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HFblogNews
  • Posts: 1473
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Date : 15th July 2020.

FX Update – July 15 – A Softer USD persists.

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EURUSD, H1

The Dollar has remained on a softening track against most other currencies, while the Euro has remained broadly underpinned amid expectations for EU leaders to green-light the proposed EUR 750 bln recovery fund this week. The Pound managed to rebound after underperforming over the prior two days. Risk appetite has been buoyant, with European and Asia stock markets rallying and US equity index futures gaining, underpinned by news that US biotech company Moderna’s candidate vaccine for the SARS Cov-2 coronavirus was shown in an early-stage trial to be safe while successfully provoking immune responses in all 45 of the volunteers. News from Oxford, UK¹, too, that more progress is being made on the vaccine front also helped lift sentiment and equity markets.

The narrow trade-weighted USDIndex carved out a fresh one-month low at 95.80, drawing in on the four-and-a-half-month low seen in June at 95.72. EURUSD rallied to its highest level since early March at 1.1445. Cable rallied to a two-day high at 1.2626, extending a strong rebound from Tuesday’s eight-day low at 1.2479. The rise in Cable wasn’t just a softer dollar story, as the Pound concurrently rebounded against the Euro, driving EURGBP to a 0.9051 low, extending a correction from yesterday’s two-week high at 0.9115. GBPJPY also lifted to a two-day high. USDJPY drifted under 107.00, expecting a moderate correction from yesterday’s one-week high at 107.44. The risk-sensitive AUDJPY cross printed a five-week high at 75.29. AUDUSD similarly reached a five-week peak, at 0.7020. The BoJ left policy unchanged, as had been widely anticipated. Governor Kuroda maintained dovish guidance, noting that there remain various tools that could be utilized for further easing.

Ahead of the BOC later, USDCAD has ebbed to a two-day low at 1.3560, weighed down by a combination of the broader US dollar softness and a broadly firmer Canadian currency, which has been concomitant with a bout of risk-on positioning in global markets. Front-month USOil futures have rotated higher following a phase of sub-$40 pricing, printing a six-day high at $40.93, which has been supportive of oil-correlating currencies, including the Canadian Dollar. Gold continues to wind higher, trading to a four-day high at $1815 earlier, before cooling to $1805 currently.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
  • Posts: 1473
  • Joined: 28/05/2017
Date : 16th July 2020.

EUR & ECB Preview.

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Economic activity has rebounded on both sides of the channel as lockdowns were lifted, but the impressive rebound in confidence data in recent months has proven to be too optimistic on the speed of the recovery with real sector data for May actually looking weaker than hoped. That ties in with the moderation in market confidence, which was also reflected in German ZEW investor confidence, which pulled back from June highs in today’s July numbers. Central bankers meanwhile acknowledge that the second quarter may not have been as bad as initially feared and have essentially switched to a wait and see stance, after putting substantial crisis measures in place.

With that in mind the ECB is widely expected to keep policy settings unchanged at today’s meeting. Lagarde’s recent comments suggest that data releases have come in slightly better than officials had feared and the central bank seems ready to move out of crisis mode and into a wait and see stance. That doesn’t mean the ECB won’t keep the option of additional easing measures open, but for now officials should be able to afford to take a step back and monitor the impact of crisis measures already implemented.

Wait and see then is likely to be the main message at today’s council meeting, although Lagarde will, however, stress again the need for fiscal stimulus to support monetary policy and step up the pressure on politicians to come to an agreement on the proposed EUR 750 bln pandemic recovery fund, that will be discussed at the EU leaders summit later in the week. Central bankers have long stressed the need to complement monetary policies with appropriate fiscal policies and on the whole central bankers also seem to welcome the proposal for a jointly funded mechanism and a focus on grants rather than loans.

The debate will take place within the context of the EU’s next multiannual budget framework, and won’t be easy, as countries disagree on whether to focus on grants or loans and whether jointly backed market funding is the right way forward.

Markets have the fund pretty much priced in and the risk is of course that the reality of EU politics once again falls short of what investors are looking for.

DAX – GER30

Meanwhile European stock markets are broadly lower with peripheral markets outperforming slightly going into the ECB meeting. General risk appetite has waned again amid concerns about the global outlook and rising tensions between the US and China. The GER30 is currently down -0.8%, and the UK100 down -0.9%, while IBEX and MIB are posting losses of -0.1%. US futures are also heading south following on from a broad move lower across Asian markets.

GER30, despite the short term decline, sustains 4-month highs, close to the 13,000 area. The index filled May’s and June’s gap, while it has been trading well above Ichimoku cloud since May, suggesting an overall positive bias. All daily exponential moving averages (20, 50 and 200) are aligned northwards. Momentum indicators are gradually moving more positive as the market has pulled higher this week. RSI is above 60 and confirming higher lows since early June, inline with the uptrend in the price action along with strong positive configuration on Stochastics, despite the flattening of MACD lines that suggest consolidation. The bulls could be looking to use any near term weakness as an entry point. Hence Support could be seen at 12,500 (20-DMA and 76.4% Fib. level since January 2020).

It is interesting to see though that despite the positive technical background it struggles to break the 13,000 Resistance area.

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EURO

The EUR fell back against a generally stronger US Dollar, with EURUSD trading slightly above S1 at 1.1384. Risk appetite waned again, amid concern about the world recovery, and US-China tensions and with the security breach at Twitter Inc not helping. Eurozone markets which traded unevenly yesterday are likely to remain cautious going into the ECB announcement today.

EUR intraday remains under pressure with fast MAs aligned lower and lower Bollinger bands extending southwards. Next immediate support could be found at 1.1350, and 1.1330 (200-EMA in 1-hour chart). Volumes meanwhile declining suggesting that the bullish momentum seen since 10 of June is threatened.

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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
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  • Joined: 28/05/2017
Date : 17th July 2020.

FX Update – July 17 – Preparing for the Weekend.

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USDCAD, H1

Currencies have hunkered down in narrow ranges, with the Dollar and Yen consolidating after rising against most other units yesterday. Global stock markets are lacking direction, too. The persisting pandemic remains a concern for investors, even though the lack of fresh cases in many reopened countries now looks like nothing more than a bad respiratory illness season. Offsetting pandemic concerns are expectations for the US and other countries to extend “first wave” fiscal support packages before they expire, while EU leaders will meet later today to move the proposed EUR 750 bln recovery fund toward fruition.

Among currencies, EURUSD settled just above the three-day low that was seen yesterday at 1.1370. USDJPY plied a sub-20 pip range in the lower 107.00s, and EURJPY and other yen crosses were similarly directionally challenged. AUDUSD held in a narrow range above yesterday’s three-day low at 0.6963. AUDJPY did likewise. USDCAD edged out a two-day high at 1.3589, extending a rebound from Thursday’s eight-day low at 1.3500. Front-month USOil prices remained in a narrow-range consolidation below the three-week high seen earlier in the week at $41.26. Highlights on the calendar today include eurozone June inflation and US consumer confidence data, neither of which are likely to impact markets much. Market participants will also be watching the White House for a decision on whether President Trump will follow through on his threat to ban Chinese Communist Party members from travelling to the US.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
  • Posts: 1473
  • Joined: 28/05/2017
Date : 20th July 2020.

Events to Look Out for This Week.


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The week ahead will be a quiet one due to the limited economic releases, with the most telling data the preliminary estimates of July manufacturing PMIs from across the globe.

Monday – 20 July 2020

PBoC Interest Rate Decision (CNY, GMT 01:30) – The People’s Bank of China announced heavy government and PBoC stimulus measures in the 1st half of the year. However, China’s central bank isn’t planning much more stimulus for the country as its economy looks to be recovering.

National CPI Index (JPY, GMT 23:30) – The Japanese price index should have zeroed on a y/y basis, compared to 0.1% in May.

Tuesday – 21 July 2020

RBA Minutes (AUD, GMT 00:30) – The RBA minutes will provide more insight on the views the Australian Central Bank has about the economy.

Retail Sales (CAD, GMT 12:30) – Core Canadian sales ex Autos are anticipated to have dropped by -13.5% m/m in May, but higher than April’s drift at -22% m/m.

Wednesday – 22 July 2020

BoJ Consumer Price Index and Core (CAD, GMT 12:30) – June BoC CPI is expected higher at 0.9% y/y from 0.7% y/y and at 0.2% m/m from 0.3% m/m in May.

Existing Home Sales (USD, GMT 13:00-14:00) – A 22.8% rebound is anticipated in existing home sales in June to a 4.800 mln pace, after a drop to 3.910 mln in May. The MBA purchase index surged by 40% in May and 17% in June, before a 3% rise thus far in July, after falling -21.8% in April. Existing home sales are tracked at closings, so sales by this measure remained weak into May even though the sector was bouncing. The median sales price is expected to rise to $285,000 in June to leave a y/y decrease of -0.1%, down from a 2.3% y/y rise in May, with potential downward pressure from a skewing of sales toward lower-cost areas. In Q1, we saw an average sales pace of an elevated 5.483 mln, and we expect a lower 4.347 mln pace in Q2.

Thursday – 23 July 2020

Jobless Claims (USD, GMT 12:30)– US initial jobless claims declined -10k to 1,300k in the week ended July 11 following the -98k drop in the July 4 week to 1,310k (was 1,314k). It’s a 15th straight weekly decline since the record surge to a historic peak of 6,867k in late March.

Friday – 24 July 2020

Retail Sales (GBP, GMT 06:00) – Following the -9.8% m/m contraction in UK retail sales ex fuel in May, they are expected to decline further by -14.4% in June.

Services and Manufacturing PMI (EUR, GMT 08:00) – June PMIs marked contraction in manufacturing activity and a sharp slowdown in services sector growth. This picture is likely to be seen again in the preliminary readings for July, as German Manufacturing PMI has been forecast at 41.5 and composite at 44.2, which it is still below neutral. Meanwhile, Services PMI is expected to fall to 42.0. The Manufacturing and Services PMI for Eurozone is seen at 44.5 and 41 respectively.

UK Service PMI (GBP, GMT 08:30) – The preliminary services PMI for July are seen to remain in contraction levels at 47.0.

Services and Manufacturing PMI (USD, GMT 13:45) – Preliminary Manufacturing are expected to slip in July, to 48 from 49.8.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
  • Posts: 1473
  • Joined: 28/05/2017
Date : 21st July 2020.

EU leaders reach a deal – EUR mixed.

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USDCAD, H1

EU leaders reach agreement on recovery fund, 7-year budget. After the second longest summit on record EU leaders managed to find a complex compromise on the EUR 750 bln pandemic recovery fund and the next seven year budget, which together amount to an unprecedented EUR 1.82 trillion. That these discussions would not be easy was clear from the outset, and after marathon talks the compromise is a complex system that aims to accommodate all sides.

The portion of grants in the pandemic recovery fund was scaled back to EUR 390 bln from EUR 500 bln in the original proposal. There is also a new system that allows states to stop handouts by qualified majority over rule-of law violations, a move that finally appeased Dutch Premier Rutte, who had voiced concern over some legislation in Poland and Hungary. The Netherlands and Austria were also among the countries securing larger budget rebates in exchange for agreeing to cash handouts, rather than conditional loans that require budget oversights in the recovery fund. The European Commission will also be tasked with coming up with proposals on protecting the EU budget and recovering spending more effectively.

All in all a complex deal – typical for the EU – and while a deal is on the table, the EUR is heading south in what looks like a “buy the rumour sell the fact move” that likely also reflects some disappointment over the lower portion of grants in the recovery fund. EURUSD is currently trading at 1.1447 (above PP), while the Pound is little changed from yesterday against the Dollar and higher against the EUR.

GER30 and UK100 futures are up 0.5% and 0.4% respectively and US futures are also making headway, with the USA100 outperforming again.

[img]https://analysis.hotforex.com/wp-content/uploads/2020/07/2020-07-21_09-04-38.pn[/img]

BTPs already rallied yesterday, there may be some consolidation today, especially as the final portion of grants was lower than in the original proposal at EUR 390 bln out of a EUR 750 bln total.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
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Date : 22nd July 2020.

FX Update – July 22 – Dollar & Yen Down.

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AUDUSD, H1

The Euro, along with the Aussie and Kiwi Dollars, posted fresh highs against the Dollar and Yen, despite a backdrop of flagging stock markets. EURUSD reached its highest level since January 2019, at 1.1547, the culmination of what has now been a five-week rally. EURJPY pegged a fresh six-week high at 123.34. Most other Euro crosses are also firmer, though remain below recent highs. Cable has moved below 1.2700, to 1.2660, below Tuesday’s six-week peak at 1.2768. USDJPY plied a narrow range just above the one-week low seen yesterday at 106.68, while EURJPY and the risk-sensitive AUDJPY scaled to respective six-week highs. GBPJPY and CADJPY, in contrast, remained below their respective six-week highs, which had been printed yesterday. AUDUSD reached a new 15-month peak at 0.7165, while NZDUSD ascended further into 18-month high territory. USDCAD settled around the 1.3450 mark, above the six-week low seen yesterday at 1.3422, concomitant with front-month USOil futures at $41.50, below the three-and-a-half month peak that was left at $42.40 yesterday.

Gold and silver prices have continued to surge, reflecting investors’ expectation for global monetary stimulus taps to remain open and the Dollar to remain weak. The gains in the non-yielding assets also reflect concerns that inflation might spike as a consequence of the stimulus. XAUUSD rallied to $1865 earlier before cooling to the $1850 zone, whilst XAGUSD ran to $22.80 (October 2013 highs) before trimming gains to R1 at $21.70.

In other news, the UK’s Telegraph newspaper reported that the UK government is pessimistic about reaching a trade deal with the EU, just days before Prime Minister Johnston’s end-of-July deadline for reaching a deal in principle. The FT also reported, citing unnamed senior government officials, that the UK government has abandoned hopes for reaching a trade deal with the US before the presidential election in November, which means that there will be zero hope for a deal by the time Britain leaves the EU’s single market at the end of the year. The pandemic gets the blame for the slow progress.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
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Date : 23rd July 2020.

FX Update – July 23 – USD Trends Lower.

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Trading Leveraged Products is risky

The Dollar has continued to track lower, despite a backdrop of flagging stock markets in Asia, although US equities closed with moderate gains yesterday and S&P 500 futures are showing a modest rise in overnight trading. The narrow trade-weighted USDIndex (DXY) printed a fresh four-and-a-half-month low at 94.82, drawing in on the early March low at 94.66, which was the lowest level seen since August 2018.

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EURUSD has been buoyant, though has remained below the 21-month high that was printed yesterday at 1.1601. The pair is amid its fifth week of an accelerating rally phase, underpinned both by broader dollar weakness (amid shifting risk premia in global markets) and broader euro outperformance (on the back of the EU recovery fund, seen as reducing Eurozone breakup risk while creating a new liquid AAA fund that will attract foreign investment). The common currency has been gaining against most other currencies recently, outside the case against the outperforming commodity currencies. The research team at Goldman Sachs is anticipating a further 10% gain in the Euro. EURJPY has seen a similar price action to EURUSD today, in holding off yesterday’s seven-week peak. Other euro crosses have also been steady.

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Elsewhere, USDJPY has continued to ply a narrow range near the 107.00 level. Cable remained buoyant, settling in the lower 1.2700s, below Tuesday’s six-week high at 1.2768. The Pound has been trading more mixed against other currencies. AUDUSD has settled near 0.7150, so far holding below the 15-month high seen yesterday at 0.7183. A sharp drop in Australia’s Q2 business confidence survey had been widely anticipated, as was a downbeat economic update of the Federal government. USDCAD posted a fresh six-week low at 1.3378, with the Canadian Dollar firming concomitantly with oil prices. Front-month USOil lifted back above $42.00, drawing back in on Tuesday’s four-and-a-half-month high at $42.40.

Geopolitics remain a concern, as China blacked out English premier league games on Chinese television, and closed the US consulate in Chengdu in retaliation for the White House closing the Chinese consulate in Houston. President TRUMP said Chinese consulates in other US cities could come under investigation.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
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Date : 24th July 2020.

FX Update – July 24 – USD remains heavy.

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USDJPY, H1

The Yen has outperformed today as risk aversion took a firm grip on global markets. The Dollar has so far failed to pick up safe haven demand, and has remained on a softening path. The narrow trade-weighted USDIndex carved out a fresh 22-month low at 94.49. The Dollar has lost appeal partly on the advent of the EU’s recovery fund, seen as a milestone by many analysts that has served to tip the balance out of the dollar’s favour, and partly amid expectations for dovish guidance from the Fed at next week’s FOMC, with some speculating that the US central bank is considering yield curve targeting. A Reuters survey highlighted increasing pessimism about the nearer-term US outlook given the extent of localized lockdown measures in response to the spike in coronavirus cases across many southern and western states. Intel also underwhelmed markets in its guidance for Q3 earnings.

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Against this backdrop, EURUSD remained firm, although off from the 21-month peak that was seen yesterday at 1.1628. USDJPY dropped by 0.5% to a one-month low at 106.17. Yen crosses were concurrently weak, driven by safe haven demand for the Yen. EURJPY fell to a two-day low at 123.36, extending a correction from Wednesday’s seven-week peak at 124.30. AUDJPY has been the biggest mover of the day so far, dropping 0.6% to a three-day low at 75.32. AUDUSD fell by a lesser magnitude, but still managed to peg a three-day low, at 0.7074. USDCAD lifted to within a pip of its peak from yesterday, at 1.3428. Oil prices have remained heavy after yesterday sinking to three-day lows. Cable edged out a fresh six-week high at 1.2773. The pair has been trending higher for about three weeks, though recent daily price action has been jagged and upside momentum has been waning, with the Pound having been weakening against other currencies on signs, and confirmation at a press conference yesterday, that the UK and EU remain deadlocked on key issues in trade talks.

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The first reading of July PMIs from the Eurozone and the UK both beat expectations earlier. The Markit Composite EZ number came in at 54.8, significantly above expectations of 51.1 and back in expansion territory over 50.0. The preliminary UK July PMI surveys smashed expectations, with the composite headline surging to a five-year high of 57.1, up from 47.7 in the final reading for June and well up on the median forecast for a 50.8 reading. This extends the strong rebound for a third consecutive month from April’s series-record low at 13.8. The services PMI rose to 56.6 from 47.1 and the manufacturing PMI lifted to 53.6 from 50.1. However, a note of caution accompanied the data, with Markit noting – “July’s PMI represents a step in the right direction, but there is a mountain still to climb before a sustainable recovery is in sight.”

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
  • Posts: 1473
  • Joined: 28/05/2017
Date : 27th July 2020.

Events to Look Out for This Week.


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The growing worries over the spreading coronavirus, the rollback in some reopenings, and possible flattening in growth have set the scene for risk aversion. Adding to the mix is the the increased friction between the US-China. Therefore next week’s inflation and GDP data out of some of the major economies and Fed monetary policy and press conference could be the highlights in the coming week. Another focus is the upcoming Q2 corporate earnings season, which will get into gear next week with “show and tells” from the FANGs and tech sector in general.
Have a look at the most important events of the coming days in our usual weekly publication.

Monday – 27 July 2020

German IFO (EUR, GMT 08:00) – German IFO business confidence is expected to slip to 85 after the jump seen in June. The current conditions index nudged higher, but less than hoped and the overall improvement is mainly due to a jump in the future expectations reading.

Durable Goods (USD, GMT 12:30) – Durable goods orders are expected to rise 14.0% in June with a 55.7% surge in transportation orders, after a 15.7% headline orders rebound in May that included an 82.0% transportation orders surge. Durable shipments should rise 10.5%, and inventories should rise 0.5%.

Tuesday – 28 July 2020

Consumer confidence (USD, GMT 14:00) – Consumer confidence is expected to bounce to 128.0 in July from 121.5 in June, versus another 16-month low of 121.7 as recently as January and an 18-year high of 137.9 in October. Overall, confidence measures remain historically high.

Wednesday – 29 July 2020

Consumer Price Index (AUD, GMT 01:30) – Australian Q2 CPI is expected to rise to 0.2% after confirmed at 0.3% q/q for Q1 2020.

