Daily Market Analysis by FxGrow

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Daily Market Analysis – 14th July, 2015

By FxGrow Research & Analysis Team

 

US Dollar Gains on expectations of Fed Rate Hike this year

 

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US Dollar rose against its major counterparts after global tensions eased on the news that Eurozone leaders have reached an agreement for a new bailout package for Greece.

 

Following the Greek deal investor sentiment has improved as they are now looking at the growth divergences between the US and Europe. Safe heaven currencies such as the Japanese Yen and the Swiss Franc are also weak reflecting the investor sentiment.

 

Globally investors have shifted their focus to the US Federal Reserve as it is expected to hike interest rates later this year.

 

Fed Chairwoman Janet Yellen will provide more cues of the timing of the rate hike at her semiannual testimony to Congress on Wednesday and Thursday.

 

Fed Chairwoman Janet Yellen said in her statement last week "It will be appropriate at some point later this year to take the first step to raise the federal funds rate and thus begin normalizing monetary policy."

 

The US Dollar remains steady against the Japanese Yen as it touched a high of 123.74 today after the risks of a Greek exit from the Eurozone were avoided.

 

EURUSD touched a low of 1.0968 as trader’s reverted back to dollar buying after the easing of concerns over Greece and China.

 

Greek's 10 year sovereign yields fell to 12.01 per cent, German 10 year yields to 0.85 percent, while the 10-year US Treasury yield rose to 2.44 per cent.

 

Wall Street rallied on Greek deal with the DJIA and the S&P 500 indices rising +1.22% and +1.11% respectively. The Stoxx600 jumped a further +2%.

 

Chinese stocks rose with the Shanghai Composite rising 2.4 per cent and the Shenzhen Composite ending 4.2 per cent higher.

 

In UK CPI Inflation dropped to zero for the month of June, following the significant drop in oil prices at the beginning of this year.

 

In Germany investor confidence dropped as the ZEW index dropped to 29.7 for the month of June. ZEW economic sentiment for the Eurozone came in at 42.7 amid uncertain conditions in Europe.

 

China's Exports increased by 2.8% for the month of June as compared from the previous year. China's customs department said that the country's trade performance will improve in the second half of 2015.

 

Japan industrial production declined 3.9% in May as the world's third biggest economy faces pressure to sustain a healthy growth in the second half of 2015.

 

Crude oil is trading lower at $51.18 after Iran reached a nuclear deal which is expected to increase the supply of Iranian crude on world markets.

 

Gold is trading lower in the Europe at 1153.98, while Silver is weak at 15.35

 

14th July 2015 – 10:34hrs GMT

 

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

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Daily Market Analysis – 15th July, 2015

By FxGrow Research & Analysis Team

 

US retail sales drop in June, weighing on Fed's interest rate decision

 

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The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for June, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $442.0 billion, a decrease of 0.3 percent from the previous month.

 

“Unexpectedly weak retail sales data adds to signs that the US economy is slowing again after pulling out of the soft patch earlier in the year” - MarkIt economist Chris Williamson.

 

“The weakness of the sales data in June, alongside disappointing PMI survey data and a smaller than hoped-for rise in non-farm payrolls, all points to the economy having moved down a gear after this rebound, settling into a far weaker underlying pace of growth than was seen throughout much of last year” - MarkIt economist Chris Williamson.

 

"The numbers add to a growing body of evidence which suggests that the US economy is slowing again as we head into the second half of the year. Such a slowing will most likely persuade policymakers to hold off on raising rates until next year unless there is a swift revival of demand in coming months" - MarkIt economist Chris Williamson.

 

Chinese Stock markets fell further, with the Shanghai Composite down by -3.74% while the Shenzhen Composite lost -4.21%.

 

China's Economy Grew 7% in the second quarter of the 2015, being supported by the government's stimulus measures.

 

Bank of Japan kept its monetary policy unchanged, and downgraded its economic growth outlook for the year 2015. The Bank reduced its growth forecast to 1.7% from 2% for 2015.

 

In UK Interest rate hike is getting closer due to consistent UK economy's growth above the trend.

 

“The point at which interest rates may begin to rise is moving closer with the performance of the economy, consistent growth above trend, a firming in domestic costs, counterbalanced somewhat by disinflation imported from abroad" - Mark Carney, BoE Governor.

 

Today Greek parliament is to vote on the bailout plan and pass the proposed reforms needed to secure the loans and avoid the default from the Eurozone. If the vote passes in the Greek parliament today it will require the support of the opposition parties.

 

Greek needs to pass the bailout plan to avoid a total Banking collapse and get assistance from the European Central Bank thru Emergency Liquidity Assistance.

 

Crude oil prices have jumped to $52.62 after Iran nuclear deal.

 

Gold is trading flat in the Europe at 1154.88, while Silver is weak at 15.29

 

15th July 2015 – 10:28hrs GMT

 

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

[vic84]

NZDUSD has been trading low and it seems very bearish, it might go further down.

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Daily Market Analysis – 16th July, 2015

By FxGrow Research & Analysis Team

 

Greek Parliament approves Bailout package

 

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Greek parliament has approved the €86 billion bailout package in a tense voting session with 229 members voting Yes, 64 voting No and 6 members refrained from voting.

 

The new bailout package demands tough economic reforms imposing sweeping sales tax hikes, reforms in pensions and a series of austerity measures as imposed by the European Union.

 

"I had specific choices before me: one was to accept a deal I disagree with on many points, another was a disorderly default. We will not back down from our pledge to fight to the end for the right of the working people. There is no other option but for all of us to share the weight of this responsibility" - Greek PM Alexis Tsipras.

 

The new third bailout package for Greece needs to be passed by the domestic parliaments of the other 19 members of the Eurozone before Greece can receive the Funds. Germany is expected to vote on the new bailout package on Friday.

 

Eurozone finance ministers will hold a conference call on Thursday to discuss the next steps in finalizing Greece’s third bailout of 86 billion euros and prevent the Greek Bank's from collapsing.

 

“We support the government but we disagree with this new memorandum, with these measures. We are the heart and soul of Syriza" - Greek Energy minister.

 

The European Central Bank is expected to hold a meeting of its governing council to extend financial support to Greek banks, which have remained closed for the last ten days.

 

"In the absence of a better solution, the European Commission has proposed to the Council to grant short-term emergency assistance to Greece from the EFSM" - European Commission VP, Valdis Dombrovskis.

 

Yesterday, Fed Chairwoman Janet Yellen said before the House of Representatives that a rate hike in 2015 is still on the table if economy evolves as expected.

 

"If the economy evolves as we expect, economic conditions likely would make it appropriate at some point this year to raise the federal funds rate target" -Janet Yellen, Fed Chair.

 

Following the comments US Dollar was higher against its major counterparts with the EURUSD trading at 1.0903 and AUDUSD at 0.7391 in the European trading session.

 

In US Wholesale prices rose to 0.4% for the month of June according to the Labor department. Meanwhile, core prices increased by 0.3% for the same period. A pickup in the prices would reinforce Fed's view of raising the interest rates this year.

 

In UK unemployment rate climbed to 5.6% for the month of June, the first time in more than two years. With good growth prospects the Bank of England has signaled that it is moving closer to hike interest rate this year.

 

The Bank of Canada has cut its interest rate by 25 basis points to 0.50%, and downgraded GDP forecast to 1% in 2015.

