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  #961  
Old 07-09-2020, 09:25
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Default Re: Hotforex.com - Market Analysis and News.

Date : 7th September 2020.

Events to Look Out for This Week.




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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  #962  
Old 08-09-2020, 16:54
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Default Re: Hotforex.com - Market Analysis and News.

Date : 8th September 2020.

FX Update – 8 September – Sterling STILL centre stage.



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.



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.



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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  #963  
Old 09-09-2020, 15:55
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Default Re: Hotforex.com - Market Analysis and News.

Date : 9th September 2020.

No-Deal Brexit : Odd rising? How about Sterling?



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.”



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.



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.



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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  #964  
Old 14-09-2020, 16:23
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Default Re: Hotforex.com - Market Analysis and News.

Date : 14th September 2020.

Events to Look Out for This Week.




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.
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  #965  
Old 15-09-2020, 16:09
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Default Re: Hotforex.com - Market Analysis and News.

Date : 15th September 2020.

What you need to know today?


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.



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).



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.
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  #966  
Old 16-09-2020, 15:11
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Default Re: Hotforex.com - Market Analysis and News.

Date : 16th September 2020.

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





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.



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.



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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  #967  
Old 17-09-2020, 14:21
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Date : 17th September 2020.

The Guppy dips to 135.00, having stalled at 136.00.



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.
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  #968  
Old 18-09-2020, 15:25
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Date : 18th September 2020.

FX Update September 18 – A volatile 24hrs.



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.



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).



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.
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  #969  
Old 21-09-2020, 16:35
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Date : 21st September 2020.

Events to Look Out for This Week.




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.
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  #970  
Old 22-09-2020, 18:49
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Date : 22nd September 2020.

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


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.



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.
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  #971  
Old 23-09-2020, 10:13
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Date : 23rd September 2020.

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



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.



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.
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  #972  
Old 24-09-2020, 16:11
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Date : 24th September 2020.

US Claims Disappoint, again & Equities under pressure.



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.



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.



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.
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  #973  
Old 29-09-2020, 14:59
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Date : 29th September 2020.

Time for the first face-off.



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.



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



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.



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.

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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  #974  
Old 30-09-2020, 16:32
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Date : 30th September 2020.

ADP, NFP and the change in their correlation.



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.



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.



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.



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.

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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.
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  #975  
Old 01-10-2020, 15:21
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Date : 1st October 2020.

Brexit headlines driving the markets.



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.



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.

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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.
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  #976  
Old 02-10-2020, 16:01
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Date : 2nd October 2020.

FX Update October 2 – Ahead of NFP.



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.



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.



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.



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.

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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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  #977  
Old 05-10-2020, 16:16
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Date : 5th October 2020.

Events to Look Out for This Week.




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!

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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.
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  #978  
Old 06-10-2020, 16:17
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Date : 6th October 2020.

US Trade Deficit at 14-year high.



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.



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.
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  #979  
Old 07-10-2020, 15:31
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Date : 7th October 2020.

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



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.
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  #980  
Old 08-10-2020, 16:15
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Date : 8th October 2020.

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



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.



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.



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.

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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  #981  
Old 09-10-2020, 16:27
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Date : 9th October 2020.

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



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.



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.



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.



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.



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.
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  #982  
Old 12-10-2020, 17:00
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Default Re: Hotforex.com - Market Analysis and News.

Date : 12th October 2020.

Events to Look Out for This Week.




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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  #983  
Old 13-10-2020, 17:14
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Default Re: Hotforex.com - Market Analysis and News.

Date : 13th October 2020.

Equity markets rally loses some momentum in EU session.



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.



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.



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.

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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.
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  #984  
Old 14-10-2020, 21:23
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Default Re: Hotforex.com - Market Analysis and News.

Date : 14th October 2020.

Big Bank Earnings & PPI lift sentiment.



USA500, Daily

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



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.



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.



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.

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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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  #985  
Old 15-10-2020, 17:49
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Default Re: Hotforex.com - Market Analysis and News.

Date : 15th October 2020.

European Equities Heavy on Covid-19 Resurgence.


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.



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.

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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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  #986  
Old 16-10-2020, 16:39
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Default Re: Hotforex.com - Market Analysis and News.

Date : 16th October 2020.

Election2020 – Only Three Weekends Remain.



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.

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Stuart Cowell
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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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  #987  
Old 22-10-2020, 02:32
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Default Re: Hotforex.com - Market Analysis and News.

