Daily Market Analysis by Vinson Financials

VinsonFinancialsFX · November 17, 2015, 3:42am

Financial News November 17, 2015

EUR/USD likely to trade at 0.95 by Q3 16

TThe poor performance of the Chinese economy is likely to increase downside risks for euro area growth and inflation. Therefore, ECB is likely to respond the down momentum with additional policy easing in the form of a time extension to QE.

Barclays anticipates deposit rate cut of 10 bp. However, a deposit rate cut is likely to build pressure on the EUR. Therefore, EURUSD pair is likely to fall further.

“We forecast EURUSD to depreciate to 1.03 by year-end and trade at 0.95 by Q3 16”, argues Barclays.

Market Review November 17, 2015

ECB Vice President Vitor Constancio , during an event in Frankfurt yesterday, warned that the terror attacks in Paris could hit investor confidence in Europe. Moreover, he condemned the “terrible events” in Paris and cautioned that they would compound the problems already facing the region. “Several factors surround what happened and responses are not easy to find because it then compounds on all the problems we were already facing quite recently,” Constancio said. Furthermore, Vice president Constancio noted, “markets are so far taking it calmly,” but warned that it was still too early to know the economic cost of the attacks and added that if they affect consumer and business confidence and risk aversion, “the consequences can of course be worse,” he said. The common currency had seen some down pressure, EUR/USD dropped to the 1.0655 area, while EUR/GBP plunged to the 0.7020 area.

In addition, European equity markets had seen some slight movement. FTSE Eurofirst 300 was little changed compared with Friday’s close, while the French stock market index, the CAC 40, was fractionally down having recovered from a 1 per cent drop at its opening.

The Asian session was rather quiet with no economic few economic releases. Released from New Zealand, longer term inflation expectations weakened marginally, with annual consumers price inflation expected to be 1.85 percent in two years’ time, compared with an expectation of 1.94 percent for the same measure in the September survey. NZD/USD is currently trading near the 0.6460 area, with the next support seen at the 0.6286.

The key events for the day would be the United Kingdom inflation data, German ZEW Economic Sentiment, the United States Consumer Price Index (CPI), Core CPI and New Zealand’s GDT Price Index.

Data releases to monitor:

EUR: Italian Trade Balance,German ZEW Economic Sentiment, ZEW Economic Sentiment.

GBP: CPI, PPI Input, RPI, Core CPI, HPI, PPI Output.

USD: CPI, Core CPI, Capacity Utilization Rate, Industrial Production, Mortgage Delinquencies, NAHB Housing Market Index, TIC Long-Term Purchases.

NZD: GDT Price Index.

Trade Idea of the Day

AUD/USD

Currently the pair is trading at 0.7082. Traders must monitor the 0.7158 resistance level and the support level 0.7015 for possible breakouts. A possible scenario would be a movement towards the 0.7049 support level, where a break may lead to the 0.7027 area. An alternative scenario could be a movement towards the 0.7127 resistance level, where a break may lead to the 0.7150 area.

VinsonFinancialsFX · November 18, 2015, 3:42am

Financial News November 18, 2015

Daily Economic Outlook: 18th November, 2015

In the United States, housing starts and building permits will update the performance of housing market. Construction in the U.S. has accelerated as the housing sales have started growing this year.

“After a surge in September, concentrated in the volatile multi-unit sector, starts are expected to have fallen in October. However, a solid rise in permits should point to further construction increases in the pipeline”, says Lloyds Bank.

The release of the minutes for the October FOMC meeting is expected to draw markets’ attention. Experts are eagerly waiting to know how many members are interested on rate hike in December.

Similarly, minutes of recent Bank of Japan policy meeting will be released tomorrow. As the GDP growth of the economy declined in Q3, which is second consecutive quarterly fall, the BoJ is expected to be under pressure to bring back the economy on track.

Market Review November 18, 2015

Yesterday, data released from the United States showed that the inflation rose slightly, raising the chance of interest rate hike in December. More specifically, the consumer price index rose 0.2% after falling the previous two months. Apart from energy and food, sectors with volatile price changes, U.S. consumer prices rose 1.9 percent over the past year, which is close to the Federal Reserve’s target of two percent. The US Dollar remained firm against other majors such us EUR, CHF and JPY, while remained relatively stable against the GBP. EUR/USD extended losses reaching as low as the 1.0630 area, while USD/JPY rose to the 123.48 area. USD/CHF rose to the 1.0150 area and GBP USD remained near the 1.5201 area.

Released from Australia during the Asian session this morning, CB Leading Index declined -0.1% versus the previous of -0.4% while MI Leading Index and Wage Price Index remained flat at 0.1% and 0.6% respectively. AUD/USD is currently trading near the 0.7095 area with the next support seen at the 0.7070 level.

The key event for the day would be released from the United States. FOMC Meeting Minutes will be monitored closely, as information regarding a possible rate hike in December may be revealed from FOMC members.

Additional economic releases would be the United States Building Permits, Housing Starts and FOMC Member Dudley speech.

View our full economic calendar for a daily roundup of major economic events.

Data releases to monitor:

CHF: ZEW Economic Expectations.

GBP: 10-y Bond Auction.

USD: FOMC Member Dudley speech, Building Permits, Housing Starts, Crude Oil Inventories, FOMC Meeting Minutes.

NZD: PPI Input, PPI Output.