 

"Additional monetary stimulus is required at this time to help return the economy to full capacity and inflation sustainably to target" -Bank of Canada.

 

Crude oil prices have moved higher to $51.77 after Greek bailout vote.

 

Gold is trading lower in the Europe at 1144.79, while Silver is weak at 14.98

 

16th July 2015 – 10:42hrs GMT

 

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

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Daily Market Analysis – 17th July, 2015

By FxGrow Research & Analysis Team

 

ECB Raises ELA to Greek Banks by 900 Million Euros

 

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European Central Bank President Mario Draghi raised Emergency Liquidity Assistance to Greek Banks providing an additional 900 million euros that would allow Greek banks to reopen.

 

The ECB has hiked its ELA to Greek banks after the Greek parliament voted in favor of the austerity reforms and the third bailout program for Greece.

 

"If things continue to proceed in a positive way as they have done in the last two days we will have a phase during the Bank of Greece and the ECB, which are working very actively in monitoring the situation, will look at exactly the needs of the Greek economy" - Mario Draghi, ECB President.

 

The European Central Bank has kept its interest rates unchanged in an effort to counter deflation as per analyst expectations.

 

"Recent developments in financial markets, which partly reflect greater uncertainty, have not changed the Governing Council's assessment of a broadening of the euro area's economic recovery and a gradual increase in inflation rates over the coming years" - Mario Draghi, ECB President.

 

"As explained on previous occasions, our monthly asset purchases of EUR60 billion are intended to run until the end of September 2016 and in any case until we see a sustained adjustment in the path of inflation that is consistent with our aim of achieving inflation rates below but close to 2 percent over the medium term" - Mario Draghi, ECB President.

 

"Several positive things have happened that could justify us to increase the ELA we approved today. Incidentally I didn't say how much. We substantially accommodated the request put forward by the bank of Greece recalibrated over one week. The increase would be €900m over one week" - Mario Draghi, ECB President.

 

Greek banks will reopen on Monday after being closed for nearly three weeks. Greek Deputy Finance Minister Madras said that withdrawal restrictions will remain in place.

 

Bank of England Governor Mark Carney said that the UK interest rates could rise around the end of this year.

 

"In my view, the decision as to when to start such a process of adjustment will likely come into sharper relief around the turn of this year" - Mark Carney, BoE Governor.

 

In US Jobless Claims declined to 281K last week indicating improving labour market conditions.

 

"If the economy evolves as we expect, economic conditions likely would make it appropriate at some point this year to raise the federal funds rate target" -Janet Yellen, Fed Chair.

 

In New Zealand Inflation Rose to 0.4% in the second quarter of the 2015, but remained well below the target range of 1% to 3% putting pressure on the Reserve Bank of New Zealand to cut interest rates.

 

Crude oil prices have moved lower to $50.83 as investors await weekly US Oil rig count.

 

Gold is trading lower in the Europe at 1143.85, while Silver is weak at 14.98

 

17th July 2015 – 09:26hrs GMT

 

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

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Daily Market Analysis – 20th July, 2015

By FxGrow Research & Analysis Team

 

Gold plunges to Five-Year Low as US Interest Rate Rise looms

 

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Gold plunged to its lowest level in more than five years in the early Asian trading session as investor sentiments were hit on the backdrop of a strong US dollar amid prospects for higher US interest rates in the coming months.

 

The precious metal fell to drop as much as 5.5 percent touching a low of $1072, its weakest level since March 2010 when Shanghai Gold exchange opened trading early this morning.

 

Gold is considered as a safe haven investment in times of financial uncertainty, but is seen as a less attractive option in the times of rising interest rates. The prices of Gold tumbled on speculation that Fed is moving closer to raising interest rates after eight years.

 

“In the physical market this would not be possible because that would consume a whole lot of physical gold. But in the futures market, because it's all digital, as long as you find a buyer to bid for it then that would be possible” - Luke Chua, Bullion Star Singapore.

 

"Gold market looks very technically weak and the biggest buyer of all, China, is now selling gold as opposed to buying it on price dips. That's a recipe for weaker prices" - Victor Thianpiriya, ANZ Bank Singapore.

 

"I think there's further downside on the price once the dust settles and the focus shifts back to US dollar strength and the interest rate outlook. The risk of it hitting $1,050 is clearly elevated." - Victor Thianpiriya, ANZ Bank Singapore.

 

Greek Banks opened today after being closed for three weeks to restore normalcy with withdrawal limits remaining in place of €420 in a week.

 

“Capital controls and restrictions on withdrawals will remain in place but we are entering a new stage which we all hope will be one of normality” - Louka Katseli, Greek bank association.

 

Canada's annual inflation rose 1.0% in the month of June, while core inflation climbed 2.3% more than analyst expectations.

 

"Expectations are more biased for another rate cut. Core CPI is less meaningful to the bank than non-energy exports and gross domestic product at this stage of the game" - Jack Spitz, National Bank of Canada.

 

The New Zealand Dollar is under selling pressure on speculations that the Reserve Bank of New Zealand (RBNZ) is set to cut interest rates on Wednesday.

 

NZDUSD is trading at 0.6580 in the European trading session after it opened the week lower at 0.6505 today.

 

Crude oil prices have moved lower to $50.98 as Saudi Arabian exports fell to the lowest in five months.

 

Gold is trading lower in the Europe at 1111.47, while Silver is weak at 14.73

 

20th July 2015 – 10:31hrs GMT

 

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

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Daily Market Analysis – 21st July, 2015

By FxGrow Research & Analysis Team

 

Reserve Bank of Australia minutes see steady Interest rates

 

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Reserve Bank of Australia released its minutes from the July 7 meeting and the Board decided to leave the cash rate unchanged at 2.0 per cent.

 

Members noted that the exchange rate had thus far offered less assistance than would normally be expected in achieving balanced growth in the economy and that further depreciation seemed both likely and necessary - RBA minutes.

 

Members noted that global economic conditions remained consistent with growth in Australia's major trading partners being around average over the period ahead. Global financial conditions were very accommodative and would remain so even in the event that the Federal Reserve started to raise its policy interest rate later in the year - RBA minutes.

 

Expectations about the timing of the US Federal Reserve's first increase in the federal funds rate were little changed over the past month. Market pricing continued to suggest that the first increase would occur around the end of 2015. Although commentary by Federal Reserve officials suggested that it could be a little sooner than that, they continued to emphasize that the exact timing of the first increase would be less important than the pace of subsequent increases, which were expected to be gradual - RBA minutes.

 

In light of current and prospective economic circumstances and financial conditions, the Board judged that leaving the cash rate unchanged was appropriate - RBA minutes.

 

Greece received emergency bridging loan of €7.2bn from the European Union which was used to repay its debts. The Greek government made payments of €4.2bn to the European Central Bank, which consisted of €3.5bn loan plus €0.7bn interest.

 

Greece cleared its overdue debt repayments of 2.05 billion euros to the International Monetary Fund.

 

"The fund stands ready to continue assisting Greece in its efforts to return to financial stability and growth" - IMF.

 

Meanwhile heavy rush was seen in Greek Banks as queues formed outside bank branches as restrictions remain in place.

 

“Capital controls and restrictions on withdrawals will remain in place, but we are entering a new stage which we all hope will be one of normality” Louka Katseli, head of the Greek banking association.