Date : 21st October 2020.

USD Down, GBP & Crypto’s Higher, CAD data.



Sterling has rallied quite strongly, showing a 1.0%+ gain on the Dollar at prevailing levels, as it rallied to test 1.3100. EURGBP is back under 0.9100 and down over 0.5% and testing 0.9050. The market reacted to remarks from EU trade negotiator, Barnier, that talks with the UK could continue “day and night.” There was also news that US Trade Representative Robert Lighthizer said that a trade agreement with the UK would come “reasonably soon.” The currency market evidently remains bullish on the EU and UK reaching an agreement, although the game of chicken between the two sides is continuing. Boris Johnson’s position is that the EU must fundamentally change its stance, while France’s European affairs minister Clément Beaune asserted yesterday that there would be “no new approach.” USDJPY tumbled under 105.00 en-route to printing a one-month low at 104.55. EURUSD lifted to a one-month high at 1.1868.



USDCAD posted a new low for a fourth consecutive day in pegging a six-week low at 1.3080 before recouping back above 1.3100 amid a near 2% drop in oil prices. USOil fell from the $41.88 highs seen on Tuesday to a low of $40.86 in London morning trade. The API reported a 600k bbl weekly inventory build after the close yesterday, versus expectations for a 2.0 mln bbl draw, which weighed on prices some. Inventories at the Cushing, OK storage hub were up by 1.2 mln bbls. Concerns over Covid related demand destruction, along with increased crude production from Libya, should keep a cap on prices for now. The EIA weekly inventory report is due at 14:30 GMT.



Canada’s CPI accelerated and retail sales grew, but both measures were on the tame side. CPI rose 0.5% y/y in September after the 0.1% gain in August. But CPI dipped -0.1% on an m/m basis (nsa) after the -0.1% slip in August and flat (0.0%) reading in July. CPI last rose on an m/m basis in June, rising 0.8%. The average of the three core CPI measures was 1.7% y/y, matching the 1.7% average seen in August. The CPI report remains consistent with ample slack in the economy, with a long way to go before activity returns to pre-pandemic levels across all industries. Meanwhile, retail sales rose 0.4% in August (m/m, sa) after a 1.0% gain in July (revised from 0.6%). Statistics Canada’s preliminary estimate is for little change in September retail sales. Sales have returned to more typical growth rates following the initial pop that followed the reopening of the economy — sales surged 21.2% in May after plunging -24.8% in April and falling -10.0% in March. Retail sales jumped 22.5% in June, an all time high growth rate. The ex-autos sales aggregate gained 0.5% in August. Both measures undershot expectations for stronger gains. Tame annual CPI growth along with the deceleration in retail sales is consistent with steady, accommodative policy from the BoC for an extended period.



Elsewhere, BTCUSD moved to 2020 highs after Paypal confirmed it will allow cryptocurrency buying, selling and shopping on its network.¹ The press release stated it “signaled its plans to significantly increase cryptocurrency’s utility by making it available as a funding source for purchases at its 26 million merchants worldwide. The company is introducing the ability to buy, hold and sell select cryptocurrencies, initially featuring Bitcoin, Ethereum, Bitcoin Cash and Litecoin, directly within the PayPal digital wallet. The service will be available to PayPal account holders in the U.S. in the coming weeks.”

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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  #988  
Old 22-10-2020, 19:57
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Default Re: Hotforex.com - Market Analysis and News.

Date : 22nd October 2020.

Volatility and US elections.



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.


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.
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  #989  
Old 23-10-2020, 17:46
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Default Re: Hotforex.com - Market Analysis and News.

Date : 23rd October 2020.

Dollar Dips as Equities escalate.



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.



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.



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.



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.
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  #990  
Old 26-10-2020, 17:09
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Default Re: Hotforex.com - Market Analysis and News.

Date : 26th October 2020.

Events to Look Out for This Week.




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.
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  #991  
Old 27-10-2020, 16:01
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Default Re: Hotforex.com - Market Analysis and News.

Date : 27th October 2020.

USD improves, GBP Mixed, CB decisions & TRY.



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.



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.



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.



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.



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.
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  #992  
Old 28-10-2020, 16:06
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Default Re: Hotforex.com - Market Analysis and News.

Date : 28th October 2020.

Alphabet Q3 earnings: Focus on advertising revenue.



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.
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  #993  
Old 29-10-2020, 16:08
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Default Re: Hotforex.com - Market Analysis and News.