Interest rate Decision and Conference (USD, GMT 18:00) – The FED is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals. Hence dovish guidance is expected from the Fed at next week’s FOMC, with some speculating that the US central bank is considering yield curve targeting. A Reuters survey highlighted increasing pessimism about the nearer-term US outlook given the extent of localized lockdown measures in response to the spike in coronavirus cases across many southern and western states.

Thursday – 30 July 2020

Gross Domestic Product (EUR, GMT 06:00) – Q1 2020 GDP was confirmed at -2.2% q/q as investment, consumption plunged. Q2 will look even worse as several economic sectors remain impacted by lockdown and new measures. More importantly, the disruptions of supply chains during the height of lockdowns have led many to re-focus on domestic production and Germany’s export oriented production sector that also relies heavily on real time supply chains, may have to rethink its strategy long term.

Harmonized Index of Consumer Prices (EUR, GMT 12:00) – The German HICP inflation is expected to slip back to 0.6% y/y for July after it was revised up to 0.8% y/y in June.

Gross Domestic Product (USD, GMT 12:30) – Gross Domestic Product is expected to show a contraction rate of -32.0%, with weakness across all the GDP components thanks to mandatory closures between mid-March and early-May. The Q2 hits to the economy were particularly large for net exports, and exports in particular, alongside hefty pull-backs in service consumption.

Jobless Claims (USD, GMT 12:30)– US Initial jobless claims rose 109k to 1,416k in the week ended July 18, missing estimates for a 16th straight decline. This uptick follows the -3k slide to 1,307k (was 1,300k) in the July 11 week and the -98k drop to 1,310k over the July 4 week.

Friday – 31 July 2020

Manufacturing PMI (CNY, GMT 01:00) – Final non- and NBS-Manufacturing PMIs are expected to decline in July, to 51.2 from 54.4 and 48.6 from 50.9 respectively.

Retail Sales (EUR, GMT 06:00) – 11% June retail sales gains are expected for Germany, following 13.9% May gains. April revised to -6.5% m/m.

Consumer Price Index & Gross Domestic Product (EUR, GMT 09:00) –The Eurozone Inflation was confirmed at 0.3% y/y in the final June reading, in line with the preliminary number and up from 0.1% y/y in the previous month. Core inflation fell back to 0.8% y/y as food price inflation decelerated, although at 3.2% y/y it remains high, largely thanks to the knock on effects of lockdown measures. The preliminary CPI for July is expected to come at 0.4% y/y, with the core inflation at 0.9% y/y. Preliminary Gross Domestic Product is expected to slow further to -4.7% in Q2, after Q1 GDP revised up to -3.6% q/q from -3.8% q/q reported initially.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

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Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date : 28th July 2020.

eBay Earning Preview – Will it Benefit from Social Distancing?

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eBay (MT4 Symbol: EBAY) is set to report its second quarter 2020 earnings after the market closes on 28th July 2020 (Tuesday). It is attracting significant interest from investors as they will get an early look at the performance of the e-commerce company during the global lockdown because of the coronavirus pandemic. eBay will be the first among the major US e-commerce companies to report its earnings as Shopify will report its earnings on 29th July followed by Amazon on 30th July.

This week’s announcement also will be eBay’s first quarterly report under new CEO Jamie Iannone, who joined the company at the end of April. This quarterly report will be expected to leave a good impression as in early June, eBay raised its 2nd quarter (Q2) outlook as the company results exceeded expectations during Covid-19. They expect the Q2 revenue to increase in the range of $2.75 billion to $2.8 billion (April guidance: 2.38 billion – $2.48 billion) and adjusted earning per share in the range of $1.02-$1.06.

eBay will report its second quarter earnings on after US trading day closes later today (July 28). The e-commerce giant is expected to report earnings per share of $1.06, up from $0.68 in the prior year quarter. Revenue is projected at $2.80 billion with the growth estimate for the current quarter at 4.10%. Most analysts expect that eBay’s upcoming earnings report will beat the forecast.

Technical Analysis

eBay’s share price has been on fire in 2020. eBay stock currently trades at $57, after climbing ~57% in 2020. BMO Capital lifted the target price of eBay stock to $59, while Wedbush and Keybanc hiked eBay’s target price to $65.

From the technical perspective, the trend is currently bullish. The price is positioned higher than both the 50 Day Moving Average and the 200 Day Moving Average. The share currently trades at $57.21, slightly lower than the 2020 high of $61.13 which also act as a strong resistance. The subsequent resistance is at $66.71 (2015 high). The immediate support for the share is at $54.03 and followed by support at the 50 Daily MA ($50.61).

The share price is on course for its best performing year. The 14-day RSI indicator has retraced from overbought region and currently shows momentum to the upside.

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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

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Tunku Ishak Al-Irsyad
Market Analyst
HF Educational Office – Malaysia

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date : 29th July 2020.

FX Update – July 29 – USD got a break but not for long.

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USDJPY, H1

The Dollar relief rally yesterday and dip today is consolidating the sharp declines seen over the prior 10 days. The narrow trade-weighted USDIndex has posted new 25-month lows at 93.31 today, breaking below Monday’s 93.40 low. EURUSD is showing gains too, though below the 22-month high seen on Monday at 1.1780. Cable has moved higher to test R1 at 1.2975, and above the five-month high seen Tuesday at 1.2951. AUDUSD whittled out a fresh 15-month peak at 0.7192, 8 pips shy of the key 0.7200 which was last seen on April 14. USDCAD trades at the 1.3360 mark, above Tuesday’s seven-week low at 1.3329. USDJPY remains heavy, and broke below yesterday’s near five-month low at 104.93, to register a new low at 104.80 before finding support. The Japanese currency is registering as the biggest gainer on the week so far, gaining most against the US Dollar and New Zealand Dollar, with just over a 2% advance versus both underperformers. The sputtering price action in global equity markets has driven safe haven demand into the Yen, with the Dollar evidently perceived to be no longer providing protection.

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Profit taking and position trimming has been a theme across markets over the last day into the Fed’s policy announcement and the final week of political wrangling over the next US fiscal package (there is a degree of uncertainty about the outcomes of both, or at least in terms of signalling with regard to the Fed). Corporate earnings and concerns about the impact of new localized lockdown measures due to spikes in coronavirus infections have also been in the mix.

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Regarding the Fed, no policy changes are expected and a dovish stance is expected, though Forex markets will be laser focused on whether there is a signal that it will tolerate higher inflation, as this could weigh on real yields, and thereby the Dollar, further. Additional comments surrounding the purchase of longer-dated debt and the sticky and tricky issue of yield caps will be in the spotlight. The statement is due at 18:00 GMT with Chair Powell’s Press Conference 30 minutes later.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

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Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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US GDP & Claims data.

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[bEURUSD, H1[/b]

The US advance GDP report beat estimates with a -32.9% Q2 contraction rate that was a modestly smaller drop than feared, though it still constituted a record drop, following annual revisions that raised the real and nominal GDP levels as of Q1, but left the chain price index the same. For revisions, the -5.0% Q1 real GDP figure was left unrevised, though the prior two quarterly gains were raised to 2.4% (was 2.1%) in Q4 and 2.6% (was 2.1%) in Q3, hence leaving a stronger trajectory into Q2. There were plenty of Q2 component surprises, with the big upside surprise coming from a much weaker than assumed real import figure, where we saw a -53.4% decline (import drops add to GDP), alongside an expected -64.1% export drop. We also saw a surprising 2.7% rise for real government purchases, instead of the widely assumed drop. The Q2 inventory figures posted the expected huge liquidation, with a -$234.6 bln inventory subtraction that left a record-large liquidation rate of -$315.5 bln. We saw more modest downside Q2 surprises for the investment figures, with a -27.0% contraction rate for business fixed investment and a -38.7% for residential investment. Consumption fell -34.6% in Q2, which was a tad weaker than we assumed but was in line with market estimates. Today’s GDP and claims data prompted tentative bumps to GDP forecasts to 28.0% (was 31%) in Q3 and 9.0% (was 7.5%) in Q4, and a trimming of the July non-farm payroll estimate to 2.6 million from 3.3 million.

The Dollar was unchanged following the data, where Q2 GDP fell a historic 32.9% and jobless claims rose another 1.434 mln versus the 1.422 previously. EURUSD sits near 1.1790, having spiked over 1.1800, and the USDJPY is steady at 105.15.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

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Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Sterling Storms On.

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GBPUSD, H1

Cable has pinned a new five-month peak at 1.3145. The pair is now firmly back in pre-lockdown territory. The UK currency still registers as the weakest of the main currencies on the year-to-date, and by some distance in trade-weighted terms, while recent dollar underperformance has been somewhat flattering the Pound. Nevertheless, there are some convincing bullish arguments in market narratives. One is the pick-up in the pace of economic recovery in the UK, as evidenced by the much stronger than forecast preliminary July PMI data and improvement in the CBI’s July distributive sales report, which flagged a near full recovery in the retail sector, with sales in upcoming months seen at near seasonal norms. There have also been signs that have led markets to factor in improved odds for an EU-UK trade deal, with a number of sourced press reports suggesting that discussions are going better than the official line suggests. However, the Government’s handling of the pandemic has been coming under daily scrutiny and last night’s sudden announcement of restrictions and lock-downs in parts of northern England only added to the uncertainty.

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Technically, Cable breached the key 20-day simple moving average on July 7 and has rallied significantly over the last 11 trading days, posting consecutive gains each day. The next Donchian Channel top is 1.3200 and then 1.3500. The 200-day moving average sits way below at 1.2688 and the RSI has breached into the 80s this week into overbought territory.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

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Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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FX Update – August 6 – USD to new lows.

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Trading Leveraged Products is risky

The USDIndex edged out a fresh 27-month low at 92.50, continuing what is a fourth consecutive week of decline and a fourth straight month of decline, dropping by just over 10% from the early March peak. The loss of confidence in the US currency has partly been reflected in the ongoing rally in gold, which has remained buoyant after posting a fresh record nominal high at $2,055.00 yesterday.

A deal on the US fiscal package remains elusive, though President Trump’s threat to take executive action to cut payroll taxes managed to keep investor spirits up, along with the above-forecast services ISM out of the US, and more positive news from the candidate vaccine front for the SARS Cov-2 coronavirus. The good vibe across equity markets flagged somewhat as the Asia session wore on, however. The MSCI Asia-Pacific equity index printed a six-and-a-half-month-high during early trading before turning lower to near net unchanged levels. S&P 500 futures, while off highs, still show moderate gains, while the European markets have opened lower to start the day.

AUDUSD saw a downward flurry after the Australian government lifted its unemployment forecast while forecasting growth would be trimmed by 2.5 percentage points as a consequence of its own lockdown measures (having chosen the sledgehammer approach, similar to many other nations, despite the standout success of the much less costly Swedish approach, which has refrained from lockdown and masks and has performed near the same as most other European countries during the pandemic, with its ICU and mortality numbers having now dropped to near nothing). AUDUSD dipped to a 0.7184 low, which is nearly 60 pips below yesterday’s peak.

Elsewhere, EURUSD edged out a new 27-month high at 1.1917, and Cable a five-month peak at 1.3182. USDJPY idled in the mid 105.00s, above yesterday’s six-day low at 105.32. USDCAD settled above the six-month low seen yesterday at 1.3231. Front-month USOIL crude futures settled in the lower $42.00s, below Wednesday’s five-month peak at $43.52.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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FX Update – Ahead of NFP, USD finds a bid.

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The narrow trade-weighted USDIndex (DXY) posted a two-day high at 93.16, extending the rebound from the 27-month low seen yesterday at 92.53. EURUSD concurrently retreated to a 1.1819 low, which is a pip shy of yesterday’s low and 2 pips shy of making it a big figure correction from yesterday’s 27-month peak. Cable posted a two-day low at 1.3098, drawing back from the 1.3187 five-month peak seen Thursday following the warily upbeat BoE outlook. USDJPY continued to ply a narrow range (less than 15 pips) around the 105.50 mark. Both the Aussie and Kiwi Dollars corrected moderately as the US currency firmed. AUDUSD, after first edging out a high at 0.7243, which matches Wednesday’s 18-month peak, ebbed to a low at 0.7196. USDCAD lifted to a three-day high at 1.3372.

Front-month USOil futures were soft for a second day, maintaining sub-$42.00 levels after posting a five-month high earlier in the week at $42.52. Gold prices corrected below $2,050.00 after printing a fresh nominal record high at $2,077.85. The ascent of gold has been a reflection of investor concerns over the risk of there being an eventual pop in inflation as a consequence of massive global fiscal stimulus efforts and massive global monetary uber-accommodation, although there has been scant sign of this happening thus far, with disinflation remaining in force and with much of the US yield curve and other sovereign benchmark yields either at or near record lows. In the mix is speculation that the Fed, and possibly other major central banks, may be amid a strategic shift to allow higher inflation.

The US Department of Labor’s weekly initial jobless claims will be THE key data release from the US later today, while labor market reports from Canada and the United States will be closely watched by market participants. The median forecast of economists polled by Reuters is for the Non-Farm Payroll to rise by 1,600,000, following the big miss in ADP number of 167,000 on Wednesday and the better than expected Weekly Claims yesterday of 1,186,000 compared to expectations of 1,400,000. The range in the Reuters poll estimates varies from -280,000 to 3,500,000. On the other hand, Canada is expected to add 400,000 jobs with the Unemployment Rate slumping lower to 11% from 12.3%.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date : 10 August 2020.

Events to Look Out for This Week.


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As the month of August began,uncertainties both fresh and familiar keep challenging the markets, driving volatility in the stock market and pushing bond rates to record lows. The worries over the second wave of the viral pandemic, US-China frictions, the government’s inability to pass a new US stimulus bill and the whatever-it-takes policy commitments from the core central banks all expected to hold in the week ahead as well.
Have a look at the most important events of the coming days in our usual weekly publication.

Monday – 10 August 2020

Consumer Price Index (CNY, GMT 01:30) – The July Chinese CPI is expected to have improved on a monthly basis, with higher outcome at 0.2% m/m from -0.1% m/m

Tuesday – 11 August 2020

Average Earnings (GBP, GMT 08:30) – Average Earnings excluding bonus are expected to have grown by 0.4% in June from 0.7%. The ILO unemployment rate is expected to be unchanged at 3.9%.

Economic Sentiment (EUR, GMT 09:00) – German August ZEW economic sentiment is seen to have inclined at 62.4 compared to 59.3 in July.

Producer Price Index (USD, GMT 12:30) – The headline CPI for PPI in July is expected with a 0.4% gain with a 0.1% core price increase. As expected readings would result in a rise for the y/y headline PPI metric to -0.7% from -0.8% in June. The y/y core reading is assumed to remain in the 0.2%-0.5% area over the near future, with the downward hit from reduced aggregate demand proving greater than the boost for prices from supply disruptions, though supply constraints for some sectors should prove increasingly important as we pass through Q3.

Wednesday – 12 August 2020

Interest Rate Decision & Policy Report (NZD, GMT 02:00) – The Reserve Bank of New Zealand (RBNZ) is widely expected to keep the OCR (Official Cash Rate) at the current record low 0.25%. The OCR is the means by which the RBNZ manages a dovish monetary policy for the New Zealand economy, by lending overnight cash at 25 basis points above the OCR, and receiving deposits and paying interest at 25 basis points below the OCR. The bank expected to expand QE, when the Bank’s bimonthly monetary policy statement and press conference are also scheduled, since last time it stressed a willingness to take further stimulus measures if necessary while noting persisting downside risks to the economy, adding that currency strength remains a negative for NZ exporters.

Gross Domestic Product (GBP, GMT 06:00) – GDP is the economy’s most important figure. The preliminary Q2 GDP is expected to slightly improved at -1.8% q/q however it remains contracted in a quarterly and yearly basis.

Consumer Price Index (USD, GMT 12:30) – The headline CPI for July is expected at a 0.3% July and with a 0.1% core price rate, following June figures of 0.6% for the headline and 0.2% for the core. The headline will be boosted by an estimated 5% July increase for CPI gasoline prices. As-expected July figures would result in a headline y/y increase of 0.7%, up from 0.6% in June.

Thursday – 13 August 2020

Employment Data (AUD, GMT 01:30) – Both the unemployment rate and the employment change are expected to have grown in July, at 7.8% m/m and 394.2K respectively.

Harmonized Index of Consumer Prices (EUR, GMT 06:00) – The German HICP inflation for July is anticipated flat.

Friday – 14 August 2020

Retail Sales (CNY, GMT 02:00) – Following the -1.8% m/m contraction in China retail sales in June, they are expected to rise slightly by 0.3% in July.

Gross Domestic Product (EUR, GMT 09:00) – The preliminary Q2 GDP s.a. is expected to remain contracted at -15.0%y/y and -12.1% q/, with national GDP rates varying pretty much along the lines of virus developments and depending and the extend of lockdown measures. The key question for the future is when the initial rebound will be, but if that can be sustained and broadened into a lasting recovery even when governments and ECB start to reign in their very generous support. The agreement on an EU wide stimulus package has helped to bolster confidence in the project, but it remains to be seen whether the package really is sufficient to strengthen long term growth in the Eurozone.

Retail Sales (USD, GMT 12:30) – July increases of 1.0% for headline retail sales is expected and 0.8% for the ex-auto figure, following June increases of 7.5% for the headline and 7.3% ex-autos. We expect a 5% increase for the CPI gasoline index, and rising sales volume as well should allow a 5% service station sales rebound as well. Real consumer spending is expected to contract at a rate of -33.2% in Q2 before an assumed 33% bounce in Q3.

Michigan Consumer Sentiment Index (USD, GMT 14:00) – The August preliminary Michigan sentiment reading is forecast at 79.0, from 72.5 in the final July reading.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date : 13th August 2020.

FX Update – August 13 – Weaker Dollar & Stronger Sterling.

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The Dollar is down for a second day, with the narrow trade-weighted USDIndex printing a six-day low at 93.08 to nearly fully unwind the gains seen in the wake of last Friday’s US July jobs report, when we printed an eight-day high at 93.87.

Some market narratives have been attributing the Dollar’s ebb as being a return of the currency’s inverse correlation with stock market direction, along with the perception that the Fed has strategically dropped its concern about inflation risk, which has driven real US yields into negative territory. These factors appear to be outweighing the improvement in the US economy and downward trend in new coronavirus cases. As for Washington’s tensions with Beijing, this hasn’t been much of a concern for Wall Street, with most onlookers anticipating this weekend’s meetings to review progress on the Phase 1 trade deal will go well, even though China has been lagging behind in its purchases of US farm and energy goods.

Among the main Dollar pairings, EURUSD climbed to a six-day high at 1.1838, putting the 27-month high seen last Thursday at 1.1917 back in the scopes. USDJPY extended a moderate correction from yesterday’s three-week high at 107.03, posting a low at 106.57. The Yen was more mixed against other currencies, with EURJPY remaining buoyant, just off the 16-month high that was pegged yesterday at 126.23, while AUDJPY traded softer after the cross peaked at a three-week high yesterday. The Nikkei 225 hit a six-month high, which followed a strong close on Wall Street yesterday, with the S&P 500 finishing just a whisker below a record closing peak. European stocks have opened lower with GER30 holding over 13,000 at 13,025 and the UK100 trades down around 6,200. AUDUSD edged out a two-day peak at 0.7188. Australian July employment data showed a forecast-smashing 114,700 rise in the headline, while the June figure was revised higher, though lockdowns across the country are now blighting the immediate outlook. USDCAD settled just above Wednesday’s six-month low at 1.3227.

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Sterling is trading mixed, edging out a two-day high at 1.3092 against the Dollar, while also gaining on the Yen and Aussie Dollar, but holding steady-to-softer versus the Euro and some other currencies. Yesterday’s preliminary UK Q2 GDP data showed a gargantuan 20.4% q/q contraction to confirm the technical definition of recession following Q1’s 2.2% shrink. The data wasn’t a surprise given the lockdown that was in place to varying degrees throughout the quarter. June GDP rose by 8.7% m/m, however, with June production data showing a robust rebound and beating expectations in the main headline readings, while high frequency data and a myriad of anecdotal evidence point to a strong rebound in the current quarter. The government’s furlough scheme has greatly limited the impact on the employment market. We have been talking down the Pound, to a degree, having seen limited scope for the currency to sustain its recent patch of outperformance. The BoE last week delivered a warily-upbeat outlook, though with localized lockdowns and most media doing their utmost to maintain maximum fear of a second wave of coronavirus infections, we take a circumspect view of the outlook over the coming months, anticipating a plateauing in economic rebound momentum. Manchester, Preston, Bradford and Aberdeen are back in lockdown and there is a number of new travel restrictions with other countries. The furlough scheme will end in late October, which is likely to trigger a wave of job losses, particularly in the airline, retail and hospitality sectors.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
  • Posts: 1473
  • Joined: 28/05/2017
Date : 14th August 2020.

