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17 July 2014 Bank of Canada and impact on CAD USD/CAD spiked up to 1.0794 yesterday before easing down to 1.0730 today. The Bank of Canada kept the overnight rate unchanged at 1.0%. The BOC Governor Stephen Poloz refrained from commenting on strength of the national currency as he said the economy won’t reach its full potential until the middle of 2016 – that’s about 3 months later than the bank projected in April. According to Poloz, the increase of annualized inflation above the central bank’s target of 2% has been caused by one-time gains in energy and import prices, not changes in economic fundamentals. The Bank of Canada also cut its Canada’s GDP growth forecast from 2.3% to 2.2% this year. All in all, this position of the BOC is surely negative for Canadian dollar. Still, many analysts thought that Poloz will do more to talk down CAD. We didn’t see much of the sell-off of this currency as the market players await Canada’s inflation data due tomorrow – this release should provide some hints whether the surge in inflation is temporary as the BOC says or not. If not, the regulator will probably have to adopt a more hawkish stance in order to stop prices from soaring. http://fxbazooka.com/upload/tiny/Ana...sdcaddaily.png Chart. Daily USD/CAD More: FX BAZOOKA - Bank of Canada and impact on CAD |
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17 July 2014 Central banks buy Treasuries Analysts at Wells Fargo Securities point out that US Treasuries are becoming more popular among foreign reserve fund managers in comparison with what was in 2013. In the past 4 months, the net purchases of Treasuries by central banks have increased $16.8 billion per month on average. Wells Fargo underlines, that this is more than enough to offset the decrease in purchases which happens as the Fed tapers QE. This partly explains why 10-year Treasury yield slid to 2.40% in May. http://fxbazooka.com/upload/tiny/Ana...sd1772.png.png Source: United States Department of the Treasury and Wells Fargo Securities, LLC More: FX BAZOOKA - Central banks buy Treasuries |
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July 18: Asian session http://fxbazooka.com/upload/tiny/Asia_eng.jpg EUR/JPY touched the lowest level since February at 136.70 as investors sought haven assets after a Malaysia Airlines plane was shot down over Ukraine and amid escalating tension in the Gaza Strip. USD/JPY rose from the lows in the 101.10 area to 101.40. The Bank of Japan released its monetary policy meeting minutes, according to which the central bank will keep QE program as long as necessary while most members are agreed that the impact is firmly on track. The greenback remains high versus its counterparts before a report today that may show a measure of US consumer confidence climbed this month. AUD/USD rose to $0.9366 after dipping to $0.9335. NZD/USD dipped to the 55-day MA in the $0.8650 area before recovering to $0.8680. EUR/USD is fluctuating around $1.3520. GBP/USD is trying to hold at $0.7100 after yesterday’s decline. More: FX BAZOOKA - July 18: Asian session |
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Key option levels (July 18) Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT). Here are the key options expiring today: EUR/USD: $1.3500 (large), $1.3525 (large), $1.3530 (large), $1.3550, $1.3575/80, (large); GBP/USD: $1.7090/7100 (large); USD/JPY: 101.30; AUD/USD: $0.9300, $0.9450; USD/CAD: 1.0700 (large), 1.0725, 1.0740/45 (large), 1.0750, 1.0770/75 (large), 1.0780/90 (large); EUR/JPY: 138.00; EUR/GBP: 0.7900, 0.7950 (large), 0.8050. More: FX BAZOOKA - Key option levels (July 18) |
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July 21: Asian session http://fxbazooka.com/upload/tiny/Asia_eng.jpg Trading wasn’t very active in Asia as it’s a bank holiday in Japan and amid concerns that geopolitical tensions could flare up at any time. USD/JPY slid to 101.19. EUR/USD rose to $1.3548. GBP/USD edged up and is trading just below $0.7100. AUD/USD consolidates in a narrow $0.9400/9380 range. The $0.9400 mark has been acting as a resistance since Friday. Buying interest remains subdued due to some disappointing Chinese headlines. NZD/USD opened with a gap up and strengthened to $0.8710. More: FX BAZOOKA - July 21: Asian session |