Date : 29th October 2020.

Apple – Earnings Tonight.



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).



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?



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.
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  #994  
Old 04-11-2020, 16:13
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Default Re: Hotforex.com - Market Analysis and News.

Date : 4th November 2020.

FX Update – Election Uncertainty = Risk Off.



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.



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.



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.
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  #995  
Old 05-11-2020, 15:43
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Default Re: Hotforex.com - Market Analysis and News.

Date : 5th November 2020.

NOW WHAT?



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.



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

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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  #996  
Old 06-11-2020, 16:34
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Default Re: Hotforex.com - Market Analysis and News.

Date : 6th November 2020.

NFP Friday on a US Election week!



Treasury Action: losses on Treasuries have accelerated even as stocks sag. Some of the action is a function of unwinding of some of this week’s big moves. But there’s some renewed concerns creeping back into the markets as the expectation for a split Congress is coming into doubt as special elections are likely necessary in January.
The US Dollar headed a bit higher after the jobs report, which revealed a higher than consensus NFP print, and saw the unemployment rate fall to 6.9% from 7.9%. USDJPY rallied to 103.48 from 103.35, while EURUSD dipped toward 1.1865 from 1.1880. Equity futures remain in the red, though off earlier lows, while yields ticked slightly higher before pulling back.

[VIDEO]https://www.facebook.com/watch/?v=390059935451192[/VIDEO]

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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  #997  
Old 09-11-2020, 15:50
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Default Re: Hotforex.com - Market Analysis and News.

Date : 9th November 2020.

Events to Look Out for This Week.




Uncertainty and doubts soared in November as the virus surged, the FED and ECB have been unable to deliver more stimulus yet, and the US election is indicating a Biden presidency and a split Congress, with Republicans likely to retain the Senate and Democrats retaining the House. More volatility looks to be in store for next week as the market monitors economic data and events for signs of faltering growth in the US and Europe into a recession.

Monday – 09 November 2020

BoE Governor Bailey speech and BoE Haldane (GBP, GMT 10:35 & 14:00) – The BoE in November topped up its asset purchase program by a further GBP 150 bln. That was a pretty clear indication that the BoE is not expecting to go down the negative rate route and that the weapon of choice remains asset purchases, which will help the government to raise the funds necessary to finance the costly labour market support and stimulus program.

Tuesday – 10 November 2020

Consumer Price Index (CNY, GMT 01:30) – Chinese inflation data in September was lower at 0.2% m/m and 1.7% y/y. October’s reading however is expected to grow to 1.8% y/y as China shows recovery in key sectors.

Average Earnings (GBP, GMT 07:00) – Average Earnings excluding bonus are expected to have grown by 1.2% (3Mo/Yr) in September. The ILO unemployment rate is expected to have declined to 4.3% from 4.5% in the three months to September.

Economic Sentiment (EUR, GMT 10:00) – German ZEW economic sentiment for September is expected to have spiked to 67.7 in November. The Eurozone presents a picture of a split economy in general with manufacturing holding up and services struggling, and that effect will also widen the gap between Eurozone economies, as countries relying more on services and tourism will struggle much more than Germany.

Wednesday – 11 November 2020

Interest Rate Decision and Conference (NZD, GMT 14:00) – In September, at the last meeting, the RBNZ left its official cash rate and QE program unchanged, as had been widely anticipated, but 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. The RBNZ indicated it is actively working on a negative rate stance and the expansion of QE.

Thursday – 12 November 2020

Gross Domestic Product (GBP, GMT 07:00) – The November BoE report took into account the resurgence of Covid-19 case numbers and the resulting restrictions in the UK and elsewhere and hence the GDP is expected to contract again in the last quarter of the year, largely due to “lower consumer spending on social activity, which was assumed to be partially offset by higher spending on other goods and services”. However as per the preliminary report, GDP for Q3 is seen to deteriorate further and present a still dismal -20.5% q/q contraction, and -22.4% y/y from -21.5%.

Harmonized Index of Consumer Prices (EUR, GMT 07:00) –The final German HICP inflation for October is seen at -0.4% y/y from -0.5%.

Consumer Price Index (USD, GMT 13:30) – The CPI headline and core are both expected to show with 0.2% October gains, following 0.2% gains for both in September as well. CPI gasoline prices look poised to be flat in October so they’ll have no impact on the headline. As-expected October figures would result in a headline y/y increase of 1.3%, steady from September.

