Daily Fundamental Dose

Trading Discussion News and Economy
565

[B]Daily Fundamental Dose: 24-June-2016[/B]

Hello Traders,

Result of EU referendum shocked the global financial markets when the U.K. voted to quit the European Union after more than four decades relationship as 52% of 65 million population voted to cease the Britain from European Union. The move provided the biggest attack to the European politics since fall of Berlin Wall and echoed sentiments of 2008-09 crisis. The British Pound responded with a crash of 11%, the greatest loss to 1985 lows, also surpassing the “Black Wednesday” plunge of 4.1%. The EUR and commodity currencies also plunged as UK exit will cause global market panic for new trade relationship while the USD gained the counter strength and the Gold, with JPY, rallied due to safe-haven demand.

[B]What next?[/B]

Now the pointer turns on to UK PM, a Bremain supporter, who might need to resign together with some of the influential political leaders, including the Chancellor of the Exchequer-George Osborne. The BoE Governor, Marc Carney, will also address the global world relating to how they would tackle with the plunge in GBP and some of the global economies, like India, China and Japan, have started currency interventions.

The UK needs to invoke Article 50 of the Lisbon Treaty which will trigger a two-year negotiation time for the EU and UK to decide their future relationship and the state of UK in global world. Further, some of the EU members, like German Chancellor and French President, will need to convey other EU members to not obey the UK during their June 28-29 meeting of EU leaders.

[B]Hence, there will be more music to face ahead……[/B]

The Financial industry will be the worst affected due to the Brexit outcome which might force the London to lose its status as a global financial hub. Some of the leading financial companies, like JP Morgan Chase and Goldman Sachs have already told that the Brexit could lead them to leave the London, leading to heavy job-losses in financial industry.

Moreover, Netherland, which was also in-line to announce referendum to leave the EU, announced the same after the Brexit poll results and some other EU nations might also practice the same in future. So, the EU and the ECB will be worst affected due to that. Some of the global central bankers, like BoJ, BoE, RBNZ and Federal Reserve will be forced to announce monetary easing and might add fuel into the global financial market volatility.

Finally, after facing the disappointment markets have started soothing, though for the time being only, and a weaker US Durable Goods Orders might lead to a bit of correction in USD while there are no signs, except a formal announcement from Japan, that can weaken the JPY.

As the global financial markets are witnessing a shockwave, it would be better to stay out of trading for the day at-least, until there can be a new sign from UK mentioning that they might maintain healthy relation with EU.

Have a safe-day……

566

[B]Daily Fundamental Dose: 27-June-2016[/B]

Hello Traders,

Brexit victory triggered market chaos, together with the flight for safe-havens, on Friday. The GBP crashed to the lowest since 1985 while the EUR also plunged heavily while the USD, JPY and Gold were the gainers. The Gold market became hot and registered $4.3 billion surge in holdings in gold-backed funds, the most in a single day in four years, while the JPY strengthened to the highest in three years against the US Dollar. Commodity currencies were in jitters and forced AUD, NZD and CAD to dip while Crude prices also dropped from its recent highs.

During early Monday, the UK Chancellor of Exchequer, George Osborne, said that he accepts the Friday’s result in full and the nation will be strong soon, giving a bit of sigh to the GBP traders; however, the Pound couldn’t stick to the gains for long and started its downward trajectory again ahead of the market opens.

The Germans, Italians and French leaders will hold a meeting today while some of the global head-honchos will get in touch with the UK to start discussing cues about their future relationship. The UK PM, which announced his resignation in October, seems delayed the future talks with EU on their upcoming relationship while a surprise announcement by the Netherlands to seek UK-like referendum triggered uncertainty for the future of EU.

Hence, it would be better not to plunge on any action ahead of strong clues from the UK while some of the global central bankers have already signaled to safeguard their currencies during the aftermath of the Brexit. While there are no important data-points for the day to observe, a speech by the ECB President, at the European Central Bank Forum, would be closely observed to determine further moves of the EUR.