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Key option levels (July 21) Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT). Here are the key options expiring today: EUR/USD: $1.3500 (large); GBP/USD: $1.7075, $1.7175; USD/JPY: 100.95, 101.20, 101.50 (large), 101.75-80 (large), 102.00 (large); AUD/USD: 0.9250, 0.9395, 0.9400 (large); USD/CAD: 1.0745, 1.0800 (large); EUR/GBP:0.8000 (large). More: FX BAZOOKA - Key option levels (July 21) |
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21 July 2014 CFTC: USD longs slightly down According to the latest CFTC report, released on July 18, large traders and speculators slightly decreased their US dollar bullish bets on the week ended July 15. The overall USD long position declined from $10.34 billion on July 8 to $9.94 billion on July 15. Large speculators iraised their bets on JPY, CHF, CAD, AUD and NZD, while there were weekly decreases for EUR and GBP. http://fxbazooka.com/upload/tiny/Ana...cot-values.png http://fxbazooka.com/upload/tiny/Ana...standings2.png More: FX BAZOOKA - CFTC: USD longs slightly down |
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21 July 2014 BMO: data to watch for EUR BMO Capital points out that the main focus for euro this week will be on the preliminary July PMIs due on Thursday and the German IFO Business Climate Index due on Friday. According to the analysts, if the French or German PMIs drift lower, bears will pull EUR/USD to $1.3450. Still BMO underlines that for the bears to succeed they need good data from the US. All in all, the specialists expect that EUR/USD will be sold this week on the rallies to $1.3550 as we’ve seen today ahead of the releases on Thursday and Friday. US dollar, on the contrary, is supported ahead of the American inflation data due tomorrow. According to the survey conducted by Bloomberg, economists expect US consumer prices to have climbed at an annual rate of 2.1% in June matching May’s figure that was the most since October 2012. High inflation strengthens the cause for an earlier-than-expected rate increase in the US and is USD-positive. More: FX BAZOOKA - BMO: data to watch for EUR |
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21th of July: American session http://fxbazooka.com/upload/tiny/News/america1.png Tatyana Norkina, analyst of the company FBS U.S. dollar index is moderately recovering at the opening session and increasing about 0.05%. Stock markets were opened with the gapdown of nearly 0.30%. It should be mentioned that there will be no publication of important macroeconomic indicators expected today, therefore tradings will be likely of pure technical nature. Currency pairs are traded on Friday levels. Thus, the pair EUR / USD went back to 1.3510/1.3520 after the morning testing 13550. The pair GBP / USD is gravitating foward the bear market: the pair failed to recover above 1.7090 in the day time and is trading at 1.7060 now. As to USD / CHF it is consolidating just above 0.8980, though bulls do not resolve to overcome 0.8990. Currency pair USD / JPY is moving in the upper range of 101.20-101.35. More: FX BAZOOKA - 21th of July: American session |
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July 22: Asian session http://fxbazooka.com/upload/tiny/Asia_eng.jpg Asian shares rose as investors bet rising tensions in Ukraine over the shooting down of a jetliner won’t curb global economic growth. Nikkei 225 advanced by 1%. US dollar index remains near 1-month high as an increase in short-term US Treasury yields signaled mounting speculation the Fed will raise interest rates. AUD/USD strengthened from the session low of $0.9350 into the $0.9390 area. RBA Governor Stevens held a speech, but didn’t talk the Aussie down. NZD/USD consolidates in a narrow $0.8670/90 range. Gold weakened to $1306.20. USD/JPY rose to 101.50. EUR/USD is frozen at $1.3522. GBP/USD is little changed in the $1.7075 area. More: FX BAZOOKA - July 22: Asian session |
