Daily Fundamental Dose

[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……

[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……

[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….

[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……

[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……

[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….

[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…….

[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……

[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………

[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…….

[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……

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.

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.

[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….

[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….

[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……

[B]Daily Fundamental Dose: 21-July-2016[/B]

Hello Traders,

With upbeat earnings from global technology giants, coupled with stronger expectations of monetary policy divergence between the Fed and rest of the major central bankers, helped pressing macro risk-on sentiment towards sky, which in-turn fueled equities and the US Dollar to mark a positive closing on Wednesday. The EUR dropped heavily ahead of today’s ECB, which is expected to spread pessimism even without a rate-cut, and the GBP gained on upbeat jobs report. Further, the JPY maintained its downstream with the news that Japanese authorities are planning for a package of economic stimulus measures totaling $190 billion or more while the AUD and NZD kept running south due to expectations of rate-cut from respective central bankers. Moreover, the Crude prices dropped during early day when the USD was in north-run but gained heavily after the EIA showed that U.S. crude stockpiles declined for ninth consecutive week, the record longest streak. Additionally, the Gold kept on its south with stronger Dollar hurting safe-haven demand.

Entering into the Thursday, an important day with some crucial economics, global markets again adhered to profit booking on the fears emanating from Turkey, which witnessed a rate-cut from S&P. The NZD opened in the gap-down after the surprise economic assessment from RBNZ signaled fear from a below 1% inflation for seven straight quarters; though, the Kiwi reversed after the central banker didn’t directly utter for rate-cut. The US Dollar Index (I.USDX) also pulled back from its four-month highs while the Gold recovered with Crude extending its previous day gains.

With the ECB on card today, together with UK Retail Sales, US Jobless Claims, Philly Fed Manufacturing Index & Existing Home Sales, markets are likely to remain volatile enough, signaling the need to be cautious. While the ECB isn’t expected to cut the rate but a lack of demand for its bond-buying program and negative wipes from Brexit might force the President to speak lower and drag the EURUSD near to 1.0900 while UK GDP’s crucial component, the Retail Sales, is likely to dip negative and can trigger fresh downside of GBPUSD towards 1.3100 area. Further, JPY is more likely to witness gains given the US details disappoint traders and mark USDJPY at 106.30-20 zone while Gold has 1328 as a good resistance to break, else it can drop to 1300 mark soon.

Have a nice trading-day……

[B]Daily Fundamental Dose: 22-July-2016[/B]

Hello Traders,

Thursday proved to be a drag for global financial markets which were well-settled in their northward trajectory. The central bankers, mainly comments from ECB & BoJ, were known to trigger the broad pullback while not-so-good US economics and downbeat earnings from some top-tier enterprises again forced traders to run for risk-safety assets. The Bank of Japan Governor, Hruhiko Kuroda, was spotted denying any need for the much anticipated “Helicopter Money” which fueled the JPY to mark best day in a month; however, later it was confirmed that the interview was taken on June 17 but the same couldn’t hurt the Yen more. The EUR kept running between the gains and losses even after the ECB President said the central bank stands ready to take needed action and asked for some time to analyze the regional economy before going further while USD ignored upbeat Existing Home Sales as Philly Fed Manufacturing plunged to six month lows. Further, the AUD and NZD remained weaker with high speculation for monetary policy easing from RBA & RBNZ respectively, which together with the decline in commodity prices, also dragged the CAD. Moreover, Crude prices dipped as US summer driving season is coming to an end and the Iraq exports kept rallying, signaling extended supply-glut.

During early Friday, the last and a volatile day for the market, USD again started gaining the strength while commodities were on the downturn as important Manufacturing & Services PMIs from EU, US & UK are scheduled for release. Also, Canadian Retail Sales and CPI are some other details to observe. The Japanese Manufacturing PMI rallied to three month high, but failed to surpass the 50.00 mark which in-turn pulled the JPY back while expected weakness in UK headline PMIs during post-Brexit days have been dragging the GBP.

Looking forward, chances are higher that the US Dollar Index (I.USDX) will be capable of printing fifth consecutive weekly gains as there are lesser important US details scheduled for release which can affect the greenback drastically. However, a surprise positive impact of GBP and any announcements from Japanese policymakers not favoring the “Helicopter-money”, which has now been fashion in Japanese policy board, may pare some of the USD gains and can print 1.1100 on the face of EURUSD with the GBPUSD expected mark of 1.3350 on upbeat economics. Additionally, the Gold could also continue on its downside towards $1300 and the USDJPY might revisit 107.00 mark.