Friday – 13 November 2020

Gross Domestic Product (GBP, GMT 10:00) – The release of preliminary Q3 GDP numbers for the Eurozone two weeks ago confirmed that economic activity rebounded as lockdowns were lifted with most countries’ data actually coming in stronger than initially anticipated. Hence unchanged number are anticipated for this week’s reading as the activity levels remain far below those seen a year ago, while at the same time there is the resurgence in virus cases and renewed lockdowns across most major Eurozone countries.

Producer Price Index (USD, GMT 13:30) – As with PPI, a flat October headline gain is forecasted with 0.2% for the core, following 0.4% gains for both in September. The y/y core reading is assumed to rise to the 1.5% area into the turn of the year, with a downward hit from reduced aggregate demand but a boost for prices from supply disruptions. Supply constraints for some sectors will prove increasingly important in Q4.

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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  #998  
Old 10-11-2020, 17:18
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Default Re: Hotforex.com - Market Analysis and News.

Date : 10th November 2020.

USA100 holds under extensive pressure



Global stock markets are mostly higher, resuming yesterday’s stellar day on Wall Street as the indexes raced sharply higher on surprisingly positive vaccine news from Pfizer and BioNTech. News from Pfizer that its COVID vaccine is very effective prompted risk-on conditions globally, lifting stocks, yields and crude oil prices.

In the Asian market equities petered out amid the realisation that there are still considerable challenges ahead in the fight against Covid-19, however there is at least a light at the end of the tunnel now that will also reduce the pressure on central banks to add ever more stimulus. Currently however equities other than the European ones have settled in a comparatively narrow range.

The GER30 is up, after correcting some of yesterday’s sharp gains, but is holding above early lows. Other European indices are higher, with the UK100 gaining a further 0.8%, the CAC 40 up 0.5% and the Spanish IBEX 1.8%. The wider Euro Stoxx 600 has risen 7% over the past 5 days, but is still down 6% over the year, highlighting that there is still room for further improvement if and when it is confirmed that the virus situation is under control and Europe doesn’t face a further cycle of lockdowns and restrictions.

On the US side however the USA100 holds in the red after it closed yesterday -1.5% lower. The hopes for a more normal life saw investors pile into travel and leisure sectors, and flee the stay home sectors. Hence, the USA100’s gains lagged through for a second consecutive day and the index fell into negative territory. The USA100 was hit by the rotation out of defensive technology stocks into shares that will benefit most from an end to lockdowns.

The asset is in a dramatic shift this week towards negative sentiment. Selling pressure has ramped up and there has been a significant breakdown on the 20-day SMA and a reversal of more than 50% of last week’s gains. The latest higher high at 12,422 has been rejected suggesting that the 3-month descending triangle is still in place and consolidation is underway. Momentum indicators are now flat to negative in the daily chart, while intraday they are decisively negative, with 4-hour RSI consistently failing under 40 and MACD readying to turn negative. This suggests an outlook of selling into near term strength.



Hence now the November higher low and 100FE at 10,929 and 11,155 are the areas to be seen of overhead supply and a near term sell-zone for any bounces this week. Breaking down below the 10,929 and more precisely 10,700 (September low & 3-month support) could confirm a medium term bearish outlook with immediate support levels on the March-September upleg. There is initial resistance at 12,000 – 12,422 .

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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  #999  
Old 11-11-2020, 17:41
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Default Re: Hotforex.com - Market Analysis and News.

Date : 11th November 2020.

FX Update – November 11 – USD lifts, JPY drops, & GBP mixed



The Dollar has firmed against the Euro and other European currencies outside the case versus the Pound, with the UK currency posting two-month highs against both the Dollar and Yen, while holding steady-to-lower against the dollar bloc before rotating lower as the news broke that the mid-Nov trade deal deadline looks to be extended from November 15 into next week.



The risk-on mood has continued. Europe’s Stoxx 600 equity index rallied to its best levels in eight months, and S&P 500 E-mini futures were showing a gain of nearly 0.8% as of the early afternoon in London. The 10-year US T-note yield rose 1.5 bp to a new eight-month high at 0.979%. Commodities were mixed, however, though oil prices gained more than 3%.



In forex markets, Yen weakness and outperformance in commodity currencies and those of export oriented economies have been prevailing. USDJPY lifted back above 105.50, though remained shy of the highs seen on Monday, while AUDJPY and NZDJPY posted new two- and 10-month highs, respectively.