FX Update – August 14 – USD Consolidates at lows.

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EURUSD, H4

The main currencies have settled in narrow ranges, with the Dollar consolidating above yesterday’s lows after a two-day decline. The USDIndex (DXY) has steadied in the lower 93.0s, above yesterday’s one-week low at 92.93. EURUSD has concurrently reached a stasis in the lower 1.1800s, below Thursday’s one-week peak at 1.1865. The pair has been in a strong uptrend since early May, producing last week’s 27-month high at 1.1917, though upside momentum has flagged over the last two weeks. The advent of the 750 bln Euro recovery fund and the fact that Europe has come through the pandemic ahead of the US have been underpinning EURUSD, along with the perception that the Fed is strategically being less attentive to inflation risks, which pushed real Treasury yields deep into negative territory. This dynamic looks to be shifting in certain aspects, which may curtail EURUSD’s uptrend. New coronavirus cases are dropping in sun states as community immunity builds up, having already done so in other parts of the US, while high frequency data and the July employment report are evidencing rebounding economic activity.

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Elsewhere today, USDJPY has been plying a narrow range below yesterday’s three-week high at 107.06. Cable has settled near 1.3050, holding well within the broadly sideways range that’s been seen over the last week. Ditto for AUD-USD, which has been making time near the 0.7150 mark.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
  • Posts: 1473
  • Joined: 28/05/2017
Date : 17th August 2020.

Events to Look Out for This Week.


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As the month of August moves into week 3, uncertainties both fresh and familiar keep challenging the markets, driving volatility in the bond market as rates bounce off record lows and stock markets consolidate. The cooling worries over the second wave of the viral pandemic, and continuing US-China frictions, even as talks are due to resume and the impasse over a new US stimulus bill all expected to hold in the week ahead.
Have a look at the most important events of the coming days in our usual weekly publication.

Tuesday – 18 August 2020

RBA Meeting Minutes (AUD, GMT 01:30) – No surprises from the RBA in their last meeting are expected, the cautious “do all we can” prose is likely to continue. Lowe talked of interest rate hikes not being on the cards for at least 3 years this week.

Building Permits & Housing Starts (USD, GMT 12:30) – Permits are expected to show a rise to 1.30 million form 1.258 million last month whilst Starts are expected to decline from 1.186 million to 1.70 million, overall this would still show a resilient US housing market.

Wednesday – 19 August 2020

FOMC Minutes (USD, GMT 18:00) – The Federal Open Market Committee minutes ability to shock have lost the power they once had, however, they remain the key documented account of the discussions that take place (on-line) between the decision makers of the FED. Watch for the tone of the talk of recovery, any reference to negative interest rates (even a reference would be something), the spectre of inflation and the on-going issues with the yield curve.

Consumer Price Index (GBP, GMT 06:00) – The headline CPI for July is expected at a 0.6% July (y/y) and with a 1.4% core price rate, following June figures of 0.6% for the headline and 1.1% for the core.

OPEC – JMMC Meeting (All Day)

Thursday – 20 August 2020

US Weekly Claims (USD, GMT 12:30) – Following last week’s final breach of 1.0 million this week claims data will be eagerly watched to see if the decline continues.

German Consumer Confidence & PPI Data (EUR, GMT 06:00) – The German PPI & Consumer confidence will provide another key indicator to the recovery in German sentiment and prices. Last week the COVID cases showed a worryingly geographically widespread spike.

Friday – 21 August 2020

Markit PMI Composite (EUR, GMT 07:30) – expected to show a decline to 50.3 from 54.9 last time.

UK Markit Services PMI (GBP GMT 08:30) – expected to show a decline from last month’s 56.5 to 55.9.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
  • Posts: 1473
  • Joined: 28/05/2017
Date : 18th August 2020.

FX Update – August 18 – Dollar in the Doldrums.

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USDIndex, H4 & Monthly

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The Dollar has continued to weaken, which pushed the USDIndex (DXY) to a new 27-month low at 92.30. EURUSD correspondingly rose to a 12-day peak at 1.1943, and another 27-month peak. Cable rallied by 0.5% in making a 5-month high at 1.3198, while EURGBP reversed most of the gains it saw yesterday in making a 0.9035 low. AUDUSD pegged an 6-month high at 0.7252, and USDCAD descended to a 7-month low at 1.3155. Aside from the generally softer US Dollar, the Canadian currency has been buoyed by continued perkiness in oil prices. Yesterday the OPEC+ group said there was near full compliance on supply quotas amount members, lifting front-month WTI crude futures to a $42.99 peak, which is just over 50 cents shy of the five-month peak that was clocked in early August. In the mix has been a measure of Yen outperformance, with USDJPY ebbing to a 12-day low at 105.41 while EURJPY and AUDJPY drifted to respective six- and four-day lows, although both recouped losses during the London AM session.

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In stock markets, yesterday’s tech-led rally on Wall Street inspired the MSCI Asia-Pacific index to rally to near to its pre-pandemic January high, while Europe’s STOXX 600 was showing a moderately 0.3% gain in early PM trading. The White House announced yesterday further restrictions on China’s Huawei, which are aimed at limiting the company’s access to commercially available chips and which has the potential to disrupt global supply chains. President Trump, meanwhile, stated that China is meeting its obligations under the Phase 1 trade deal, although a review of the deal has been delayed. Beijing announced that it will be making an anti-dumping inquiry on Australian wine imports. In focus is tomorrow’s publication of the minutes from the recent FOMC meeting, which comes amid market speculation that the Fed may adopt an average inflation target, specifically with the aim of pushing inflation above the 2% target. This has been a Dollar negative, as it has driven real Treasury yields deep into negative terrain.

US Equity markets have opened in positive tones on the back of strong quarterly earnings from key retailers Walmart and Home Depot, USA30 trades at today’s pivot point at 27,855, USA100 sits at 11,338 and the USA500 tests intra-day all-time highs at R1 level at 3391.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
  • Posts: 1473
  • Joined: 28/05/2017
Date : 19th August 2020.

EURUSD holds 1.1900 gains.

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EURUSD, H4

Eurozone HICP inflation was confirmed at 0.4% y/y, in line with the preliminary release. The uptick in the headline rate came despite the dampening impact of Germany’s temporary cut to the VAT rate. Energy prices also remain much lower than a year ago and core inflation lifted to 1.2% y/y in June from 0.8% y/y in the previous month.

Mixed signals then for the ECB, and while there may be nothing in the data to suggest a serious risk of deflation, the low headline rate will add to the arguments of those at the council who are pushing for a more symmetric inflation target that would require the ECB to let inflation run above target for a while following a period of below-target headline rates. In the current situation that would push the first rate hike even further into the future. A similar debate seems to be happening at the FOMC, which is currently also conducting a framework review.

EURUSD has settled off yesterday’s 27-month peak at 1.1965, concurrently with the USDIndex (DXY) consolidating recent losses above Tuesday’s 17-month low at 92.15. The softer dollar hypothesis, which has been dominant in markets for several months, is currently being challenged. Most incoming US data are showing a strong rebound in economic activity, while the S&P 500 and Nasdaq equity indices have scaled to record highs. News that House Speaker Pelosi said that the Democrats are willing to trim their proposals has been taken as a positive, as it increases the odds that the Republicans and Democrats will break their stalemate and reach a deal on the next pandemic fiscal rescue package. July data showed an acceleration in homebuilding in the US to the most in almost four years. Coronavirus infections are now dropping sharply in the recently afflicted sun states, such as Arizona, Texas and Florida, indicating the downward phase of a classic Gompertz curve progression of respiratory illness as community immunity builds up.

In focus is today’s publication of the minutes from the recent FOMC meeting, which comes amid market speculation that the Fed may adopt an average inflation target, specifically with the aim of pushing inflation above the 2% target. This has been a dollar negative, as it has driven real Treasury yields deep into negative terrain. Any confirmation of this would bolster the softer dollar hypothesis, and likely push EURUSD above 1.2000, while any lack of reference to this issue would have an inverse effect. The advent of the 750 bln Euro recovery fund, which has reduced perceived EU break-up risks, and the fact that Europe has come through the pandemic ahead of the US (having been impacted earlier), have also been underpinning factors of EURUSD.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
  • Posts: 1473
  • Joined: 28/05/2017
Date : 25th August 2020.

The Europe Brief.

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The round of August confidence data has so far been mixed, as the services sector registers the fallout from lockdowns and the resurgence of new Covid-19 infections. Travel restrictions and new social distancing measures hit the services sector and consumer confidence especially in countries relying on tourism. Downside risks to the outlook continue to linger then, even as positive headlines on vaccines and treatment are offering a way out.

German Q2 GDPwas revised slightly higher with today’s release – to a still firmly negative -9.7% q/q, from -10.1% q/q reported initially. The breakdown not surprisingly showed a pretty broad based contraction, with only government consumption helping to dampen the blow. Private consumption meanwhile contracted -10.9% q/q and exports slumped -20.3%, versus a -16.0% q/q decline in imports as borders were closed and supply chains disrupted.

Beyond the temporary impact of lockdowns, the most worrying part of the report is the -19.6% q/q dip in equipment investment, which followed a -7.3% q/q decline in the previous quarter and could suggest that companies are not expecting a quick rebound.

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The manufacturing sector at least continues to rebound and after a rise in Germany’s preliminary composite PMI German Ifo business confidence today that jumped to 92.6 in August, from 90.5 in July. A better than expected number, that registered a broad based improvement, especially in the current conditions indicator. The breakdown for the diffusion index, which gives the balance of positive and negative answers, showed services sentiment lifting to 7.8 from 2.1, while manufacturing improved to a still negative -5.4, from -12.1 in the previous month. All in all a broad based improvement that should go some way to restore confidence in the recovery especially against the background of positive headlines on Covid-19 vaccines and treatment.

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The Eurozone August PMI (August 21) revealed a more mixed picture, however, in the preliminary release. Developments were uneven across countries with France more hit than Germany, although final readings will likely show that Spain and Italy suffered even more from the renewed restrictions for the services sector.

With inflation still at very low levels, central bankers have enough room to manoeuvre. Eurozone HICP inflation may have lifted slightly in July, although with the headline confirmed at 0.4% y/y in the final reading, it remains far below the ECB’s definition of price stability. Part of this is of course due to special factors, with energy prices still far below the levels seen last year and July readings also impacted by the dampening impact of Germany’s temporary cut to the VAT rate. Indeed, core inflation lifted to 1.2% y/y in July from 0.8% y/y in June, although even that is lower than the ECB would like to see.

ECB still debating inflation target

While there may be nothing in the inflation data to suggest a serious risk of deflation, the low headline rate will add to the arguments of those at the council who are pushing for a more symmetric inflation target that would require the ECB to let inflation run above target for a while following a period of below target headline rates. In the current situation that would push the first rate hike even further into the future. A similar debate seems to be happening at the FOMC, which – like the ECB – is also conducting a framework review. There is some speculation that Fed-chairman Powell will give some hint on average inflation targeting at the Jackson Hole conference, which in the past has been the stage for coordinated signals from central banks.

EUR continues to benefit from stimulus agreement

EURUSD has lifted to the mid 1.1800s today, posting an intraday peak at 1.1843, which is 60 pips up on Monday’s New York closing level. The Euro has also rallied against the Yen, which is the day’s biggest loser, and most other currencies. While a bout of general dollar selling has helped to lift EURUSD, there have concurrently been a couple of cues to buy euros, including the better than expected Ifo reading and optimistic comments from German finance minister Scholz.

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Still the pair’s 5-month rally out of sub-1.0650 levels of mid March has been losing momentum in recent weeks, even it still produced new 27-month highs. Last week was the first down week the pair has seen out of the last nine weeks. A sustained correction is increasingly likely. The US is clearly through the worst of the pandemic, the economy is rebounding, Wall Street is on an record-breaking winning streak, and Treasury yields have perked up in recent sessions despite an expected dovish lean from Fed Chair Powell at his keynote address this Thursday.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
  • Posts: 1473
  • Joined: 28/05/2017
Date : 26th August 2020.

Durables present a potential GDP surge in Q3.

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The 11.2% July durable goods orders surge sharply exceeded estimates, following gains of 7.7% (was 7.6%) in June and 15.1% in May, led by increases of 35.6% for transportation after a 19.7% (was 20.0%) June rise, and a 30.0% rise for defense after a -16.7% (was -16.8%) June decline. Excluding transportation, orders rose 2.4% in July, following a 4.0% (was 3.3%) June gain.

The huge July orders gain marks a third straight monthly pop after two big pandemic drops in March and April.
For the equipment sector specifics, nondefense capital goods orders excluding aircraft were up 1.9%, following June’s 4.3% (was 3.3%) increase. Nondefense capital goods shipments ex-aircraft increased 2.4%, following the 3.8% (was 3.3%) gain in June. Inventories declined -0.5% following a -0.1% (was unchanged) June dip. The inventory-shipment ratio fell to 1.73 from 1.87.

Today‘s data may require an upward revision in our 30.5% Q3 GDP estimate. The June equipment data were revised upward while the June inventory data were revised modestly lower, leaving what appears to be net upward risk for our assumed upward Q2 GDP revision to -32.2% from -32.9%.

Today‘s report largely assures that we’ll see a GDP surge in Q3 that reverses most of the GDP decline reported in Q2.

Yields cheapened a bit on the durable goods beat, with a bear steepener still the play ahead of Fed Chair Powell’s Jackson Hole speech tomorrow. Concurrently, Equity futures are gyrating in a narrow range around unchanged levels. The 30-year bond was up 4 bps to 1.435%, but has notched back to 1.423%. The 10-year also was also about 3 bps cheaper at 0.719%. The just auctioned 2-year note is up 1 bp to 0.154%.

The US Dollar headed higher after the surge in durable orders, taking EURUSD to four-session lows of 1.1772 from near 1.1790 and USDJPY to 106.42 from 106.30.

While there are still widespread expectations that the FOMC will be shifting to an average inflation strategy, some chips are being taken off the table after last week’s rally as the FOMC minutes weren’t clear on the timing of the adoption. And KC Fed’s George said “it’s too soon to try to speculate on what else might be needed other than to say the Fed is going to be very vigilant.”

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
  • Posts: 1473
  • Joined: 28/05/2017
Date : 27th August 2020.

The “big” day.

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With all eyes on Powell, FX markets traded within a narrow range overnight. GER30 and UK100 futures meanwhile are both up 0.1%, while US futures are slightly in the red after producing fresh record highs for the USA500 and USA100 yesterday, while most Asia stock markets have beaten a retreat.

The USA100 is holding above the latest near term support at 11,930. The technical picture remains strongly positive for Wall Street in general not only on risk appetite gains but also on tech stocks rally after the reports from Bloomberg that Amazon’s founder and Chief Executive Jeff Bezos has become the first billionaire in modern history to cross the $200 billion mark as the shares of his company rose to a new high. His wealth is now almost double that of the second richest person in the world, Microsoft founder Bill Gates,

Let’s turn back to the USA100 though, in which the “buying the deep” strategy has been seen so far in the near and medium term. Buying into near term weakness remains a viable strategy. Today will be an interesting session as depending upon the perceived level of dovishness of the speech, there could be a sizeable influx of volatility.

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Fed Chair Powell’s Jackson Hole speech later today (Thursday) is much anticipated. The markets are looking for more of an update on the FOMC’s Framework Policy Review. The Fed has been discussing a shift in its inflation strategy to targeting an average price target, versus the 2% mark, which would allow an overshoot of price pressures to make up for the underperformance over the last decade. As suggested by the FOMC minutes and by KC’s George earlier today, not everyone on the Committee ascribes to this shift. Obviously there was no decision at the July 28, 29 meeting, though one is expected to be made at the September 15, 16 meeting.

Even though no one really expects the FOMC to even start to think about thinking about raising rates for a couple of years, any indication from Powell that there’s more opposition to a shift, or that an announcement won’t be made next month, won’t sit well with the markets.

Meanwhile, there is a risk markets will be disappointed as he may not yet be in a position to deliver in terms of specifics on inflation targeting changes or other policy rubrics. The FOMC hasn’t completed its framework review, and there are known differences of opinion among Committee members. Any sense of disappointment would likely catalyze a rebound in the USD.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
  • Posts: 1473
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Date : 31st August 2020.

FX Update – August 31 – The USD trend persists.

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EURUSD, H1

The Dollar posted fresh trend lows against some currencies before recovering in low volume, (London is closed today) end-of-month re-balancing trades. The framework regime shift at the Fed, announced by Chairman Powell last week, effectively reaffirmed the dollar softening trend, concomitantly with shorter dated inflation-adjusted Treasury yields posting fresh lows. The yields on the 5- and 7-year real constant maturity Treasury notes were indicated on Friday at new seven-year-plus lows, at -1.40% and -1.26% respectively (down by a respective 15 bp and 11 bp from week-before levels). The narrow trade-weighted USDIndex (DXY) logged a new 27-month low at 92.11, and is set to rack August up as a fourth consecutive month of descent and the worst August for five years. EURUSD printed a high at 1.1938, which drew back in on the 27-month high seen a couple of weeks back at 1.1967. This puts the pair on course to make this the thirteenth up week that’s been seen out of the last sixteen weeks. For now, the softer dollar theme looks likely to remain in play. But there are forces that may weaken this trend. One is that incoming US data has been showing ongoing economic recovery in the US. Another is that the ECB is also considering average inflation targeting with the aim of increasing inflation expectations, which would presumably weigh on the Euro. The Eurozone’s economic recovery may also flatten as a consequence of renewed restrictions for hospitality and travel operators. This was the prime cause for preliminary August services PMI surveys missing consensus expectations. Governments in most European countries (Sweden being the main exception) remain somewhat trigger happy in imposing localised restrictions in response to upward flurries in positive coronavirus tests — even though there hasn’t been any significant correspondence of actual public health events (serious illness and associated hospitalisations and deaths). The death rate from all respiratory illnesses outside Covid-19 has been greater than for Covid itself for some time now, and all-cause mortality rates continue to trend below long-term averages.

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Elsewhere, Cable posted a fresh eight-month peak at 1.3367 before retreating to 1.3332. AUDUSD lifted to a new trend peak at 0.7382, which is the loftiest level the pair has seen since December 2018. NZDUSD saw an eight-month high at 0.6740. USDCAD sank back below 1.3100 but remains shy of Friday’s seven-month low at 1.3045. Like other oil correlating currencies, the Canadian Dollar lost upside momentum as crude prices pared gains from the highs that were seen mid last week. Hurricane Laura wasn’t as disruptive to Gulf of Mexico crude production as feared. USDJPY is higher on the back of yen underperformance, rising to the lower 105.90’s, retracing some of the declines seen on Friday from levels near 107.00. AUDJPY, meanwhile, has lifted by over 0.7% but has remained short of last week’s 18-month peak. EURJPY, GBPJPY and other yen crosses have also lifted, but have also remained below recent highs.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Risks for UK Economy.

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The markets continue to take a sanguine view of the apparently stalled progress in the EU and UK trade talks. All things Brexit continue to go down to the wire, and expectations for any real progress are low until much nearer the deadline, which is widely accepted as being the EU leaders’ summit in October. The consensus view is that a deal will be struck. There are grounds to doubt there can be anything other than a narrow deal, given the intransigence on the EU’s level-playing-field rules and fishing rights.

A bare-bones deal or a no-deal outcome are a risk.

Prime Minister Boris Johnson’s cabinet is full of Brexit ideologues; of the view that Brexit is an opportunity to craft the UK on the Singaporean model, as an outwardly-oriented, low-tax and pro-trade hub. Signing up to the EU’s level-playing-field rules is not consistent with this view, and there is only so far that the EU is likely to bend. The government, which has over four years on the electoral clock and a large majority in parliament, is in a position to weather the short-term economic damage that leaving the EU’s single market without a comprehensive new trade deal would cause. Note that when UK leaves the single market, it will not just be leaving free trade with the EU but also the 40 free trade deals the EU has across the globe.