Have a nice-day……

567

[B]Daily Fundamental Dose: 28-June-2016[/B]

Hello Traders,

With the Monday keep punishing GBP and EUR, it seems that the Friday’s wild moves weren’t only the panic and global traders have much more to witness that could rattle the global financial market. The ECB President, during his speech on Monday at annual ECB forum, said that the central bank is feeling sad about the UK’s cessation from EU. There will be EU summit on Tuesday and Wednesday wherein the EU leaders will decide on what to do next about the UK and might ask the UK to submit for Article 50 which would start procedure for its departure from the Union. The USD kept enjoying without any major details, except an unchanged Services PMI, due to the counter-strength while the JPY remained strong with the Gold as market players maintained their likeliness for safe-havens. Further, the commodity currencies were on downstream as Crude prices remained under-pressure.

On Tuesday, the UK witnessed another bad news as S&P reduced its grade by two steps to AA from AAA while Fitch cut its credit rank by one step. Both have negative outlooks on the Britain now. Generally, the EU forum will conclude with a discussion between Fed Chair, BoE head and ECB President but this time the Fed Chair withdrew from it without providing reason, indicating the US Fed is more interested in making new-ties with UK secretly than to have an open relationship.

Market players adhered to profit-booking on Tuesday when they helped the commodity currencies as Crude prices registered gains on looming strike in Norway threatened to cut output in western Europe’s biggest producer. Further, the JPY and Gold also witnessed some profit-booking moves while the USD witnessed mild correction ahead of the crucial GDP and CB Consumer Sentiment Index release by world’s largest economy.

Amidst the global uncertainty about the future status of UK, together with Scotland and Northern Ireland which voted for Bremain, chances are higher that the JPY and Gold can continue moving up; however, a bit of profit booking can’t be denied with upbeat US details. Moreover, Crude prices can also pare some of its recent losses due to the Norway strikes and could help building the market volatility. Hence, it would be better to have USD longs with a bit of JPY while staying away until there are some final words from this week’s EU summit.

Have a nice trading-day……

568

[B]Daily Fundamental Dose: 29-June-2016[/B]

Hello Traders,

After two-days of crash, the market adhered to profit-booking on Tuesday, favoring a bit of pullback in EUR, GBP and some of the commodity currencies, like AUD, NZD and CAD. The US Dollar Index (I.USDX) witnessed first negative daily closing in three-days even if the GDP surpassed 1.0% forecast with 1.1% growth & Consumer Confidence rallied to seven month’s high as Fed Governor, Jerome Powell, said that he sees more downside risk, indicating that the Fed’s next move will be a cut than a rate-hike. The JPY and Gold also pared some of their recent gains while potential strike in Norway and crisis in Venezuela helped Crude price to rise. The on-going European summit also played its crucial role as European Council summit pressed the U.K. to spell out how it wants to move forward after the referendum. They warned that delaying the period before Britain formally activates the EU’s exit mechanism will prevent the start of negotiations over any future relationship.

On early Wednesday, the Japanese Retail Sales fell more than expected and registered a third straight month of annual declines while Japanese PM became loud mouthed by saying the cabinet will take all the available steps to curb the JPY volatily and cut its strength. The JPY declined in response to the news.

For the rest of the day, German Prelim CPI, EU Summit and US Pending Home Sales would take opportunity to fuel the global forex market volatility while the news announcement from UK will also be observed in detail. Given the EU maintains its rough tone against UK and the Britain keep delaying the notification to communicate its cessation, chances of renewed downside of the GBP can’t be denied. However, fresh sentiment favoring that the global central bankers would take bold actions to counter the recent pessimism might help the USD. Hence, it would be better to support the USD and gains in commodity currencies while paring some JPY gains.