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22 July 2014 Russian-Ukrainian conflict in the limelight Economists at Deutsche Bank expect to see new developments in the Russian-Ukrainian crisis today with the EU finance ministers holding a meeting to discuss a possibility of imposing new sanctions on Russia. At least, the US president Obama urges the European government to do so. Meanwhile, Kremlin is denying responsibility for the Malaysian plane crash in Donetsk. "There is a real possibility of a ratcheting up of sanctions on Russia later this week – including possibly more hard-hitting “level 3” sanctions. The US may find it economically easier to deal with this outcome than Europe though." "Perhaps the most market-friendly outcome is that EU leaders talk very tough but do not agree on intensifying sanctions against Russia", Deutsche Bank says. According to Reuters sources, despite all the tough talk, the EU is unlikely to punish Russia beyond the speeding up of the imposition of already agreed individual sanctions. |
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Key option levels (July 22) Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT). Here are the key options expiring today: EUR/USD: $1.3450, $1.3500, $1.3540, $1.3550 (large), $1.3565, $1.3580, $1.3600; GBP/USD: $1.7075; USD/JPY: 101.00, 101.75, 101.95, 102.15 (large); USD/CHF: 0.9050; AUD/USD: $0.9365; USD/CAD: 1.0745 (large), 1.0765, 1.0800; NZD/USD: $0.8575, 0.8665; EUR/GBP: 0.7975; EUR/JPY: 137.00. More: FX BAZOOKA - Key option levels (July 22) |
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22 July 2014 EUR/USD below $1.3500 EUR/USD hit $1.3477, the lowest level since the beginning of February. The single currency was sold-off as the European trade started. The sentiment about the single currency was bearish and in absence of positive developments this made euro fall triggering sell stops. Potential further EU sanctions on Russia keep EUR/USD under pressure. USD bulls on the other hand, are active ahead of the US CPI release at 12:30 GMT. Note that EUR/USD is oversold in the short term and the RSI and MACD on H4 didn’t confirm this fresh low. Support us at $1.3476, $1.3450 and $1.3425/15 (200-week MA/June 2013 high). Resistance is at $1.3529, $1.3550 and $1.3575. http://fxbazooka.com/upload/tiny/Ana...2/eurusdh4.png Chart. H4 EUR/USD More: FX BAZOOKA - EUR/USD below $1.3500 |
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22 July 2014 Euro area: debt mounts According to the EU’s statistics office Eurostat, euro zone’s government debt rose from 8.90B euro in Q4 2013 (92.7% of GDP) to 9.05B euro in Q1 2014 (93.9% of GDP). The biggest increases in debt were in Slovenia and Belgium (7 and 3.9 percentage points respectively). Greece, the bloc’s third-biggest economy Italy and Portugal have the highest debt levels (174.1%, 135.6% and 132.9% of GDP respectively). More: FX BAZOOKA - Euro area: debt mounts |
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July 23: Asian session http://fxbazooka.com/upload/tiny/Asia_eng.jpg Asian shares rose for a third day, with the regional benchmark index extending a 6-year high, as lower US inflation data damped concerns interest-rate increases will be brought forward. MSCI Asia Pacific Index outside of Japan gained 0.4%. Nikkei 225 slid by 0.1%. USD/JPY slid below 101.40. AUD/USD jumped from the $0.9380 area to $0.9435, inspired by the better-than-expected Q2 inflation data in Australia. CPI came in line with forecast at 0.5%, while trimmed mean CPI rose from 0.6% to 0.8%. Higher inflation makes it more difficult for the RBA to shift from its current neutral stance to dovish. NZD/USD strengthened to $0.8680. EUR/USD is trading in the $1.3460 area after it lost about 60 pips yesterday falling to an 8-month minimum. GBP/USD edged up to $1.7075 from yesterday’s low at $1.7040. More: FX BAZOOKA - July 23: Asian session |
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Key option levels (July 23) Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT). Here are the key options expiring today: EUR/USD: $1.3450, $1.3470 $1.3500 (large), $1.3545/50 (large); USD/JPY: 101.70, 101.85, 102.15/30; USD/CHF: 0.8875, 0.9050; AUD/USD: $0.9325 (large), $0.9350; USD/CAD: 1.0745, 1.0800 (large); EUR/JPY: 136.75; EUR/GBP: 0.7990/8000. More: FX BAZOOKA - Key option levels (July 23) |