Another risk is that the UK government’s pandemic-era furlough scheme will end in late October, which is likely to cause an upward jolt to the unemployment rate, with the aviation, high street retail and hospitality sectors to be hardest hit. The wage support scheme protected about 9.5 mln jobs at the height of the lockdown, though there remains up to 1.5 mln jobs at risk of being chopped in October, unless the government extends its support scheme (as Germany did with its plan last week).

Furthermore, today’s UK economic data releases, showed that employment in the manufacturing sector dropped at one of the steepest rates since the Great Recession 11 years ago.

The final UK August manufacturing PMI was revised a tick lower, to 55.2 in the headline reading versus 55.3 in the preliminary figure. The details showed production in the sector to be rising at its quickest pace since May 2014, while new orders rose by the fastest since November 2017. Export orders rose for the first time in 10 months. However employment was on the downside, while backlogs of work fell at an increased rate, too, which points to space capacity. Business sentiment for the year has ahead remained near the 28-month peak, with hopes being pinned on expectations for a return to economic normalcy.

The risk is that conditions will deteriorate as lockdown-caused work backlogs drop, and when the government wage support program expires in October as stated earlier, which will likely spark job losses (there is a chance that the scheme will be extended).

The final August services PMI survey will be released on Thursday. The government’s ‘Eat Out to Help Out” scheme (with the government, courtesy of the bond market and eventually the taxpayer, meeting up to half the bill for consumers at restaurants and pubs from Monday to Wednesday during August) was partly behind the strength in activity in the service sector. The scheme, as of today, has now expired, which will likely lead to a weaker services PMI headline in the September survey. The service sector will be particularly exposed to a cut in the wage support scheme in October, with the aviation, high street retail and hospitality sectors most at risk.

As markets for now are taking a sanguine view of the trade talks and as there is a slight recovery in both the domestic and global economy from the more extreme phase of lockdowns that were seen earlier in the year, the UK currency remains well supported.

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GBPUSD has risen above the 1.3470 level for the first time since April 2018. The pair has continued to be floated by broad US Dollar weakness. GBPJPY has also been lifted by Yen weakness, which saw the cross print 7-month highs yesterday. The Pound has fared less well against the Euro and other currencies. Among the mix of forces affecting the Pound is the coronavirus, which has ceased to be a public health event in terms of causing severe illness and associated hospitalizations and deaths. This being the case, regional UK governments remain somewhat trigger happy with regard to implementing localized lockdown measures in response to rises in new cases, and we can assume that this will only get worse going into the winter, the season of contagious respiratory illness.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Events to Look Out for This Week.


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The shortened week starts with the major markets closed for Labor Day, but overcompensates on Wednesday and Thursday with the BoC and ECB rate decisions and Press Conferences, and Inflation from the US.
Have a look at the most important events of the coming days in our usual weekly publication.

Monday – 07 September 2020

Labor Day – US, Canada closed.

Trade Balance (CNY, GMT N/A) – The Chinese trade balance is expected to turn out positive in March, standing at $18 bln, compared to the deficit of $7 billion in February.

Gross Domestic Product (JPY, GMT 23:50) – Japan is expected to confirm a -8.1% contraction of its economy in the second quarter of the year.


Tuesday – 08 September 2020

Gross Domestic Product (EUR, GMT 09:00) – GDP is the economy’s most important figure. Q2’s GDP is expected to confirm a contraction to -13.1% q/q and -15% y/y.

UK Inflation Report Hearings (GBP, GMT N/A)

Wednesday – 09 September 2020

Consumer Price Index (CNY, GMT 01:30) – The July Inflation was confirmed at 2.7% y/y, above the preliminary number and the 2.5% y/y in the previous month. Now the August number is expected to continue higher to 3.1 % y/y with a rise in the monthly reading at 1.0% y/y from 0.6% last month.

Event of the week – BoC Interest Rate Decision (CAD, GMT 14:00) – The BoC’s announcement is expected to reveal no change in rates and a reiteration of a whatever-it-takes policy outlook that is shared by the core central banks. The latest jobs report showed that two-thirds of jobs have been recovered, consistent with bank’s view that there is still a long way to go before the economy and labour market return to pre-COVID levels of activity. Overall, a roughly as expected report that supports the recovery story but also highlights the long journey faced by the economy to return to pre-COVID levels of employment and production.

Thursday – 10 September 2020

Event of the week – ECB Interest Rate Decision & Press Conference (EUR, GMT 11:45 & 12:30) – Even before the negative inflation print, there had been calls for the ECB to move to a more “symmetric inflation target” as part of the ongoing strategic policy review. With the Fed already indicating a shift to an average inflation target and the August HICP rate falling back to -0.2% y/y, the pressure to strengthen the ECB’s commitment to the “low for longer” message has only increased, especially after the rise in the EUR, which clearly has some council members rattled. Against that background the ECB’s policy meeting will be of intense interest for markets and while markets don’t expect a change in overall policy settings, Lagarde is likely to send a dovish signal and hence strengthen the commitment to the “low for longer” stance.

Jobless Claims (USD, GMT 12:30)– US initial jobless claims dropped -130,000 to 881,000 in the week ended August 29 following the -93,000 drop to 1,011,000 in the August 22 week.

BoC’s Governor Macklem speech (CAD, GMT 16:30)


Friday – 11 September 2020

Eurogroup Meeting.

Harmonized Index of Consumer Prices (EUR, GMT 06:00) – The German HICP final inflation for August is anticipated to remain unchanged at -0.1% y/y.

Consumer Price Index (USD, GMT 12:30) – The August CPI is seen with 0.2% m/m gains for both the CPI headline and core, following 0.6% gains for both in July. The headline will be boosted by an estimated 1.9% August increase for CPI gasoline prices. As-expected August figures would result in a headline y/y increase of 1.2%, up from 1.0% in July. Core prices should set a 1.5% y/y rise, below the 1.6% y/y pace last month. As with PPI, the headline inflation figures continue to be lifted by oil prices. The Fed will have plenty of elbow room for an easing monetary policy over the coming quarters.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date : 8th September 2020.

FX Update – 8 September – Sterling STILL centre stage.

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GBPUSD, H1

The head of the UK government’s legal department has quit, according to sources cited by the FT,¹ (paywall) who report that Sir Jonathan Jones is “very unhappy” about the government’s decision to overwrite parts of the Northern Ireland protocol that was enshrined in the Withdrawal Agreement. This is a significant development, as it shows the government’s intent on leaving the single market at year-end without a deal, if necessary, rather than being a mere negotiating tactic. The unilateral move to overwrite parts of the Withdrawal Agreement, specifically aimed at enhancing the UK’s state aid autonomy, crosses a fundamental EU red line.

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Sterling has hit fresh lows against its peers, racking up a near 1% loss versus the Dollar and being the biggest loser out of its peer group. Cable dropped to new lows at 1.3020, while EURGBP gained 0.86%, printing a two-week high at 0.9048. The Pound is also down against the other European currencies, the yen and dollar bloc currencies. The latest news is that UK Prime Minister Boris Johnson will give a speech later today where he will defend his government’s decision introduce legislation that will unilaterally unpick parts of the EU Withdrawal Agreement. The Internal Market Bill, which will be published this week, is specifically designed to enhance the UK’s state aid autonomy — rather than constrain it, which puts the UK on a crash course with Brussels and its regime for limited state aid. EU Commission President von der Leyen tweeted yesterday that the Withdrawal Agreement is “an obligation under international law and prerequisite for any future partnership.” The risk of the UK exiting the EU without a trade deal are now much greater, and the Pound is likely to run much lower yet. Leaving the frictionless trade of the single market without a mitigating trade deal means UK trade shifting to much less favourable WTO terms (think tax and regulatory friction). The UK won’t just be leaving the common market, but also the 40 trade agreements the EU has with global economies.

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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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No-Deal Brexit : Odd rising? How about Sterling?

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A a no-deal Brexit outcome is now a much greater risk.

The London Times have reported that senior members of Prime Minister Johnson’s party are warning him about the risks of a no-deal exit from the EU’s single market, and that the plan to unilaterally dilute the Withdrawal Agreement is a risky move. Johnson’s move may be tactical, aimed at turning a weak negotiating position into a strong one before political leaders become involved in the Brexit endgame, which is set to happen between now and the EU leaders’ summit in October.

But, the view that Johnson’s cabinet are Brexit ideologues, and are serious about blowing up trade talks and prepared to exit the single market at year-end without a deal, is now much strengthened. As Robert Peston, a generally well regarded ITV political journalist, puts it in an opinion piece, the real reason Johnson’s government is sacrificing the prospect of a trade deal boils down to the desire to subsidise British industry — to “have the discretion to invest without fetter in hi-tech, digital, artificial intelligence and the full gamut of the so-called fourth industrial revolution.”

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The Brussels position is that the UK can only have a trade deal if it adheres to the EU’s state aid regime, or at the least follow very similar rules, which constrains governments from subsidizing industry to prevent unfair competition. The Internal Market Bill, which is the legislation that will unilaterally unpick parts of the Withdrawal Agreement, published by the government today, is specifically designed to enhance the UK’s state aid autonomy rather than constrain in.

This fits the Singapore model that has been must touted by Johnson and his allies during the Brexit debate.

The UK government knows full well the impact that this will have in relations with Brussels. EU Commission President von der Leyen in a tweet this week stressed that the Withdrawal Agreement is “an obligation under international law and prerequisite for any future partnership.” A senior minister admitted yesterday that the Bill breaks international law, while the head of the UK government’s legal department quit in disgust. This proposed legislation has greatly raised the odds for the UK leaving the EU’s single market without a new deal.

The Internal Market Bill, coupled with a finance bill planned for later in the year, will give ministers the power to tweak protocols that affect Northern Ireland trade with the rest of the UK, and will also enhance the UK’s state aid autonomy — which is be inharmonious with the EU’s regime for limited state aid. This has put the UK on a crash course with Brussels.

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The Poundis likely to drop much further than it already has if markets see the odds of a no-deal Brexit getting much greater than before. Leaving the frictionless trade of the single market without a mitigating trade deal means UK trade shifting to much less favourable WTO terms (think tax and regulatory friction). The UK won’t just be leaving the common market, but also the 40 trade agreements the EU has with global economies.

Additionally, the continued ramping up in coronavirus testing in the UK, meanwhile, is producing a noisy surge in positive results. The shear volume in testing means that even a 1% rate of false positives may be producing scary looking 1,800 new “cases” per day. Along with the approach of winter, the ‘case-demic’ — rising numbers of positive tests in juxtaposition to a lack of corresponding rises in hospitalisations/deaths (which was seen in the 2009 swine flu episode) — is maintaining the media-driven coronavirus psychosis.

The economic impact of this should not be underestimated.

Gatherings of more than six people are now being banned in the UK. Currently however, Sterling has hit fresh 6-week lows against the Dollar, Euro and Yen. The low in Cable is 1.2883, which marks a 4%-plus decline from the last week’s nine-month high at 1.3484. However the biggest underperformer this year is the GBPCHF , with a dive up to 7.6%. This selling pressure came coincided with a strong risk-off vibe in global markets as big tech and energy stocks suffer significant losses, affected by unrealistic tech valuations and plunge in oil prices.

Meanwhile, the Swiss Franc, an historic low-beta safe-haven currency, periodically correlatives inversely with global stock market direction, along with sentiment about the EU (Switzerland’s biggest trading partner). Hence the GBPCHF move has retreated from 200-DMA down to 1.1800 area, breaking the key support band 1.1850-1.1900 and the 50% Fib level from 2020 downleg, with further downside today.

Momentum is increasingly corrective, with RSI into the 40s, whilst MACD accelerates below its signal line. The inference is that near and medium term negative bias is increasing. A closing breach of 1.1850 would imply further downside towards a previous breakout Support at 61.8% Fib. level, i.e. at 1.1755. If latter rejected, the next Support level comes to the lows 1.16s.

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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
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Date : 14th September 2020.

Events to Look Out for This Week.


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The week ahead is expected to be a massive one, as three of the major Central Banks – the Fed, BoJ and BoE– will announce their rate decision and hold a policy press conference. However, markets’ attention will be focused on Brexit jitters, virus concerns and lingering US-China tensions which will also remain in the mix.
Have a look at the most important events of the coming days in our usual weekly publication.

Monday – 14 September 2020

Leadership election of the ruling LDP – Japan.

UK Inflation Report Hearings (GBP, GMT N/A).

UK Parliamentary Vote on Brexit (GBP, GMT N/A) –Internal Market Bill, which overrides parts of the Brexit divorce deal, will be debated in the Commons on Monday September 14.

Tuesday – 15 September 2020

RBA Minutes (AUD, GMT 01:30) – The RBA minutes should provide guidance as to how further the RBA members are prepared to go in order to support the economy. The bank in its last meeting left rates on hold, and increased the size of the Term Funding Facility and made the facility available for longer. RBA Governor Lowe said “the board is committed to do what it can to support jobs, incomes and businesses in Australia”. “Low for longer”, with the willingness to do more if necessary, is pretty much the stance at most major central banks as the world economy deals with Covid-19.

Average Earnings (GBP, GMT 06:00) – Average Earnings excluding bonus for July are expected to decline to -0.6% (3Mo/Yr). The ILO unemployment rate is seen unchanged.

Economic Sentiment (EUR, GMT 09:00) – German ZEW economic sentiment for September is expected to have slightly declined, after spiking to 64 in August. This will be important for retail to actually recover as consumers need to be confident enough to go out and spend again.

Wednesday – 16 September 2020

Consumer Price Index and Core (GBP, GMT 06:00) – The UK CPI inflation is anticipated to be underwhelmed as Brexit jitters. August CPI is anticipated higher at 1.3% y/y from 1% y/y, while core is anticipated lower at 1.4%y/y from 1.8% y/y.

Retail Sales (USD, GMT 12:30) – August Retail sales are anticipated to increase at 0.9% for headline and 1.0% for the ex-auto figure, following July gains of 1.2% for the headline and 1.9% ex-autos.

Consumer Price Index (CAD, GMT 12:30) – The August BOC CPI is expected to continue adding to the backing for steady BoC policy this year, as the Fed and ECB also remained in a wait and see stance. CPI has been forecasted to grow to a 0.9% y/y pace in August, above the 0.7% last month.

Interest Rate Decision, Monetary Policy Statement and Press Conference (USD, GMT 18:00-18:30) – The FOMC announced a shift in its monetary policy strategy, moving to an average inflation target. Though the outcome was widely expected, the timing surprised. Markets widely assumed it would be outlined at the September FOMC, along with the SEP. Under this strategy, the Fed will let the economy run hotter and will let the inflation rate rise “moderately” over 2% in order to make up for prior undershoots of that level. There was no indication of a time frame. Hence this meeting will provide further guidance and timeframe. Lastly as the government looks unlikely to deliver more stimulus, the Fed is expected to be all in.

Thursday – 17 September 2020

Interest Rate Decision, Monetary Policy Statement (JPY, GMT 03:00 – 06:00) – The focus is on Monday’s leadership election of the ruling LDP, which will appoint a new prime minister after Shinzo Abe stepped down. Yoshihide Suga is expected to win. No major changes to prevailing policies would be expected should he indeed be confirmed as the new PM. He is a supporter of ‘Abenomics’, large fiscal stimulus is already in the works, and the close relationship between government and the BoJ would be maintained.

Consumer Price Index and Core (EUR, GMT 09:00) – The final reading of August inflation is expected to have held steady at -0.4% m/m and core at -0.5% m/m.

Interest Rate Decision, Monetary Policy Statement and MPC Voting (GBP, GMT 11:00) –Shadowed by the ongoing political developments in Brexit, the BoE is not expected to proceed with any interest rate actions while no change in the MPC voting is expected. BoE policymakers have been subtly changing their tune to a more circumspect one. MPC member Vlieghe, for instance, said that there is a “material risk” that it could take several years before the economy to return to full capacity.

Building Permits & Housing Starts (USD, GMT 12:30) – Housing starts should slip to a 1.440 mln pace in August, after climbing to a 1.496 mln pace in July from 1.220 mln in June, versus a 14-year high of 1.617 mln in January. Permits are expected to climb to 1.530 mln in August, after rising to 1.483 mln in July. All the housing measures have rebounded sharply in Q3, though the dramatic Q2 climb in the MBA purchase index has been followed by more stable Q3 readings around lofty levels.

Philly Fed Index (USD, GMT 12:30) –The Philly Fed index is seen rising to 19.0 in September from 17.2, after the big jump to 27.5 by June from a 40-year low of -56.6 in April. The Philly Fed index posted a bottom in the last recession of -40.9 in November of 2008. These diffusion indexes should remain elevated as factory activity continues to ramp up, though with backtracking in some states from restrictions on retail activity. Conditions are improving through Q3, as producers face lean inventory levels.

Friday – 18 September 2020

Retail Sales (GBP, GMT 06:00) – – UK retail sales for August expected to give further glimpse into Covid-19 damage, with a very pessimistic outcome as forecasts sustain contraction picture .

Retail Sales (CAD, GMT 12:30) – July Retail sales are anticipated to increase at 24.5% for headline and 9.4% for the ex-auto figure.

Michigan Index (USD, GMT 14:00) – The preliminary Michigan sentiment report should climb to 75.0 from 74.1 in August.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
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Date : 15th September 2020.

What you need to know today?

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Trading Leveraged Products is risky

Risk seemed to bounce back yesterday, but investors turned cautious again as the FOMC meeting comes into view. Data out of China, including industrial production and retail sales, beat expectations and the PBOC injected 600 bln yuan via a 1 year MLF, which helped China bourses to move higher. Hang Seng and CSI 300 meanwhile are up 0.5% and 0.7%, also helped by comments out of China that a vaccine could be taken in November.

The main US equity indexes closed on Wall Street yesterday with gains of over 1%, and USA500 mini is up 0.5% in overnight trading. Positive news on the Covid-19 vaccine and treatment front, news of some mega mergers, along with above-forecast data out of China, have collectively floated investor spirits.

Elsewhere Asian markets traded mixed, however Eurozone peripheral markets are mostly outperforming slightly, after ECB officials including President Lagarde strengthened the central bank’s message on the EUR since last week’s policy announcement. The message that if the exchange rate threatens to undermine the inflation projection, the ECB will act, is getting clearer and has already seen peripheral markets rallying yesterday.

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GER30 and UK100 futures are both up 0.1% at the moment, underperforming versus US futures, which are up around 0.5% after a mixed session in Asia overnight. The GER30 and UK100are hardly changed as the focus turns to the FOMC meeting, which starts today and its policy statement and new Summary of Economic Projections (SEP) on Wednesday.

Chair Powell largely pre-empted this meeting in terms of policy with his Jackson Hole announcement of the FOMC’s new strategies where it will pursue an average inflation target and monitor any shortfall in employment. An upward revision is seen in the Fed’s GDP and inflation outlooks, and a downward bump to unemployment, as a consequence of its regime change. The upward revisions to growth may give the US Dollar a lift, though the lower-for-longer strategy on interest rates may offset.

The BoE, which announces its policy decision on Thursday, is also expected to keep overall settings on hold, against the background of Brexit and virus jitters. PM Johnson managed to get his controversial Internal Market Bill through the first reading in parliament yesterday and that leaves the risk of a no-deal scenario firmly on the table.

In FX markets

The USD and JPY softened against their peers amid a background theme of mostly higher stock markets. Among currencies, the USDIndexprinted a 5-day low at 92.84. Sterling remained heavy, though remained above above recent lows. The UK government’s controversial Internal Markets Bill was passed in the House of Commons, and will now go the House of Lords.

As for the Euro, attention will be on the latest ZEW investor sentiment survey, which is the first major confidence data of September. A slight decline in the expectations reading is expected to 71.0 from 71.5. Nothing yet to shake the ECB’s baseline scenario, with Brexit and virus/casedemic developments the key factors that policymakers will be watching closely. EURUSDconcurrently pegged a 5-day high at 1.1900. USDJPY flatlined in the mid-to-upper 105.00s (PP at 105.80).