 

Canada's Wholesale Trade fell for the month of May to C$54.5 billion led by a decrease in motor vehicle sales, according to Statistics Canada.

 

"Expectations are more biased for another rate cut" - Jack Spitz, National Bank of Canada.

 

UK public sector net borrowing rose to £8.58 billion for the month of June according to the Office for National Statistics.

 

Gold prices have consolidated near the $1100 level as investors shift their focus on prospects of higher interest rates in the US.

 

Crude oil prices have moved lower to $50.44 on supply concerns.

 

Gold is trading lower in the Europe at 1106.80, while Silver is weak at 14.82

 

21st July 2015 – 11:12hrs GMT

 

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

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Daily Market Analysis – 22nd July, 2015

By FxGrow Research & Analysis Team

 

Bank of England policymakers edge towards Rate hike

 

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Bank of England released minutes from its July policy meeting which showed that all the nine monetary policy committee members voted unanimously to holding both interest rate at its record low of 0.50 percent and the amount of asset purchases at 375 billion pounds.

 

In light of recent developments, all members thought it appropriate to leave the stance of monetary policy unchanged at this meeting. For a number of members, the balance of risks to medium-term inflation relative to the 2% target was becoming more skewed to the upside at the current level of Bank Rate - Bank of England.

 

The sterling effective exchange rate had risen by close to 3% over the month. The actual path that Bank Rate would follow over the next few years was uncertain, and would depend on the economic circumstances - Bank of England.

 

UK forward short-term interest rates had fallen following the Greek referendum and over the month. Absent that uncertainty, the decision between holding Bank rate at its current level versus a small increase was becoming more finely balanced - Bank of England.

 

For a number of members, the balance of risks to medium-term inflation relative to the 2 percent target was becoming more skewed to the upside at the current level of bank rate - Bank of England.

 

After the release of the BoE minutes the pound appreciated 0.4 percent versus the US dollar and is currently trading at $1.5627 in the European trading session.

 

Investors are expecting the interest rates in UK to increase in the May 2016, as indicated by the BOE Governor Mark Carney.

 

Greece's PM Alexis Tsipras seeks support of the Syriza party ahead of the crucial vote on reforms. The vote is expected to be passed with the support of opposition parties to start talks on a new €86bn bailout package for Greece.

 

EURUSD has recovered from a low of 1.0813 to trade at 1.0930 in the European trading session ahead of the crucial Greek vote.

 

"We have agreed to lighten the interest burden, lengthen the maturity of the Greek debt. It's something that can be done when the time comes, after the negotiation of a good program of development and assistance" - Pierre Moscovici, European Union Commissioner.

 

Reserve Bank of Australia Governor Glenn Stevens said an interest-rate cut is possible as the central bank prefers a weaker Australian dollar to support business and industry.

 

"That is why we have felt that, on balance, a somewhat lower exchange rate was likely to be a part of the necessary adjustment. That adjustment seems to be occurring, with relatively little disruption, and is having an expansionary effect" -Glenn Stevens, RBA Governor.

 

In UK public sector borrowing declined to 9.4 billion pounds for the month of June according to the office for National Statistics.

 

Swiss trade surplus rose to 3.578 billion francs for the month of June according to the Federal Statistics Office.

 

"The economic outlook for Switzerland has dimmed again, and while analysts expect to see the strongest economic momentum in the Eurozone over the next six months, the present state of the Eurozone economy is still rated as poor" - Credit Suisse

 

Crude oil prices have moved lower to $50.20 after industry data showed rise in US crude stocks.

 

Gold is trading lower in the Europe at 1089.54, while Silver is weak at 14.70

 

22nd July 2015 – 11:56hrs GMT

 

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

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Daily Market Analysis – 23rd July, 2015

By FxGrow Research & Analysis Team

 

Reserve Bank of New Zealand Cuts Rates a Second Time

 

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The Reserve Bank today reduced the Official Cash Rate (OCR) by 25 basis points to 3.0 percent.

 

Global economic growth remains moderate, with only a gradual pickup in activity forecast. Recent developments in China and Europe led to heightened uncertainty and increased financial market volatility. Particular uncertainty remains around the impact of the expected tightening in US monetary policy - Reserve Bank of New Zealand.

 

New Zealand’s economy is currently growing at an annual rate of around 2.5 percent, supported by low interest rates, construction activity, and high net immigration - Reserve Bank of New Zealand.

 

The New Zealand dollar has declined significantly since April and, along with lower interest rates, has led to an easing in monetary conditions. While the currency depreciation will provide support to the export and import competing sectors, further depreciation is necessary given the weakness in export commodity prices - - Reserve Bank of New Zealand.

 

A reduction in the OCR is warranted by the softening in the economic outlook and low inflation. At this point, some further easing seems likely - Reserve Bank of New Zealand.

 

Following the rate cut by the RBNZ New Zealand Dollar climbed to a one week high as NZDUSD touched a high of 0.6691 in the European trading session today.

 

Australian Dollar has declined over the week mainly led by a weakness in the commodity prices and as US economic data boosts expectations for higher interest rates by the Federal Reserve.

 

Greek parliament has approved the second package of reform measures required for getting the third bailout package of €86bn from the European Union.

 

The crucial vote saw 230 members voting in the favor, 63 members against it and 5 members abstained from the voting.

 

Following the vote EURUSD rose from a low of 1.0923 to trade at 1.0991 in the European trading session.

 

The Standard & Poor's rating agency has upgraded the credit rating of Greece from CCC- to CCC + with a stable outlook after Greece repaid the IMF and ECB.

 

"The upgrade reflects Greece's improved liquidity perspective following last week's consent, in principle, from the Euro group to the three-year loan program for Greece via the ESM, alongside the provision of €7.16 billion in three-month bridge financing to the Greek government, which it used on July 20 to clear its arrears with the IMF and the Bank of Greece and to repay the ECB” - Standard & Poor's rating agency.

 

In UK Retail Sales fell 0.2% in June according to the Office for National Statistics, London.

 

GBPUSD declined from a peak of 1.5665 to touch a low of 1.5589 due to unexpected drop in the Retail sales.

 

US Home Resales climbed to their highest level in 8 years in the month of June. Existing Home sales rose 3.2% to an annual rate of 5.49 million.

 

Crude oil prices have moved lower to $49.19 after US crude oil stocks rose 2.5 million barrels according to the EIA weekly report.

 

Gold has recovered its losses and is currently trading at 1101.80, while Silver is flat at 14.87

 

23rd July 2015 – 10:20hrs GMT

 

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

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Daily Market Analysis – 24th July, 2015

By FxGrow Research & Analysis Team

 

Gold prices hit 5-year lows on weak China PMI, Global cues

 

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Gold prices fell in the Asian trading session as globally investors see a slowdown in the Chinese Economy which is one of the top buyers of the precious metal.

 

Gold touched a record low of $1078.67 in the early trading session and consolidated at $1081.40in the European trading session today.

 

The China Purchasing Managers Index (PMI) showed a decline to 48.2 a 15-month-low, well below analyst expectation of 49.7 on backdrop of the recent stock market crash and weak global exports.

 

“In our opinion, the movements in the gold price earlier this year reflected market expectations that the events in Greece or the pullback in Chinese stocks were local – not global – risks and that the possibility of a disorderly outcome was/is still low. This does not necessarily mean that the market is correct. It simply reflects its current view” - World Gold Council.

