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Asian Session – Oil slump drags equities lower; yen see-saws on mixed BoJ signals

Posted on January 21, 2016 at 8:26 am GMT

Shares in Asia were unable to hold on to earlier gains and fell sharply towards the close as oil headed back down again. Tokyo’s Nikkei 225 index closed down 2.4% and the Shanghai Composite index lost 3.2%. On Wednesday, US shares rallied towards the end of the session but still ended the day lower, with the S&P 500 index closing down by 1.2%. US crude futures hit a fresh 2003 low of $26.19 a barrel yesterday but had recovered to [..]

Technical Analysis – EURCAD in ascending channel, faces resistance at 1.61

Posted on January 21, 2016 at 8:04 am GMT

EURCAD staged a good rally from 1.4023 all the way up to 1.6103. This is the highest level since 2009 but the pair appears to be facing difficulty clearing this key 1.61 level. The bullish bias is still in place since the tenkan sen and kijun sen lines are positively aligned while the daily Ichimoku cloud is rising. RSI is in bullish territory above 50 but has stalled around the 70 level suggesting consolidation is likely at current price levels. [..]

European Session – Loonie jumps after BoC keeps rates on hold; dollar pares gains on weak inflation

Posted on January 20, 2016 at 3:48 pm GMT

European equity markets opened sharply lower on Wednesday as oil continued to spiral downwards. London’s FTSE100 and the Frankfurt Dax fell by around 3% when trading opened but rebounded slightly as oil prices started to stabilize. US crude futures moved away from a new 12-year low set earlier in the day to rise to $28.90 a barrel in afternoon European trade. The euro had climbed as high as 1.0975 dollars in early European session on increased risk-off sentiment but later [..]

Kiwi drops to 4-month low as weak inflation raises hopes of more rate cuts

Posted on January 20, 2016 at 11:21 am GMT

Inflation in New Zealand fell to the lowest level since 1999 as the annual rate of increase in the consumer price index declined to 0.1% in the final quarter of 2015. Expectations were for the inflation rate to stay unchanged at 0.4%. On a quarterly basis, CPI fell by 0.5% from the previous quarter, sharply below forecasts of a 0.2% fall. The drop was mainly attributed to an 8.1% decrease in petrol prices. The sharper-than-expected drop in inflation puts the [..]

Asian Session – Kiwi plunges on weak inflation; dollar tracks oil lower

Posted on January 20, 2016 at 8:24 am GMT

The US dollar was in retreat on Wednesday after oil prices reversed their gains made yesterday to head back down again. Oil came under pressure after the International Energy Agency said in its monthly report that the oil market could “drown in oversupply” unless something changes. WTI crude futures hit a fresh 2003 low of $27.49 a barrel in late Asian session today, falling below Brent crude which was down at $28.11. Safe haven currencies such as the euro and [..]

Technical Analysis – USDJPY bearish below 120 gives scope for deeper falls

Posted on January 20, 2016 at 8:02 am GMT

USDJPY failed to hold above the key 120.00 level and breached this level at the start of this year to a low of 116.40. The underlying outlook is bearish and there is scope for deeper falls towards the 2015 lows of 115.84 and 115.55. The technical indicators are bearish, with the tenkan and kijun lines being negatively aligned and RSI in bearish territory. The daily Ichimoku cloud is falling. Prices would need to move back above the key 120 level [..]

Pound slumps on Carney remarks as markets ignore strong inflation data

Posted on January 19, 2016 at 3:27 pm GMT

The British pound was caught between two directions today after dovish comments from the Bank of England’s Governor contrasted the strong inflation data from earlier in the day. The Bank’s Governor, Mark Carney, reiterated his dovish view on Tuesday saying that he would like to see signs of notable progress in three areas before raising interest rates. They comprise of economic growth accelerating to above trend, domestic cost pressures picking up and core inflation moving towards the 2% target. Speaking [..]

European Session – Sterling tumbles to 1-year low versus euro after dovish Carney

Posted on January 19, 2016 at 3:27 pm GMT

Sterling was in focus today as it tumbled to fresh 7-year lows after dovish comments from Bank of England Governor Mark Carney. The pound had earlier rallied on better-than-expected UK inflation data which showed headline CPI rose 0.2% y/y in December, above forecasts of 0.1% gain. Cable plunged below $1.42, a low not seen since March 2009 after Carney said that the UK economy was not strong enough for an interest rate rise. Focus now turns to Wednesday’s UK employment [..]

Bears take a step back as some calm returns

Posted on January 19, 2016 at 12:11 pm GMT

The third week of 2016 has started in a calmer manner as major stock markets do not seem to be extending the heavy losses of the previous week. In addition, oil prices had deteriorated so rapidly that some sort of recovery was inevitable. The negative trend since the start of the year needs a lot of progress to be reversed but investors will probably welcome any respite to the selling. Positive data has also helped today in view of the [..]

China posts slowest annual growth since 1990 on manufacturing pain

Posted on January 19, 2016 at 11:08 am GMT

China’s economy grew at the slowest pace in 25 years in 2015, with GDP growth easing to 6.9% from 7.3% in 2014. During the final quarter of 2015, the economy expanded by 1.6% quarter-on-quarter, slightly below estimates of 1.7% growth. But year-on-year growth met expectations at 6.8%, which is the slowest growth since 2009 at the height of the financial crisis. Other indicators released today underlined the weakening but stable trend. Industrial output in December grew by 5.9% year-on-year, down [..]

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