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AUDUSD rallied by over 0.5% to a 12-day high at 0.7336 but retreated to 0.7310. The release of the latest RBA minutes, although stating “a lower exchange rate would provide more assistance to the Australian economy,” sparked initial Aussie Dollar buying as markets deemed the minutes to be less dovish in overall tone than had been anticipated. The Aussie was subsequently given a further lift by above forecast Chinese data. .

USDCAD has been playing a narrow range in the mid 1.3100s, below the 3-week high that was seen last Wednesday at 1.3261. Oil prices have stabilized in recent days following a near 20% tumble, which has arrested the recent decent in oil-correlating currencies, such as the Canadian Dollar. The flattening out in the recovery pace of the global economy, juxtaposed to large global crude stockpiles and uncertainty about Chinese demand (which has been importing crude in record quantities in recent months, but may now be ready to slow this process down), caused the rotation lower in oil prices.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
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Date : 16th September 2020.

FX Update September 16 – A weaker USD ahead of the FED.

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EURUSD has rallied by just over 50 pips from the intraday low in posting a high at 1.1882. This swings yesterday’s six-day peak at 1.1901 back into scope. Dollar weakness is driving the move, which is being facilitated by strong gains in Cable (0.6%) and in the AUDUSD and NZDUSD (both 0.5%). USDJPY touched the key psychological 105.00, S2 and new seven-week low from a pivot yesterday at 105.50 and highs last week of 106.38.

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Regarding the FOMC, no changes are expected in policy, and while the central bank will likely present upward revisions to US economic projections, the recently codified lower-for-longer monetary policy regime is driving a bearish dollar sentiment. The Dollar is also correlating inversely with global stock markets. These factors appear to be outweighing recent ECB signalling about its concerns about euro strength, which partly counterbalances the easing measures implemented earlier in the year. The Pound has rallied to six-day highs against both the Dollar and Euro.

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Cable‘s high is 1.2976. The gains in the UK currency have been concurrent with market narratives showing a measure of incredulity about the UK government’s insistence that it is serious about its threat to leave the EU’s single market at year-end without a new trade deal, given the massive near-term disruptive impact it would have on the economy and the divisions appearing within the Conservative Party and among UK nations. Even though the controversial Internal Market Bill sailed through the House of Commons, the proposed legislation is likely to have a tougher time in the House of Lords, and in any case there are suspicions that the legislation is merely a gambit of PM Johnson and his cabinet to up the ante and strengthen their negotiating position into the final weeks of talks. This fits with expectations that a more practical attitude will be seen in trade negotiations once state leaders become directly involved in the run-in to the October 15th-16th EU summit. This backdrop has lessened the bearish conviction markets have with regard to the Pound.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date : 17th September 2020.

The Guppy dips to 135.00, having stalled at 136.00.

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GBPJPY, Daily

Both the UK and Japan are in the middle of political upheavals, (the Brexit Trade talks and Internal Market Bill on one side and the handover from one political dynasty to his trusted lieutenant on the other. Earlier today we had the BOJ signalling No Change to current policy as the new PM Suga completes his first few days in the role. The BOE has just published their statement¹ and minutes from their latest meeting, and again it’s no change across the board, (excuse the pun), although the spectre of negative interest rates in the UK is more firmly “in the toolbox” than ever before. The BOE continues to negotiate the tricky ground around monetary policy with the backdrop of deteriorating UK-EU relations and the likelihood of PM Johnson overseeing a very limited trade deal with the EU, if one is agreed at all. The Brexit endgame showdown is very much “in-play”.

BOE highlights include – “stands ready to adjust monetary policy”, and to
“keep under review the range of actions” – taken as a nod to possible negative rates next year with the statement that the MPC has been briefed on the BoE’s plans to explore how a negative bank rate could be implemented effectively. It also “does not intend to tighten monetary policy until there is clear evidence that significant progress is being made in eliminating spare capacity and achieving the 2% inflation target sustainably.”

Cable continues to rotate around 1.2900 today, whilst EURGBP jumped from 0.9090 to 0.9150 and GBPJPY plunged to 135.00 a level not seen since July 20, some 42 trading days ago.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
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Date : 18th September 2020.

FX Update September 18 – A volatile 24hrs.

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The Dollar has scraped out a two-day low at 92.76 in the narrow trade-weighted USDIndex, with EURUSD concurrently pegging a two-day high at 1.1868, gaining quite sharply from yesterday’s five-week low at 1.1736. A steadying in stock markets today has seen the Dollar ebb back after finding safe haven demand during the worst of this week’s sharp sell-off across global equity markets.

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The Pound has come under modest pressure against most other currencies. Cable posted an intraday low at 1.2941. The WHO is warning of a serious second wave of SARS-CoV-2 in Europe¹ (Germany recorded 2,179 cases yesterday) on the back of a surge in new cases (despite data showing a continued very low rate of death alongside a relatively low incidence of Covid being listed on death certificates). In the UK, coronavirus cases and, with it, corona-panic are surging. Localised lockdowns are now affecting 10 million people in the UK, and the government’s scientific advisory group are, according to an FT report, advising the government to implement a two-week national lockdown. The embattled Health Secretary (Matt Hancock) this morning called it a “last line of defence” but “will do whatever is necessary”. This is a negative backdrop for the Pound, adding to the uncertainty surrounding the Brexit endgame, and with the minutes from the BoE MPC meeting yesterday affirming that the central bank is at full steam on contingency planning for negative interest rates (although stressing that it is not ready to do so yet).

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Elsewhere, USDJPY has settled in the mid 104.00s, testing the seven-week low seen yesterday at 104.52. Yen crosses have also rebounded out of lows. Both EURJPY and AUDJPY lifted above their respective Thursday highs. Japan’s core CPI came in at -0.4%y/y, matching expectations, but the NZDJPY was the biggest mover, moving over +0.6% as the Kiwi holds its bid.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
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Date : 21st September 2020.

Events to Look Out for This Week.


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After an exciting week, the markets continue to digest central bank decisions while waiting for a fresh catalyst. Rising virus infections around the world remain in focus as there is the fear that the equality of hospitalization and deaths will change if the virus spreads from young holiday markets to older generations, and with restrictions ramped up again there is concern that economic activity will be hit again. Meanwhile US-China tensions and no-trade deal Brexit is back in play after BoE was briefed on negative rates. Markets will also be guided by hard economic data.

Monday – 21 September 2020

Inflation Report Hearings (GBP, GMT N/A) –The BOE Governor and several MPC members testify on inflation and the economic outlook before Parliament’s Treasury Committee.

Tuesday – 22 September 2020

RBA’s Debelle, BoE’s Governor Bailey and Fed Chair’s Powell speech

Wednesday – 23 September 2020

Interest Rate Decision & Policy Report (NZD, GMT 02:00) – The Reserve Bank of New Zealand (RBNZ) is widely expected to keep the OCR (Official Cash Rate) at the current record low 0.25%. RBNZ Governor Orr, speaking in the first week of September, stressed again that the central bank is actively preparing a new package of measures to implement if necessary. That could include negative wholesale interest rates, further quantitative easing and direct lending to banks. The RBNZ is in the low-for-longer whatever-it-takes boat with the bulk of the world’s central banks.
Markit Services and Composite PMIs (EUR, GMT 07:30-08:00) – The prelim. EU Markit PMI Indices are expected to continue above 50, but slightly decline on Services, which could result in a composite PMI for September at 51.6 from 51.7.
Markit Services and Composite PMIs (GBP, GMT 08:30) – The prelim. UK Markit Service PMI Indices is expected to have improved in September to 59.5. The ongoing recovery in the service sector could continue to be the dominant upward driver of the composite figure. The government’s ‘Eat Out to Help Out’ scheme is behind the so far strength in activity.
Markit Services and Composite PMIs (USD, GMT 13:45) – The prelim. US Markit Service PMI for September is seen lower at 54.9, after the 55.0 in the final read for August. In August the composite index dipped to 54.6 in the final version versus the 54.7 preliminary, though it’s up from July’s 50.3.
Monetary Policy Meeting Minutes (JPY, GMT 23:50) – The BOJ minutes, similar to the ECB Reports, provide a detailed assessment of the bank’s most recent policy-setting meeting, containing in-depth insights into the economic conditions that influenced the rate decision. They are usually a cause for FX turbulence.

Thursday – 24 September 2020

Interest Rate Decision & Policy Report (CHF, GMT 07:30) – The influence of the SNB’s intervening hand may have been in play this month. Total Swiss sight deposits of Francs have risen by 130 bln since the pandemic and consequential lockdowns took a grip on global markets back in March. Sight deposits can be viewed as a proxy marker of SNB intervention to sell Francs in forex markets (after buying foreign currencies), which results in the crediting of newly created Francs in commercial banks sight accounts. The rise in sight deposits also reflects SNB operations to boost liquidity via the COVID-19 refinancing facility. The advent of the EU’s recovery fund (a new liquid AAA fund that also reduces Eurozone breakup risks), seen as a milestone by many analysts, has by many accounts caused a re-weighting of the common currency in portfolios, which will help the SNB combat what it sees as a chronically overvalued Franc. The SNB would like to step out of the negative interest rate policy sooner rather than later, but with the world economy still in the grip of Covid-19 and data releases highlighting the fallout from the crisis, there is little the central bank can do if it wants to keep the currency under control.
German IFO (EUR, GMT 08:00) – German IFO business confidence is expected to rise to 94 from 92.6 in August.
Jobless Claims (USD, GMT 12:30)– US initial jobless claims fell -33k to 860k in the week ended September 12 after a revised 893k print in the September 5 week. This is the fourth reading with claims below 1 mln since the surge in the March 20 week.
BoE’s Governor Bailey speech (GBP, GMT 14:00)

Friday – 25 September 2020

Durable Goods (USD, GMT 12:30) – Durable goods orders are expected to rise 2.0% in August with a 3.1% climb in transportation orders, after an 11.4% headline orders climb in July that included a 35.7% transportation orders surge. The durable orders rise ex-transportation is pegged at 1.5%. Defense orders are pegged at 0.9%, following a 33.4% July pop. Boeing orders rose to 8 planes from zero orders in July. The vehicle assembly rate should improve to 12.1 mln from 11.9 mln units in July, versus a 0.1 mln trough in April. Durable shipments should rise 2.5%, and inventories should fall -0.6%.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
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Date : 22nd September 2020.

FX Update September 22 – USD, YEN, AUD & GBP all in play.

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Trading Leveraged Products is risky

AUDJPY, Daily

The Dollar and Yen have remained firm and pushed ahead of Monday’s highs. The Australian Dollar has been the major mover of note out of the main currencies we track, falling to new lows after RBA deputy governor Debelle said that the central bank is watching the currency “carefully” and that forex intervention is a policy option, as is negative interest rates (while stressing that this doesn’t mean it’s on the table). AUDUSD hit a low at 0.7177 to post a new four-week low, while AUDJPY posted a fresh seven-week low at 75.10. Elsewhere, EURUSD moved lower to post a new seven-week low at 1.1724. Cable also remained heavy, pushing to 1.2710, before recovering the 1.2800 handle following Governor Bailey’s defence of the need to use negative interest rates. The governor said that “we have looked very hard” at ways of adding further monetary stimulus, including negative interest rates. Bailey, who was speaking at the British Chambers of Commerce, subsequently said that last week’s note in the minutes from the MPC meeting, that members had been briefed on negative interest rate preparations, “did not imply” that the BoE would adopt negative rates. This seemed to inspire the snap back in the Pound. USDJPY settled in the mid 104.00s after rebounding out of yesterday’s six-month low at 104.00, and what appears to be BOJ intervention. EURJPY also traded above yesterday’s low, though ebbed back under 123.00 after peaking at a rebound high at 123.35. GBPJPY broke below 133.00 briefly, but rallied to hold 134.00, following the Governor’s comments.

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A risk-off theme has continued in global markets, although price changes in assets and currencies have moderated somewhat today relative to yesterday. This backdrop is supportive for the Dollar and Yen, though some market narratives are pointing to a rise in some inflation-adjusted (aka real) JGB yields as being yen positive. Japanese markets reopened from a long weekend. The Nikkei 225 managed a modest gain, but this was the exception as most Asian markets continued to drop, and some quite sharply (South Korea’s KOPSI, for instance, racking up a loss of over 2.5%). S&P 500 minis have also declined in its overnight session, although only moderately. Most commodity prices have managed to steady, however, and the pace of declines in global stocks has, overall, lessened. Nonetheless, the prevailing bias across markets is one of caution. Many European countries are implementing restrictions in the face of a surging coronavirus case-demic (still no significant correspondence in public health issues, i.e. hospitalisations, mortality), which has clobbered stocks in the airline and hospitality sectors. The US Congress remains deadlocked over the size and shape of a new fiscal support bill, while uncertainty about the upcoming US election (6 calendar weeks but only 31 trading days away) is also causing market participants to tread cautiously.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
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Date : 23rd September 2020.

FX Update – September 23 – Day 3 of Dollar Gains.

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EURUSD, H1

The Dollar is up for a third consecutive day, even managing gains against the Yen as global stock markets lifted out of recent correction lows. Solid US data yesterday, including the August existing home sales and the September Richmond Fed index, have been in the mix, alongside a flurry of dovish signalling from central bank policymakers. BoJ Governor Kuroda earlier stressed that the Fed’s recent policy regime change is similar to the stance the Japanese central bank took in 2016, which he described as an overshooting strategy. He said that the BoJ won’t hesitate to take additional easing steps if necessary. Policymakers at the ECB, BoE and RBA have been similarly ramping up dovish signalling in the wake of the Fed’s move in late August, not wanting to see their respective currencies rise against the Dollar in these disinflationary times. ECB’s Mersch is the latest, cited by Bloomberg today saying that it is obvious that the exchange rate influences inflation.

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Expectations for the RBA to cut rates again are also cementing, which has been concomitant with recent declines in iron ore and other commodity prices. The flagging pace in global economic growth is marring the outlook for resources, which is the prime influencer of the export-oriented Australian economy’s terms of trade. Westpac analysts are expecting an easing at the October 6th RBA policy review, while a NAB research note is calling for a rate cut at either the October or November meetings. AUDUSD dropped 0.6% in posting a six-week low at 0.7113, extending losses from last week’s highs around 0.7350. AUDJPY fell by 0.5%, foraying further into 10-week low terrain. The USD Index (DXY) printed an eight-week high at 94.24, while EURUSD lifted to an eight-week low at 1.1673. USD-PY edged above 105.00. Cable hit a two-month low at 1.2681, marking a 6% decline from the high seen in early September. The Pound also saw moderate declines versus the Euro and Yen, among other currencies, amid a bearish mix of new Covid restrictions in the UK, the upcoming expiry of the government’s wage support scheme, and Brexit endgame uncertainties.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
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Date : 24th September 2020.

US Claims Disappoint, again & Equities under pressure.

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USA500, H1 & Daily

A 4,000 initial claims rise to 870,000 in the third week of September followed a -27,000 drop to 866,000 in the BLS survey week, leaving a disappointing rise as we now log the fourth week with the new additive seasonal factors. We saw a -167,000 continuing claims drop to a modestly higher than expected 12.58 million in the BLS survey week, after a downward bump that left a -797,000 decline to 12.747 million in the first week of September. The insured jobless rate fell to 8.6% from 8.7%, versus a 17.1% peak in the second week of May and a 1.2% cycle-low for nearly two years ending in mid-March.

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Initial claims are averaging 875,000 thus far in September, versus higher prior averages of 992,000 in August and 1.34 million in July. The 866,000 BLS survey week reading undershot prior BLS survey week readings of 1.104 million in August and 1.422 million in July. We saw a 4.442 million peak in April and a 203,000 prior cycle-low in April of 2019. We now have a continuing claims drop of -1.912 million between the August and September BLS survey weeks, though this measure is clouded by the seasonal adjustment switch that left one procedure for the August figure and another for September. We saw prior declines of -2.459 million in August, -2.28 million in July, and -1.61 million in June. September nonfarm payroll consensus remains around 900,000, though today’s data adds some risk to the forecasts and could be amended into next week.

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The US Equity markets, which have seen Futures under pressure all day following yesterday’s significant declines (Nasdaq closed down by over 3% and the S&P 500 lost over 2.3%) are weaker again, with the USA500 trading at 3230 in early trades, 30 points above the key 3200 support level, but still 130 points above the vital 200-day moving average at 3,100.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
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  • Joined: 28/05/2017
Date : 29th September 2020.

Time for the first face-off.

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The first presidential debate is due to take place today, ahead of an election that is turning into a major event risk.

At the same time markets are waiting for developments on further US stimulus measures as US Democrats released a USD 2.2 trillion proposal in a bid to break the deadlock in talks with Republicans. The debate is at 01:00 GMT while the focus turns on any potential market fallout especially as it coincides with indications of a possible approval of the fiscal stimulus but crucial with the approach of month- and quarter-end which could exacerbate volatility.

Additionally in the US this week, there is also the threat of massive layoffs/furloughs from the airlines come October 1 as the CARES package provisions expire. Data remains thin for now. September consumer confidence headlines Tuesday, and is followed Wednesday with the ADP private payroll report, September ISM, vehicle sales, August income and consumption. Thursday has the high frequency jobless claims before Friday’s September nonfarm payrolls release.

Now in regards to tonight’s debate, the importance of it does not rely solely due to the fact that is the every first debate but mainly because it might present the clear winner especially this year in which the candidates have not been as highly visible with limited campaigns done because of Covid-19.

The candidates will be questioned for 90 minutes, without commercial breaks, according to the Commission on Presidential Debates. Ahead of the debate the vulnerable one look to be Trump following a New York time report that the president paid no income tax for 11 years. However is an excellent brutally effective debater so it will interesting to see how he will overcome any attacks. Please note that in some states voting has already started via mail or in person.

The debate will take place at Case Western Reserve University and Cleveland Clinic in Cleveland, while the topics selected by Wallace, moderator of the first 2020 presidential debate, are the:

The Trump and Biden Records
The Supreme Court
Covid-19
The Economy
Race and Violence in our Cities
The Integrity of the Election
Below you can also find the latest national polls prior the debate.

[img]https://ig.ft.com/autograph/graphics/us-2020-polltracker.svg?frame=webM[/img]

Based on UBS research below we enclose the campaign policy platform of each Party:

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What is the 2020 Republican Party platform?
President Trump abandoned the usual practice of endorsing a lengthy campaign policy platform in conjunction with the GOP national nominating convention. Instead, he released an abbreviated written agenda for a planned second term in office. The GOP policy statement is largely aspirational, with fewer details than one is accustomed to seeing from a presidential candidate. The president’s proposed fiscal policies include additional tax cuts for individuals and federal tax credits and deductions for corporations that repatriate jobs to the US from overseas locations. The statement also explicitly supports additional capital gains tax relief through an expansion of the Opportunity Zone program.

Numerous provisions from the Tax Cuts and Jobs Act (TCJA) are scheduled to expire at the end of 2025, but the president does not discuss how the resulting tax hikes will be averted. Absent additional congressional action, the individual income tax cuts, an increase in the standard deduction, and the expanded child tax credit will all revert to prior levels in just over five years. Voters are left to assume that the president will be able to convince Congress to make the tax cuts permanent.

The policy statement, which was released in conjunction with his acceptance speech, also focuses on the adoption of a more adversarial posture toward China, strict enforcement of immigration laws, and support for law enforcement personnel. While all three are viewed by the GOP as winning campaign strategies, the reference to “ending our reliance on China” suggests that the president is willing to continue to use tariffs as a tool of foreign policy if elected to a second term. He has threatened to selectively impose tariffs upon, and to strip government contracts from, companies that refuse to relocate their operations to the US.

Meanwhile, in a rare instance of tacit agreement with his challenger, the president reaffirmed a desire to cut prescription drug prices, lower healthcare insurance premiums, and require coverage of all preexisting conditions. On the whole, the impact of the president’s policies on Treasury receipts (and on the US economy generally) is difficult to calculate. Whether or not this is purposeful is debatable, but the inevitable conclusion is that a second Trump administration would be similar to the first and forced to rely on deficit financing to accomplish its goals.