 

“Investors now seem focused on the direction of the US dollar and the Fed’s monetary policy stance... The gold price already reflects a possible rate hike later this year and that the US-centered perspective is missing a more comprehensive view of the market” - World Gold Council.

 

“Whether it happens over before the end of the year, or later, we believe that the gold price should already incorporate, at least in good part, current market expectations of a rate hike. In our view, the gold price may be less susceptible to the first rate hike when it actually occurs and the main focus will be the pace at which the Fed signals it will continue raising rates” - World Gold Council.

 

“Should the conditions change and the risk of contagion or the unintended consequences of a Greek exit increase, we would expect to see a stronger reaction from the gold price. As a high quality, liquid asset, it is likely that many investors would use gold to protect wealth. Similarly, the recent Chinese stock market sell-off hasn’t resulted in a large uptick in the gold price thus far. A more substantial market correction in China, however, could spill over to other economies, increase uncertainty and make gold a more relevant hedge” - World Gold Council.

 

The markets are now focusing on a Federal Reserve rate hike in September this year as geopolitical tension appears eased for now.

 

"What a conundrum we face: commodities are shouting that the global economy is deteriorating, key emerging markets are already seeing major volatility, and yet the world's most important central bank is close to tightening monetary policy" - Michael Every, Rabobank

 

Following the Weak China PMI Australian Dollar has dropped to a low of $0.7285 in the European trading session, the lowest levels since 2009.

 

Crude oil prices have moved lower to $48.64 on concerns of global oversupply and weak demand.

 

Gold prices tumbled to 5 year low and is currently trading at 1079.92, while Silver is weak at 14.49

 

24th July 2015 – 10:55hrs GMT

 

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

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Daily Market Analysis – 27th July, 2015

By FxGrow Research & Analysis Team

 

US Dollar weak ahead of FOMC Rate Decision

 

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The US Dollar is weak ahead of the much awaited Federal Open Market Committee policy meeting this week on Wednesday.

 

According to the Analyst expectations 80% believe that Fed will hike interest rates in September and give a clear direction to the future rate hikes.

 

The Fed officials will meet on Tuesday and Wednesday and issue a statement at the conclusion of Wednesday’s meeting. Investors will be looking for directions as to whether the Fed is moving closer to raising interest rates in September this year.

 

Globally investors seem to be cautious if Fed fails to give any indication of a September rake hike in its policy meeting on Wednesday.

 

In the FOMC statement, look for only minor cosmetic changes to the post-meeting communique... do not expect policymakers to provide any new clues with regard to a potential rate hike in September - Deutsche bank.

 

In the minutes to the April meeting the FOMC had a discussion about whether or not to signal in the statements leading up to liftoff that a rate hike is likely coming in the near term. The Committee concluded that it would not signal a rate hike in the meeting prior to liftoff. Instead, the first hike would be decided on a meeting-by-meeting basis - JP Morgan.

 

The July FOMC statement should emphasize data dependence and eschew any overt signals about the timing of liftoff. We look for a cautiously optimistic assessment of the outlook as data have been somewhat more mixed since the June meeting. With the market pricing less than a 40% chance of a September hike, July communications should push those odds up slightly - Bank of America.

 

At issue is whether the FOMC will alter its forward guidance to prepare the markets explicitly for a near-term rate hike. If the Committee feels confident it can start normalizing policy in September, which has been our forecasted lift-off date, we believe it will adjust the language - Credit Suisse.

 

The Euro zone's manufacturing sector declined as the PMI for the Euro area came in at 52.2 for the month of July. German PMI fell to 52.2 while French PMI fell to 49.6 in the month of July.

 

"Eurozone economic growth lost only slight momentum in July amid the rollercoaster events of the Greek debt crisis during the month. The rate of expansion remained reassuringly robust to suggest that it was by-and-large 'business as usual' for the region as a whole" - Chris Williamson, chief economist at Markit.

 

Crude oil prices have moved lower to $47.87 due to a weak trend in Asia and slump in the manufacturing sector in China.

 

Gold has recovered its losses and is currently trading at 1099.57, while Silver is flat at 14.68

 

27th July 2015 – 09:55hrs GMT

 

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

[FxGrow Support]

Daily Market Analysis – 28th July, 2015

By FxGrow Research & Analysis Team

 

China Slowdown worries Global Investors

 

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In China growth has fallen to the lowest level since 2009 as Shanghai stocks plunged by 8.48% on Monday, in spite of government efforts as the world’s second largest economy is heading towards a slowdown.

 

Globally investors are worried that the slowdown in China will pull other major economies including the US and Japan as Europe is already under pressure from its member countries.

 

Major concerns are that the foreign trade between US and China may get affected and the slowdown will affect industries in USA. Many of US companies are involved in trade with China which may get affected.

 

As the economy of China is driven by debt, the slowdown will start a financial crisis which could spread to the other parts of the world.

 

"Even if China's economy maintained its growth rate, the main contribution would be from public investment, so the effect on Asian economies and Japan's exports warrants due attention. The slowdown in exports and output are likely temporary" - Bank of Japan Deputy Governor Hiroshi Nakaso.

 

Many U.S. consumer companies are brushing aside worries that China's weakening economy and sputtering stock market will dramatically damage their bottom lines even with early trouble signs in recent earnings reports - Reuters.

 

The Chinese economy has faced difficulties this year as decelerating growth in factory output, retail sales and domestic investment has been compounded by a slowing property market - Reuters.

 

A slowdown in China will have a spillover effect on many countries including USA, UK, Australia, India and Europe.

 

In China Manufacturing activity plunged in the month of July to 48.2 hitting a 15 month low showing signs of a slowdown in the world’s second largest economy.

 

Greek Prime Minister Alexis Tsipras seeks support of the Syriza party to tackle the new 86billion euro EU-IMF bailout.

 

"Collective, democratic regrouping procedures are called for. Our strategy must be clarified... The congress procedure must be set into motion as soon as possible" - Greek Prime Minister Alexis Tsipras.

 

Greek PM is aiming to strike a deal with its European creditors soon, before dealing with the internal conflicts in the party.

 

Crude Oil is trading lower at $47.13 on China stock market collapse and oversupply concerns.

 

Gold is trading lower in the Europe at 1094.60, while Silver is weak 14.57

 

28th July 2015 – 03:02hrs GMT

 

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

[FxGrow Support]

Daily Market Analysis – 30th July, 2015

By FxGrow Research & Analysis Team

 

FOMC - September Rate Hike Remains Open

 

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Federal Open Market Committee (FOMC) released its policy statement which showed that the members are locked in a debate on the timing of the rate hike as the US labor market continues to improve with solid job gains and declining unemployment.

 

The statement from the July meeting of FOMC suggests that September rate hike remains open as FOMC is on track to deliver a 25bp rate hike at the next meeting in September.

 

Information received since the Federal Open Market Committee met in June indicates that economic activity has been expanding moderately in recent months. The labor market continued to improve, with solid job gains and declining unemployment - FOMC.

 

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators continuing to move toward levels the Committee judges consistent with its dual mandate - FOMC.

 

To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate. In determining how long to maintain this target range, the Committee will assess progress - both realized and expected - toward its objectives of maximum employment and 2 percent inflation - FOMC.