Have a nice trading-day……

569

[B]Daily Fundamental Dose: 30-June-2016[/B]

Hello Traders,

With the receding tensions over the Brexit’s negative effects on global economy, the pullbacks in EUR & GBP stretched for the second day on Wednesday. The markets also punished USD during the same time-frame as six-month lows of US Pending Home Sales and a weaker spending favor no rate-hikes by the Fed during 2016. During EU summit the UK leader was repeatedly pushed to apply for the formal start of the cessation procedure; however, the UM PM, David Cameron, kept delaying the same and said this is the task of his successor, for which the French President said that the U.K. won’t be able to access the single market without applying the rules of freedom of movement. On the central bankers’ front, ECB President said he would do whatever it takes for global policy alignment while BoJ head said that more funds can be injected into the market should they be needed, which in-turn weakened the JPY. Commodity currencies remained firm as easing tensions over the Nigerian Crude output and fact the Norway’s oil and gas workers’ strike won’t hurt more to the global oil supply helped the energy prices. Moreover, EIA showed a sixth consecutive week of draw-downs in crude stockpiles.

During early day, New-Zealand ANZ Business Confidence rallied to four month highs while German Retail Sales surged to nine-month high but the Crude prices remained a bit weaker. The GBP and EUR seems again starting their southward trajectory while JPY held strong even after witnessing larger than forecast decline in Japanese Industrial Production.

For the rest of the day, the UK GDP and Current Account will be in lime-light while US Jobless Claims, Chicago PMI and EU Flash CPI are some other details that could offer busy trading schedules to Forex market players. As there prevails a sense of optimism about the capacity of global central bankers to counter the Brexit damages, and the BoJ is also have been forced to introduce another monetary stimulus, chances are higher that the JPY and Gold could pare some of their recent gains. However, threat that the Fed would continue with its current policy for the rest of the year can provide them a buffer and weaken the greenback.

Have a nice trading-day……

570

[B]Daily Fundamental Dose: 01-July-2016[/B]

Hello Traders,

With the US Chicago PMI rallying to 18 months high, the US Dollar Index (I.USDX) registered its second positive day in the week while preparation on the part of the BoE & ECB to announce additional stimulus to withstand Brexit shocks provided additional strength to the greenback and weakened the EUR & GBP. Moreover, the commodity currencies, AUD, NZD & CAD remained strong due to on-going easing talks favoring further demand of commodities while Crude prices needed to provide negative closing. The JPY also dipped against majority of its counterparts as BoJ stands ready to announce round of “helicopter money” while the Gold extended its up-move with its safe-haven status.

Chinese Manufacturing numbers, published on early Friday, showed that the official reading was at 50.00 bifurcating mark while Caixin PMI fell to 48.6 in June from 49.2 in May. Further, official Services PMI surpasses prior 53.1 with 53.7 mark. Additionally, the Japanese Household spending declines less than expected and the CPI matched weaker forecasts, providing a bit of strength to the JPY during early hour trading.

For the rest of the day, UK Manufacturing PMI and US ISM Manufacturing PMI are likely to givern the market moves while Canada observes Bank Holiday. As the global policymakers are bending towards monetary easing, chances are higher that the Fed could also put a halt to its expansionary monetary policy expectations and can hurt the USD. However, upbeat data-points might help the Fed to remain hawkish. The JPY can also liquidate some of its heavy gains given the BoJ adheres to further monetary easing while EUR & GBP are more likely to extend their downside.

Have a nice trading-day & great weekend……

571

[B]Daily Fundamental Dose: 04-July-2016[/B]

Hello Traders,

Following a traumatic week fueled by Brexit, last week gained some optimism from global investors as concerns that top-notch policymakers will be able to tackle the Brexit side-effects. That turned the equity markets again towards north while improving manufacturing numbers from EU & US, even after being related to pre-referendum time, helped the EUR & USD to mark a positive weekly closing. Further, better than expected US GDP and a six month high of CB Consumer Confidence provided additional strength to the US Dollar Index (I.USDX) in marking consecutive second weekly gains. The GBP maintained it’s south-run, with lesser pace than the previous week, while commodity currencies stretched their up-moves as improved global sentiment favored additional supply. Moreover, the JPY closed in the negative territory for the first time in three weeks as growing concerns of BoJ’s monetary policy easing were backed by weaker Japanese inflation numbers.