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What is the 2020 Democratic Party platform?
In contrast to the president’s abridged policy statement, the Democratic Party platform is a protracted recitation of policies as disparate as the need for federal bankruptcy reform, a Green New Deal, and reinvestment in rural America. The Biden campaign has not released a consolidated fiscal plan but instead weaved his call for higher taxes to partially fund a series of spending proposals related to infrastructure investment, climate change, and an expansion of healthcare coverage. At its core, however, the Biden campaign is focused on strengthening the federal regulatory regime, reversing many of the provisions of the Tax Cuts and Jobs Act, and increasing federal funding of long-time Democratic policy priorities.

The former vice president advocates an increase in the highest marginal tax rate to 39.6%, and higher payroll taxes for individuals earning more than USD 400,000 a year. He also proposes to tax capital gains at the same rate as ordinary income for taxpayers earning more than USD 1 million. The corporate tax rate is targeted for an increase, albeit less than the rate prevalent before the enactment of the Tax Cuts and Jobs Act. The corporate tax rate would increase from 21% to 28%, and an alternative minimum tax of 15% would be levied on companies that report more than USD 100 million in book income.

The Democratic campaign platform also takes aim at the estate tax by recommending a reduction in the exemption to USD 3.5 million and the elimination of the stepped-up basis rule. Tax preferences for the fossil fuel industry would be eliminated, while those for energy efficiency would be increased. With the exception of the payroll tax increase, most of Biden’s fiscal policy platform could be implemented with a majority vote in the Senate through budget reconciliation.

The Tax Policy Center has estimated that Biden’s tax proposals would increase federal revenue by about USD 4 trillion between 2021 and 2030, or 1.5% of GDP over a decade.1 Roughly half of the revenue gain would be derived from higher taxes on US households, with the remainder coming from businesses and corporations. The Tax Foundation expects the Biden tax plan to reduce after-tax income for the top 1% of taxpayers by 7.8%. The top 5% would see their after-tax income drop by 1.1%, with diminishing reductions thereafter as income declines.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

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Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
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Date : 30th September 2020.

ADP, NFP and the change in their correlation.

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Today ADP reported a 749k sure in private payroll employment in September, almost double the 400k expectation, after an upwardly revised 481k (was 428k) increase in August.

There were solid gains across industries. The service sector added another 552k jobs, with the goods sector adding 196k. Manufacturing jobs were up a hefty 130k. In services, trade/transport posted a big 186k gain, while leisure/hospitality jobs increased 92k, and education/health employment was up 90k. Professional/business services added 78k jobs. The ADP gains have massively undershot improvement in BLS payrolls and other labor market indicators since the growth rebound began, suggesting that this could continue despite this month’s solid gain. However please note that during the pandemic year ADP has done an awful job as an indicator of NFP number. In general after since May we have seen the absence of correlation between the ADP employment change figures with Nonfarm Payrolls.

The September Nonfarm Payroll gain is seen at 900k, as most measures of output extended their rebounds in September. Initial claims have slowly tightened, and we saw another big -1,912k continuing claims plunge between the August and September BLS survey weeks. The jobless rate is expected to hold steady from 8.4%, alongside a 0.8% September hours-worked increase with a 34.6 workweek and hourly earnings to be unchanged, following August’s 0.4% rise, as the measure gives back more of the 4.7% April pop with the shift in the composition of jobs back toward lower-paid workers. The nonfarm payroll forecast assumes a 1,075k private jobs increase.

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Seasonal Trends and Weather

For disruptions to employment from weather as gauged in the household survey, the biggest disruptions occur in the winter months generally with the average peaking in February. There is an additional climb through the late-summer months due to disruptive hurricanes in some years. This September has seen hurricane activity but they’ve been less disruptive than some of the major events in years past, leaving modest upside weather-risk for payrolls. Of course, any weather related disruptions will be eclipsed by COVID-19.

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Hourly Earnings

As stated above, a flat figure for September average hourly earnings is anticipated, after gains of 0.4% in August and 0.2% in July, but drops of -1.3% in June and -1.1% in May, as we further unwind the 4.7% April surge. Job losses have been skewed toward lower paid retail, leisure and hospitality workers, and this prompted the April spike in average hourly earnings that is now being reversed. A 4.6% y/y increase in September from 4.7% in August is forecasted.

Continuing and Initial Claims

Continuing claims fell -1,912k between the September and August BLS survey weeks, after a drop of -2,459k between August and July, and a -2,280k drop between June and July survey. The economy is unwinding the 24,912k continuing claims peak in the second week of May. Initial claims fell to 866k in the September BLS survey week from 1,104k in the August survey week, and 1,422k in the July survey week. The September initial claims anticipate to average at 870k from 992k in August.

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Conclusion

Employment should rose further with output in September, despite delayed stimulus and ongoing disruptions in the re-opening process. The September hours-worked is expected to increase of 0.8%, with a 34.6 workweek, while hourly earnings remain flat. The jobless rate should hold steady at 8.4%, leaving the rate below the 9.98% cycle-high from the last recession in October of 2009.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
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Date : 1st October 2020.

Brexit headlines driving the markets.

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The UK currency took a sharp rotation lower on Brexit related developments. Weighing were reports that the EU and UK are struggling on key issues in trade negotiations, and with the European Commission president von de Leyen announcing that the EU has taken the first step in a legal infringement procedure against the UK in relation to the controversial Internal Market Bill. However later on an FT report cited UK officials with inside knowledge saying that the EU and UK have reached a compromise on the state aid issue, contrary to an earlier Reuters article, which had cited EU sources. Fishing rights remains a sticking point, apparently.

The EU recovery fund is likely to be delayed just as nearly all European countries are ratcheting up Covid restrictions. And this comes amid the ECB campaign of verbal intervention to keep a lid on the Euro. Similar messaging from other central banks, including the BoE and RBA, has also contributed to an overall weakening in the strongly bearish Dollar bias that forex market participants had until recently. The rhetorical interjections countervail the impact of the Fed’s regime shift to a lower-for-longer stance on interest rates.

In Europe, positive Covid test results have continued to soar in most countries. Covid hospitalisations and mortality, while bumping higher over the last week in many countries, still remain at basement levels relative to the March/April peak. The ratio between Covid-caused death and flu- and pneumonia-caused death also remains low, again contrasting markedly to the March/April situation. Nonetheless, the trend in most countries in Europe is for tighter restrictions and more localized lockdowns, which should limit the upside scope of the Euro.

EURUSD earlier posted a 9-day high at 1.1769. EURJPY gained, too, with both the Dollar and Yen having softened amid a backdrop of mostly higher global stock markets. EURGBP dove about 90 pips in returning to levels around 0.9065-75. Heads of state will bring the issue to a resolution at the October 15th-16th EU summit. The odds for a deal being struck now appear much greater, though how extensive any deal will be remains uncertain, and there is a risk that the UK will see a downward jolt in its terms of trade when it leaves the EU’s single market on January 1.

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European stock markets have pared early gains. The UK100 outperformed as the Pound sold off and the UK Gilt future is currently down by 0.2%, while the GER30 underperformed and lost most of its early gains amid the rise in local virus case numbers and with Bayer AG under pressure after a profit warning. This comes in contrast to the European final manufacturing PMIs, which confirmed the improvement in sentiment.

The UKGilt has had a key downside move that is potentially outlook changing, breaking the 200-Day MA and resuming the 2-month downtrend. The UKGilt is heading towards the support band 135.30/135.00. The rebound from 134.20 to 136.98 last week is now the medium term resistance area. Given the deterioration in momentum we have seen, with RSI into the 40s and MACD lines sustaining a move into negative area, the outlook is becoming increasingly worrying for the bulls. If this 200-Day MA at 136 continues to be seen as a sell zone, the downside pressure will grow. Initial Support, at 50% Retracement level on year’s rally and 50-week SMA, is a key level. If this is breached on a closing basis it would open 132.80-132.00 which is the year’s low area, however a strong obstacle will be the 61.8% fib level at 134.00. How the market reacts around 134.00 would then be the key as to whether this is a near term upswing or something far more bearish.

Generally though investor sentiment was boosted by headlines suggesting progress on the next US stimulus package, and US futures are up 0.8 to 1.3%, with the USA100 outperforming. The vote on the Democratic proposal was delayed to give negotiators more time to come up with a compromise deal as Fed officials warn against delaying a new aid deal until next year.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
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Date : 2nd October 2020.

FX Update October 2 – Ahead of NFP.

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USDJPY, H1

The Yen has rallied versus other currencies amid a pronounced risk-off positioning theme in global markets on news that President Trump, along with the First Lady and White House public relations counsellor, have tested positive for Covid.

S&P 500 E-minis are 1.4% lower, and Asian & European stock markets have also taken a hit. USDJPY dove by over 0.5% in pegging a low at 104.94. EURJPY fell to a four-day low and the high beta AUDJPY cross plummeted by over 1% to two-day lows under 75.00.

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Following the positive Covid test news, Trump’s age and health is an added item on a growing worry list. Trump is now self-isolating, and at the least his pre-election campaigning will be greatly curtailed. The next Presidential debate is scheduled for October 15. CDC data shows a 94.6% survival rate for people over 70, though presumably this is better for people in their early-to-mid 70s, like Trump, as the data will be skewed by people over 80, who are at greater risk.

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Among other currencies, EURUSD dipped to a two-day low at 1.1694 before rebounding quite sharply to a 1.1738 peak. Cable saw a similar price action, bouncing out of a low at 1.2838 and rallying 100+ pips to 1.2952 following news of a meeting between UK PM Johnson and European Commission President Von der Leyen scheduled for tomorrow. AUDUSD posted a two-day low at 0.7132. USDCAD lifted back above 1.3300 and matched yesterday’s peak at 1.3329.

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In Japan, August unemployment came in at 3.0%, matching expectations and having no impact. Chinese and South Korean markets remained closed. Ahead, the flash September estimate of Eurozone CPI is up, where we expect a -0.4% y/y outcome after -0.2% y/y in the prior month. In the US, the September payrolls report is up. We expect it to show a continued rebound as workers have returned to work, but there will still be a net drop in employment for 2020 overall. Political negotiations on a new fiscal relief package in the US remain ongoing. The mood music has improved somewhat, with some Republicans eager to strike a deal with the Democrats before the November 3 elections. The Covid situation in Europe remains a concern, with the new case rate high and new restrictions in one form or another being introduced seemingly daily in many countries.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
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Date : 5th October 2020.

Events to Look Out for This Week.


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The announcement on Friday that US President Trump, the First Lady and White House counsel Hope Hicks had all tested Covid positive rattled market sentiment. This comes on top of many European countries renewing travel restrictions and quarantine measures and introducing new virus measures and regional lockdowns. Globally, concerns that the still fragile recovery will be disrupted have left markets looking for additional monetary and fiscal support, with the latter once again lagging while central banks are keeping their options open. Hence, the week’s focus will remain on the health of the President and wider virus issues, and concerns the recovery is losing momentum. The US Presidential Elections, surprisingly, may take a back seat, while from a data perspective, the FOMC minutes and RBA rate statements are the week’s top releases.

Monday – 05 October 2020

Retail Sales (EUR, GMT 09:00) – Retail sales across Europe are expected to show a bounce back during August as many markets opened and in limited numbers, Europeans went on holiday. MoM growth is expected to turn positive (0.9%) from -1.3% in July whilst the YoY figure is expected to rise to 0.6% from 0.4% in July.

ISM Services PMI (USD, GMT 14:00) – Services data, the bedrock of high income countries’ economic data, for the US is expected to slip slightly this month to 56.0 from the August reading of 56.9 and the July reading of 58.1.

Tuesday – 06 October 2020

Trade Balance (AUD, GMT 00:30) – Tuesday’s import/export and trade balance data will likely show a continued decline, with Australia’s second city Melbourne (and the wider state of Victoria) starting to emerge from a second strict lockdown.

Event of the Week – RBA Interest Rate Decision & Statement (AUD, GMT 03:30) No change in interest rates from the RBA is expected and as with other central banks the mantra of lower for longer will persist. What will be of interest is the Bank’s perspective on moving lower still and the possibility of negative interest rates before year end.

Wednesday – 07 October 2020

Event of the Week II – FOMC Minutes – (USD, GMT 18:00) – The minutes from the Sept 15-16 meeting are likely to show no major surprises and confirm the shift to average inflation targeting. The reference to the measures taken to contain the virus continued to have substantial impacts on economic activity. The view on inflation is that the negative effects from COVID-19 on aggregate demand have more than offset upward price pressures.

Thursday – 08 October 2020

Initial Jobless Claims (USD, GMT 12:30) – Last week there was better than expected numbers for the first time in 3 weeks with claims coming in at 837K, some 13k under 850k expectations. Today a further fall to 825k could be expected.

BOC’s Governor Macklem (CAD, GMT 12:30) – The Governor is expected to re-iterate the Banks view of aggressive stimulus posture, reiterating forward guidance and the continuation of its QE program until “the recovery is well underway.”

Friday – 09 October 2020

GDP (GBP, GMT 06:00) – Following the unexpectedly higher than forecast rise in July to 6.6%, monthly UK GDP is expected to fall under 6% to 5.7% for August.

Employment Change & Unemployment Rate (CAD, GMT 12:30) – Little change is expected in this month’s employment data, which is expected to show a 15.6K decline from 245.8k last time to 230.2k today. The Canadian unemployment rate is expected to remain steady at 10.2%.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
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Date : 6th October 2020.

US Trade Deficit at 14-year high.

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The US trade deficit widened almost exactly as expected to a 14-year high $67.1 bln that slightly beat the $67.0 bln gap in July of 2008, leaving the largest gap since the $68.3 bln figure in August of 2006. We saw prior gaps of $63.4 (was $63.6) bln in July, $53.5 bln in June, and $57.9 bln in May. Though the deficit rise tracked estimates, it incorporated small but offsetting downside surprises for both exports and imports. Exports rose 2.2% to $171.9 bln and imports were up 3.2% to $239.0 bln, following respective July gains of 8.3% to $168.3 bln (was $168.1 bln) and 10.9% to $231.7 bln.

Excluding petroleum, the deficit expanded to -$68.6 bln from -$65.4 bln (was -$65.7 bln). The “real” August goods balance widened to -$92.3 bln versus July’s -$91.1 bln (was -$90.5 bln). We saw a slight August narrowing in the bilateral trade deficit between the US and China to -$30 bln from -$32 bln, though both figures reflect elevated import levels as suppliers respond to the intense inventory liquidation through the three quarters through to Q2. The data track robust bilateral export data from China through August.

Foreign trade was impacted harder by shutdowns than the other GDP components, and activity hit a bottom in May, versus lows for most other measures in April. We had a much bigger hit for exports than imports, and the rebound for service exports has been disappointingly small. Expectations for GDP growth now fall in the 31.5-33.0% range for Q3 and 5.5-6.0% in Q4, following the record -31.4% in Q2.

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The Dollar was steady after the trade report, which showed the deficit widening more than consensus forecasts. EURUSD remains near two-week plus highs, topping at 1.1807, just above its 50-day moving average, while USDJPY sits near mid-range around 105.60.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
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Date : 7th October 2020.

Tonight October 7 – Pence & Harris – Does it matter?

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In short yes. Tonight (October 7) is the vice-presidential, one and only, head to head debate and after last week’s bad tempered, chaotic first presidential debate expectations were limited. Indeed little attention or significance is traditionally given the V-P debate, however, the debate has taken on a new significance following the news flow in the last few days. “Expect the unexpected” is a bit of a cliché and one often used to describe the first four years of the Trump presidency but the last few days have been just that.

Tonight, it is the turn of Vice-president Mike Pence and the lady who would like his job, Democratic vice-presidential nominee Kamala Harris to debate the issues that matter most to Americans and to their respective chances of success on November 3rd. The ages of their immediate bosses (Trump is 74 and Biden 77, making them 78 and 81 respectively in 2024) is always on the radar, a risk factor that has heightened interest following the President’s Covid-19 hospitalization. The reins of power pass to the vice-president if the President becomes incapacitated, for any reason, for any period of time. Pence, 61, and Ms. Harris, 55 are renowned for their debating and oratory skills and tonight’s debate should be much more mannered and coherent, even with its added significance.

Five key areas of interest tonight could be:

COVID-19 – The president’s handling of the crisis and his very own infection is likely to be a point of sparky debate and hold attention of the live audience in the University of Utah as well as the millions tuning-in on TV. Pence will clearly defend the administration’s handling of the crisis (after all he chairs the White House task force) and the Presidents infection and apparent rapid recovery. Ms. Harris, chosen by Biden, particularly for her “attack-dog” style will be promoting the inverse story of needless deaths and incompetency by the administration.

The Economy – Old, safe ground and simple messages from Pence reiterating the “best ever” economy “making America great again” pre-pandemic. The economy is safe in the president’s hands and taxes will be reduced. How Pence deals with the sudden ending of additional fiscal support talks by the President earlier today is a curved-ball he will have to deal with. Ms. Harris on the other hand will point to the millions of jobless Americans, the preference the administration has shown to big business and the imbalances and stuttering recovery of the US economy.

Other hot topics which are polarizing the electorate include the state and future direction of Healthcare, Law & Order (including Policing, the Gun lobbies and the summer of disorder) and the Supreme Court and the likely nomination of Amy Coney Barrett to the supreme court to replace Ruth Bader Ginsberg.

Foreign policy, Trade and the Environment are likely to receive less airtime.

If the Polls are to be believed the Democrats could not only win the Presidency, but the Senate too, but with over three weeks to polling day, the outcome is still far from certain. The key swing states and potentially, just a few voters within those swing states, could determine the result on November 3.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
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Date : 8th October 2020.

FX Update – October 8 – Post Schnabel, Bailey, Jordan & Pre-Claims & Macklem.

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EURUSD, H1

EURUSD has settled to near net unchanged levels near 1.1750 after ebbing back from a 1.1781 high, which was set in early London trading. Dollar weakness had been a driver earlier, and the currency has seen recouped lost ground. Uncertainties prevail about next month’s US election and the risk that it will be contested, about the Brexit endgame, and, increasingly, about new Covid restrictions and lockdowns in North America and, more especially, Europe. More dovish remarks have come from ECB policymakers, who have recently made known their concern about the recent rise in the euro’s effective exchange rate, given its tightening impact on real interest rates at a time when new Covid restrictions are crimping economic activity. ECB’s Schnabel also warned about credit cycle risks further down the track, especially when support measures are withdrawn, which could equally be applied to the UK, the US and many other economies given the large debt levels that have been built up over the last decade.

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Overall, there is no strong directional bias at play in EURUSD at the current juncture. New positive Covid test outcomes continue to shoot up in Europe, but the rate of serious illness (as measured by ICU admissions) and mortality rates remain at low levels, although bumping up in many countries, as indeed are the same metrics for other respiratory disease in the usual seasonal pattern. Tentatively, there is little sign as yet that another big wave impact on public health, as witnessed in March and April in Europe, is happening. But most governments are nervous and firmly set on pursuing virus-suppression-until-vaccine strategies. Northern states in the US, as in Canada, are also seeing spikes in positive Covid tests, which is also leading to the implementation of new restrictions. Weekly jobless claims data and Fed speakers will feature later in the US along with a keynote speech from the BOC’s Macklem.

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USDCAD posted a 17-day low at 1.3228, weighed on by a combo of US Dollar weakness and a 1% rise in oil prices. On Canada’s domestic front, rising positive Covid tests are becoming a problem as they are leading to economically disruptive restrictions. Canada’s September employment report is up on Friday, where expectations are for a 100,000 headline gain after the 245,800 rise in August, with unemployment seen ebbing to 10.0% from 10.2%.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

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Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date : 9th October 2020.

The last leg of EU-UK trade talks OR Not?

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The outlook isn’t good for either the UK or Europe given the surge in new Covid cases. New restrictions, from travel limitations to pub closures to local lockdowns, are being introduced almost daily in the UK, and this will have a negative impact on economic activity. The government’s furlough scheme is being withdrawn this month, and being replaced by a narrower, more targeted wage protection scheme, though the Chancellor has announced there will be a new scheme to support those affected by local lockdowns. Dovish signalling has come from the BoE governor this week, similar to policymakers at other central banks.

Attention remains fixated however……

Attention remains fixated on the final phase of talks between the EU and UK, with less than one week to go until the EU’s summit. Despite the public brinkmanship, there have been reports from behind the scenes of motion toward finding a compromise on key issues from both UK and EU sources. Any news of a deal would likely boost Sterling over the near term.