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23 July 2014 AUD: higher inflation and what it means AUD/USD strengthened to $0.9440 after a government report showed annual inflation accelerated to the fastest pace in 4 years. Australian consumer prices climbed 3% in Q2 from a year earlier, matching estimates. The RBA aims for inflation of between 2 and 3%. Trimmed mean CPI reading, which excludes the most volatile components, increased by 2.9% y/y vs. 2.7% expected. As a result, traders pared bets that the Reserve Bank of Australia will cut interest rates next year. According to Westpac, as inflation is currently low in the many countries of the world, higher reading from Australia caused AUD/USD to rise. HSBC points out that it will be now more difficult for the RBA to lower the national currency and convince the market that it will likely cut interest rates further when inflation is in the upper part of their target band. More: FX BAZOOKA - AUD: higher inflation and what it means |
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23 July 2014 BoE policy minutes in focus Market attention is now focused on the June BoE meeting minutes release at 8:30 GMT. According to currency analysts at RBS, The British currency may lose some ground on the release. Economists are convinced that the UK regulator unanimously voted in favor of unchanged monetary policy. Note that high UK inflation was released a few weeks after the June meeting, so the Bank hadn’t had enough ground to turn hawkish yet. They see the August meeting as a more likely time to see divergence of views in the MPC. By the way, August meeting will coincide with inflation forecasts and a fresh Quarterly Inflation Report. More: FX BAZOOKA - BoE policy minutes in focus |
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23 July 2014 USD is still the dominant power It’s the 70th anniversary of the Bretton Woods Conference which created the foundations of the global monetary system based on the US dollar we have today. Despite the efforts to step away from American currency, companies, consumers and central banks around the world prefer the US dollar to other currencies. Almost 90% of the $5.3 trillion a day in foreign-exchange transactions last year involved USD – and this percentage is the same as it was in 1989. Here's the infographics done by Bloomberg: http://fxbazooka.com/upload/tiny/Ana...currencies.png More: FX BAZOOKA - USD is still the dominant power |
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23 July 2014 Key takeaways from the BOE minutes As it was expected, GBP/USD weakened below the $1.7060 mark post the MPC minutes release. The document brought no surprises with all the 9 Commitee members voting to leave rates unchanged. There was no inspiration for the hawks in the document, but market particpants know that the July meeting was held before the upbeat UK inflation release. MPC has no preset view rate rise terms, it will be data-dependent; Indications of inflationary pressures areincreasing; BOE expects Q2 GBP growth of 0.9% before slowing modestly in Q3 & Q4. UK Q1 GDP will be revised up to to 0.9%. (Don't forget that Q2 GDP will be released on Friday). Waiting for the BoE Governor Carney speech at 11:45 GMT. Given the upbeat GDP forecast, we expect cable to remain supported at 1.7040. http://fxbazooka.com/upload/tiny/Ana...3/gbpusdh1.png Chart. H1 GBP/USD More: FX BAZOOKA - Key takeaways from the BOE minutes |
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23 July 2014 BOE Carney speech: quotes The BoE Governor Carney increased selling pressure on GBP/USD, dampening expectations of an early rate hike. Key Carney's quotes: UK economy is still in extraordinary times There is no clear timing on rate hikes, they will be gradual The BOE is balancing inflation implications from sustained economic momentum versus conflicting signals of labour market slack Expensive currency weighs on the economy Government needs to be careful that household indebtedness doesn’t pull the economy back into recession UK economy is currently producing as much as in did at the pre-crisis time "Next inflation report will provide the next opportunity to update our thinking on these important questions" (next report is August 13th) GBP/USD slipped to $1.7020 as of writing. More: FX BAZOOKA - BOE Carney speech: quotes |