During the weekend, the Australian general election grabbed the global markets’ eye as results so far declared shows no clear majority and a hung parliament, which in-turn threatens the Australia’s credit rating, as said by top-tier rating institutions. The US markets are closed Monday due to Independence-day holiday while the fastest contraction of Australian Building Approvals in three months seems failing to drag the AUD down.

For the rest of the day, UK Construction PMI and the outcome from AU and EU could continue fueling the global financial markets. Moreover, the UK national leader’s comment, mainly relating to their recent avoidance of Article 50 initiation, could further direct the GBP moves. AS the US marktes are close for the day, chances of subdues trading can’t be denied.

Have a nice trading-day….

572

[B]Daily Fundamental Dose: 05-July-2016[/B]

Hello Traders,

Even if the US markets were closed on Monday, due to Independence-day, the greenback managed to mark a positive daily closing as pessimism at EU, mainly driven by Italian news that the nation might use state funds to recapitalize its banking system, coupled with aftershocks of Brexit trauma, helped the US Dollar Index (I.USDX). The JPY strengthened again as the renewed risk sentiment pushed market players toward risk-safety while the GBP and EUR remained weaker with aforementioned reasons and a seven year low by the UK Construction PMI. Commodity currencies, like AUD, NZD and CAD, maintained their upside and ignored the recent weakness in Crude prices due to fading risk from expected Nigerian labor disputes. The Gold also remained up and revisited the highs marked on Brexit-day.

On early Tuesday, the RBA fueled the market volatility with no action, as expected, but the voting counts from Australian election kept signaling a hung parliament, forcing the authorities to tally the votes again. Further, the China’s services expanded and Japan’s deteriorated while the BOE signaled it could provide stimulus measures to support the economy in coming months. Additionally, An index published by YouGov Plc and the Center for Economics and Business Research on Tuesday tumbled to 105 from 112.6 in the three days ended June 23, providing further damages to the GBP and again fueling the market shift in favor of the USD and JPY.

For the rest of the day, Bank of England Governor, Mark Carney, will speak London following the release of the central bank’s bi-annual Financial Stability Report while the UK Services PMI will also be released. Furthermore, US Factory Orders and the NZD GDT Price Index will also be observed closely to fuel the first US trading-day of the week.

Considering the recent trading change to the one we have already observed on Brexit-day, chances are higher that the USD and JPY, coupled with the Gold, can continue their up-moves while commodity currencies, UK and EUR might be the losers for the time being.

Have a nice trading-day……

573

[B]Daily Fundamental Dose: 07-July-2016[/B]

Hello Traders,

Even if the renewed pessimism at EU & UK fueled US Dollar on Tuesday, the greenback index (I.USDX) failed to sustain the same and marked a daily negative on Wednesday as minutes of pre-Brexit FOMC meeting showed that the policymakers were afraid of uncertainty to US economy and to the rate-hike plan even ahead of the Brexit. The bears also ignored eight month high US ISM Non-Manufacturing PMI. At the UK, the GBP kept running down and dropped to the fresh 31 year lows as seven U.K. property funds froze withdrawals amid a surge in redemption while the EUR also dropped against majority of its counterparts on fear that Brexit will surely damage the EU growth. Further, JPY and Gold prices gained heavily due to their safe-haven demands while the Crude also rallied on weaker stockpile details from API.

On Thursday, AUD witnessed a shock when S&P Global Ratings cut the outlook on Australia’s AAA credit rating to negative from stable as it sees the upcoming coalition government to be less effective to help the national growth and counter the budget deficit. Further, the New-Zealand Dollar was a clear winner as it rallied across the board after RBNZ Deputy Governor, Grant Spencer, said further interest-rate cuts could pose a risk to financial stability. Additionally, BoJ Governor, in a speech to his bank’s branch managers, said that Japanese Inflation might slightly be negative and he would make sure to take all the necessary measures, providing a bit pullback to JPY’s up-moves.