Trade Idea of the Day

USD/CAD

Currently the pair is trading at 1.3312. Traders must monitor the 1.3369 resistance level and the support level 1.3225 for possible breakouts. A possible scenario would be a movement towards the 1.3297 support level, where a break may lead to the 1.3270 area. An alternative scenario could be a movement towards the 1.3338 resistance level, where a break may lead to the 1.3360 area.

VinsonFinancialsFX · November 19, 2015, 5:29am

Financial News November 19, 2015

Daily Economic Outlook: 19th November, 2015

Market will focus on the U.K. October retail sales report. The Headline sales volumes inched up by 1.9% m/m in September. Although the increase was partly added to firm spending related to the Rugby World Cup, other categories also performed strongly, says Lloyds Bank.

The bank expects flat headline sales for the month. The retail indicators for October indicate that annual growth is likely to have eased back significantly.
Today’s publication of the October ECB meeting minutes will draw attention of the analysts as the ECB is expected to deliver further policy stimulus in the coming months. At the press conference, President Draghi gave a strong indication that more policy easing is on the table for the next meeting on 3rd December. Ahead of the minutes, comments from ECB council members Weidmann, Coeure and Praet will be closely observed.

In the United States, the Philadelphia Fed survey for November and weekly initial jobless claims will be in focus.

Feds rate hike likely next year

Several FOMC members raised nonstandard reasons for rate hike in December. Analysts suspect pushing the hike into 2016 may increase uncertainty in financial markets.

Members are also seemed to differ over the possibility of inflation level returning to the target level of 2%, and they assume the performance of labor market is not sustainable.

They believe that the PCE inflation will remain below 2% through the end of 2016.
The ongoing global financial and economic developments also drew FOMC’s attention. Most of the participants argue the downside risks arising from abroad seem to ease economy is secure now.

“We believe that divisions within the committee and the soft path of inflation we expect early next year will lead to a lower policy path in 2016 than the committee expects; we forecast it will hike only three times in 2016”, say Barclays.

Market Review November 19, 2015

After last night’s FOMC minutes the EURUSD moved above 1.0700 level as a result of some profit taking but drop in early European session as the risk appetite increased returned. Fed officials comments hinted that a rate hike could be right around the corner. Furthermore some analyst based on bonds futures pricing predict two hikes during the following months.

USD price action was also pushed by the Bank of Japan that kept monetary policy steady something that was widely expected, despite the country’s recent slip into a technical recession. Traders also monitor the ECB minutes release, later today, of its latest policy meeting that may hint what the central bank might do in December.

Additionally last night New Zealand PPI inputs rose 1.6% q/q in Q3 the same thime PPI output rose 1.3% q/q. In Japan Trade Balance came in at -0.2T., Swiss trade balance released at 4.16 billion. Eurozone Current Account announced at 29.4 bilion. Other important releases expect ECB monetary policy meeting for today will be the UK retail sales and Canada wholesale sales. Also we have US Unemployment Claims and Philly Fed Manufacturing Index that may move the market.

Data releases to monitor:

GBP: Retail Sales m/m, CBI Industrial Order Expectations

EUR: ECB Monetary Policy Meeting Accounts

USD: Unemployment Claims, Philly Fed Manufacturing Index, CB Leading Index m/m, Natural Gas Storage

CAD: Wholesale Sales m/m

Trade Idea of the Day

EUR/JPY

Currently the pair is trading at 131.55. Traders must monitor the 133.37 resistance level and the support level 130.65 for possible breakouts. A possible scenario would be a movement towards the 131.44 support level, where a break may lead to the 131.15 level and possible below to the 130.80 area. An alternative scenario could be a movement towards the 131.94 resistance level, where a break may lead to the 132.30.

VinsonFinancialsFX · November 20, 2015, 4:22am

Financial News November 20, 2015

Euro area November consumer confidence may improve

The European Commission’s consumer confidence indicator is scheduled to publish today. The indicator is calculated based on the questions regarding the general economic situation, savings and households’ financial situation, expectations of unemployment over the next 12 months.

Other business surveys observe an improvement in the job market of the economy both in terms of wages as well as employment. Lower oil prices continue to prevail in the market , therefore, purchasing power for consumers is seemed to be increased.

“We expect the number for consumer confidence to improve from -7.7 to -6.9 for November. The rest of the EC confidence indicators, along with the flash PMI estimates, will be released next week” says Societe Generale in a research note.

Market Review November 20, 2015

Asian Session was rather quiet while the lack of important announcements pushed the market to move sideways. All these despite the ‘’confirmation’’ of a rate hike in December by FED, this signals that traders are looking beyond December into next year and the outlook for Fed’s rate path is still rather unclear something that can confirm form bonds futures pricing.

On the data front New Zealand’s Credit Card Spending y/y announce at 7.8% that boosted a little the country’s currency. China also release CB Leading Index m/m at 0.6%. Germany released PPI in early European session at -0.4% missing the forecast of -0.2% causing EUR/USD to drop below the 1.0690. UK will release public sector net borrowing. Additionally today the Canadian data will attract investors interest since includes retail sales and CPI. Furthermore Eurozone will also release consumer confidence.

Data releases to monitor:

GBP: Public Sector Net Borrowing

EUR: Consumer Confidence, German Buba President Weidmann Speaks

USD: FOMC Member Dudley Speaks

CAD: Core CPI m/m, Core Retail Sales m/m, CPI m/m, Retail Sales m/m

Trade Idea of the Day

USD/CAD

Currently the pair is trading at 1.3329. Traders must monitor the 1.3370 resistance level and the support level 1.3245 for possible breakouts. A possible scenario would be a movement towards the 1.3340 resistance level, where a break may lead above the 1.3370 level. An alternative scenario could be a movement towards the 1.3292 support level, where a break may lead to the 1.3245.