 

When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent. The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run - FOMC.

 

Following the FOMC statement US dollar rose against its major counterparts with EURUSD touching 1.0948 and GBPUSD 1.5593 in the European trading session today. USDJPY crossed the 124 handle to reach 124.20 while NZDUSD is trading at 0.6614

 

Global equity markets are up with the Dow Jones industrial average up by 121.12 points to close at 17,751.39; S&P 500 gained 15.32 points to close at 2,108.57; the Shanghai Composite index was up 0.7% to 3,819.27; the Nikkei Stock Average was up 1.1%; Australia’s S&P ASX 200 was up 0.6% today as Fed remains on track to hike interest rates later this year.

 

Greek PM Alexis Tsipras is facing opposition from Syriza party over the €86bn bailout deal and a series of economic reforms as demanded by its European creditors.

 

"I would be the last person to want elections, if I had the secured parliamentary majority to make it through to the end of the four-year term" - Greek PM Alexis Tsipras.

 

German consumer confidence index remained flat at 10.1 points amid uncertainty about Greece's financial stability.

 

"German consumers apparently assume that the hard-won solution in the debt dispute with Greece will have negative consequences on the German economy" - GfK analyst.

 

UK Retail sales growth slowed in the month of July according to a report by the Confederation of British Industry (CBI).

 

CBI Retail sales balance dropped to +21 in July while analysts expectations were for a rise to +30.

 

Crude oil prices have stabilized at $48.91 following the FOMC statement.

 

Gold is trading lower in the Europe at 1086.71, while Silver is flat at 14.67

 

30th July 2015 – 07:57hrs GMT

 

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

[FxGrow Support]

Daily Market Analysis – 31st July, 2015

By FxGrow Research & Analysis Team

 

Greek Bailout - IMF won't back Greek deal without reforms

 

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The International Monetary Fund said after its board meeting on Wednesday that it cannot officially join the €86bn third bailout deal for Greece as the country’s debt levels are unsustainable.

 

"As we've said before, the IMF can only support a program that is comprehensive. What do we mean? We mean a program that ensures medium-term sustainability" - IMF spokesperson, Angela Gaviria.

 

"In order to ensure that sustainability, that medium-term sustainability, there's a need for difficult decisions on both sides and by both sides. I mean, difficult decisions in Greece regarding reforms, and difficult decisions for Greece's European partners about debt relief” - IMF spokesperson, Angela Gaviria.

 

“According to its own rules, the IMF cannot participate in any new bailout. I mean, they’ve already violated their rules twice to do so, but I don’t think they will do it a third time” - Greek finance minister.

 

Germany has insisted that IMF has to be involved in the new 86 billion euro bailout deal.

 

Greece needs to repay 3.2 billion euro to the European Central Bank on August 20 and with the recent IMF move will make it difficult for Greece to receive the new bailout funds in time.

 

"There is a need for difficult decisions on both sides... difficult decisions in Greece regarding reforms, and difficult decisions among Greece's European partners about debt relief" - IMF official.

 

Greece's talks with its International creditors for a €86bn third bailout deal continue with top officials from the European Union and International Monetary Fund meeting key ministers in Athens.

 

Greek Prime Minister Alexis Tsipras is seeking support from Syriza party for accepting the tough bailout as demanded by its European creditors.

 

“We are telling the Greek people loud and clear and with no remorse that this is the deal we managed to bring to them and if there is someone who thinks that they could have achieved a better deal, let them come out and say that” - Greek PM Alexis Tsipras.

 

US Economy grew by 2.3% in the second quarter of 2015 according to the Commerce Department. Initial jobless claims rose by 12K in the week ended July 25 according to the Labor Department.

 

In Japan household spending declined for the month of June showing signs of contraction in the world's third biggest economy. Annual core consumer inflation rose 0.1% in June.

 

"There's a risk the recent softness in exports and output may hurt corporate sentiment just when companies were beginning to turn more aggressive on investment" - Koji Ishida, Bank of Japan board member.

 

New Zealand Business Confidence declined to the lowest level in 6 years according to ANZ Business Outlook.

 

Crude oil prices fell to $47.66 on concerns of oversupply after OPEC indicated there would be no cuts in production.

 

Gold is trading lower in the Europe at 1083.44, while Silver is weak at 14.62

 

31st July 2015 – 12:23hrs GMT

 

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

[FxGrow Support]

Daily Market Analysis – 03rd Aug, 2015

By FxGrow Research & Analysis Team

 

US Consumer Sentiment declines to the lowest level in the last eight months

 

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Consumer confidence slipped a bit in the July 2015 survey. A disappointing pace of economic growth was the main reason for the small decline in consumer confidence - University of Michigan.

 

The Sentiment Index was 93.1 in the July 2015 survey, down from 96.1 in June. A disappointing pace of economic growth was the main reason for the small decline in consumer confidence. Importantly, consumers still anticipate that the expansion will continue - University of Michigan.

 

While expected changes in unemployment have been trendless at positive levels in the past year, the July survey was the first since last September that consumers on balance expected no significant change in the rate of joblessness during the year ahead - University of Michigan.

 

US economy growth has been low this year, with an annual rate of growth at just 0.6% from January to March 2015. Most of the economists still see that the Federal Reserve will raise its interest rates later this year.

 

Gold has opened the week lower with prices down as much as 7 percent after Federal Reserve indicated the prospects of raising its interest rates this year.

 

Investors are awaiting the US Non-Farm Payrolls data this week which will provide fresh clues on the timing of the rate hike and the strength of the US economy.

 

In China manufacturing activity declined to the lowest level in 2 years showing signs of a further slowdown in the later part of the year. Caixin manufacturing PMI declined to 47.8 in the month of July the weakest level seen since 2013.

 

Eurozone Consumer Inflation rose to 1.0%, while the unemployment rate remained at 11.1%

 

In Canada Economic output shrank 0.2% in May according to the data released by the Statistics Canada.

 

Greek Stock markets opened today after a 5 - week shutdown, with restriction put in place due to capital controls.

 

The Greek benchmark index slumped by 19 percent to 649.48 reaching the lowest levels seen since September 2012.

 

Greek Banking sector was in spotlight as their shares were down due to Recapitalization, Bad debts and they are not expected to make any profits this year.

 

Crude oil prices fell to $46.41 on weak China data and oversupply concerns.

 

Gold is trading lower in the Europe at 1092.90, while Silver is weak at 14.69

 

03rd Aug 2015 – 10:14hrs GMT

 

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

[FxGrow Support]

Daily Market Analysis – 04th Aug, 2015

By FxGrow Research & Analysis Team

 

Reserve Bank of Australia holds rates steady at 2 percent

 

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At its meeting today, the Board decided to leave the cash rate unchanged at 2.0 percent - Reserve Bank of Australia.

 

The global economy is expanding at a moderate pace, but some key commodity prices are much lower than a year ago. Much of this trend appears to reflect increased supply, including from Australia. Australia's terms of trade are falling nonetheless - Reserve Bank of Australia.

 

The Federal Reserve is expected to start increasing its policy rate later this year, but some other major central banks are continuing to ease policy. Hence, global financial conditions remain very accommodative. Despite fluctuations in markets associated with the respective developments in China and Greece, long-term borrowing rates for most sovereigns and creditworthy private borrowers remain remarkably low - Reserve Bank of Australia.

