News / Page 121

China RRR cut lifts markets but weak PMI point to more pain ahead

Posted on March 1, 2016 at 11:05 am GMT

China’s central bank surprised markets on Monday by cutting the reserve requirement ratio (RRR) for large banks by 50 bps to 17%. The move is the first monetary easing by the People’s Bank of China (PBOC) since October 2015 and the fifth cut to the RRR in the past year. The RRR is the proportion of cash that banks must hold as reserves and the latest reduction should boost liquidity in the economy by around $100 billion. The cut, which [..]

Asian Session – Markets boosted by China RRR cut, shrugging off weak PMI

Posted on March 1, 2016 at 9:04 am GMT

Shares across Asia opened higher on Tuesday as market sentiment was boosted by yesterday’s move by China’s central bank to cut the reserve requirement ratio. The People’s Bank of China reduced the amount of cash that large banks must hold as reserves by 50bps to 17%. The cut should free up about $107 billion in funds for the banks to lend. The Shanghai SE Composite index ended the day 1.7% higher, reversing earlier losses from weaker-than-expected PMI data. The official [..]

Technical Analysis – GBPUSD struggles below 1.40, bearish outlook remains

Posted on March 1, 2016 at 7:46 am GMT

GBPUSD has been struggling to rise back above the key 1.40 level after breaking below it on February 24. The technical indicators are supporting further downside. The three moving averages are negatively aligned (50MA, 100MA and 200MA) and are falling. MACD is below zero and trending down, while RSI is in bearish territory below 50. However, since RSI is close to oversold territory this may suggest some consolidation in the near term, so prices may pause their decline for now. [..]

European Session – Euro under pressure on expectations of ECB action, dollar dented by weak US data

Posted on February 29, 2016 at 3:52 pm GMT

The markets turned from risk off to risk on by late European session trading. The start to the session saw negative sentiment as investors were disappointed with the outcome of the G20. They expected more to be done with respect to taking action to spur global growth. However, market sentiment was soon boosted during the mid-session with the help of China announcing that they cut the reserve requirement ratio (RRR) so that the amount of cash banks must hold as [..]

Technical Analyst – NZDUSD moves to bottom of recent range

Posted on February 29, 2016 at 3:07 pm GMT

NZDUSD has been trading within a range between 0.6544 and 0.6773 since early February but moved towards the lower bound of the range today as it started the week sharply down from Friday’s close. The bottom of the range corresponds with the 38.2% Fibonacci retracement level (0.6550) of the December-January downleg from 0.6882 to 0.6346. RSI has dipped just below 50 following the sell-off of the last two days, though the MACD still has some momentum above 0, suggesting the [..]

Eurozone slips back into deflation; pressure builds on ECB

Posted on February 29, 2016 at 12:10 pm GMT

Inflation in the Eurozone slipped back into negative territory in February according to the flash estimates by Eurostat. Annual CPI fell from 0.3% in January to -0.2% in February, which was below consensus forecasts of drop to 0.0%. This was the first negative reading since September 2015 and marks the end of four months of accelerating inflation. Core inflation was also weaker than expected, coming in at 0.8% year-on-year, against expectations of 0.9%. The core rate, which excludes food and [..]

Asian Session – Yen firms on risk aversion and lack of action by G20

Posted on February 29, 2016 at 9:11 am GMT

The G20 meeting of world finance leaders failed to produce the coordinated action to combat the slowing global growth that some investors were hoping for. However, the G20 did release a statement saying they agreed “to adopt all policy tools – fiscal, monetary, structural – to counter risks, foster confidence and strengthen growth”. Meanwhile, China’s premier signalled over the weekend that China will intensify the use of fiscal policies. Asian equities were mostly negative on Monday as markets were in [..]

Technical Analysis – EURUSD more bearish after falling below 1.10

Posted on February 29, 2016 at 7:55 am GMT

EURUSD has been more bearish since falling from the high of 1.1375 on February 11. Breaking below key support at 1.10 and below the 50 and 100-day moving averages on Friday accelerated the decline to a low of 1.0910 today. Prices have stabilized around this level but the negative bias remains in the short term as indicated by the technicals. RSI is bearish below 50 while the MACD is falling. There is scope to target the January lows at 1.0710. [..]

US GDP in surprise upward revision; dollar/yen lifted to 1-week high

Posted on February 26, 2016 at 4:03 pm GMT

The US economy expanded by more than initially estimated in the final three months of 2015 as inventories rose by more than first reported. GDP grew at an annualized rate of 1% in the fourth quarter, up from initial estimates of 0.7% and above consensus forecasts of a 0.4% expansion. However, this still represents a slowdown from the 2.0% rate seen in the previous quarter. The main changes in the second estimate that drove the upward revision were higher inventories, [..]

European Session – Dollar surges to one-week high above 113 yen on strong US data

Posted on February 26, 2016 at 3:54 pm GMT

There was risk on sentiment in global markets today especially after upbeat US GDP data. Oil helped risk appetite as well as prices rallied 3% after rising from below $33 to rise above $34 before easing back down. Oil is set for a weekly rise as strong US gasoline demand and hopes of OPEC action outweighed concerns of oversupply. The dollar gained across the board and pressured the euro back below $1.10. A series of data out of Europe today [..]

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