VinsonFinancialsFX · November 23, 2015, 4:32am

Financial News November 23, 2015

EUR/USD’s further downside likely as December approaches

Markets were further prepared for more policy easing from ECB last week. ECB’s President Mario Draghi emphasized his “whatever it takes” commitment again, that it has necessary measures to reach back to the inflation target and start with strong inflation anticipations.

EUR/USD is likely to relatively depreciate towards December, as ECB meeting comes closer, any higher side would be seen as a chance to restart post meeting EUR/USD short positions.

“We continue to expect an extension of the current QE program and a 10bp deposit rate cut to -30bp. Yet, with EONIA forwards pricing more than a 10bp cut in December we see a risk for EUR/USD to squeeze higher should the ECB disappoint”, anticipates Barclays.

An unwinding of recent rebound in inflation expectations would be unlikely by ECB and it is also unlikely to squeeze EUR higher, this might tighten the financial conditions through the interest rates and FX channels.

Market Review November 23, 2015

The week started form where the previous one ended. USD open higher as supported by rate hike expectations since the economic data support this and the EUR is pressured by expectations of further stimulus by ECB in December. Draghi noted that the central bank is ready to act swiftly to boost inflation in Eurozone he also hinted there could be changes to the asset purchase program and deposit rate. ECB president had made it clear in the last post meeting press conference that policy makers will re-examine the current stimulus program in the upcoming meeting.

On the data front New Zealand’s Visitor Arrivals m/m announced at 0.2%. In Europe French Flash Manufacturing PMI came in at 50.8 while French Flash Services PMI at 51.3. German Flash Manufacturing PMI came in at 52.6 German Flash Services PMI at 55.6. Eurozone Flash Manufacturing PMI data came in at 52.8 and Flash Services PMI at 54.6. From US we expect the Flash Manufacturing PMI to be announced at 54 and Existing Home Sales at 5.39 million. Furthermore today Eurogroup meeting is held traders are advice to be alert for any announcement.

Data releases to monitor:

EUR: Eurogroup Meetings

USD: Flash Manufacturing PMI, Existing Home Sales

Trade Idea of the Day

CAD/JPY

Currently the pair is trading at 91.93. Traders must monitor the 93.10 resistance level and the support level 91.75 for possible breakouts. A possible scenario would be a movement towards the 91.75 support level, where a break may lead to the 91.40 area. An alternative scenario could be a movement above the 92.05 resistance level, where a break may lead to the 92.55.

VinsonFinancialsFX · November 24, 2015, 5:03am

Financial News November 24, 2015

Daily Economic Outlook: 24th November, 2015

The German IFO survey, Bank of England MPC testimonies and the second estimate of US Q3 GDP will draw market attention today. The BoE Governor Carney and Chief Economist Haldane will confirm to the Treasury Select Committee, along with external MPC members Forbes and Vlieghe.

The November Inflation Report was more dovish than expected. The annual CPI inflation was expected to remain below 1% until the second half of next year and coming to target only in late 2017, based on market-implied interest rates, estimates Lloyds Bank.
The U.S. Q3 GDP second estimate is likely to be revised up to around 2% on a qoq annualized basis. The detail should confirm that underlying domestic activity posted a robust growth to warrant a potential rise in policy rates in December. Consumer confidence and the Richmond Fed survey are also expected to release.

A moderate improvement in the German IFO headline index is expected at 108.4, says Lloyds Bank. However, despite the expected increase, the implied pace of growth would be observed as insufficient by the ECB to enable it to meet its inflation mandate.

Market Review November 24, 2015

European Central Bank executive board member Sabine Lautenschläger said on Monday that she does not see a need for the central bank to boost up its stimulus measures, suggesting that if the ECB presses forward with more easy-money policies in December, it will do so without the support of its influential German contingent.

“For me it is clear: At the moment I see no reason for further monetary policy measures, especially not an expansion of the asset-purchase program,” Ms. Lautenschläger said in prepared remarks for a conference in Munich.

Her comments come just days after ECB President Mario Draghi sent a strong signal that the ECB was ready to expand its bond-purchase program and reduce its deposit rate further into negative territory at the December policy meeting.

“If we conclude that the balance of risks to our medium-term price stability objective is skewed to the downside, we will act by using all the instruments available within our mandate,” he said last Friday. EUR/USD remained near the 1.0640 area, with the next support seen at the 1.0592 level.

Released during the Asian session this morning, Japan’s Flash Manufacturing PMI came in at 52.8 beating the estimated 52.1 and causing insignificant impact on the on the USD/JPY, which is currently trading near the 122.62 area.

Released during the early European session, German Final GDP showed that the German economy have grown by 0.3% in the third quarter, as predicted in an earlier estimate.

The key events for the day would be the German Ifo Business Climate, the United Kingdom Inflation Report Hearings, the United States Prelim GDP, CB Consumer Confidence and RBA Gov Stevens speech.

Data releases to monitor:

CHF: Employment Level.

GBP: Inflation Report Hearings, CBI Realized Sales.

