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Asian Session – Dollar lower on risk-off after weak China manufacturing PMI

Posted on November 2, 2015 at 8:48 am GMT

Asian equity markets opened lower on Monday after weaker-than-expected China manufacturing PMI data on Sunday. The official manufacturing PMI in China was unchanged at 49.8 in October from a month earlier. This was below expectations that it would rise to 50 and the third month in-a-row of a reading below 50, which indicates shrinking activity. There was further evidence of Chinese manufacturers continuing to struggle with the release of the Caixin manufacturing PMI today. The private survey showed manufacturing activity [..]

Technical Analysis – USDTRY opens with gap and drops sharply below cloud

Posted on November 2, 2015 at 8:13 am GMT

USDTRY opened with a gap lower on Monday at 2.8261 compared to Friday’s close of 2.9144. The pair subsequently fell sharply after opening to reach 2.7574 where it found support at 2.7568. This is the 61.8 Fibonacci retracement level of the upleg from 2.5598 to 3.0749. Prices then bounced back up to the 50% Fibonacci at 2.8178. Most daily technical indicators are giving bearish signals – the RSI is below 50 and pointing down. The tenkan-sen is below the kijun-sen [..]

Week Ahead – RBA and BoE to meet; China PMI could point to turnaround in manufacturing

Posted on October 30, 2015 at 3:16 pm GMT

Next week is set to be another data-packed one with China PMI data, US non-farm payrolls and German factory orders among the highlights. Central bank meetings from the Reserve Bank of Australia and the Bank of England will also come in focus, particularly the Bank of England, which will publish its quarterly inflation report. But the US Fed may once again steal the limelight as several Fed officials, including Janet Yellen are due to speak next week. Chinese manufacturing PMI [..]

European Session – Euro reclaims 1.10 while dollar comes under pressure after US personal spending data

Posted on October 30, 2015 at 3:01 pm GMT

The euro moved higher on Friday to recover most of the post-FOMC losses against the dollar and regained the key 1.10 handle. There was a mixed batch of Eurozone data but what was more positive for the euro was news that inflation for the euro area moved out of negative territory. The flash estimate of CPI for October showed a move up to 0.0% from September’s – 0.1%. Inflation data are important for the ECB as weak inflation readings could [..]

Central bank meetings lift some of the fog heading into year-end

Posted on October 30, 2015 at 12:14 pm GMT

The meetings of the European Central Bank, the Federal Reserve and the Bank of Japan during the past couple of weeks have managed to clear up some of the uncertainty regarding the next steps in monetary policy from the world’s major central banks. Firstly, starting with the ECB which met the previous week, one should expect some sort of extension or expansion of its current Quantitative Easing program during the next meeting in December and possibly a lowering of the [..]

Bank of Japan stands pat on monetary policy but further stimulus expected

Posted on October 30, 2015 at 11:43 am GMT

The Bank of Japan did not repeat last year’s shock to the markets when it unleashed a big boost to its QE program and instead kept monetary policy unchanged at its meeting on Friday. In October 2014, the Bank of Japan unexpectedly increased its asset purchase program by 30 trillion yen to 80 trillion yen per annum, fuelling the depreciation of the yen. While today’s decision was expected by a majority of economists, falling inflation and stuttering growth may yet [..]

Asian Session – Yen firms after Bank of Japan holds policy steady

Posted on October 30, 2015 at 8:37 am GMT

The Bank of Japan decided not to increase monetary stimulus at its policy meeting on Friday and kept interest rates and its asset purchase program unchanged. Although the move was expected, analysts had not ruled out a surprise move by the central bank following its shock announcement one year ago to expand its stimulus program. The decision came despite the Bank’s admittance that it will take longer to meet its 2% inflation target, therefore pushing back the time frame to [..]

Technical Analysis – EURGBP bearish after closing below Ichimoku cloud

Posted on October 30, 2015 at 8:07 am GMT

EURGBP closed below the daily Ichimoku cloud for a second day on Thursday after falling below it. Technical indicators give increasing bearish signals. The market is below the 200-day moving average and the RSI is below 50. The tenkan-sen has crossed below the kijun-sen line, also a bearish signal. Prices are testing a critical Fibonacci retracement level of 61.8% at 0.7143. A break below this level would open the way for another leg down towards the 76.4% Fibonacci at 0.7053. [..]

European Session – Euro rebounds on strong Eurozone consumer confidence, German CPI

Posted on October 29, 2015 at 3:19 pm GMT

The dollar held onto most gains made after the FOMC statement although traded a bit more mixed today. Further gains were capped by lower US GDP numbers and higher jobless claims. The euro was lifted by stronger Eurozone confidence data and more upbeat German inflation data. Confidence in the euro-area economy surprised to the upside and rose for a fourth consecutive month in October to 105.9, compared to expectations of a drop to 105.1. Preliminary German CPI data was unchanged [..]

US economy loses momentum in Q3 on weak inventories

Posted on October 29, 2015 at 2:43 pm GMT

US GDP growth slowed in the third quarter of the year, expanding at an annualized rate of 1.5% according to the advance estimate – sharply down from the second quarter’s 3.9%. Consensus estimates were for GDP to grow by 1.6%. The slower growth was attributed to a downturn in private inventory investment, which deducted 1.44% from GDP growth in the July-September quarter. Exports also slowed as the combination of a strong dollar and weak overseas demand held back export growth. [..]

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