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23 July: American session http://fxbazooka.com/upload/tiny/News/america1.png Tatiana Norkina, an analyst at FBS There are mixed feelings in the markets today in early U.S. session. Yesterday's strong growth in the dollar has been transformed into a protracted outset in the absence of important economic indicators. The dollar index remains in 80.85 (-0.01%), but with some probability of further recovery. Trading in the stock markets opened in opposite directions. Thus DJIAna is currently losing 0.15% and S & P500, on the contrary, adds about +0.20%. The similar situation is spotted in the currency markets - trades are conducted relatively quietly. The EUR / USD is consolidating in the range of 1.3455-1.3470. Obviously, the pair remains under bearish pressure. The USD / CHF currency pair updated its maximum of 10 pips, reaching the 0.9030 level, but then went under the figure of 0.9020. The USD / JPY is trading below the Ichimoku cloud time, in the area of 101.40, which gives grounds to predict its imminent decline to the 101.20 figure. The GBP / USD, pulled out of the common context sfter M.Carney's speech and a number of negative statistics having been released, collapsed to the 1.7030 support area. Bulls are trying to regain lost ground, but the major bearish trend still remains in force. More: FX BAZOOKA - 23 July: American session |
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July 24: Asian session http://www.fxbazooka.com/upload/tiny/Asia_eng.jpg Asian shares traded near a 6-year high after a Chinese manufacturing gauge rose to its strongest reading in 18 months. MSCI Asia Pacific Index outside of Japan added 0.4%. Nikkei 225 is down by 0.34% as Japanese trade deficit widened more than expected. USD/JPY rose to 101.57, but then dipped below the opening level of 101.47. NZD/USD fell by 120 pips in the Asian trade, hitting a one-month low of $0.8575. Despite the interest rate was raised again by 0.25% to 3.5%, RBNZ Governor Wheeler signaled a pause to the tightening cycle at least until December, as the regulator now needs time to access the impact of higher rates. June NZ trade balance came out better than expected with a 247M surplus, but the market didn’t pay much attention to that. AUD/USD consolidates in a narrow $0.9470/35 range. The price has initially spiked on upbeat China PMI, but is now below the yesterday’s high. EUR/USD is trading a bit on the downside, but almost flat in the $1.3460/55 area. GBP/USD edged down to $1.7030. More: FX BAZOOKA - July 24: Asian session |
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Key option levels (July 24) Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT). Here are the key options expiring today: EUR/USD: $1.3440, $1.3450 (large), $1.3475 $1.3500 (large), $1.3520/30 (large); GBP/USD: $1.6900, $1.7000, $1.7020, $1.7095; USD/JPY: 101.50/55 (large), 101.65/75 (large), 101.80/90 (large); AUD/USD: $0.9300/25 (large), $0.9340, $0.9400 (large), $0.9450; USD/CAD: 1.0680, 1.0700, 1.0725, 1.0790 (large); NZD/USD: $0.8600, $0.8625, $0.8640, $0.8700, $0.8740; EUR/GBP: 0.7800 (large), 0.8000; EUR/JPY: 136.75. More: FX BAZOOKA - Key option levels (July 24) |
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24 July 2014 GBP/USD hit $1.7008 on retail sales June retail sales rose by 0.1% m/m and 3.6% y/y vs. 0.2% and 3.9% y/y growth expected. However, despite the June stagnation, the overall Q2 retail sales volumes were the strongest in 10 years. June data added to yesterday's market pessimism, pulling GBP/USD down to $1.7008. Buy orders for the pair are clustered at $1.7000/10, while sell stop orders lie below $1.6990. Meanwhile, EUR/GBP extended the upside to 0.8926. Combination of upbeat euro zone data and weak UK figures is very supportive for the cross. |