USD: Prelim GDP, Goods Trade Balance, Prelim GDP Price Index, S&P/CS Composite-20 HPI, CB Consumer Confidence, Richmond Manufacturing Index.

EUR: German Ifo Business Climate, Belgian NBB Business Climate.

CAD: Gov Council Member Patterson speech.

AUD: RBA Gov Stevens speech.

Trade Idea of the Day

USD/CAD

Currently the pair is trading at 1.3327. Traders must monitor the 1.3435 resistance level and the support level 1.3246 for possible breakouts. A possible scenario would be a movement towards the 1.3290 support level, where a break may lead to the 1.3260 area. An alternative scenario could be a movement towards the 1.3363 resistance level, where a break may lead to the 1.3400 area.

VinsonFinancialsFX · November 25, 2015, 4:25am

Financial News November 25, 2015

Daily Economic Outlook: 25th November, 2015

PCE deflator data of the U.S. will draw markets’ attention today. The Fed’s preferred measure of inflation, is likely to increase to 1.4% on the ‘core’ rate in October, says Lloyds Bank.

This will boost the Fed confidence that inflation is returning to its target level.
The Chancellor’s Autumn Statement in U.K. is likely to provide the day’s domestic focus. The Autumn Statement provides a scope for a mid-year adjustment.

“Although we expect the Chancellor to claw his way back to the balanced budget objective for 2019/20 - and the OBR to still project a surplus in the final year of the projections in 2020/21 - we look for a cumulative increase in borrowing of around £40bn over the 5-year forecast horizon. The overshoot for 2015/16 should still be sufficiently modest, however, to avoid any meaningful change for the planned gilt issuance in this fiscal year”, argues Lloyds Bank.

Market Review November 25, 2015

Reserve Bank governor Glenn Stevens signalled yesterday, at a business economists forecasting conference in Sydney, that interest rates will stay on hold at next Tuesday’s meeting saying the case for leaving them steady was one he “happened to agree with”. The RBA had not cut rates even though the economy was growing more slowly than it could and inflation was low. RBA governor also added, “I’m more than content to lower it if that actually helps, but is that the best thing to do at any particular time?” Stevens asked, while replying to a question on the cash rate. In addition, he said, “We’ve got Christmas. We should just chill out, come back and see what the data says.” The Australian dollar surged to one month high after RBA governor hints no rate cut plan in 2015, AUD/USD rose sharply to the 0.7282 area and currently is trading near the 0.7265 area.

Elsewhere, the BoJ minutes of October 30 noted that some members of the Bank of Japan’s (BOJ) policy board believe that an output gap was one reason the country was taking longer to meet inflation targets, minutes of the central bank’s latest meeting showed Wednesday. Concerns about the output gap were not shared by the majority, but they highlighted a lingering worry that the delay in Japan meeting the BOJ’s 2 percent target meant that its quantitative easing had been ineffective. An output gap is the difference between what an economy is producing and what it could produce if operating at its most efficient. A negative output gap - when a economy is producing less than it could at optimum - indicates weak demand, which in turn can mean low inflation pressure. USD/JPY dropped slightly today and currently is trading near the 122.35 area.

Released during the Asian session this morning, Japan’s SPPI rose 0.5% missing the estimated 0.6% while Australian Construction Work Done declined by -3.6% versus the estimated -1.8%.

The key events for the day would be the United Kingdom Autumn Forecast Statement and BBA Mortgage Approvals, the United States Core Durable Goods Orders, Unemployment Claims and New Zealand’s Trade Balance.

Data releases to monitor:

NZD: Trade Balance.

GBP: BBA Mortgage Approvals, Autumn Forecast Statement.

USD: Core Durable Goods Orders, Unemployment Claims, Core PCE Price Index, Durable Goods Orders, Personal Spending, Personal Income, HPI, Flash Services PMI, New Home Sales, Revised UoM Consumer Sentiment, Revised UoM Inflation Expectations, Crude Oil Inventories, Natural Gas Storage.

EUR: Italian Retail Sales, German 10-y Bond Auction.

AUD: RBA Assist Gov Debelle Speech.

Trade Idea of the Day

USD/CHF

Currently the pair is trading at 1.0164. Traders must monitor the 1.0225 resistance level and the support level 1.0091 for possible breakouts. A possible scenario would be a movement towards the 1.0142 support level, where a break may lead to the 1.0115 area. An alternative scenario could be a movement towards the 1.0196 resistance level, where a break may lead to the 1.0215 area.

VinsonFinancialsFX · November 26, 2015, 3:56am

Financial News November 26, 2015

Daily Economic Outlook: 26th November, 2015

Japan’s October CPI and labor market data will draw market attention today. In the last policy meeting, BoJ did not make any change on broad assessment of inflation expectations. The headline CPI is priced to stay in negative territory at -0.1% y/y for October, foresees Lloyds Bank.

It also anticipates some modest policy easing by BoJ in October to 0.8% from 0.9%.
In the euro area, ECB’s easing in credit conditions supports the economic activity of the region. In the past couple of months, a weaker pace is observed in the growth of annual money supply in the euro area. The consumer spending in German is supported by solid consumer confidence.

“Since hitting a thirteen year high in June, the GfK measure of German consumer confidence has weakened in recent months and a further easing is expected in the reading for December. However, it still remains elevated and points to the prospect of further gains in German consumer activity”, added Lloyds Bank.