 

In Australia, the available information suggests that the economy has continued to grow. Overall, the economy is likely to be operating with a degree of spare capacity for some time yet. Recent information confirms that domestic inflationary pressures have been contained. In such circumstances, monetary policy needs to be accommodative. Low interest rates are acting to support borrowing and spending - Reserve Bank of Australia.

 

Further information on economic and financial conditions to be received over the period ahead will inform the Board's ongoing assessment of the outlook and hence whether the current stance of policy will most effectively foster sustainable growth and inflation consistent with the target - Reserve Bank of Australia.

 

Following the news AUDUSD soared and is currently trading at 0.7382 in the European trading session.

 

The Euro zone manufacturing PMI came in at 52.4 for the month of July as the manufacturing sector continues to grow amid Greek debt crisis.

 

"Policymakers will be reassured by the robust growth rates seen in these countries and the resilience of the manufacturing sector as a whole, especially as growth is likely to pick up again now that Greece has jumped its latest hurdle in the ongoing debt crisis" - Chris Williamson, chief economist at Markit.

 

UK Manufacturing PMI rose to 51.9 for the month of July as the British economy continues to gain momentum.

 

"Although a tick higher in the headline PMI breaks the decelerating trend in UK manufacturing, growth in the sector remains near-stagnant and suggests that the sector is continuing to act as a drag on the economy" - Rob Dobson, Markit.

 

Crude oil is trading lower at $45.87 on slowdown in China and oversupply concerns.

 

Gold is trading lower in the Europe at 1092.85, while Silver is weak at 14.55

 

04th Aug 2015 – 09:50hrs GMT

 

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

[FxGrow Support]

Daily Market Analysis – 05th Aug, 2015

By FxGrow Research & Analysis Team

 

Greece in severe depression after third bailout

 

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Greece is trapped in a prolonged and severe depression after securing the third bailout from its European creditors. The country will need a debt write-down of €95 billion to avoid a permanent recession according to the National Institute of Economic and Social Research (NIESR).

 

“We don’t see Greece getting back to the level it was when it joined the euro in 2001, let alone anywhere near where it was before this crisis struck, so this is a prolonged and severe depression for Greece” - Jack Meaning, NIESR.

 

“Certainly, as the prospects for Greece deteriorate while inside the euro area, questions over Greece remaining a member will persist” - NIESR.

 

Greek bank shares sold off sharply for the third day in a row on Wednesday with buyers yet to emerge on a scale large enough to counter continued dumping of the stocks - Reuters.

 

Greece's banks have seen deposits severely depleted as Greeks pulled out their euros for fear they would be forcibly converted into a new drachma outside the euro zone. The banks have been propped up by emergency money from the European Central Bank - Reuters.

 

Greece's dismal economic prospects may also weigh on the market. The European Commission says the Greek economy will shrink by 2 to 4 percent this year, a return to the recession that plagued the country for six years until 2014 - Reuters.

 

EURUSD is down from the yesterday’s high of 1.0985 to trade at 1.0877 in the European trading session today.

 

US Dollar is stronger after comments from Atlanta Fed President Dennis Lockhart said that the US economy was ready for the first rate hike in September.

 

UK PMI services declined to 57.4 in the month of July. Investors are awaiting the Bank of England quarterly inflation report to know the central bank’s growth and inflation outlook.

 

UK construction PMI fell to 57.1 for the month of July amid weak demands. Shortage of new housing and increasing demand has pushed house prices upwards.

 

"Commercial activity was a key growth driver during July, which partly offset ongoing weakness in civil engineering and softer residential building trends" - Tim Moore, Markit.

 

New Zealand unemployment rate rose to 5.9% as the number of n ew jobs created could not meet the growing demand. It is expected that the Reserve Bank of New Zealand will consider further monetary policy easing.

 

"Despite lower quarterly growth, this is still the 11th consecutive quarter of employment growth, making it the second-longest period of growth since the period between 1992 and 1996" - Diane Ramsay, New Zealand.

 

In China services sector rose as Caixin services PMI surged to 53.8 in July, showing a positive sign in the world's second biggest economy.

 

Crude oil is trading lower at $46.20 after Iran’s oil minister said the country could boost output within a week of the lifting of international sanctions.

 

Gold is trading lower in the Europe at 1089.75, while Silver is flat at 14.61

 

05th Aug 2015 – 13:13hrs GMT

 

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

[FxGrow Support]

Daily Market Analysis – 07th Aug, 2015

By FxGrow Research & Analysis Team

 

Bank of England maintains Bank Rate at 0.5% and the size of the Asset Purchase Programme at £375 billion

 

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The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy in order to meet the 2% inflation target and in a way that helps to sustain growth and employment. At its meeting ending on 5 August 2015, the MPC voted by a majority of 8-1 to maintain Bank Rate at 0.5%. The Committee voted unanimously to maintain the stock of purchased assets financed by the issuance of central bank reserves at £375 billion, and so to reinvest the £16.9 billion of cash flows associated with the redemption of the September 2015 gilt held in the Asset Purchase Facility - Bank of England.

 

Robust private domestic demand is expected to produce sufficient momentum to eliminate the margin of spare capacity over the next year or so, despite the continuing fiscal consolidation and modest global growth. This is judged likely to generate the rise in domestic costs expected to be necessary to return inflation to the target in the medium term - Bank of England.

 

There had been a range of influences on international financial markets over the month, including: reactions to news on the progress of negotiations between the Greek government and its creditors; falls in global commodity prices; and large moves in Chinese equity prices. There had been some associated volatility in UK equity markets within the month - Bank of England.

 

Following the news GBPUSD plunged to a low of 1.5465 yesterday and is currently trading at 1.5517 in the European trading session.

 

"It would have been imprudent to push through a rate rise at this moment when our economic recovery remains in need of care and encouragement" - John Longworth, British Chambers of Commerce.

 

"Rates will eventually have to rise and when they do, it should be done slowly and steadily. Until that moment, the Bank of England is right to keep interest rates at current levels" - John Longworth, British Chambers of Commerce.

 

Globally Investors are awaiting the Non-Farm Payrolls report due to be released at 12:30 GMT today. US NFP is expected to come at 225K and Unemployment rate is expected to stay steady at 5.3%

 

This month Nonfarm Payroll release will decide the timing of the rate hike by the Federal Reserve this year.

 

A better than expected report will see US Dollar gaining ground and EURUSD is expected to touch 1.0800 on strong NFP data.

 

Crude oil is trading lower at $44.73 on oversupply concerns.

 

Gold is trading higher in the Europe at 1090.91, while Silver is up at 14.75

 

07th Aug 2015 – 10:51hrs GMT

 

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

[FxGrow Support]

Daily Market Analysis – 10th Aug, 2015

By FxGrow Research & Analysis Team

 

US Non-Farm Payrolls support Fed Rate Hike in September

 

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Total nonfarm payroll employment increased by 215,000 in July, and the unemployment rate was unchanged at 5.3 percent. Job gains occurred in retail trade, health care, professional and technical services, and financial activities - US Bureau of Labor Statistics.

 

Following the NFP data US Dollar rose to a 2 month high versus the Japanese Yen and to a 5 month high against the Swiss Franc. Towards the end of the trading session US dollar gave up its gains due to drop in long bond yields.