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24 July 2014 EUR is cheered up by PMIs EUR/USD recovered to $1.3485 as the euro area released mainly better than expected PMIs from the euro area. European stocks rose with Euro Stoxx 50 index adding 0.6%. The preliminary euro zone’s manufacturing PMI rose to 51.9 in July from 51.8 in June. Services PMI jumped to 54.4 from 52.8, against forecasts of dropping to 52.7. German PMI came out above expectations with a strong reading of 52.9 vs. 52.0 expected. France lagged as its manufacturing PMI fell from 48.2 to 47.6. Negative news came from Italy where retail sales contracted by 0.1%. Resistance is at $1.3500 and $1.3525, while support is at $1.3450 and $1.3425. |
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July 24: American Session http://fxbazooka.com/upload/tiny/US_eng.jpg Tatiana Norkina, analyst at FBS U.S. dollar shows strength after the release of labor market data. The number of unemployment benefits applications for the past week has fallen to 284 thousand, from 303 thousand. Analysts had predicted an increase to 308 thousand. This encouraged strenghtening of the dollar index which is now adding about 0.10%. Stock markets have opened not that positively. DJIA and S&P500 have gone into the red zone, losing about 0.03%. Currency pairs are trading rather nervously today. Thus, the EUR/USD pair was consolidsating to 1.3485 after the release of positive statistics on eurozone, but then corrected to the 1.3460 area. The USD/CHF currency pair has found support at 0.9010 and is now consolidating around 0.9020. USD/JPY fixed above 101.40, then rose to the 101.80 resistance. Corrective fall of the GBP/USD pair has continued today: the bears have lowered the rate to 1.6970. More: FX BAZOOKA - July 24: American Session |
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July 25: Asian session http://fxbazooka.com/upload/tiny/Asia_eng.jpg US dollar headed for a second weekly gain versus euro before data today may show durable goods orders rebounded in June, adding to signs the economy is gathering momentum. USD/JPY is trading under resistance in the 101.80 area. Japanese CPI data that came out somewhat higher than expected (+3.6% in June vs. +3.5% expected), but Japanese economy minister Amari reassured the markets that the QE end is nowhere near. AUD/USD consolidates in a narrow $0.9425/00 range, retracing from the yesterday's $0.9470 high. NZD/USD trades in a tight $0.8550/85 range following the yesterday’s sharp selloff. New Zealand business confidence came below the forecast at 39.7. Gold price consolidates at the monthly lows a bit above $1290. EUR/USD is trading a bit on the upside, in the $1.3460 area. GBP/USD is trying to recover after it slid to $.1.6965 yesterday. More: FX BAZOOKA - July 25: Asian session |
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Key option levels (July 25) Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT). Here are the key options expiring today: EUR/USD: $1.3400 (large) $1.3420 $1.3500/10 (large); GBP/USD: $1.7000 (large) $1.7150; USD/JPY: 101.00, 102.00; AUD/USD: $0.9375, $0.9425, $0.9445; USD/CAD: 1.0695 (USD 600m), 1.0720, 1.0800; NZD/USD: 0.8610, 0.8720; EUR/GBP: 0.7800, 0.8100. More: FX BAZOOKA - Key option levels (July 25) |
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July 28: Asian session http://fxbazooka.com/upload/tiny/Asia_eng.jpg Asian shares rose, while Treasuries and oil slipped as investors await data on US services before the Federal Reserve meets this week. MSCI Asia Pacific Index is up by 0.27%. Japanese Nikkei 225 is up by 0.41%. The dollar index, a gauge of its strength against a basket of key currencies, stood little changed at 81.026 after striking a near six-month high of 81.084 on Friday. USD/JPY is once again fighting with resistance in the 101.80 area. AUD/USD is trading below $0.9400 touching the levels in the $0.9380 region on the downside. NZD/USD slid to $0.8530. EUR/USD is trading in the $1.3430/25 area, near 2014 low at $1.3420 which was hit on Friday. GBP/USD is little changed in the $1.6880 zone. More: FX BAZOOKA - July 28: Asian session |