Market Review November 26, 2015

Australian business investment plunged during the third quarter, the Australian Bureau of Statistics figures showed today. In the three months to September, capital expenditure fell a staggering 9.2%. It came as a huge shock to most economists as many were expecting a decline of just 2.9%. More specifically, total investment amounted to just $31.4 billion in Q3, while business spending declined by 20% compared to last year. The latest economic figures from Australia will put pressure on the Reserve Bank to cut interest rates again, which contradicts with the latest comments of the RBA governor Glenn Stevens who suggested to ‘chill out’ on prospects for interest rate cuts. The Australian dollar wiped out some of yesterday’s gains against the US Dollar and fell to the 0.7220 area, after reaching to the 0.7282 area.

Reuters news agency reported yesterday that Euro zone central bank officials are considering options such as whether to stagger charges on banks hoarding cash or to buy more debt ahead of the next European Central Bank meeting. Furthermore, some ECB officials said that “even buying rebounded loans at risk of non-payment has been discussed in preparatory meetings, although such a radical step is highly unlikely for now”. The meeting of the ECB’s monetary policy committee next Tuesday (December 3) is firmly in focus, with expectations that the central bank could introduce more stimulus measures to revive inflation and boost growth in the region. The Euro dropped to a more than seven-month low of $1.0565 on Wednesday as speculation mounted over what form the stimulus might take.

The day is expected to be quiet, as the US banks will be closed in observance of Thanksgiving Day. The key events for the day would be the ECB M3 Money Supply, GfK German Consumer Climate and Private Loans.

Data releases to monitor:

EUR: M3 Money Supply, Private Loans, GfK German Consumer Climate.

CAD: Corporate Profits.

Trade Idea of the Day

GBP/JPY

Currently the pair is trading at 185.09. Traders must monitor the 187.00 resistance level and the support level 183.85 for possible breakouts. A possible scenario would be a movement towards the 184.90 support level, where a break may lead above the 184.30 area. An alternative scenario could be a movement towards the 186.00 resistance level, where a break may lead to the 186.00.

VinsonFinancialsFX · November 27, 2015, 3:56am

Financial News November 27, 2015

2016 global macro economic outlook

In 2015, global macro economic outlook was mostly dominated by the hike aniticipations from Fed and global growth. There were obstacles in US growth in the beginning of the year, in Q2 and early Q3 there was increase in Euro area’s sovereign debt concerns, with August’s Chinese currency volatiltiy.

The inflaxion point likely remains in place for the next year.

According to RBC Capital Markets,

Global growth and global headline inflation should stabilize and start picking up,
Fed hikes will highlight central bank policy divergence,
USD has room for further gains, even after the first Fed hike,
RMB is likely to weaken through the year
EM corporate debt/leverage will remain a concern.

Market Review November 27, 2015

The Asian session was busy with economic releases from Japan. More specifically, National CPI core stayed unchanged at -0.1%, while Tokyo CPI core improved more than expected to 0.0. Furthermore, household spending dropped sharply by -2.4% in October. Nonetheless, unemployment rate dropped to 3.1% in October, hitting the lowest level in 20 years. USD/JPY is currently trading near the 122.30 area with the next support seen at the 122.25 level.

Released from the United Kingdom during the session,. Gfk index of consumer confidence fell unexpectedly last month. In a report, GfK NOP said that U.K. Gfk Consumer confidence fell to a seasonally adjusted 1, from 2 in the preceding month.

Released during the early European session, German Import Prices declined -0.3% versus the estimated -0.1% while French Consumer Spending declined by -0.7% versus the estimated rise of 0.2%. Furthermore, Spanish Flash CPI declined by -0.3% versus the estimated -0.5%. EUR/USD rose slightly despite the negative economic data and currently is trading near the 1.0625 area.

The key events for the day would be the United Kingdom Second Estimate GDP, Prelim Business Investment and Index of Services.

Additional economic releases are the Italian 10-y Bond Auction, GfK German Consumer Climate and the Canadian Raw Materials Price Index (RMPI).

Data releases to monitor:

EUR: Italian 10-y Bond Auction, GfK German Consumer Climate.

GBP: Second Estimate GDP, Prelim Business Investment, Index of Services.

CAD: RMPI, IPPI.

Trade Idea of the Day

USD/CAD

Currently the pair is trading at 1.3319 Traders must monitor the 1.3435 resistance level and the support level 1.3246 for possible breakouts. A possible scenario would be a movement towards the 1.3340 resistance level, where a break may lead to the 1.3375 area. An alternative scenario could be a movement towards the 1.3291 support level, where a break may lead to the 1.3260 area.

VinsonFinancialsFX · November 30, 2015, 4:43am

Financial News November 30, 2015

EUR/CHF likely moves upside ahead of ECB’s December meeting

The KOF leading growth indicator in Switzerland, GDP and CPI inflation will slightly impact and the import data will only be of second importance despite expectations for a stabilization in inflation and growth.

The Swiss Franc will likely trade largely after the ECB meeting. Latest ECB meeting rhetoric has risen market expectations for additional stimulus from SNB, which causes CHF depreciation.

Swiss National Bank might not pre-empt the ECB, but however respond at its December meeting with its “nuclear” option, causing material CHF depreciation.

“We see EUR/CHF higher post the SNB meeting and expect the SNB to actively intervene post ECB should EURCHF depreciate. We remain long USDCHF spot and look for material further upside”, says Barclays in a research note.

