"'Indeed, USD’s correction has been moderate, given the extent and pace of gains seen recently, and underlines the strength of the bullish trend, in our view. We would also suggest that this robust performance is a function of USD establishing itself as an asset currency, MS argues."

"'As a result, we expect USD behavior to change, and this is likely to be most emphasized in its relationship with yields. Lower yields would not necessarily be seen as a USD negative in this scenario, as was the case with EUR in the past two years through to this May. Relative asset valuations are once again the driver of this change, favoring USD and attracting inflows,' MS clarifies."

"'The post-FOMC reaction aside, the recent decline in US yields is likely a reflection of inflows and consistent with a higher USD. The fact that these flows are the result of relative fundamentals and not a geopolitical shock – portfolio allocation to the US rather than a safe-haven flow – also implies that these trends are likely to be sustainable, in our view,' MS adds."

"'Hence, we think the medium-to-longer-term structural USD bullish trend is set to stay in place despite recent US yield developments,' MS adds."

"In line with this view, MS maintains a short EUR/USD in its strategic portfolio from 1.2920 with a revised profit-stop at 1.2840 and a target at 1.20."

'This content has been provided under specific arrangement with eFXnews.'

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Oct 10, 2014

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[OctaFX_Farid]

DJIA stays flat, CBOE VIX jumps higher

FXStreet (Mumbai) - The DJIA is trading flat, swinging between minor gains and losses, although the Chicago Board Options Exchange(CBOE) Volatility Index (VIX) has broken through key resistance levels.

Sharp rise in the VIX indicates that the market sentiment is jittery despite the DJIA holding ground so far. The VIX is trading 7.57% higher today at 20.18. It has comfortably breached through the key resistance levels of 18.00 and 18.99. The index appears on its way to test the recent cyclical high of 21.48. The VIX chart indicates a possibility of fresh selling in the US Equity markets.

VIX Technical levels

VIX has an immediate resistance of 20.72 (Feb 5th. high) and 21.48 (Feb 3rd. high), while the support is located at 18.99 and 18.00 levels.

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Oct 10, 2014

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[OctaFX_Farid]

DJIA stays flat, CBOE VIX jumps higher

FXStreet (Mumbai) - The DJIA is trading flat, swinging between minor gains and losses, although the Chicago Board Options Exchange(CBOE) Volatility Index (VIX) has broken through key resistance levels.

Sharp rise in the VIX indicates that the market sentiment is jittery despite the DJIA holding ground so far. The VIX is trading 7.57% higher today at 20.18. It has comfortably breached through the key resistance levels of 18.00 and 18.99. The index appears on its way to test the recent cyclical high of 21.48. The VIX chart indicates a possibility of fresh selling in the US Equity markets.

VIX Technical levels

VIX has an immediate resistance of 20.72 (Feb 5th. high) and 21.48 (Feb 3rd. high), while the support is located at 18.99 and 18.00 levels.

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Oct 10, 2014

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[OctaFX_Farid]

USD/CHF tests 0.9590 and finds some selling interest

FXStreet (San Francisco) - The US Dollar extended gains from 0.9525 to trade at daily highs around 0.9590 versus the Swiss Franc, where the pair found selling interest that launched it back to 0.9575.

Currently, USD/CHF is trading at 0.9578, up 0.37% on the day, having posted a daily high at 0.9594 and low at 0.9527. The hourly FXStreet OB/OS Index is showing overbought conditions, alongside the FXStreet Trend Index which is slightly bullish.

USD/CHF levels

Above the 0.9590, the USD/CHF will face resistances at 0.9600, 0.9625 and 0.9675. To the downside, supports are at 0.9525, 0.9500 and 0.9475.

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Oct 10, 2014

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[OctaFX_Farid]

USD/CHF tests 0.9590 and finds some selling interest

FXStreet (San Francisco) - The US Dollar extended gains from 0.9525 to trade at daily highs around 0.9590 versus the Swiss Franc, where the pair found selling interest that launched it back to 0.9575.

Currently, USD/CHF is trading at 0.9578, up 0.37% on the day, having posted a daily high at 0.9594 and low at 0.9527. The hourly FXStreet OB/OS Index is showing overbought conditions, alongside the FXStreet Trend Index which is slightly bullish.

USD/CHF levels

Above the 0.9590, the USD/CHF will face resistances at 0.9600, 0.9625 and 0.9675. To the downside, supports are at 0.9525, 0.9500 and 0.9475.

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Oct 10, 2014

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[OctaFX_Farid]

GBP/USD finds support above 1.6000

FXStreet (Córdoba) - Cable dropped further against the US dollar and printed a fresh 4-day low at 1.6006. GBP/USD found support above 1.6000 and rebounded, rising back on top of 1.6030. Greenback remains strong in the market as stocks decline in Wall Street.

GBP/USD trims weekly gains

After starting the week around 1.5960 GBP/USD jumped to the upside and on Thursday, boosted by the reaction of the market to the FOMC minutes reached 1.6225. The same day made a reversal that continued Friday.

During the last 24 hours the pair lost more than 200 pips, trimming weekly gains. Still holds above the level it had a week ago but considerably far from the highs.

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Oct 10, 2014

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[OctaFX_Farid]

GBP/USD finds support above 1.6000

FXStreet (Córdoba) - Cable dropped further against the US dollar and printed a fresh 4-day low at 1.6006. GBP/USD found support above 1.6000 and rebounded, rising back on top of 1.6030. Greenback remains strong in the market as stocks decline in Wall Street.

GBP/USD trims weekly gains

After starting the week around 1.5960 GBP/USD jumped to the upside and on Thursday, boosted by the reaction of the market to the FOMC minutes reached 1.6225. The same day made a reversal that continued Friday.