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Key option levels (July 28) Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT). Here are the key options expiring today: EUR/USD: $1.3475; GBP/USD: $1.6975, $1.7035; USD/JPY: 102.00/10, 102.45; AUD/USD: $0.9350; EUR/GBP: 0.7910/15, 0.8000. More: FX BAZOOKA - Key option levels (July 28) |
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28 July 2014 CFTC: USD net longs at 6-week high According to the latest CFTC report, released on July 26, large traders and speculators slightly increased their US dollar bullish bets on the week ended July 22. The overall USD long position went up from $9.94 July 15 to a 6-week high at $14.12 billion. http://fxbazooka.com/upload/tiny/Ana...ot-values2.png During the past week large speculators bet in favor of JPY and CAD, while there were weekly decreases for EUR, GBP, CHF, AUD and NZD. http://fxbazooka.com/upload/tiny/Ana...-Standings.png More: FX BAZOOKA - CFTC: USD net longs at 6-week high |
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28 July 2014 Hilsenrath: the Fed is divided on rates Jon Hilsenrath, Wall Street Journal columnist and the Fed expert, has written an article about the Federal Reserve’s next meeting which will take place on Wednesday. According to Hilsenrath, all the FOMC members agree that the central bank should continue tapering QE and this time they will announce another cut in monthly bond purchases from $35 to $25 billion. As a result, QE3 may end in October. In addition, the expert says that the Fed’s officials will discuss when and how to raise interest rates – here there’s no single opinion about the FOMC members. The hawk Richard Fisher, president of the Federal Reserve Bank of Dallas, predicted the Fed could start raising rates by early 2015 “or potentially sooner.” However, there are doves like Chicago Fed President Charles Evans who thinks that the short-term rates should stay near zero until well into next year for the Fed could be sure that the economy’s really getting stronger and that inflation is going to be at the central bank’s target and now below. The Fed’s Chair janet Yellen has emphasized that the timing of rate hikes will depend on the economy. As the Federal Reserve has said since March it will keep rates near zero for a “considerable time” after the bond program ends and as QE is likely to end in October, the Fed will need to renew its forward guidance and tell the markets more about when it plans to raise the interest rates. More: FX BAZOOKA - Hilsenrath: the Fed is divided on rates |
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29 July 2014 BOJ Ishida on additional stimulus The Bank of Japan board member Koji Ishida warned on Tuesday that domestic structural factors may further delay a rebound in export performance even despite the fact that global growth picks up. This makes Japanese economic recovery fragile. Ishida also made the case for a more flexible view of the BOJ’s 2% price goal suggesting that the central bank won’t automatically expand stimulus simply because inflation fails to hit the target within a given timeframe. Japanese CPI has risen steadily, although its growth slowed to 1.3% in the year to June from 1.4% in May. More: FX BAZOOKA - BOJ Ishida on additional stimulus |
Re: Market news and trade recommendations by FBS
MARKET NEWS
29 July 2014 European yields are falling Spanish and Italian bond yields hit the latest in a series of record lows on Tuesday with investors looking to 60 billion euro of coupon and debt repayments from the two countries this week to return to the market. Yields on 10-year German bonds, the benchmark for euro zone borrowing costs, also touched all-time lows with the prospect of a fresh round of long-term loans to banks from the ECB (TLTRO) from September also supporting demand for euro zone bonds. Italy is the only euro zone country selling bonds this week, so there may be enough cash to keep the euro zone yields subdued at or near historic lows. Green line – Italian 10-year bond yield Orange line – Spanish 10-year bond yield Yellow line – German 10-year bond yield http://fxbazooka.com/upload/tiny/Ana...20in%20spa.png Source: Bloomberg More: FX BAZOOKA - European yields are falling |