For the rest of the day, UK Manufacturing Production, US ADP & Jobless Claims and the Canadian Building Permits and Ivey PMI, followed by the US Crude Oil inventory number, will be important to watch. Considering the UK pessimism, the EUR and GBP might extend their downside while the USD may have less to shed and the JPY and Gold can witness a bit more of pullback if the greenback managed to register good growth on job numbers. Further, even if the political uncertainty at AU poses negative for AUD but its less risky status, with high interest-rate, can save it from further downside.

Have a nice and safe-trading……

574

[B]Daily Fundamental Dose: 08-July-2016[/B]

Hello Traders,

With 10-week low Jobless Claims, coupled with better than forecast & prior ADP Non-Farm Employment Change, the US Dollar Index (I.USDX) managed to completed the Thursday on a positive note. The EUR and GBP remained weaker as EU fined Spain and Portugal for breaching budget deficit limits and UK Manufacturing Production dipped in negative again. The AUD and CAD also went down on weaker commodity prices while the NZD enjoyed the RBNZ statement that wasn’t favoring any rate-cuts. The Crude prices plunged 5% on higher than expected US stockpiles data while the Gold price adhered to profit-booking; however, the JPY was storng enough during the present state of risk-safety.

As we are on the NFP day, market players have been cautious since the start and are placing good order on JPY and some of them also favor the US Dollar as the NFP is more likely to reverse its dismal reading of May month. Additinoally, smaller than expected Japanese current account balance, in addition to near four years low of Economy watchers’ sentiment, presently restricts some of the JPY bulls.

In addition to the US jobs report, the Canadian labor market numbers can also become crucial as the recent plunge in Crude prices have already damaged the CAD and a weaker employment print might provide additional damages to the Loonie.

Considering the first US job details after Brexit, and after the plunge in registered in May, this month’s job report would be closely examined. If there are any more good news than expected, which is likely, the USD can get a boost. Hence, stay alert.

Have a nice trading-day and a great weekend….

575

[B]Daily Fundamental Dose: 11-July-2016[/B]

Hello Traders,

With a surge in US NFP again alleviating concern about the strength of the world’s largest economy, coupled with seven month high Non-Manufacturing PMI, the US Dollar Index (I.USDX) managed to print a third weekly positive closing while pessimism at EU kept dragging the regional currency EUR. Further, the GBP extended its south-run with disappointing data-points while RBA’s no rate-change helped the AUD register across the board gains. Moreover, the NZD remained upbeat and the CAD dragged down with weaker Crude prices but the JPY maintained it’s north-run amidst global uncertainty. Additionally, a surprising hike in US unemployment and weaker Earnings helped the Gold prices to test 28 months high.

During the weekend, the Chinese inflation numbers remained dismal and provided weakness at the starting trade sessions on Monday while a strong victory by Japanese Prime Minister Shinzo Abe at upper house election favored continuation of easing measures, which he also promised during early Monday and pulled the JPY a bit.

Looking forward, the economic calendar is quite for the rest of the day, except the EU summit, and might extend its favor for the US Dollar and can keep pulling a JPY a bit more. Also, the Gold can witness profit-booking moves and weaker Chinese details could also drag the AUD, NZD and weaker Crude prices can extend CAD downturn.

Have a nice trading-day…….

576

[B]Daily Fundamental Dose: 12-July-2016[/B]

Hello Traders,

Friday’s upbeat US NFP, coupled with expectations of more stimulus from global policymakers, helped the US Dollar Index (I.USDX) to register a daily positive closing; however, the greenback failed to rise against EUR and GBP as the UK is close to announce successor of PM David Cameron, British Home Secretary Theresa May, on Wednesday night. The AUD and NZD, even after rising across the board as market players searched for high yielding currencies, failed to strengthen against USD while JPY crashed across the board as Abe’s upper house victory is soon to announce mammoth monetary stimulus. The Gold also dipped with profit booking while the Crude price maintained its downside with strong USD.