 

Non-Farm Payrolls supports the Fed outlook to begin raising Interest rates later this year in September.

 

"I don't think it's done any harm but I don't see anything here that screams that Sep hike chances have increased. The revision to June helps, as does the increase in working hours and the underemployment rate falling. Wages rose as expected but y/y only showed a small gain. There's reasons to be bullish but I don't see this report making the Fed's mind up for definite" - Janus Capital's Bill Gross.

 

"If I had to pick trigger for the Fed to act on jobs it would probably be the unemployment rate dropping to 5.0% or better, and/or a big uptick in wages. Get them up to 2.5%+ y/y and that might be enough for the Fed to pull the trigger" - Janus Capital's Bill Gross.

 

The US dollar remained supported against its major counterparts on Monday after Friday’s strong NFP report supported the Fed rate hike view.

 

In China Exports declined in the month of July due to a strong Yuan and weaker demand in the European Union.

 

"As global growth moderates and commodity prices remain depressed, it is unlikely to see China's trade growth pick up significantly in the remainder of the year" -ANZ Bank.

 

In Canada employment growth was better than expectations with creation of 6.6K Jobs in the month of July. The unemployment rate remained at 6.8%, while participation rate was at 65.7% according to a report by Statistics Canada.

 

German Industrial output declined for the month of June to 1.4% mainly due to risks in the Euro zone and a weak growth in the emerging market countries including China.

 

The British Deficit widened to 1.6 billion pounds in the month of June according to the Office for National Statistics.

 

Greek government is close to securing the third bailout deal of €86bn to prevent an economic collapse just a week before €3bn debt repayment to the European Central Bank is due.

 

"When the new bailout comes to parliament for a vote it will be one bill with two articles - one article will be the loan agreement and the MoU (memorandum of understanding) and the second article will be the prior actions" - Greek official.

 

"Efforts are being made to conclude the negotiations, the horizon is by Monday night or early Tuesday" - Greek official.

 

Crude oil is trading lower at $43.86 amid rising US rig count.

 

Gold is trading higher in the Europe at 1094.69, while Silver is up at 14.93

 

10th Aug 2015 – 10:13hrs GMT

 

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

[FxGrow Support]

Daily Market Analysis – 11th Aug, 2015

By FxGrow Research & Analysis Team

 

People's Bank of China Devalues Yuan to Increase Exports

 

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China has devalued the Yuan to combat slowdown, which had ripple effects on the Forex markets as the People’s Bank of China cut its daily reference rate by 1.9 percent.

 

People's Bank of China depreciated Yuan by 1.9 percent against the US dollar to levels seen almost three years back, which came as a shock to the currency markets.

 

The statement that was released by the Central Bank said it had changed the way it calculated the currency's daily midpoint against the greenback, now taking the midpoint from market-makers quotes and the previous day's closing price.

 

Monetary policies in emerging market economies diverged and it was hard to make policies - People's Bank of China.

 

The Yuan dropped 1.8 percent to 6.32 per dollar as of 1:34 p.m. in Shanghai. It slid 2.3 percent in Hong Kong’s offshore trading.

 

The ECB reinforced its accommodative monetary policy. The euro area is confronted with the threat from persistent declining inflation and low growth potential. The Bank of Japan announced additional easing monetary policies. The Bank of England maintained its easing monetary policies - People's Bank of China.

 

The Federal Reserve ended the program of asset purchases. The world economy faces the challenge that the policy rate of the U.S. may rise. The global financial conditions may tighten and emerging market economies may be faced with the sudden reversal of capital flows if the Federal Reserve raises its policy rate earlier than expected - People's Bank of China.

 

"Since China's trade in goods continues to post relatively large surpluses, the Yuan’s real effective exchange rate is still relatively strong versus various global currencies, and is deviating from market expectations" - People's Bank of China.

 

The devaluation followed weekend data that showed China's exports tumbled 8.3 percent in July, hit by weaker demand from Europe, the United States and Japan, and that producer prices were well into their fourth year of deflation - Reuters.

 

The move by the People's Bank of China overnight could have a significant impact on whether the Federal Reserve decides to hike interest rates this year.

 

Greece has agreed a bailout deal with its European creditors according to the European Commission as it said a technical agreement had been reached with Greece, which now requires political approval.

 

In Germany Investor confidence dropped to 25.0 in the month of July according to a report released by the ZEW Center for European Economic Research.

 

Crude oil is trading lower at $44.07 on oversupply and weak global demands.

 

Gold is trading higher in the Europe at 1109.31, while Silver is up at 15.25

 

11th Aug 2015 – 11:41hrs GMT

 

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

[FxGrow Support]

Daily Market Analysis – 12th Aug, 2015

By FxGrow Research & Analysis Team

 

Euro hits 2-week high after Greece reached third bailout deal with creditors

 

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Greece and its international lenders reached an 85 billion euro bailout agreement on Tuesday after nailing down the terms of new loans needed to save the country from financial ruin - Reuters.

 

European Commission spokeswoman said that a technical deal has been reached between Greece, the International Monetary Fund, the European Central Bank, and the European Stability Mechanism.

 

The deal, which came after 23 hours of talks that continued through the night, must still be adopted by Greece's parliament and by euro zone countries - Reuters.

 

Following the news EURUSD reached a 2 week high of 1.1115 and is currently trading at 1.1142 in the European trading session.

 

“The crucial nature of the situation requires the immediate convening of parliament to proceed with the deal’s approval and allow disbursement of the first installment” - Greek PM Alexis Tsipras.

 

The Greek government has submitted a Draft bill in the Parliament today which contains an agreement with its European creditors for securing the third bailout funds. They are expected to pass the bill on Thursday with Euro group meeting scheduled on Friday.

 

According to the agreement, Greece will have to produce a primary budget deficit of 0.25 percent of GDP in 2015, followed by surpluses of 0.5 percent in 2016, 1.75 percent in 2017, and 3.5 percent in 2018.

 

"After this deal the prime minister should call for elections, so that the Greek people can vote on whether they approve the programme or want something else" - Greek Health Minister.

 

Global investors are awaiting the Germany’s IFO survey, which is likely to indicate Europe’s largest economy is on track to post a reasonable pace of growth.

 

Gold rose more than one per cent on Tuesday as the dollar cut gains and European stocks fell and investors assessed the impact of China’s move to devalue its currency and prop up its economy.

 

“Gold’s best moment this year came in the first few months when we saw various FX swings, lots of different central banks cutting interest rates or intervening in their monetary policy, so probably there is some element of that which has helped the rally from Monday continue a bit. Probably gold is benefiting from fears that this is a new round of currency war" - Matthew Turner, analyst at Macquarie.

 

Consumer confidence in Australia rose for the month of August by 7.8% to 99.5 points according to the Westpac-Melbourne Institute.

 

"Movements of the Index of this magnitude are unusual and generally associated with highly significant events such as interest rate moves or Commonwealth Budgets" - Bill Evans, Westpac chief economist.

 

Crude oil is trading lower at $43.45 due to a rapid decline in the value of Yuan.

 

Gold is trading higher in the Europe at 1116.20, while Silver is up at 15.31

 

12th Aug 2015 – 11:42hrs GMT

 

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

[FxGrow Support]

Daily Market Analysis – 14th Aug, 2015

By FxGrow Research & Analysis Team

 

Greek parliament approves €85bn bailout deal

 

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Greek parliament has approved the new €85bn rescue package following a debate and voting on the deal on Friday.