Market Review November 30, 2015

The Asian session was busy with economic releases from Japan and Australia. Released from Japan, Retail Sales rose 1.8% beating the estimated 0.9%, while Prelim Industrial Production rose 1.4% versus the estimated 1.9% and Housing Starts declined -2.5% versus the estimated rise of 2.5%. USD/JPY is currently trading near the 122.80 area with the next resistance seen at the 123.05 level. Released from Australia, MI Inflation Gauge showed a 0.1% rise versus the previous of 0.0%, Company Operating Profits rose 1.3% beating the estimated 1.1% and Private Sector Credit rose 0.7% versus the estimated 0.6%. AUD was strong in November as RBA maintained a neutral stage and supported by strong job data. However, the AUD is vulnerable to any weak Chinese data such as Chinese PMI data. AUD/USD is currently trading near the 0.7200 area with the next support seen at the 0.7158 level.

Released during the early European session, German Retail Sales dropped -0.4% missing the estimated 0.3%. The Euro remained weak thru the previous week and today, and seems that would continue heading south. The focus this week would be on the ECB Meeting on Thursday, where the European Central Bank is widely expected to announce additional easing measures. Some of these measures may include further reduction in the deposit rate and expansion of the asset purchase program. EUR/USD remained near the 1.0590 area with the next support seen at the 1.0565 level.

Elsewhere, KOF Economic Barometer came in at 97.9 versus the estimated 100.3. The USD/CHF pair currently trades at 1.0301, which was last seen in August 2010. Furthermore, Gold (XAU/USD) hit fresh five-year low by reaching to the 1052.63 level on Friday.

The key events for the day would be the United Kingdom Net Lending to Individuals, M4 Money Supply and Mortgage Approvals.

Additional economic releases are the United States Chicago PMI, Pending Home Sales and the Canadian Current Account.

Data releases to monitor:

EUR: Italian Prelim CPI.

GBP: Net Lending to Individuals, M4 Money Supply, Mortgage Approvals.

CAD: Current Account.

USD: Chicago PMI, Pending Home Sales.

NZD: Overseas Trade Index.

Trade Idea of the Day

NZD/USD

Currently the pair is trading at 0.6555. Traders must monitor the 0.6603 resistance level and the support level 0.6492 for possible breakouts. A possible scenario would be a movement towards the 0.6579 resistance level, where a break may lead to the 0.6600 area. An alternative scenario could be a movement towards the 0.6518 support level, where a break may lead to the 0.6500 area.

VinsonFinancialsFX · December 1, 2015, 4:36am

Financial News December 1, 2015

Daily Economic Outlook: 1st December, 2015
The manufacturing PMIs for November will in focus. The eurozone numbers are expected to remain steady. First estimate of the U.K. and the U.S. (ISM) will be released.

Financial Stability Report of Bank of England will draw markets’ attention.

The central bank is also expected to publish the UK bank stress tests at the time of releasing financial report, which will indicate new macroprudential policy actions.
“At the margin, the focus on macroprudential measures - including possible separate action to cool buy-to-let lending - would lessen the urgency to begin a tightening of monetary policy”, says Lloyds Bank.

Market Review December 1, 2015

The Reserve Bank of Australia left the cash rate at 2 per cent for the seventh month in a row, but kept the possibility open for a further cut in 2016. The decision to hold was widely expected and the AUD/USD pair climbed to the 0.7275 area. In the accompanying statement, the RBA said the low inflation outlook “left scope for further easing of policy, should that be appropriate to lend support to demand”. Furthermore, the central bank said that will just “continue to assess the outlook” and acknowledged that there is “a large decline in capital spending in the mining sector”. Meanwhile, RBA maintained that the economy will have “moderate expansion” and there was “gradual improvement in conditions in non-mining sectors over the past year.”

Released from Australia during the Asian session, Building Approvals rose 3.9% beating the estimated decline of -2.4% while Current Account came in at -18.1B versus the estimated -16.6B. Released from Japan, Capital Spending rose 11.2% beating the estimated 2.3%. USD/JPY remained within tight range and near the 122.90 area.

Released during the early European session, Swiss GDP unexpectedly stagnated in the third quarter. More specifically, output remained unchanged in the three months through September, after increasing of 0.2 percent in the prior period. The momentum was held back by weak performance in the energy, construction and financial sector. Released also from Switzerland, Retail Sales dropped -0.8% missing the estimated 0.4%. Also released during the session, Spanish Manufacturing PMI came in at 53.1 beating the estimated 51.9.

Elsewhere, the United Kingdom banks passed the stress tests, but RBS and Standard Chartered were the weakest. More specifically, Royal Bank of Scotland and Standard Chartered scraped through the country’s bank stress tests after taking steps to improve their capital ratios during the testing process. The Bank of England, which ran the tests, said it planned to make banks hold as much as GBP 10 Billion in extra capital as the credit cycle begins to normalize.

The key events for the day would be the United Kingdom Manufacturing PMI, the Eurozone Unemployment Rate, New Zealand’s GDT Price Index and the United States ISM Manufacturing PMI.

Data releases to monitor:

EUR: Italian Manufacturing PMI, French Final Manufacturing PMI, German Unemployment Change, German Final Manufacturing PMI, Final Manufacturing PMI, Italian Monthly Unemployment Rate, Italian Quarterly Unemployment Rate, Unemployment Rate.

GBP: Manufacturing PMI.

CAD: GDP, RBC Manufacturing PMI.