A pricing out of negative interest rate expectations in New Zealand following the RBNZ policy review today, which saw policymakers signal that the need for more monetary stimulus has reduced, boosted the Kiwi Dollar, which gained about 1% on the US Dollar and by more against the Yen. But biggest mover today, so far is EURNZD down some 1.5% from early day trades at 1.7350 to 1.7090 lows now.



The Japanese currency’s pronounced underperformance on Monday and continued softness marks a return to form with an inverse correlation of risk appetite in global markets. The success of Pfizer’s candidate vaccine for Covid in trials has been greeted as a game changer by investors. Bank shares, which hit record valuation lows this year, and so-called social-close stocks along with energy shares have rallied strongly, revealing that investors are looking across the valley of the prevailing predicament of Covid-related restrictions and economic weakness, and beyond to a return to normality in 2021. There is naturally some caution (known unknowns include long-term vaccine efficacy and population-wide safety), which has seen asset price gains lose momentum, though the massive fiscal and monetary stimulus that is in the works across the world, and the lower-for-longer monetary policy rubric at the Fed and other central banks (which enhances the value of corporate earnings), is a powerful tonic for higher valuations in cyclical assets. There are also a multitude of other credible Covid-19 vaccine candidates, aside from Pfizer’s, many of which have been reporting encouraging signs in advanced-stage testing.

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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  #1000  
Old 12-11-2020, 15:20
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Default Re: Hotforex.com - Market Analysis and News.

Date : 12th November 2020.

FX Update – November 12 – Sterling Pressured, JPY in Demand



GBPJPY, H1

Some reversal in recent positioning themes has been seen, with the dollar bloc and Pound softening against the Dollar, and the Yen outperforming moderately. This dynamic has been concomitant with global stock markets, outside the case of Japan, flagging. A fall in Chinese tech stocks, sparked by Beijing regulators launching an antitrust investigation, led a broader paring of recent gains in equity markets, which surged over the last week. Some caution had already been creeping back into markets, at least enough to deter investors from entering new positions at the recently heightened levels. The raised level of optimism for a Covid-19 vaccine assisted return to normality remains intact, though there is some way to go and there are known unknowns, including long-term vaccine efficacy and population-wide safety issues. There also appears to be some disquiet about Trump’s refusal to accept the election results, especially with his move to fire his defence secretary, which some fear means that he will try to stay in office. Unnamed Trump aides cited by the Washington Post, however, say that he has no real plan to overturn the results. Japan’s Nikkei 225 gets a special mention for bucking the trend in rallying to a fresh 29-year high.

In currencies, EURUSD has been trading neutrally in the mid-to-upper 1.1700s. The pair completed a more-than 50% retrace of the outsized gain the pair saw last week and through to Monday, which left a two-month peak at 1.1920. USDJPY has ebbed moderately, to the lower 105.00s. The Pound has come under some moderate pressure, correcting recent gains. There is still no breakthrough in EU-UK trade talks. Sources cited by Reuters yesterday reported that the ‘final-final’ deadline is the end of next week, (November 20) so the clock is ticking. The general expectation remains that there will be a last minute climbdown and the two sides will strike a deal. Media networks, meanwhile, are increasingly highlighting the likely disruptive impacts of the UK leaving the single market and customs union, which will happen in just seven weeks’ time. Today’s UK GDP data, although a Q3 record at 15.5%, showed further weakness during September and was 3 ticks below expectations of 15.8%. The current data shows the UK economy is -9.7% smaller than it was at the end of Q4 2019.



Technically, GBPJPY rejected 140.00 yesterday, moving under the 20-Hour moving average into the close. Today the pair have moved under 139.00 and tested S2 at 138.70, and R3 is at 138.05. The fast MAs are aligned and trending lower, RSI is 36 and falling, the MACD histogram & signal line are also aligned lower and breached 0 line this morning. Stochastics have moved into the oversold zone but remain weak. The H1 ATR is 0.1630, and the Daily ATR is 1.3000.



Elsewhere, the Kiwi Dollar dropped back after a short-lived rally following remarks by RBNZ’s Hawkesby, who said that while negative interest rates remain an option, less monetary stimulus now appears necessary than previously thought, which essentially repeated the signalling from the central bank yesterday in the wake of its policy review. NZDUSD printed a 20-month high at 0.6914 before retreating to the mid 0.6800s.

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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