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But even with a deal, and even with UK progress in signing continuity agreements with non-EU trading partners, the UK will see its terms of trade position deteriorate. It has also become increasingly clear that London’s European dominance in financial services will erode, deal or not. The technical picture of Cable is overall neutral after Tuesday’s bearish engulfing candlestick pattern at the 1.3000 area. However the asset reversed again to the upside retesting that area once again. Interestingly an inverse head and shoulders looks ready to be formed, however how the market will respond and whether or not it will confirm the formation depends on next week’s summit. A decisive move above 1.3000 and the 50-DMA could indicate a boost to August highs, while a pullback to 1.2700 lows would increase the negative momentum.

Next week’s Summit

The October 15 EU summit that was originally seen as the deadline for Brexit talks, and which Boris Johnson still flags as the point where the UK will walk away even if there is no deal, is just a week away and the chances that there will be an agreement at that point is almost non-existent, despite latest comments from officials. EU Commission President Von der Leyen and UK Prime Minister Johnson may have agreed to extend official talks during a recent phone conversation, but the fact that these seem to still be regular talks, rather than “tunnel” discussions based on agreed “landing points” on key issues, highlights that differences remain too large to get a deal done quickly.

Listening to the UK side, the question of how to deal with fisheries and future access to UK borders is the key point, but while that clearly is important as a signaling factor for the UK public and important for some EU member states, the more pressing issues for the EU are level playing field rules, the governance of any agreement and the future cooperation on data sharing on security and crime fighting. Indeed, level playing field rules and governance could be the key to any agreement.

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Not that EU states are in any mood to give ground on fishing at the moment and indeed, while it seems at first sight that the UK has every right to exclude the EU’s fleet from its own waters, most of the fish found in UK waters is actually sold and eaten in the EU. The fishing issue, which is a big part of the UK government’s narrative at home (more so than the right to subsidise companies) clearly is a bargaining chip that national heads of state don’t want to give up as long as talks remain at negotiator level.

Next week’s summit will bring an opportunity to take stock and maybe pave the way for “landing zones” that would allow the move towards “tunnel talks” later in the month.

That would push the timing of the likely showdown into early November. Given that any agreement still has to go through a legislative process on both sides of the Channel and that there is a clear risk that the EU parliament will reject any deal if the UK’s Internal Market Bill is not scrapped or modified by then and that Johnson may face defeat if he makes too-big concessions on fisheries, there are still pitfalls ahead.

Ultimately both sides want a deal and it is widely hoped that there is very likely going to be one, although it is also likely to be limited in scope. For the Brexiteers the opportunities that await outside of the EU and its regulations make up for that. The recent agreement with Japan was a case in point, with the UK barely able to match the agreement the EU has with Japan. At the current juncture, the best the UK can hope for is to replicate the deals the EU already has.

Even with a tariff free, quota free deal, the UK’s loss of unfettered access to the single market and customs union would lead to trade destruction.

UK exporters would face cost-increasing non-tariff barriers, such as customs formalities and regulatory barriers. The same would be the case for EU exporters to the UK, though the impact would be much magnified on the UK side of the Channel. Productivity would also be impacted, given reduced competition and reduced scope for businesses to benefit from economies of scale.

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Financial services — a golden goose that accounts for 22% of government tax receipts — is a particular concern. A Bloomberg article highlighted the steady stream of financial services resources that are being moved out of the UK to the Eurozone, and the fact that even with an EU trade deal in place, London will likely continue to lose business to Eurozone financial centres as the “equivalence” regime on rules would leave firms with long-term uncertainty.

Hence with or without this year’s pandemic, the transition would have been difficult. The UK is likely to also face a huge rise in structural unemployment, as Brexit will cut off access to the cheap workforce in Eastern Europe, while a large part of those losing their livelihoods now – first and foremost those in services sector – won’t be able to just retrain as builders and benefit from the building boom the government is trying to generate.

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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
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Date : 12th October 2020.

Events to Look Out for This Week.


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The risk that virus developments will disrupt the recovery is back in play and very real globally. The lack of another round of stimulus in the US, ongoing US-China frictions and US elections weigh further on a potential economic recovery, as, after all, there is still a long way to go. The EU summit and Q3 earnings season kick off in the next week, with most of the large financials reporting. Data-wise, in focus will be inflation data from the biggest economies in the world, including the US, China and Europe.

Tuesday – 13 October 2020

Trade Balance (CNY, GMT N/A) – Chinese trade is expected to see a decline in September, at $50.5B from the $58.9B last month.

Harmonized Index of Consumer Prices (EUR, GMT 06:00) – The German final HICP inflation for September is anticipated to be at -0.1% y/y.

Average Earnings (GBP, GMT 06:00) – Average Earnings excluding bonus are expected to have grown by 0.6% (3Mo/Yr) in August. The ILO unemployment rate is expected to have steadied to 4.1% in the three months to August.

Consumer Price Index (USD, GMT 12:30) – Consumer Price Index is seen at 0.2% September gains for both the CPI headline and core, following 0.4% gains for both in August. The headline will be restrained by an estimated -0.3% September drop for CPI gasoline prices.

Wednesday – 14 October 2020

Producer Price Index (USD, GMT 12:30) – For September both the headline and the core PPI are forecasted at 0.1%. As expected readings would result in a y/y headline PPI metric of 0.2%, up from -0.2% in August. A modest decline in energy prices will weigh on the headline. The y/y core reading is assumed to remain in the 0.9%-1.2% area over the near future, with a downward hit from reduced aggregate demand but a boost for prices from supply disruptions.

Thursday – 15 October 2020

European Council Meeting -Event of the week – With political heavyweights now getting directly involved, we will find out over the next week (into the EU’s October 15th-16th summit) what degree of compromise both sides are willing to make to reach their shared goal of tariff free, quota free trade. Johnson reportedly wants to persuade the EU to enter in “the tunnel” (known as “submarine” in EU parlance), which refers to a media blackout period, to allow the final phase of negotiation to be uninterrupted by media or other criticism. Von de Leyen rejected that this is happening, however. The EU position has been that this would only happen when compromise positions have been established, which has not happened yet, with fishing rights and EU level playing field rules, the latter of which includes the state aid issue, remaining sticking points.

Employment Data (AUD, GMT 00:30) – The unemployment rate is an important national priority for RBA, hence the employment change is key for the RBA this week. However, another sign of economic contraction it is expected as the s.a. reading is seen at -50K in September.

Consumer Price Index (CNY, GMT 01:30) – Consumer Price Index is seen unchanged for September at 2.4% y/y and 0.4% m/m.

Friday – 16 October 2020

IMF Meeting
European Council Meeting -2nd day
US Presidential Debate – Cancelled and postponed until 22nd of October.
Consumer Price Index (EUR, GMT 09:00) – Inflation remains too low and against that background the ECB clearly is on course to strengthen the low for longer message by switching to a fixed inflation target. Eurozone CPI is anticipated steady at -0.4% m/m and core at 0.2% m/m for September.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date : 13th October 2020.

Equity markets rally loses some momentum in EU session.

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Risk aversion picked up again, underpinned by negative vaccine news amid reports that Johnson & Johnson halted its Covid-19 trial due to “unexplained illness”.

The December 10-year Bund future is up 1 tick, while in cash markets Treasury yields have dropped back -1.2 bp to 0.76% after yesterday’s holiday. In FX markets EUR and GBP both declined against a largely stronger US Dollar. Negative vaccine headlines weighed on sentiment overnight, but tech stocks remained supported and the prospect of additional monetary and fiscal stimulus should help to underpin sentiment.

European stock markets are narrowly mixed in opening trade, with the UK100 up 0.04%, GER30 down -0.14% and the Euro Stoxx 50 down -0.03%, while US futures are narrowly mixed, with only the USA100 future managing fractional gains.

The ECB is clearly readying a strengthening of the PEPP program, the BoE is stepping up the preparations for a move towards negative rates and ECB President Lagarde also stressed again the need for fiscal stimulus to support the wave of monetary stimulus as the renewed surge in virus cases is threatening the still fragile recovery. An ongoing salvo of dovish signalling from ECB policymakers has resulted in outright Euro and GER30 declines, though has likely been contributory in offsetting dollar weakness recently. Aside from the Fed itself, and partly in response to, many other central banks have been conducting similar messaging campaigns.

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Further pressure has been added to both EUR and GER30 despite after the release of German HICP inflation earlier. German HICP inflation confirmed at -0.4% y/y in the final reading for September. The national CPI rate was confirmed at -0.2% y/y, with the temporary cut to the VAT rate as well as the decline in energy prices the main reasons for the negative headline rate. Excluding household energy and petrol, CPI would have been 0.6% y/y. Still, while is not real deflation, the officials are clearly concerned that a prolonged period of negative headline rates against the background of new virus restrictions and rising unemployment will lead to a more permanent shift in inflation expectations that could lead to a deflationary spiral down the line. For the dovish camp at the ECB, the numbers will provide further ammunition in the push for additional stimulus measures and a further extension and strengthening of the PEPP program.

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GER30, despite a decline on opening, retains the support at the 50-period SMA in the 1-hour chart. Although the asset has reversed nearly all the year’s losses and is trading clear above 12,500, the outlook is still not decisively positive, but neutral. It has been in a new uptrend since the beginning of October but momentum looks neutral with bulls struggling for a second day to move above 13,200 (76.4% FIb level) after a weak close yesterday. The improvement in momentum indicators will clear the strength level of the trend, as MACD is being tested around neutral as RSI slips lower towards 50. Immediate Resistance is in place at yesterday’s high, and the 13,200 at 76.4% Fib. The bulls need to show a breakout of this area. A pullback below 61.8% Fib. level at 13,027 but more precisely below the round 13,000 would seriously challenge whether bears are slowly taking the control again.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date : 14th October 2020.

Big Bank Earnings & PPI lift sentiment.

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USA500, Daily

Bank of America (BoA) and Goldman Sachs (GS) both reported third-quarter earnings earlier that beat estimates.

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BoA reported net income of $4.9bn, or 0.51 cents per share (EPS) compared to the consensus estimate of 0.49 cents EPS. Revenue in the same quarter last year was $5.8bn and only $3.5bn for the second quarter of 2020. Like JPMorgan and Citibank yesterday, the recovery in Q3 was the reduction in provisions for bad loans down to “only” $1.4 bn from the colossal $5.1bn in Q2. Total revenues were lower at $20.3bn. Shares closed down 2.84% yesterday at 24.95 and are down a further 2.9% in out-of-hours trading today at 24.21.

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Goldman Sachs (GS) figures were significantly better than consensus, with EPS at an impressive $9.68 versus expectations of just $5.57 – a beat in excess of 73% and a record for a quarter. Net revenues for the quarter were $10.78 bn versus $9.45 bn, a beat of some 14% and 30% better than the same quarter in 2019. Shares closed down 1.55% yesterday at 210.81 and are up 2.0% in out-of-hours trading today at 215.10.

US headline PPI rose 0.4% in September, with the core rate up 0.4% as well, both hotter than forecast, following respective August gains of 0.3% and 0.4%. The core price ties with August for the firmest since April 2019. Prices have recovered from big and record drops in April of -1.3% for the headline and -0.4% on the core. The 12-month pace climbed to a 0.4% y/y rate from -0.2% y/y previously, and the core rate surged to a 1.2% y/y clip versus 0.6% y/y. Goods prices increased 0.4% on the month from August’s 0.1% gain, with food prices jumping 1.2% from the prior -0.4% decline, while energy prices fell -0.3% after slipping -0.1% previously. Services prices were up 0.4% from 0.5% in August.

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The Dollar edged lower following the September PPI print. USDJPY hit near two-week lows of 105.21, down from near 105.30, as EURUSD headed to intraday highs of 1.1764 from near 1.1755. The Dollar has been on the decline generally since before the open. Equity futures remains mixed with USA500 trading at 3519, up from earlier lows at 3502 but down from European session highs at 3532.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date : 15th October 2020.

European Equities Heavy on Covid-19 Resurgence.

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Trading Leveraged Products is risky

GER30, UK100, H1

European stock markets are selling off, with the GER30 now down 3%, the UK100 2.3%, as investors price out stimulus hopes in the US and prepare for fresh economic setbacks as the second round of Covid-19 hit Europe and leads to increasingly strict restrictions. France has announced a curfew for Paris, that confines citizens to their homes between 9 pm and 6 am for four weeks, in the U.K. regional lockdowns are widened with London moving to tier 2 (No household mixing indoors anywhere from midnight on Friday. People are discouraged from using public transport. Schools, universities and places of worship remain open. All businesses and venues can continue to operate) and in Germany Chancellor Merkel has urged citizens to stick to the rules while signalling that official measures will be tightened if cases continue to rise at the current rate. Officials are eager to avoid full lockdowns, but despite the respite over the summer, they failed to prepare appropriate alternative measures to deal with the spike in cases that is now starting to show up in hospital admissions. Central bank officials continue to signal the willingness to do more if needed, but that hasn’t prevented Eurozone spreads from widening this morning, as peripheral bond markets feel the pressure from the pick-up in risk aversion. The Italian 10-year yield is up 3.4 bp, although still below the 0.7% mark, while German 10-year yields have dropped back -3.8 bp and -3.2 bp so far today.
The GER30 spiked below 12,600 from a close yesterday at 12,970, the UK100 pushed below 5,800 from highs yesterday over 6,000.

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The GER30 spiked below 12,600 from a close yesterday at 12,970, the UK100 pushed below 5,800 from highs yesterday over 6,000.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date : 16th October 2020.

Election2020 – Only Three Weekends Remain.

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A little over 2 weeks – 12 trading days – until the US Election, and the Town Hall meetings co-hosted on the two main US national TV networks provided nothing really new with regards to policy or outlook. However, it did provide the opportunity to have both meetings running consecutively side-by-side. President Trump was in Miami, in the must-win state of Florida (29 Electoral College votes) with NBC, while former Vice President Biden was in Philadelphia, Pennsylvania, another key swing state with 20 Electoral college votes available to the victor, with ABC.

President Trump said “I know nothing about QAnon”, that he WILL accept a peaceful transfer of power, ”Yes, I will. But I want it to be an honest election, and so does everybody else.” and commented on whether he took a coronavirus test on the day of his last debate with Mr Biden, saying: “Possibly I did, possibly I didn’t.”

Candidate Biden continued to avoid answering if he would move to increase the size of the supreme court (the third arm of US government) with judges if, as seems likely, the Senate confirm judge Amy Coney Barrett to the court before election day. “I have not been a fan of court packing. I’m not a fan.” He admitted that the 1994 crime bill, which he helped draft, which the Black Lives Matter Movement has claimed is one of the reasons for mass jailings of African Americans, was a “mistake” but continued to defend his record “It [the bill] had a lot of other things in it that turned out to be both bad and good.”

So attention is turned to a weekend of high intensity campaigning, the final two-week onslaught of media messages and no-holds-barred advertising. The pair are still expected to meet face to face for the final time before polling day on Thursday in Belmont University, Nashville, Tennessee (a strongly Republican state with 11 electoral college votes, almost guaranteed for the President).

The Pandemic, Economics, Foreign Policy, and even the environment are likely to be key topics in what is expected to be a much less raucous and chaotic affair than their first encounter. The most powerful job in the world is up for grabs, and it impacts us all, regardless of where we live.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date : 22nd October 2020.

Volatility and US elections.

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US Elections had been and always expected to be an event historically extremely volatile globally. Elections similar to other political or banking sector events are notably treated by market participants with anticipation and speculation. As discussed in our HF Markets Q4 Outlook, markets look to have already pricing in the possibility of Biden’s victory even though they overall maintain an increasing cautious optimism, holding US Dollar basket to 2018 low territory.

Historically, it has been noticed that during election years, market participants due to the heightened uncertainty, shift their investments into Money market funds instead from the safety of stock and bond funds, AS THEY waiting out. The 2020 is not any different but it’s been a unique one as we have seen an extreme money flow into currency assets in comparison with past election years, due the sluggish US and worldwide economic activity as the Covid-19 crisis resumes, the truce with China again which is under scrutiny, the lockdowns in several areas, the lack of additional fiscal stimulus from central bankers, Brexit frictions and the fear of double dip recession in Europe.

That said, cash balance into money funds spike to $980 in 2020 as of June 30, given the large risk premia. However as soon as uncertainty recedes we might see equity market’s volatility and volume to spike again since they consider to be attractive and more stable assets in period which there are historically low interest rates. If we emphasize on the medium term thought it is expected that if current conditions sustained, market volatility will extend beyond Election days with any potential outcome, i.e. a Biden win and Democrat majority in Congress, a Biden win but split Congress, or a Trump victory with split Congress.

Meanwhile, a very chart from Wells Fargo Investment Institute, shows the USA500 implied Volatility index along with USA500 index performance prior and post the Election Day based on the election since 1988 with 2008 recession year excluded. This chart interestingly suggest that typically the USA500 tends to eased/consolidate a bit a month prior elections despite a extremely high volatility, while USA500 price continue their upwards move after the election day even though volatility declines significantly.

[img]https://images.mktw.net/im-247849?width=1260&size=1.6580310880829014[/img]
WELLS FARGO INVESTMENT INSTITUTE

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
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Date : 23rd October 2020.

Dollar Dips as Equities escalate.

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EURUSD, H1

The Dollar fell back concomitantly with rallying European stock markets and US index futures, which was likely a repositioning dynamic after declining over the last two weeks.

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EURUSD rebounded quite strongly, rising back above 1.1850 from a three-day low at 1.1787. Preliminary October PMI data in the services and composite readings out of the Eurozone and UK undershot the median forecast of economists, but didn’t impact the Euro or Sterling. Technically, the H1 chart has moved over the 50-hour moving average (1.1835) to test R1 at 1.1852; above here is Wednesday’s high and R2 at 1.1885. Today’s pivot point is next support at 1.1830, below the 50-hour moving average. The MACD histogram has broken the zero line and the signal is starting to rise, although still south of the zero line, RSI is positive and trades at 64.50, Stochastics are moving into the OB zone.

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Cable settled at near net unchanged levels around 1.3090-95 after dropping back from a high at 1.3124. The UK currency remains comfortably up on week-ago and month-ago levels against the Dollar and Euro, and others, with market participants anticipating a limited trade deal between the EU and UK. The two sides are amid intensive face-to-face discussions. The UK and Japan today signed the trade deal that was agreed in principle a month ago.

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USDJPY is modestly softer after upside forays over the last day stalled at 104.93-95. At levels around 104.70, the pair remains down by 1% on the high seen on Wednesday. AUDUSD rallied to an eight-day high at 0.7158, floated by higher stock markets in Europe and an above-forecast composite PMI reading out of Australia. Global asset markets are likely to remain skittish, notwithstanding the rally today, with investors pondering the uncertainties presented by the surge in Covid cases in Europe and elsewhere, including now in many US states and in Canada, and which are leading to ever more restrictive countermeasures. The ongoing delay in new US fiscal stimulus and the event risk posed by the upcoming US elections are also in the mix. Regarding the elections, polls point to a Biden presidency, but it is less clear if his Democratic party can take control of the Senate. If not, then Congress will remain split at least until the mid-term elections in two years, which will limit the scope for policy changes and crimp Democrat ambitions for expansive fiscal policy.

US data later is topped by flash PMI data, Manufacturing numbers are expected to show a slight rise to 53.5 from 53.2 last time, whilst the more important and significant Services numbers are expected to increase by a single tick from 54.6 to 54.7. The data is due at 13:45 GMT.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
  • Posts: 1473
  • Joined: 28/05/2017
Date : 26th October 2020.

Events to Look Out for This Week.


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A gigantic week is coming with FAANGs reporting their Q3 earnings, along with the rate decisions and monetary policy statements from three key Central Banks (ECB, BoJ, and BoC) as the second wave of Covid-19 is hitting the world with full force. Across the Atlantic, all eyes will be also on what emerges from the Brexit talks and how markets will reform in the final week prior to the US Elections. Focus will be on inflation data from the biggest economies in the world, including the US, China and Europe.

Monday – 26 October 2020

German IFO (EUR, GMT 09:00) – German IFO business confidence is expected to slip slightly to 92.9 in October after the jump seen in September to 93.4.