 

The new deal which seeks harsh austerity measures was approved with 222 votes for, 64 votes against and 11 absent in a 24 hour session in the Greek parliament.

 

Greek PM Alexis Tsipras is facing harsh criticism from his own party for accepting the demands of its European creditors, with several members showing dissent and threatening to split the party and call for early elections in Greece.

 

EURUSD was supported by the news that Greek parliament has approved the new bailout deal terms and is currently trading above the 1.1100 level at 1.1133 in the European trading session.

 

International Monetary Fund has welcomed the bailout deal but said that it will wait to see if there is a plan for reducing Greece's debt.

 

“The IMF will remain closely engaged with the Greek government and the European partners to assist in this process, and will make an assessment of its participation in providing any additional financing to Greece once the steps on the authorities’ program and debt relief have been taken” - Delia Velculescu, IMF.

 

“The IMF has been adopting a line of, not silence but, we try to be mindful of developments and not be excessive in our positions” - IMF managing director.

 

“There’s a need for difficult decisions on both sides and by both sides. I think everybody understands that the IMF can only be involved when these decisions on these two sides are taken.” - Senior IMF official.

 

Greek PM has called French president François Hollande, European Commission president, leader of European parliament members for approval of the rescue package by the Euro group.

 

Greece Economy has grown unexpectedly in the second quarter of the 2015 as its GDP rose 0.8% from the previous quarter.

 

“The surprise is partly explained by some consumption indices, such as retail sales, that were in positive territory in the second quarter and this was helped by some improvement in the labor market. There was also a very strong positive impact from tourism, which is having increasing knock-on effects on the economy” - Nikos Magginas, economist at National Bank of Greece.

 

The Peoples Bank of China put the Yuan's central parity rate at 6.4010 Yuan for US$1, a drop of 1.11% from the previous day.

 

“The central bank, if necessary, is fully capable of stabilizing the exchange rate through direct intervention in the foreign exchange market to avoid the herd mentality resulting in irrational movements of the rate” - Peoples Bank of China economist Ma Jun.

 

In New Zealand Retail sales fell short of analyst expectations. Retail sales in the second quarter of the 2015 grew by 0.1% while the expectations were for a 0.5% growth.

 

Weak economic data from New Zealand has increased the expectations for a further rate cut by the Reserve Bank of New Zealand.

 

Crude oil is trading lower at $41.92 on oversupply concerns and weak global demand.

 

Gold is trading higher in the Europe at 1117.34, while Silver is up at 15.46

 

14th Aug 2015 – 08:57hrs GMT

 

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

[orni308]

USDCAD has been down a bit as there is a slow down in buying in this pair, but this situation will change soon.

[FxGrow Support]

Daily Market Analysis – 22nd Sept, 2015

By FxGrow Research & Analysis Team

 

Chinese economy weaker, but far from collapse

 

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In China economy is not as weak as it looks according to a survey done by a New York research group. In a report published by the CBB International in the aftermath of the Stock market plunge in China and its currency devaluation Capital expenditure has rebounded and services sector is showing signs of growth.

 

"Perceptions of China may be more thoroughly divorced from facts on the ground than at any time in our nearly five years of surveying the economy” - CBB President Leland Miller.

 

“Global sentiment on China has veered sharply bearish — too bearish. While we have long cautioned clients against relying on rosy official views of the Chinese economy, we believe sentiment has swung substantially too far in the opposite direction” - CBB President Leland Miller.

 

"The best situation for most economies is stable and low inflation. China appears to be enjoying exactly that, notwithstanding the widespread fear of deflation” - CBB International.

 

Asian shares rose on Tuesday and the dollar held steady as U.S. markets bounced back and the European Central Bank said it was prepared to ease monetary policy further - Reuters.

 

European markets are seen steady, with financial spread betters expecting Britain's FTSE 100 (FTSE) and France's CAC 40 (FCHI) to open flat and Germany's DAX (GDAXI) to start the day up 0.1 percent - Reuters.

 

MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) was up 0.4 percent at 0039 EDT. Australia (AXJO) advanced 0.3 percent and South Korea (KS11) almost 1 percent, but most Southeast Asian markets retreated. Japanese markets are shut through Wednesday - Reuters.

 

In Switzerland’s trade balance fell to 2.869B, from 3.579B in the preceding month according to a report released by the Federal Statistical Office.

 

Global investors are awaiting Septembers Manufacturing PMI data from China and Europe today as markets in Japan are closed for the next three days.

 

European Central Bank and Bank of Japan dovish bias is expected to provide support to the markets. If ECB will extend its QE program beyond September 2016 EUR will come under pressure and slip below 1.1000

 

Crude oil is trading higher at $46.01 as investors are waiting for the weekly stockpiles report.

 

Gold is trading higher in the Europe at 1135.02, while Silver is up at 15.22

 

22nd Sept 2015 – 07:34hrs GMT

 

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

[FxGrow Support]

Daily Market Analysis – 23rd Sept, 2015

By FxGrow Research & Analysis Team

 

China manufacturing PMI falls to lowest in more than 6 years

 

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Activity in China's manufacturing sector unexpectedly shrank to a 6½-year low in September, indicating a sharper slowdown in the world's second-largest economy that could spell more turmoil for financial markets.

 

The preliminary Markit China Manufacturing Purchasing Managers' Index (PMI) fell to 47.0 in September, the worst since March 2009 and below market expectations of 47.5 and August's final 47.3. Levels below 50 signify a contraction.

 

Global investors and policymakers are on edge over China after the U.S. central bank last week held off from raising interest rates, saying it was unsure if international problems and China's slowdown in particular, will hurt the U.S. recovery - Reuters.

 

"The weaker-than-expected PMI suggested domestic and external demand remained sluggish. It's almost certain China's economic growth will slide below 7 percent in the second half of this year" - Minsheng Securities.

 

"The principle reason for the weakening of manufacturing is tied to previous changes in factors related to external demand and prices" - Chief economist at Caixin Insight Group.

 

"Fiscal expenditures surged in August, pointing to stronger government efforts on the fiscal policy front. Patience may be needed for policies designed to promote stabilization to demonstrate their effectiveness" - Chief economist at Caixin Insight Group.

 

The Asian Development Bank has cut its estimate for China's growth to 6.8 percent for 2015. It expects the growth rate of the world's second largest economy will fall to 6.7 percent in 2016.

 

Mario Draghi, European Central Bank President, will speak on monetary policy before the European Parliament’s Economic and Monetary Committee providing insight into whether the central bank is contemplating expanding its bond buying and if so, when.

 

The Eurozone continues to experience extremely low levels of inflation and unemployment is very high.

 

The UK manufacturing sector growth stalled for the first time in more than two years, with a stronger Pound and weak exports weighing on the sector's margins and volumes.

 

The trade surplus in Switzerland contracted in August, as the strength of the Swiss Franc hit demand in the European Union and China.

 

Crude oil is trading higher at $46.80 as market survey points to fall of crude oil stocks.

 

Gold is trading lower in the Europe at 1127.06, while Silver is up at 14.79

 

23rd Sept 2015 – 09:00hrs GMT

 

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.