During the last 24 hours the pair lost more than 200 pips, trimming weekly gains. Still holds above the level it had a week ago but considerably far from the highs.

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Oct 10, 2014

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[OctaFX_Farid]

WTI Crude tanks further, Option traders target $77.50 by Dec

FXStreet (Mumbai) - The WTI Crude prices continue to fall towards a two and a half year low of USD 83.59/barrel hit during the last week. The prices are down 1.25% to trade at USD 84.75/barrel.

The fundamentals of weak demand, weak global growth and excess supplies continue to dominate the market sentiment. Moreover, the weak fundamentals of Crude oil are evident from the activity in the Options data which shows traders are targeting USD 77.50/barrel by December. Implied volatility of January WTI options at that level shows a 25 delta, which is a 25% portability that a $77.50 put option will end up in the money at the Dec. 16 expiration.

Moreover, the Oil and Petroleum Exporting Countries (OPEC) group has blamed the speculators for the recent slump in the Oil prices.

WTI Crude Technical levels

Crude has an immediate support of 84.09 below which prices can slump to 83.59 levels. Meanwhile, a breach of 85.00 levels on the upside, shall open doors for the re-test of 86.29 levels.

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Oct 13, 2014

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[OctaFX_Farid]

EUR/USD not there… yet

FXStreet (Edinburgh) - The common currency is now looking to consolidate below the key 1.2700 handle, with EUR/USD gyrating around 1.2690/95.

EUR/USD halfway to last week’s tops

Spot remains well poised to challenge the key barrier at 1.2700. However, if the USD weakness persists in the upcoming sessions, the pair might try to re-test recent peaks near the 1.2800 handle. “The break of the support at 1.2640 coupled with the weak daily close last Friday suggests further downside pressure for today. Expect 1.2680 to cap for a retest of the strong support at 1.2600/05 but clear break below this level appears unlikely for now”, noted market analysts at UOB Group.

EUR/USD levels to watch

At the moment the pair is up 0.49% at 1.2693 with the next resistance at 1.2698 (high Oct.13) ahead of 1.2716 (high Oct.10) and then 1.2743 (21-d MA). On the flip side, a breakdown of 1.2638 (200-h MA) would expose 1.2605 (low Oct.10) and finally 1.2583 (low Oct.7).

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Oct 13, 2014

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[OctaFX_Farid]

Eurozone Industrial Production seen dropping 1.5% - ING

FXStreet (Łódź) - Martin Van Vilet from ING expects August Eurozone Industrial Production numbers to drop further, about 1.5% on a monthly basis.

Key quotes

"The national industrial production figures released last week clearly confirmed that the industrial recovery across the Eurozone has lost significant momentum."

"Industrial production (excluding construction) in Germany fell a significant 4.3% MoM in August – admittedly partly because of the timing of school holidays."

"Industrial output in France, meanwhile, was unchanged, while Italian output rose by only 0.3%."

"Production in Spain – which the IMF thinks will outpace Germany in 2015 (we are not so sure yet) – also rose by a modest 0.2%, and although production in the Netherlands saw a much stronger rise (+1.3%), this was solely due to a sharp rise in the erratic mining component."

"Taken together, the national data point to a decline in Eurozone aggregate production, due tomorrow, of around 1.5% MoM. That would more than reverse the 1.0% MoM increase seen in July, and even with some rebound in September, it thus seems likely that the industrial sector acted as a drag on GDP in the third quarter."

"If the PMI is anything to go by, the much larger services sector fared better and should have contributed positively to GDP growth."

"So we doubt whether the overall Eurozone economy contracted in 3Q. Indeed, for the time being we have pencilled in Eurozone GDP growth of 0.1% QoQ in 3Q. Such growth, however, clearly is much too low for comfort."

"Pressure on European policymakers to deploy further monetary and renewed fiscal stimulus, therefore, looks set to continue."

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Oct 13, 2014

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[OctaFX_Farid]

Natural Gas gains, traders decrease bullish bets

FXStreet (Mumbai) - Natural Gas prices are trading higher today despite of weather forecasts indicating a low probability of extreme weather conditions.

Natural Gas is trading 0.61% higher at USD 3.883/mmbtu even as the Commodities Futures Trading Commission (CFTC) data released on Friday showed that hedge funds and money managers decreased their bullish bets in the week ending October 7. Net longs fell sharply to 6,288 contracts from 26,166 in the previous week.

The latest weather models do hint at pockets of cooler weather across the U.S. in the coming days, although the temperatures are not expected to fall to freezing levels. Consequently, the heating demand for Natural Gas may not pick up much leading to a fall in price.

Natural Gas Technical levels

Natural Gas has an immediate resistance of 3.947 (Oct 8 high), while the immediate resistance is located at 3.81 levels.

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Oct 13, 2014

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[OctaFX_Farid]

USD/JPY attempts a shy recovery early US session - FXStreet

FXStreet (Łódź) - FXStreet Chief Analyst Valeria Bednarik observes that USD/JPY has climbed a few pips above the 107.30 immediate support, but the attempts to recover are rather feeble.

Key quotes

"With no data to backup currencies’ movements, risk sentiment takes the lead, with easing concerns putting dollar under mild selling pressure."

"The EUR/USD hourly chart shows price above a bullish 20 SMA but indicators turning lower above their midlines, as gains remain limited."

"In the 4 hours chart price hovers around a flat 20 SMA as momentum continues to head south in negative territory, limiting chances of a firmer advance."

"A firmer advance beyond 1.2700 may see the pair approaching 1.2745, while risk to the downside will increase on a break below 1.2660 support now."

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Oct 13, 2014

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