During early day, Japanese wholesale prices fell 4.2% against the previous drop of 4.3% but failed to provide a relief to the JPY decline while German WPI increased more than forecast with 0.6% gain.

For the rest of the day, speech by the US FOMC member, Federal Reserve Bank of St. Louis President, James Bullard, and the EU outcome of Spain and French sanction, due to deficit target overrule, can entertain the market players with continued strength of the AUD, NZD and a bit of USD. The JPY and the Gold, together with CAD, are likely to extend their downsides.

Have a nice trading-day……

577

[B]Daily Fundamental Dose: 13-July-2016[/B]

Hello Traders,

Although, two of the influential FOMC members, during their public appearances on Tuesday, said that there would be negligible impact of Brexit on US economy, and the same was affirmed by the IMF, the US Dollar Index (I.USDX) declined on a daily basis as JOLTS Job Openings dipped to four-month lows. The EUR remained weaker while the GBP maintained its surge on the break of political uncertainty as UK interior minister is all set to becomes the next British PM. Some of the high yielding currencies, namely AUD and NZD extended their rally while the CAD gained on a Crude best up-move in three months. Furthermore, the JPY declined again majority of its counterparts and the Gold also pared some of its recent gains on improved market sentiments. Upbeat demand forecast by the US Government and OPEC became the reason for the Crude’s around 5% rally on Tuesday.

Though, the market again favored the greenback and the JPY on Wednesday when the Japanese PM announced fiscal measures, in stead of helicopter money and the Chief Cabinet Secretary Yoshihide Suga told reporters it’s untrue that the government is considering so-called helicopter money as stimulus. Further, the Crude also weakened a bit with expected hike in US stockpile after the API released better than forecast number. Moreover, a smaller than forecast Chinese Trade Balance number dragged the AUD and NZD which rallied heavily yesterday.

For the rest of the day, monetary policy meeting by the Bank of Canada (BoC) is likely to grab market attention while there are no other major releases to be observed from the rest of globe to observe. Though, renewed risk-on sentiment might help the JPY to rise further with increased strength after recent pullback while the USD might continue jumping between gains and losses.

Have a nice-day………

578

[B]Daily Fundamental Dose: 14-July-2016[/B]

Hello Traders,

Even with not so major releases on Wednesday, the market reversed from what it used to be during the early weekdays, the US Dollar weakened a bit against EUR, JPY and CAD while gaining against AUD, NZD and EUR. The underlying reason seems to be the Fed Government’s budget number releases, which dipped to $6 billion in June from $50 billion in the same month a year earlier, and the dovish mark of Philadelphia Fed President Patrick Harker. The present FOMC member, when he last spoke publicly in late May, predicted two to three rate increases this year but he now expects less than or equal to 2 rate-hikes. The JPY witnessed profit booking and pared some of its earlier losses while no rate-cut and downplayed threat from Brexit by Bank of Canada (BoC) helped the CAD register gains. The NZD hit with RBNZ saying it will issue an unscheduled assessment of the economy next week, prompting traders to increase bets on an interest-rate cut in August and the AUD lost ground with profit-booking. The Crude prices, which gained the day before, dipped on Wednesday with surprise hike in EIA US stockpiles and a statement from OPEC showing rate of decline in non-OPEC supply will slow next year.

On Thursday, the market restored to its early week pattern of favoring USD and punishing the rest of it, except GBP ahead of the crucial BoE when the UK central bank is expected to cut its rate. The Japanese currency was again hit with strong speculative moves favoting helicopter money in Abe’s new stimulus measures which he would announce sometime during next week while nearness to BoE and final placement of UK PM helped the GBP to rally. Furthermore, the Australian Jobs report, which showed smaller than expected hike in Employment Change and an increase in Unemployment, dragged the AUD to south.