Re: Market news and trade recommendations by FBS
MARKET NEWS
29 July 2014 IMF: GBP is overvalued The International Monetary Fund warned that British pound is overvalued by 5-10% and this may hamper efforts to rebalance the British economy, reports the UK Telegraph. According to the IMF, high sterling may hit exporters and take some of the steam out of the improving economy which has the fastest growth pace among advanced economies. The fund claimed that the Bank of England’s ultra-loose monetary policy was the right course at present, but warned that interest rates may have to rise if inflation starts to increase. The IMF also said that the BoE Governor Mark Carney should improve his controversial “forward guidance”. The BoE’s Deputy Governor Broadbent said today that the IMF’s view on pound was fuelled by weak global growth. According to him, UK has had sharp bounce in economic activity and current account deficit doesn't threaten British economy. More: FX BAZOOKA - IMF: GBP is overvalued |
Re: Market news and trade recommendations by FBS
MARKET NEWS
July 30: Asian session http://fxbazooka.com/upload/tiny/Asia_eng.jpg Asian shares are a bit on the upside with MSCI Asia Pacific Index up by 0.2%. US dollar is consolidating versus its counterparts after yesterday’s gains. The greenback remains near the highest in almost eight weeks against major peers amid prospects jobs numbers will add to indicators of stronger economic growth, prompting the Fed to further taper stimulus at a meeting that concludes today. USD/JPY is trading in the 102.10 area after it closed above 102.00 yesterday. Japanese industrial production contracted by 3.3%. AUD/USD is in the $0.9380 area. NZD/USD is just above $0.8500. New Zealand’s building concerts rose by 3.5%. According to the data released today, the RBNZ made no currency interventions in June. EUR/USD is trading just above $1.3400. GBP/USD is in the $1.6945 area. More: FX BAZOOKA - July 30: Asian session |
Re: Market news and trade recommendations by FBS
MARKET NEWS
Key option levels (July 30) Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT). Here are the key options expiring today: EUR/USD: $1.3400, $1.3415, $1.3470, $1.3500; GBP/USD: $1.6800; USD/JPY: 101.70/75, 102.50; AUD/USD: $0.9400, $0.9425, $0.9450, $0.9475; USD/CAD: 1.0780, 1.0800; EUR/GBP: 0.7800, 0.7900, 0.7950 (large), 0.8000. More: FX BAZOOKA - Key option levels (July 30) |
Re: Market news and trade recommendations by FBS
MARKET NEWS
30 July 2014 New coordinated sanctions against Russia Russia keeps getting penalized for backing of armed rebels in eastern Ukraine. The United States and Europe have made a joint effort on Tuesday. The new sanctions are designed to hit major pillars of the Russian economy, including oil and gas supplies and technology, banking and finance, and arms sales. Close associates of Putin are also targeted. The US sanctioned three Russian banks and a state-owned shipbuilder that serves Russia’s navy and oil and gas industry. The EU curbed Russia’s access to bank financing and advanced technology in its widest-ranging sanctions, including an arms embargo and limits on access to European capital markets for Russian state-owned banks. Details of the EU sanctions are expected to be published Thursday and the measures are supposed to kick in on Friday. More: FX BAZOOKA - New coordinated sanctions against Russia |
Re: Market news and trade recommendations by FBS
MARKET NEWS
30 July 2014 Spanish GDP beat expectations Spanish growth in Q2 turned out to be higher than the Bank of Spain has expected: the nation’s GDP increased by 0.6% q/q versus the anticipated growth of 0.5%. At the same time, Spanish consumer prices fell by 0.3% y/y, while the economists expected an increase. Economy Minister Luis de Guindos yesterday said that Spain raised economic growth forecasts from 1.25% to 1.3% for 2014 and from 1.75% to 2% for 2015. That will push unemployment lower than the 24.9% rate initially predicted for 2014. More: FX BAZOOKA - Spanish GDP beat expectations |
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