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Asian Session – RBA cuts rates by 0.25% but aussie bounces back; Oil struggles at $40

Posted on August 2, 2016 at 8:21 am GMT

The Reserve Bank of Australia cut interest rates to a new historic low of 1.50% today in a widely expected move. Weaker-than-expected inflation data out last week prompted the RBA to make its second 25bps reduction this year. In a possible sign of further cuts to come, RBA Governor Glenn Stevens said in his statement that the risk of the housing market being exacerbated by lower interest rates has diminished. The Australian dollar hit a one-week low of 0.7485 against [..]

Technical Analysis – Oil bearish after fall below key $40 support for first time in 3 months

Posted on August 2, 2016 at 7:01 am GMT

WTI oil fell below the key $40 a barrel level on Monday for the first time since April. The break below the 200-day moving average accelerated the decline. Prices have stabilized today just above $40 but the bias remains to the downside. RSI is trending down and is in bearish territory but as it is approaching oversold levels at 30, there could be some consolidation in the near term. Just below the $40 level lies the 50% Fibonacci retracement level [..]

European Session – Dollar pares back losses but sterling weaker on PMI downgrade

Posted on August 1, 2016 at 2:50 pm GMT

Major currencies struggled for direction in lacklustre trading in today’s European session as the dollar recovered only modestly from last week’s drop, while the pound took a knock from weak PMI data. The US dollar managed to hold above 102 yen after plunging below the level on Friday following surprisingly weak US GDP data for the second quarter, which dampened the likelihood of a tightening in Fed policy this year. Comments from Fed policymakers provided only limited support to the [..]

Pound pressured by downwardly revised UK manufacturing PMI but Eurozone revised up

Posted on August 1, 2016 at 11:16 am GMT

The post-Brexit gloom appears to have had a bigger impact on the UK’s manufacturing sector than initially thought, according to data out today. The final reading of the Markit/CIPS manufacturing PMI was revised down from 49.1 in the one-off flash estimate to 48.2 in July – the lowest since February 2013. Expectations were for the final reading to remain unrevised and compares with a figure of 52.1 in June. This was the steepest deterioration in manufacturing activity since October 2012. [..]

Asian Session – Dollar steadies after hit from weak GDP data

Posted on August 1, 2016 at 7:51 am GMT

The US dollar was steadier on Monday following its tumble after weaker-than-expected GDP data last Friday. US economic growth missed estimates by a wide margin in the second quarter due to weak business spending, reversing the recent trend of bullish data for the world’s largest economy. Adding to the disappointment was a downward revision to first quarter growth, leading investors to significantly pare back their expectations of a Fed rate hike in 2016. The dollar hit a three-week low of [..]

Technical Analysis – USDJPY shifts to bearish after tumble to 102.00

Posted on August 1, 2016 at 7:14 am GMT

USDJPY has shifted its outlook from neutral to bearish after Friday’s big drop back below the key 105.00 level to fall through another key level at 102.00. The market appears to have stabilized just above 102.00 but with RSI being below 50 in bearish territory, there is scope for further downside. The next target comes in at the 78.6% Fibonacci retracement of the upleg from 99.398 to 107.48, at 101.57. A deeper decline would see a retest of the July [..]

Week Ahead – Pressure on BoE to cut rates; PMI data and US NFP also in focus

Posted on July 29, 2016 at 2:45 pm GMT

The Bank of England meets next week in a highly anticipated meeting where the Bank is expected to cut rates for the first time since 2009. The Reserve Bank of Australia also meets and will likely ease policy too. The latest PMI survey data for the Eurozone, UK, US and China will also be watched as investors look for signs of any negative impact on growth from Brexit, while the July non-farm payrolls report out of the US will for [..]

European Session – Dollar extends losses on dismal US GDP numbers; gold rallies

Posted on July 29, 2016 at 2:41 pm GMT

The last day of the trading week ended with a raft of data out during the European session. The Eurozone halved its growth in the second quarter, with GDP rising by 0.3%, though in line with expectations. The flash inflation estimate for the euro area in July rose to 0.2% year-on-year from 0.1% in June. From the UK, the Gfk consumer confidence survey fell to a lower – than – expected figure of –12 in July from –1 in June. [..]

BoJ refrains from radical measures; eases only modestly but yen soars

Posted on July 29, 2016 at 10:10 am GMT

The Bank of Japan underwhelmed financial markets today after it failed to meet expectations of a large expansion of its stimulus program. Following the announcement this week by the Japanese government of a 28 trillion yen fiscal stimulus package, expectations had been running high that the central bank would follow suit with a similar large stimulus of its own. However, the Bank of Japan decided to make only modest changes to its existing policy as it opted instead to review [..]

Asian Session – Yen soars after BoJ disappoints but says will review all policies at next meeting

Posted on July 29, 2016 at 8:06 am GMT

The Bank of Japan announced only a modest tweak to its monetary policy at the end of its two-day meeting today, leaving financial markets widely disappointed which were expecting bolder measures. The Bank decided to increase the size of its purchases of exchange-traded funds from 3.3 trillion to 6 trillion yen annually. It also announced a doubling of the size of its dollar lending facility to $24 billion in a move designed to help Japanese businesses overseas. However, the Bank [..]

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