As we are reaching to the crucial BoE wherein the central bank is expected to cut its benchmark interest-rate for the first-time since 2009, chances of the GBP to trim its recent gains can’t be denied if the Governor sounds dovish. On the contrast, a no rate-hike or a hawkish statement might propel the GBP further towards north and recover its Brexit losses. Additionally, the US PPI & Jobless Claims are some extra data-points that market players need to take care of.

Have a nice and safe trading…….

579

[B]Daily Fundamental Dose: 15-July-2016[/B]

Hello Traders,

The Bank of England (BoE) disappointed global financial markets on Thursday when it decided to wait till August to cut their benchmark interest-rates which was much expected. The GBP responded with an across the board rally and the EUR also gained a bit. However, the EUR couldn’t sustain the gains as an attacker killed 80 people in the French Riviera city of Nice late on Thursday. The USD remained weaker with GBP’s gains extending market support away from greenback and three Federal Reserve policymakers expressed the view that there was no hurry to raise U.S. interest rates in the wake of the UK decision to leave the European Union, despite signs that the U.S. economy is near full employment. The JPY kept loosing its strength in the expectation of mammoth monetary measures to come soon while the AUD and NZD remained sideways with smaller gains as weaker USD strengthened commodity prices.

On early Friday, the Chinese GDP and Industrial Production provided additional fuel to already optimist market and helped commodity currency as both the headline figures surpassed consensus. The upbeat Chinese data also gave further punishment to rsafe-havens, including Gold and JPY as market players were rush towards risky assets after BoE and Dragon nation’s details.

For the rest of the day, final reading of EU CPI, US CPI & Retail Sales are likely to govern the moves and most likely that the EUR can drop further while a weaker than 0.01% forecast reading can provide further downside of the regional currency. The USD is likely to extend its weakness given the consumer-centric details print downbeat figures while the JPY can hold its running downside with mild pullback.

Have a nice-day and a great weekend……

580

Great post Mr.Anil , Quick question, could you direct me to the sources and methods you use to determine your fundamental analysis? Thank you, I’m wanting to learn more.

581

Even though, fundamentals starts from the basic concepts of economics relating to particular market, economy, commodity, etc., there are various news portals where you can read the latest news (e.g. Bloomberg, Reuters, The Time, SharpsPixley, etc.

582

[B]Daily Fundamental Dose: 18-July-2016[/B]

Hello Traders,

With the US Retail Sales surging more than expected & prior, the US Dollar rallied during Friday, providing a consecutive third weekly gain to the US Dollar Index (I.USDX) while the EUR remained a bit weaker with no major progress in EU-UK talks and an attack in France dragging the regional currency down. The GBP registered first positive week in four after the BOE disappointed global markets by asking some more time to analyze the economy and give the rate-cut while Theresa May’s positioning as PM shrugged-off rencet political uncertainty in the Britain. The JPY kept weakening in the wake of expectations favoring mammoth asset purchase program by the Bank of Japan (BoJ) and the AUD also remained upbeat with market players run for high interest-bearing currencies. Further, the NZD dropped heavily after the RBNZ announced for a release of surprise economic-check statement while the CAD also gained after the Crude prices marked a positive week.

During early week, the New Zealand’s consumer price index rose less than expected in the second quarter, giving further fuel to speculations concerning RBNZ’s rate-cut while vanished coup in Turkey provided additional damage to the JPY and Crude prices.

There prevails a holiday in Japan on Monday while no important economics to track for the rest of the day, giving help to expect pre-established moves in favor of USD and GBP to the market players.

Have a nice and safe-day….