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

[B]Daily Fundamental Dose: 25-July-2016[/B]

Hello Traders,

With upbeat US economics and broader risn-on market sentiment, the US Dollar Index (I.USDX) managed to print a fifth consecutive weekly rise while speculations concerning additional monetary easing to come by headline central bankers fueled the equities. The Euro remained weaker with soft data-points and ECB’s inability to signal any exact measures to counter Brexit while contraction in leading UK PMIs dragged the GBP towards south. Further, the JPY again adhered to negative weekly closing on market players’ bet of BoJ’s monetary easing and improvement in global risk appetite which also dragged the Gold for second back-to-back weekly decline. Additionally, the AUD and NZD, together with the CAD, had to bear the burden of weaker commodity prices, hurt by stronger USD, and the chances of further monetary actions from their respective central bankers while nearness to end of the summer-driving season, coupled with record high level of oil and gas inventories, as per seasonal formation, fetched the Crude prices down.

Moving on, the present week, which started with a less than expected fall in Japanese exports, carries some of the important details/events that could fuel the global financial markets. Among them, Preliminary reading of UK, US and Canadian GDP, and the monetary policy meetings of the Federal Reserve and Bank of Japan, will grab the market attention. Additionally, inflation numbers from Australia and EU, together with the US CB Consumer Confidence and Durable Goods Orders, are some of the second-tier details that could continue making the markets active for the week to come.

Even after looking at the recent slew of improving US details, the US Fed isn’t likely to alter its present monetary policy; however, it might sound a bit hawk than it was previously and can extend the USD north-run. Further, the BoJ is more expected to initiate monetary policy action and can provide additional weakness to JPY while a dip in UK GDP might continue dragging the British Pound towards south. Though, being the eventful week and the on-going G20, wherein the global policymakers are discussing to form united measures to counter macro risk, any disappointment from the market consensus can be responded with higher than usual strength. Hence, it would be in the best interest of market players to keep on sidelines with JPY, GBP and EUR while USD, AUD and NZD should more be preferred for trading. The EURUSD might re-test its 1.0800 area while GBPUSD signal 1.2900 revisit and the USDJPY keep struggling with 106.55-60 TL which indicates its south-run to 103.50 if the BoJ observes recent market fashion of refraining the additional monetary stimulus.

Have a nice trading-day……

[B]Daily Fundamental Dose: 26-July-2016[/B]

Hello Traders,

During the first trading-day of the crucial week, market players again shifted to risk-off mode as important monetary policy meetings of the Bank of Japan and the Federal Reserve, coupled with headline GDP from EU, US & UK, scheduled during the week, might trigger wild moves. The same anticipation dragged the US Dollar to print a negative daily closing, which could also be witnessed in weaker equities and the safe-havens, like Gold, JPY and AUD, gained upside momentum. The EUR gained on better than expected German IFO numbers and counter-strength from greenback’s weakness while the GBP ignored weaker manufacturing detail and rose. The AUD and NZD registered noticeable gains but the CAD couldn’t enjoy such up-moves as Crude prices tested to three-month lows on higher US Rig counts.

Coming to Tuesday, news from Japan shook the global financial markets as Japanese Finance Minister cut down speculation of mammoth fiscal stimulus by saying the government is still deciding on the same while Bank of Japan might also prove its worth to take suitable actions. Additionally, the Government economic projections also release some pressure off the policymakers to revive the economy. The JPY responded with a bold north-run across the board and the AUD and Gold also gained some ground with the same reason. However, the US Dollar needed to bear the burden and stretched its previous decline as the two-day FOMC will start today, this in-turn helped commodity basket and the commodity-currencies, like NZD, CAD and AUD as well.

Looking forward, today’s US CB Consumer Confidence and New Home Sales will be the first US releases of the week and would bear market attention. Even as forecasts signal upbeat numbers, a weaker reading would be responded with greater downside of the US Dollar with EURUSD revisiting 1.1030 resistance and GBPUSD struggling around 1.3100. The USDJPY is more likely to extend its recent up-move towards 103.40-30 horizontal support and the Gold might confront 1325-26 resistance-zone.

Have a nice trading-day……