New Home Sales (USD, GMT 14:00) – New home sales are seen at -1.1% in September after a drop-back to a 1,000k pace from a 14-year high of 1,011k in August, versus a prior high of 965k in July. With the economy’s reopening, the recovery for new home construction and sales is proving much faster than for the rest of the economy, partly due to solid fundamentals going into the crisis, and even lower mortgage rates now.

Tuesday – 27 October 2020

ECB Bank Lending Survey (EUR, GMT 09:00).

Durable Goods (USD, GMT 12:30) – Durable goods orders are expected to drop -0.7% in September with a 3.0% decline in transportation orders. The durable orders rise ex-transportation is pegged at 0.4%. A defense orders gain is pegged at 4.0%, following a -3.6% August correction. Boeing orders fell back to zero planes in September from 8 in August and zero in July.

Wednesday – 28 October 2020

Consumer Price Index (AUD, GMT 00:30) – Australian inflation data in Q2 was moderate but in line with projections and remained within the average rate of increase between 2% and 3% that the RBA targets over the medium term. The RBA trimmed mean CPI for Q3 is seen at 0.1% q/q.

Interest Rate Decision and Conference (CAD, GMT 14:00) – In September, the Bank of Canada maintained an aggressive stimulus posture, reiterating forward guidance and the continuation of its QE program until “the recovery is well underway.” However, the BoC removed its promise to “provide further monetary stimulus as needed,” keeping its commitment to hold rates at current levels and maintain the asset purchase program at the current pace. The policy rate was held steady at 0.25%, and it is expected to be maintained in this meeting as well.

Thursday – 29 October 2020

Interest Rate Decision and Conference (JPY, GMT 03:00) – The Bank of Japan remains pledged to do whatever it takes to support the recovery. The BoJ minutes last time highlighted that some council members are becoming concerned that virus developments will negatively impact the recovery. On the political front, PM Suga is expected to maintain policy continuity.

Gross Domestic Product (USD, GMT 12:30) – Gross Domestic Product should advance in Q3 and reveal headline growth of 33.5%, with a reversal in the inventory trajectory from a record-liquidation rate of -$287 bln in Q2 to a $12 bln accumulation rate in Q3, as the inventory figures begin a long rebuild into early-2021.

Interest Rate Decision and Conference (EUR, GMT 12:45 & 13:30) – More than data releases, it is developments on the virus front that will have strengthened the dovish camp at the ECB. The number of new infections, but also hospital admissions and deaths, continues to rise across Europe, with Ireland just announcing a full lockdown until early December. Developments are adding to pressure on the central bank to act sooner rather than later, and the debate at next week’s ECB meeting will likely be lively, although on balance Lagarde is expected to hold fire for now and focus on a dovish presser that will lay the ground for a PEPP extension in early December.

Friday – 30 October 2020

Retail Sales and GDP (EUR, GMT 07:00) – The German Retail sales are seen at 4.2% y/y in September from 3.7% y/y last month. The final Gross Domestic Product in Germany for Q3 is seen at -8.9% q/q from 9.7%.

Gross Domestic Product and Consumer Price Index (EUR, GMT 10:00) – Fears of a double dip recession are on the rise, with preliminary Q3 GDP s.a. numbers likely to show the index down to 16.9% y/y from -14.7%. The Euro Area preliminary CPI is anticipated at -0.4% y/y in October with core reading at 0.5% y/y from 0.2% y/y last month.

Personal Income/Consumption (USD, GMT 12:30) – A 0.3% increase in personal income in September is anticipated after a -2.7% decrease in August, alongside a 1.1% climb in consumption after a 1.0% bounce in August.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
  • Posts: 1473
  • Joined: 28/05/2017
Date : 27th October 2020.

USD improves, GBP Mixed, CB decisions & TRY.

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The Dollar firmed up into the London open and beyond, paring declines seen earlier in pre-Europe trading in Asia. The move drove gold and oil prices lower, too, indicating there has been some depth in dollar buying, although the magnitude of movement hasn’t been great.

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US equity index futures have managed modest gains after the S&P 500 closed with a 1.9% loss yesterday, though investor sentiment in global markets remains decidedly restive. Most Asian stock markets declined, and Australia’s ASX 200 equity index closed with a 1.7% loss in its worst single day performance in a month. Soaring positive Covid tests and the associated trend toward increasingly restrictive countermeasures, along with the risk of next week’s US election results being contested, and the delay in US stimulus relief, are keeping markets on edge. Overall strong Q3 economic data are being overlooked as markets look to what is appearing to be a grim winter ahead in the northern hemisphere, with risks of a double dip recession being factored in, especially in Europe. Amid this, the Dollar has been holding up, despite a narrowing in nominal US yields relative to peers in recent days, including Bunds and JGBs, revealing that the US currency is functioning as a safe haven currency again.

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The USDIndex index lifted back above 93.00, though remains down on yesterday’s and Friday’s highs at 93.11-13. EURUSD tipped back to levels around 1.1800 after posting a high at 1.1836. USDJPY remained settled in the upper 104.00s in what could be termed a consolidation of the steep decline seen last Wednesday but has tested below S1 below to 104.60. The pair remains about 0.7% down from week-ago levels. Sterling continued to trade without direction, overall, holding over 1.3000 around 1.3020. EU and UK trade talks continue in London through to tomorrow before relocating to Brussels. They are reportedly working to a mid-November deadline.

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Taking a step back, the currencies that are showing the biggest gains on the year-to-date are the ones that most would expect to have risen against the backdrop of the global pandemic crisis, being currencies of current account surplus economies, specifically ones that don’t have a high commodity export component. Thereby the Euro, Swiss Franc and Yen are the biggest gainers, while the dollar bloc and the likes of the South African Rand and Russian Ruble, among others, are showing the biggest year-to-date declines, save the politically savaged Turkish Lira. Turkey seems to be in dispute with all its neighbours and some further afield. The Central Bank holding rates last week has not helped its predicament – USDTRY printed a new all time high earlier at 8.1580.

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USDCAD lifted out of a correction low at 1.3169, with oil prices, although up yesterday’s lows, coming under moderate pressure during the early London session. WTI benchmark crude prices are down 6.5% from week-ago levels, and prospects for a sustained rebound look to be limited given the supply glut and weakening demand as Covid-containing measures intensify across Europe and some parts of North America. This backdrop should keep USDCAD underpinned. The pair has been trending lower since March, though we have been noting trend derailing risks. A run to levels around 1.3500 and above seems possible, as the BOC decision tomorrow and the US Election next week remain the key immediate fundamentals .

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
  • Posts: 1473
  • Joined: 28/05/2017
Date : 28th October 2020.

Alphabet Q3 earnings: Focus on advertising revenue.

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Once again the FAANGs excluding Netflix plan to report their earnings the same day within 30 minutes of each other. FAANGs illustrate 20% of the S&P500’s total value. Even though most of them face increasing antitrust scrutiny, all posted an impressive rally this year as their shares have surged and sustained close to record highs as the pandemic reckoned with online services such as shopping, streaming, clouds.

Hence in addition to our earnings articles, today we will focus also on Alphabet’s third quarter earnings for 2020 which will be reported along with the rest of the giants. Just a quick reminder, Alphabet Inc. is a holding company and Google’s parent company. The company’s businesses include Google Inc. (which is the largest one) and its Internet products, such as Access, Calico, CapitalG, GV, Nest, Verily, Waymo and X. The company’s segments include Google and Other Bets.

Alphabet’s report will be key after its first year-over-year revenue decline in company history in Q2 as a result of the lack of advertisement demand from the majority of businesses amid the economic slowdown globally. However the forecasts for Q3 have the company well positioned with the consensus recommendation “strong buy”, corresponding to the majority of the consensus recommendation from Reuters Eikon, as 30 out of 36 analyst firms recommend “buy” and “strong buy”, while only 6 recommend ‘hold’. Hence, no analyst firm is making a “sell” or “underperform” recommendation for the company.

GROWTH FOR ALPHABET INC 

Note: Units in Millions of US Dollars
According to Zacks Investment Research and Reuters Refinitiv, the information service is expected to have $11.33 in earnings per share during the third quarter of 2020, which represents a yearly rise of 12% since the reported EPS for the fiscal quarter ending September 2019. Focus should also turn onto the revenues number which is projected to hit a 6% yoy spike, to around $42.8 billion, from the $40.49 billion reported last year. Net sales meanwhile are seen at $35.26 billion.

Revenue by business segment:

Google Search & Other (ad revenue, dominated by Google Search) – consensus of $24.96 billion*
YouTube ads – consensus of $4.38 billion*
Google Network (ad sales on third-party websites/apps) – consensus of $5.07 billion (down 4%)
Google Cloud – consensus of $3.32 billion*
Google Other (Play Store, hardware, YouTube subscriptions) – consensus of $5.11 billion*
Other Bets (Google Fiber, Verily, Waymo, etc.) – consensus of $153 million (down 1%)
Despite the huge diversification of its portfolio, Alphabet Inc earns nearly 71% of its revenue from advertising. Hence even though, the travel sector is still weak the majority of the analysts remain bullish on the advertisement services of Alphabet into Q3 given the slightly ‘temporary as it seems’ recovery that we have seen as the pandemic eased over the summer and business began reopening. Morgan Stanley stated also that they came into earnings season positive about the online ad market recovery but grew more optimistic following Snap’s blowout ad revenue beat and better-than-expected ad results from Verizon subsidiary AOL, Sirius-owned Pandora, and Interpublic Group.

The positive consensus for Q3 could also be driven by the shift of Alphabet to Google Play and YouTube to help its partners support their businesses. The majority of the analysts believe that we could see strength in YouTube ad pricing and the return of brand spending in its channel checks.

Alphabet CEO Sundar Pichai however highlighted in his latest statements GOOGL’s focus on non-advertising segments. Like tech giant and its cloudspace rival Microsoft Corporation (NASDAQ: MSFT), GOOGL has the capacity and resources to strategically pivot, from a large “legacy” company to an aggressive emergent; in this case, from search to various ‘other segments’ offering potential growth.

Meanwhile, the risks that Alphabet faces ahead of the report is the solid competition from Amazon in advertising business and cloud services but also the cold headwinds on the earnings front in addition to emerging regulatory challenges. Coming off a not-so-stellar Q1 reporting season, GOOGL fell short in Q2, reporting its first ever year-over-year quarterly decline.

Earlier this week, the Justice Department, along with 11 Republican state attorneys general, filed an antitrust lawsuit against Google, alleging an unlawful monopoly on search services and advertising. US Deputy Attorney General Jeffrey Rosen called GOOGL, “the gateway to the internet” and said the company “has maintained its monopoly power through exclusionary practices that are harmful to competition.”

At this stage, we have to point out that a consensus recommendation, similarly to economic data forecasts, has a significant effect on the near-term stock price, as it represents a company’s wealth picture. Hence on every earning report, stock price is highly influenced by the comparison between the outcome and the expectations. The market tends to react positively if the outcome comes in better or at least in line with the forecast, while the price moves lower if the reported earnings miss expectations.

Technically, the current Google price action has posted a sharp rally since the March panic with the stock rebounding from the $1,000 area to record highs at $1,732.41. Currently the asset is traded at the $1,524 area which is just a 23.6% loss from all-years highs. The overall bias remains strongly positive even though medium term momentum indicators signal a potential pullback lower.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
  • Posts: 1473
  • Joined: 28/05/2017
Date : 29th October 2020.

Apple – Earnings Tonight.

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APPLE, Daily

The world’s largest company, APPLE (APPL), report their 4th quarter earnings ending September 30th after the close of the New York stock market later today The consensus among analysts is for revenues of $64 billion versus $64 billion in Q4 2019 and earnings per share (EPS) of $0.69 (with estimates ranging from 0.54 to 0.8) versus $0.76 in the same quarter last year.

Apple hardware has been clearly hit from the disruption in the supply chains, starting with factories and shops in China and rippling out across the wider distribution and production facilities in Asia, Europe and then North and Latin America. iPhone sales are likely to miss estimates, but likely to be compensated for by increases in services and possibly other hardware.

Style, design and being the best premium product has always been at the core of what Apple does and the big move in recent years has been away from this dominance of hardware (even though the iPhone still accounts for over 60% of revenues) to invest significantly in services. The initial move was a partnership in 2015 with IBM and Cisco to try to break into the corporate market; this has been followed by Apple Pay and more recently the long awaited upgrade for Apple TV.

Apple TV+ was launched in November 2019. Initially it was only to be in the USA but it was then made available to 100 countries at an extremely competitive $4.99 per month. Apple has entered a very crowded video-streaming marketplace, which remains dominated by Netflix, but includes Amazon and Disney. Apple Services is a growing revenue stream within the technology giant and TV+ marks its latest attempt to diversify its dependence from the ubiquitous iPhone. The aggressive pricing structuring, undercutting its competitors, is a break from traditional Apple pricing models. However, the poor reviews and weak content in the first few months of launch have been disappointing. Disney+ with a huge back-catalogue and equally as aggressive pricing has been the new winner in the streaming wars. Netflix missed expectations last week, but as subscriber numbers continue to grow, what will we see for AppleTV+?

However, this quarter saw the delayed launch of the much heralded iPhone 12 with (finally) 5G capabilities. The buzz word from Apple is the dawn of a new “super cycle” of upgrades, as many in the companies home country of the USA have delayed upgrading awaiting the 5G model. However, 5G coverage in the US is patchy and sporadic and with a highly diffused network of poor signal areas. A lot could depend on the iPhone 12, is the pent-up demand there to be taken advantage of ? Early market gossip and market news suggest their is indeed that demand.

As ever, guidance and outlook will be key with some analysts expecting a hit on revenues because of the iPhone 12 delay and figures could be as low as $60.00 billion. (JP Morgan).

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Overall the services and wearables business, including sales of AirPods and Apple Watch consumables is expected to show a hefty 17-24% growth year on year.

In the midst of the Pandemic, Apple announced the launch of the iPhone SE retailing at $399.00, the issue of the cut price iPhone proved a significant success and offered simple churn of existing sales rather than any enhancement of new replacement units. can signs of the upgrade cycle be announced tonight?

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The major Wall Street banks have price targets for the stock ranging from $150 down to $49. The consensus among 41 analyst is a target price of $122 with 23 of the 41 recommending a Buy or Strong Buy rating and none of the 41 with a Sell rating. The stock currently trades at $114.00.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
  • Posts: 1473
  • Joined: 28/05/2017
Date : 4th November 2020.

FX Update – Election Uncertainty = Risk Off.

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If there is one thing markets (all markets) hate, it’s uncertainty, and that’s what we have at the moment in both the Presidential and Senate races. As things stand at 08:30 GMT the morning after the USA Election 2020, there are 87 Electoral votes still available. Trump, with 213, needs 57, and Biden, on 238, needs 32, to reach the key 270 votes required to become President of the USA. States yet to declare results are:-

Pennsylvania 20
Michigan 16
Georgia 16
North Carolina 15
Wisconsin 10
Nevada 6
Alaska 3
Maine 1
The Senate (with 100 votes) stands at 47 each for the Republicans and Democrats with 6 decisions awaited.

So it’s very much risk aversion on a closer than expected US election, and Trump agitating the process with claims that his rivals are attempting to manipulate the results has driven the dollar higher on a safe haven bid, while US Treasuries have surged, driving the 10-year T-note yield down by 12 bp. The DXY dollar index rose by over 0.7% in making a high at 94.30. The S&P 500 E-mini has also racked up a 1% decline, reversing over half of the gain that the cash version of the index saw on Wall Street yesterday.

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There is potential for the US to be in limbo for days as the closeness of the race means a drawn-out process of vote counting. Political pundits warned ahead of the election that if Biden won a close contest, the risk of Trump formally contesting the outcome would rise. This backdrop should keep the risk-off positioning theme in play, unless there is any clear-cut outcome. The Democrats are looking set to retain their dominance in the House, though it’s looking less certain that they will flip the Senate.

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Elsewhere among currencies, EURUSD has seen volatile price action, dropping sharply from levels in the mid 1.1700s to a 1.1602 low before recouping to the mid 1.1600s. The pair still remains down by around 0.5% on the day. The biggest currency losers include the Australian Dollar, which is down by over 1%, and the likes of Mexican Peso, which is showing a 3% loss, and the South African Rand, which is nearly 2% lower versus the US Dollar. The Yen has been mixed, losing ground to the Dollar while holding steady versus the Euro and gaining on the more risk-sensitive, higher beta currencies. Amid all this, the Pound has been underperforming peer currencies, that is the Euro, Dollar, Yen, and others. Cable dropped over 1% to a 1.2915 low while EURGBP rallied out of two-month lows and back above the 0.9000 level. We have been earmarking Sterling as being a currency at particular risk given the upcoming drop in the UK’s terms of trade when the country exits the single market and customs union, the impact of which will be compounded by Covid lockdowns in the UK and across Europe.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
  • Posts: 1473
  • Joined: 28/05/2017
Date : 5th November 2020.

NOW WHAT?

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Global stock markets are rallying and sovereign bond yields, led by US Treasury yields, are tumbling as investors warm to the idea of a split government that could finally bring additional stimulus, but keep overall spending and debt under control and thus support a low yield environment for longer. Markets are discounting a Biden presidency and a split Congress.

Although Democrats still have a narrow path to taking control of the Senate (there is a 48 versus 48 deadlock currently, with four seats left to be decided), most political pundits think it unlikely. At the same time Biden is the favourite to win the presidency, although there is still some way to go before vote counting will be complete, while Trump is mounting legal challenges. The general view is that Biden will reach the 270 winning electoral college vote threshold (he’s currently at 264 to Trump’s 214), as well as that Trump’s litigation efforts will come to naught.

Without the Senate, the Democrats big fiscal stimulus plans will be kept in check. This means both a reduced prospect for bond issuance and a reduced prospect for inflation, which is why Treasuries have been rallying strongly. The yield on the 10-year T-note has plunged by nearly 17 bp from the high seen just ahead of Tuesday’s election. The combo of lower yields, loose labour market conditions, the prospect of less competition for resources from the government, excitement about tech and the growing fad for WFH (work from home) stocks, and prospects for a Covid vaccine are among the factors underpinning Wall Street.

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Hence since so far no one can celebrate a victory, you should focus on markets and how the scenario with US President Biden with a Republican Senate and a Democrat House might affect them in the near and long term future.

In the above scenario, there is firstly the concern whether US President Trump may chase some policies prior to Biden’s establishment in the White house. For example trade policy falls under the President in power, in contrast with fiscal policy and regulatory policy which fall under the US Senate in the face of a divided Congress. Another concern in a divided Government, in the long term, is the strive to achieve a sustainable fiscal position, as so far due to Covid-19 this has not been possible to accomplish. Meanwhile even without a final election outcome so far, questions have been raised in regards to prejudice, which would be corrosive to US competitiveness according to UBS.

However despite all this potential uncertainty and regardless if any of the above become true, the US economy is expected to show growth next year. According to Morgan Stanley,

"In short term, the business cycle dominates the political cycle, especially when we’re so early in a recovery. Secondly, a viable vaccine is now close to being approved. This approval, along with a better understanding of the disease and how to treat it with therapeutics, should allow us to manage a second wave better than the initial outbreak. That means by spring, we should be fully open in the economy, with safe participation by most people. The timing and pace of reopening is perhaps the most important variable and driver of economic activity next year. It’s also what financial markets continue to look forward to and why they’ve traded so well this year."

Not exactly like March, but definitely a sell off has been seen in equity markets due to the election and as the virus and restrictions remain headwinds. Despite the latest swing higher, we could state that so far the pandemic’s second wave might not have been discounted from global markets. Hence since the Election will be soon be out of the way, then if the pandemic is settled within the year Equity markets could be boosted as business will not suffer anymore. As this implies the reopening of economies globally, stocks – not solely technology ones, but all others from the tourism sector, services sector, industrial sector, etc – could finally recover.

Just to highlight however that there is the risk still of a divided Congress with Mr Biden in the House. This would limit his ability to deliver a big fiscal stimulus package as he desires to raise corporate taxes to 28%, after Mr Trump cut the rate from 35% to 21% in 2018. However the drop in taxes increased corporate profits, spurring a jump in stock buybacks that has helped to boost share prices over the past two years. These repurchases increase earnings on a per-share basis, which can boost the stock price.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HotForex

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