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European Session – Euro clings on to 1.11 dollars as equities rebound

Posted on March 11, 2016 at 3:46 pm GMT

European equity markets recovered on Friday following a highly volatile session yesterday as markets digested the ECB’s unexpectedly large and unconventional stimulus measures. Shares in Frankfurt and Paris were up by around 3% in late European trading. London’s FTSE-100 index was up by a more modest 1.5% as mining stocks underperformed. The euro came down from yesterday’s one-month high of 1.1217 dollars and had retreated to 1.1080 dollars in mid-European session before strengthening again to reclaim the 1.11 handle in [..]

Draghi’s big stimulus unappreciated by markets

Posted on March 11, 2016 at 3:29 pm GMT

There was massive anticipation ahead of the European Central Bank meeting this week and it turned out this was well justified. Thursday’s trading following the announcement and during the press conference of ECB President Mario Draghi produced some stomach-churning volatility in Europe’s currency and stock markets. Stocks liked the initial announcement out of the ECB, which also led the euro to drop. The measures exceeded expectations by all accounts, but during Draghi’s press conference there appeared to be a change [..]

Week Ahead – After ECB, attention turns to Fed; SNB, BoE and BoJ also in focus

Posted on March 11, 2016 at 1:31 pm GMT

It will be another busy week for central banks over the next seven days as the US Federal Reserve, Bank of Japan and Bank of England hold their policy meetings. The Swiss National Bank will be meeting too next week, while major data out of Japan, the US and the UK will also be eyed. It should be a quiet start to the week with Japanese machinery orders to be the main data on Monday. Machinery orders in January are [..]

Asian session – euro searching for equilibrium post-ECB, yen down as oil helps risk-on

Posted on March 11, 2016 at 8:49 am GMT

The euro was still searching for new equilibrium levels following the ECB action the previous day, as it backed off the 1.12 level it crossed during the previous day’s US session to trade around 1.1130. The low registered after the announcement of the ECB stimulus measures was 1.0820. Although the measures announced by Draghi were much more than what the market anticipated –especially the increase in the monthly QE purchases and the expansion of the program to cover non-bank corporate [..]

Technical Analysis – Gold extends yearly highs; bias bullish

Posted on March 11, 2016 at 8:05 am GMT

Gold set a new one-year high of 1283.43 today before easing to around 1270. The rally since the start of the year has led to the bullish crossover of the 50-day moving average with the 100- and 200-day moving averages, underlining the current positive bias. Both the RSI and the MACD remain in positive territory, suggesting scope for further gains in the near term. However, with prices moving along the upper Bollinger band for the past week, a short-term correction [..]

ECB unleashes more stimulus as it cuts all three rates and expands QE

Posted on March 10, 2016 at 3:59 pm GMT

The European Central Bank took markets by surprise by delivering a series of stimulus measures at today’s policy meeting. While the majority of economists were expecting a 10bps cut in the deposit rate and some form of modification to the asset purchase program, the ECB went further and reduced its three key interest rates, as well as increase the size of its bond purchases. At today’s announcement, the ECB cut its main refinancing rate from 0.05% to 0.00%, a move [..]

European Session – ECB action exceeds expectations but euro rebounds after initial fall

Posted on March 10, 2016 at 3:57 pm GMT

The European Central Bank surprised the markets today after announcing that not only was it reducing the deposit rate from -0.30% to -0.40%, but also boosting its monthly bond purchases by 20 billion euros to 80 billion, including investment grade non-bank corporate bonds in its asset purchase program and announcing 4 new long-term funding programs (TLTROs). The main refinancing and the marginal lending facility rates were both reduced by 5 basis points to 0% and 0.25% respectively. The euro initially [..]

Asian Session – Euro choppy ahead of ECB, kiwi slides on RBNZ surprise cut

Posted on March 10, 2016 at 8:51 am GMT

The euro see-sawed ahead of today’s crucial meeting of the European Central Bank, as during the previous day’s US session it rose all the way up to 1.1034 dollars only to reverse direction and head lower to 1.0965 in late Asian trading. It was clear that the euro was waiting to hear from the ECB and its President Mario Draghi before deciding to make a big move. Regarding the ECB meeting later today, it looks like the market has priced [..]

Technical Analysis – NZDUSD drops below 0.67 but holds neutral bias

Posted on March 10, 2016 at 8:12 am GMT

NZDUSD dropped below the 0.67 handle yesterday after a sharp sell-off following a surprise rate cut by the Reserve Bank of New Zealand. The pair extended its losses into Thursday to cross below the 200-day moving average but found support at the top of the Ichimoku cloud around 0.6615 where prices rebounded. The stochastics are trending down and have fallen below 50 so further losses in the near term are possible. If prices continue to decline, the next support would [..]

European Session – Aussie rallies to new 8-month high on commodities bounce

Posted on March 9, 2016 at 3:46 pm GMT

The Australian dollar posted significant gains versus the US dollar today, as a recovery in oil prices and generally more upbeat sentiment regarding risk assets helped it to power ahead. The aussie rose to 0.7509, breaking through the 75 US cents mark. Trading in the aussie was volatile as during the Asian session, it had traded as low as 0.7411. In the oil market, US crude oil managed to climb back above the $37 a barrel level, while Brent rose [..]

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