583

[B]Daily Fundamental Dose: 19-July-2016[/B]

Hello Traders,

With the recent end to coup attempt in Turkey, coupled with signs of inaction at the Federal Reserve during 2016, global equity markets managed to extend their rally. The same could be seen in the S&P 500 surge to four consecutive records through Thursday and dragged the US Dollar Index (I.USDX) during the first trading of the week wherein few economics are up for publish. The EUR remained lackluster while the GBP extended its pullback. Further, commodity currencies, like AUD, NZD and CAD, went down with latest speculations favoring lose monetary policy from their central bankers while Gold also dipped for third consecutive day as investors adhered to cash-out from SPDR Gold fund. Moreover, JPY couldn’t halt its running decline on concerns of mammoth monetary policy easing to come and Crude prices kept running down hovering supply glut. Hence, market mood on Monday was in favor of Equities where most of the traders/investors ran in search of higher returns while Bonds and currencies became their victims.

Alike all other days, the Tuesday gifted USD optimism as chances of monetary policy divergence between the Fed and rest of the globe increased after RBA minutes showed doors open for further easing and favored the stronger currency. The Australian central banker also said that the economic growth would have slowed during previous quarter with soft inflation and losing momentum in job market yet to prevail. Additionally, the RBNZ also tightened its grip over the housing market boom, indicating sooner rate-cut from the central bank, which further dragged the NZD down. At the Japanese front, news that one of the BoJ Governor’s aide researched on no need for the BoJ to increase another round of large QE helped the JPY during early trading sessions.

For the rest of the day, UK CPI, EU ZEW Economic Sentiment and the US Housing market numbers are likely to provide market direction. Considering the recent slew of UK economics helping the GBP, better than expected CPI print can fuel the GBPUSD towards challenging 1.3500 with 1.3350 being immediate resistance while weaker consensus of EU numbers can drag the EURUSD towards 1.1000 again. Further, the JPY, together with Gold, might pare some of their recent gains and could print 105.30 and $1338 respectively. Though, a surprise dip in US details can endanger its recent gains.

To sum up, it would be better to expect a bit more upside in the USD and JPY, coupled with a tip-up in GBP, based on CPI figures. However, chances of the further weakness in AUD, NZD and CAD can’t be denied.

Have a nice trading-day….

584

[B]Daily Fundamental Dose: 20-July-2016[/B]

Hello Traders,

Unlike Monday when global equities maintained their upswing and Fx witnessed mixed results, the Tuesday closed with a pullback from usual direction as weaker earnings report from some of the big enterprises, coupled with IMF’s cut to macro growth forecast, again helped the safe-havens. However, the US Dollar Index (I.USDX) managed to mark a fresh four months high on upbeat housing market reports while the GBP ignored better than forecast CPI as IMF cut down its 2017 growth forecast to 1.3% from 2.2% on Brexit concern. The EUR also dropped with disappointing ZEW economic sentiment numbers while the JPY and Gold enjoyed its risk-free status for the first time in previous four-days. Further, the AUD and NZD kept running down with on-going market consensus of a lose monetary policy actions from RBA & RBNZ respectively while the CAD remained weaker due to a dip in Crude prices to the lowest in two-month as smooth supply during the geo-political tensions signaled a global supply-glut formation.

Markets again joined the Monday moves during early trading sessions on Wednesday when the UK job reports and US Crude oil stockpiles are scheduled for release. However, the US Dollar refrained from declining as the overall technical favor additional strength of the greenback which in-turn favors further dips in Crude and Gold prices.

Forecasting today’s market, it becomes important to have a look at the UK Claimant Count Change as it is the only numbers among all three Job details that would include the Brexit time, rest two, namely Unemployment Rate and Earnings, will flash the data through May-end and might already have been priced in. Additionally, there aren’t any big releases to observe from US while an unscheduled economic assessment from RBNZ during the day-end could be important for the NZD traders and can further weaken the NZDUSD to 0.6950 mark. On the other hand, EURUSD is more likely to drop below 1.0900 while weaker UK details can drag the GBPUSD to sub-1.0300 area.

Have a nice trading-day……