USD: Final Manufacturing PMI, ISM Manufacturing PMI, Construction Spending, ISM Manufacturing Prices, Total Vehicle Sales, FOMC Member Evans speech.

NZD: GDT Price Index.

Trade Idea of the Day

CAD/JPY

Currently the pair is trading at 92.14. Traders must monitor the 92.61 resistance level and the support level 91.62 for possible breakouts. A possible scenario would be a movement towards the 91.85 support level, where a break may lead to the 91.65 area. An alternative scenario could be a movement towards the 92.40 resistance level, where a break may lead to the 92.60 area.

VinsonFinancialsFX · December 2, 2015, 4:07am

Financial News December 2, 2015

NZD likely to weaken in near future
The New Zealand dollar is likely to be under pressure over the coming year. It is expected to fall to around 62c against the US dollar by June 2016, estimates Westpac.

This is because of following factors.
The RBNZ is expected to deliver another rate cut next week. The economy is expected to face low inflation rate in near future that will cause the Reserve Bank to cut interest rates next year. As a result, the NZ dollar will face downward pressure.

At the same time, the economy will face pressure due to change in global interest rates, especially US interest rates. The Fed is expected to hike interest rate in this month; thereby US dollar will be stronger against other currencies including the NZD.

“Overall we think NZ export commodity prices will remain under pressure over the next year or so. While dairy prices in particular are likely to rise in response to sharply lower NZ dairy production as the El Nino weather pattern weighs on pasture growth and milk supply, we think Chinese consumer demand could remain muted over the year ahead with the Chinese economy forecast to slow further in 2016”, forecasts Westpac.

Market Review December 2, 2015

The Australian dollar rose sharply against the US Dollar during the Asian session as Australian GDP grew 0.9% beating the expectation of 0.7%.The positive data came due to a rebound in mining exports following a weather-related contraction in exports the previous quarter. This compared with analysts’ forecasts of a 0.8 per cent gain in gross domestic product in the third quarter and a revised figure of 0.3 per cent growth in the three months to end June. Moreover, Reserve Bank governor Glenn Stevens has described the 0.9 per cent rise in gross domestic product in the September quarter as “not a bad outcome” and added “Let’s not overplay the significance but the economy is growing.” Governor Stevens reiterated once again that the “outlook will continue its moderate growth." AUD/USD climbed to the 0.7340 area and currently is trading near the 0.7320 area.

Released during the early European session, Spanish Unemployment Change came in at -27.1K beating the estimated -10.3K and causing slight impact on the common currency. EUR/USD climbed to the 1.0625 area after dipping to the 1.0555 area as the week started.

Elsewhere, the International Monetary Fund has added the Chinese renminbi to the world’s basket of reserve currencies, an acknowledgment of China’s economic importance. In a statement, the IMF said that its executive board decided that starting October 1, 2016, the Chinese currency, which is more commonly known as the Yuan, will be freely usable, and join the U.S. dollar, the Euro, the Japanese yen, and the British pound in the basket of currencies that make up the Special Drawing Right.

The key events for the day would be the United Kingdom Construction PMI, the BOC Rate Statement and Overnight Rate, the United States ADP Non-Farm Employment Change and Fed Chair Yellen speech.

Data releases to monitor:

EUR: CPI Flash Estimate, Core CPI Flash Estimate, PPI.

GBP: Construction PMI.

CAD: BOC Rate Statement, Overnight Rate.

USD: FOMC Member Lockhart speech, ADP Non-Farm Employment Change, Fed Chair Yellen Speech, Revised Nonfarm Productivity, Revised Unit Labour Costs, Crude Oil Inventories, Beige Book, FOMC Member Williams speech.

Trade Idea of the Day

EUR/GBP

Currently the pair is trading at 0.7055. Traders must monitor the 0.7080 resistance level and the support level 0.7002 for possible breakouts. A possible scenario would be a movement towards the 0.7065 resistance level, where a break may lead to the 0.7100 area. An alternative scenario could be a movement towards the 0.7030 support level, where a break may lead to the 0.7005 area.

VinsonFinancialsFX · December 3, 2015, 3:50am

Financial News December 3, 2015

ECB likely to cut deposit rate at todays meeting

The ECB has given a hint of adjusting its asset purchase program along three tools, such as time commitment, pace, and composition. A change in time and pace may be expected, but it is a less effective toll to influence exchange rate.

Since the euro area experiencing lower core inflation outlook, the ECB will choose a monetary tool that will help the Bank to correct the inflation outlook.

“The ECB could cut the deposit rate by 10bp and provide the market with forward guidance of further cuts. Another option would be to cut 20bp and signal its willingness to cut more if needed”, argues Barclays.

Market Review December 3, 2015

The economic data from Australia was once again in focus during the Asian session. More specifically, Australia released its Trade Balance, which came in at -3.31B missing the estimated -2.61B, HIA New Home Sales declined -3.0% versus the previous of -4.0% and AIG Services Index came in at 48.2 versus the previous of 48.9. AUD/USD remained near the 0.7320 area with the next resistance seen at the 0.7342 level.

Released during the early European session, Spanish Services PMI came in at 56.7 beating the estimated 56.2 and causing insignificant impact on the EUR/USD, which returned to the 1.0570 area.

