Forex Previews

Market turmoil boosts safe havens as global equities slump

Posted on February 9, 2016 at 1:30 pm GMT

Volatility in financial markets intensified on Monday and Tuesday, leading investors to seek safety in less risky assets. Safe-haven currencies like the yen and the Swiss franc have risen sharply, while government bond yields such as that of Japan, the US and Germany have dropped to near or at record lows. Equities have been the main losers in the current market rout. US indices fell sharply for a second day on Monday and the S&P 500 is down 9.3% since [..]

US jobs growth slows in January but wage growth beats estimates

Posted on February 5, 2016 at 3:35 pm GMT

Non-farm payrolls increased at the slowest pace in four months in January as jobs growth fell back after the holiday season at the end of the year. The change in non-farm payrolls last month was 151k – below consensus estimates of 190k and below the 200k plus rate seen in the previous three months. There was a downward revision to last month’s figure, but for the whole of 2015, there were 85k more jobs created than initially estimated. Strong employment [..]

Week Ahead – Eurozone GDP and Yellen testimony to be main market drivers

Posted on February 5, 2016 at 12:36 pm GMT

It will be a relatively quiet week for the economic calendar in the next 7 days as many Asian markets will be closed for the Lunar New Year, including China. The Eurozone will see a number of key data releases that will include the first GDP readings for the fourth quarter of 2015. In the US, attention is likely to focus on Janet Yellen’s semi-annual testimony to Congress. German industrial production data will start the week on Monday, which will [..]

BoE lowers growth and inflation outlook but downplays talk of rate cut

Posted on February 4, 2016 at 3:38 pm GMT

The Bank of England downgraded its projections for the UK economy in its latest quarterly inflation report. It also decided to keep interest rates unchanged at a record low of 0.5% as expected. However, in a surprise move, the MPC’s lone dissenter, Ian McCafferty, who had been voting for a quarter point rate hike since last August, voted to keep rates on hold at today’s meeting. In its February report, the Bank lowered its growth and inflation forecasts for 2016-2018 [..]

Kiwi rises to 3½-week high on strong employment and Wheeler comments

Posted on February 3, 2016 at 11:50 am GMT

The New Zealand dollar was one of the strongest performing currencies on Wednesday after employment grew more-than-expected and the RBNZ governor said monetary policy won’t focus on headline inflation. The kiwi jumped by 1% to a 3½-week high against the US dollar as traders pushed back their expectations of a rate cut in March. The Reserve Bank of New Zealand last cut its official cash rate in December by 25bps to 2.50% but kept them on hold at its January [..]

RBA keeps rates steady at 2% but cautious on growth outlook

Posted on February 2, 2016 at 11:10 am GMT

The Reserve Bank of Australia concluded its first monetary policy meeting of 2016 today and left its cash rate unchanged at 2.0%. The Bank last cut rates in May 2015 but has been largely neutral since August following the Australian dollar’s sharp decline over the period. The weaker aussie has been supporting the Australian economy to rebalance away from the country’s overreliance on mining exports. Record low interest rates have boosted domestic demand, which has helped sustain annual GDP growth [..]

Personal spending flat in December as US consumers save more

Posted on February 1, 2016 at 3:43 pm GMT

Personal consumption expenditure was flat in December month-on-month, falling short of expectations of a 0.1% gain. The lacklustre spending data contrasts with a healthier monthly rise of 0.3% in personal income in December. The figure was slightly better-than-expectations of a 0.2% gain and suggests that US consumers are being cautious and saving more. The savings ratio increased to 5.5% from 5.3% during the period. There was however an upward revision to the previous month’s consumption figures, which was revised up to 0.5% [..]

China manufacturing output remains sluggish in January

Posted on February 1, 2016 at 11:44 am GMT

PMI data out in China today pointed to continued contraction in manufacturing activity at the start of 2016. The official manufacturing PMI was stuck below 50 for the sixth month in-a-row, while the private Caixin survey showed some signs of bottoming out. The official manufacturing PMI index fell to 49.4 in January from 49.7 in December. The figure was below estimates of 49.6. A reading above 50 indicates a monthly expansion in activity. Export demand remained weak with new export [..]

Week Ahead – RBA, Bank of England, US NFP and Chinese PMI on traders’ watchlist

Posted on January 29, 2016 at 3:44 pm GMT

The central banks theme will continue into next week as the Reserve Bank of Australia and the Bank of England meet. The closely watched manufacturing PMIs in China should give a fresh insight into the state of China’s struggling manufacturing sector. The all-important non-farm payrolls in the US will round up the week. Starting off the week on Monday are the January manufacturing PMI readings for China. The official manufacturing PMI is expected to show a marginal decline to 49.6 [..]

Bank of Japan cuts rates to negative in shock move

Posted on January 29, 2016 at 1:19 pm GMT

The Bank of Japan lived up to its reputation of surprising markets by adopting negative interest rates today in a bid to lift price levels in Japan. At its first policy meeting of the year, the Bank decided to introduce a negative interest rate of -0.1% on current accounts that financial institutions hold at the Bank, which effectively results in a 20bps reduction from the present rate of 0.1%. Only last week, the Bank’s governor, Haruhiko Kuroda had strongly opposed [..]

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