Elsewhere, Federal Reserve Chairwoman Janet Yellen indicated yesterday that she is ready to raise short-term interest rates this month barring a surprise that shakes her confidence in the economy. Moreover, she stated that she sees dissension within her ranks, which could complicate her moves toward ending seven years of near-zero rates. “I don’t need unanimity. I think we have to tolerate some dissent,” Ms. Yellen said in answer to a question after delivering a speech on the economic outlook. “I wouldn’t try to stifle dissents, and I would even expect some at critical junctures.” Furthermore, she anticipated “continued economic growth at a moderate pace that will be sufficient to generate additional increases in employment, further reductions in the remaining margins of labour market slack and a rise in inflation to our 2 per cent objective.”

In another place, the BoC stayed neutral as it left the overnight rate target unchanged at 0.5% the Bank Rate unchanged at 0.75% and the deposit rate at 0.25%. The Canadian dollar stayed in established range against the US Dollar. The pair is currently trading near the 1.3315 area with the next support seen at the 1.3280 level.

The key events for the day would be the ECB rate decision and press conference, where the Central Bank is expected to announce expansion of policy easing. Furthermore, there are also talks that ECB would further lower the deposit rate, which currently stands negative at -0.2%.

Additional economic releases would be the United States Unemployment Claims and Fed Chair Yellen testimony.

Data releases to monitor:

EUR: Italian Services PMI, French Final Services PMI, German Final Services PMI, Final Services PMI, Retail Sales, Spanish 10-y Bond Auction, French 10-y Bond Auction, Minimum Bid Rate, ECB Press Conference.

GBP: Services PMI.

USD: Unemployment Claims, Final Services PMI, Fed Chair Yellen Testimony, ISM Non-Manufacturing PMI, Factory Orders, Natural Gas Storage, FOMC Member Fischer speech.

Trade Idea of the Day

GBP/CAD

Currently the pair is trading at 1.9893. Traders must monitor the 1.9999 resistance level and the support level 1.9775 for possible breakouts. A possible scenario would be a movement towards the 1.9830 support area and further downward movement to 1.9775 level. An alternative scenario could be a movement near the 1.999 resistance level, where a break may lead to the 2.0075.

VinsonFinancialsFX · December 4, 2015, 4:06am

Financial News December 4, 2015

ECB may hold current policy rates in near future

The ECB declared a deposit rate cut of 10 base points to -0.3% and kept all other rates unchanged. The Bank extended its asset purchase program for further 6 month and decided to reinvest the principal payments on the securities purchased under the program.

Analysts support the central bank’s decision because weakening currency too much will have a negative impact on the economy.

“Today’s deposit rate cut looks to have been the “final one” under the conventional policy pillar. We expect policy rates to remain at their current levels in the foreseeable future”, says Rabobanks in a research note on Thursday.

Market Review December 4, 2015

The European Central Bank stepped up yesterday its efforts to boost the Eurozone’s weak economy but the size of the stimulus disappointed the markets, driving up the euro against the dollar to as high as 1.0980 level after dipping to the 1.0517 area earlier in the day. Moreover, ECB cut the deposit rate to a record low of -0.30% and vowed to print money for as long as it takes to defeat deflation, pushing its radical stimulus measures to extremes never seen before in any major region in modern history. In addition, Mario Draghi, the ECB’s president, said the bank will keep buying EUR 60bn of bonds each month as far out as March 2017 or “beyond if necessary”. It is effectively an open-ended pledge. “Abundant liquidity will continue for a long, long time,” he said. ECB actions came despite signs that economic growth in the Eurozone is picking up, and ignores intense protests from German-led hawks that quantitative easing at this late stage is doing more harm than good.

Elsewhere, Federal Reserve chair, Janet Yellen, has strongly indicated during her testimony to the Congress yesterday that Federal Reserve policymakers are likely to vote to raise US interest rates in two weeks, barring any major shocks to the global economy. Moreover, she noted that unemployment had lowered to 5%, economic growth was continuing well and she was confident that inflation would return to the Fed’s 2% target. “I currently judge that US economic growth is likely to be sufficient over the next year or two to result in further improvement in the labour market,” she said. “Ongoing gains in the labour market, coupled with my judgment that longer-term inflation expectations remain reasonably well anchored, serve to bolster my confidence in a return of inflation to 2%.”

Released during the Asian session this morning, Australian Retail Sales rose 0.5% versus the estimated 0.4%, Japanese Average Cash Earnings rose 0.7% beating the estimated 0.7% and Consumer Confidence in Japan came in at 42.6 beating the estimated 41.8.

Released during the early European session, German Factory Orders rose 1.8% beating the estimated 1.3%, while Swiss Consumer Price Index (CPI) declined -0.1% versus the estimated 0.0%.

The key events for the day would be the United States Non-Farm payroll, Average Hourly Earnings and Unemployment Rate. The data will be critical, as it is the last bunch of important economic data before the Fed’s rate decision on December 16.

Data releases to monitor:

EUR: Retail PMI.

CAD: Employment Change, Trade Balance, Unemployment Rate, Labour Productivity, Ivey PMI.

USD: Average Hourly Earnings, Non-Farm Employment Change, Unemployment Rate, Trade Balance.
Trade Idea of the Day

USD/CAD

Currently the pair is trading at 1.3351. Traders must monitor the 1.3407 resistance level and the support level 1.3283 for possible breakouts. A possible scenario would be a movement towards the 1.3380 resistance level, where a break may lead to the 1.3405 area. An alternative scenario could be a movement towards the 1.3330 support level, where a break may lead to the 1.3300 area.

VinsonFinancialsFX · December 7, 2015, 3:57am

Financial News December 7, 2015

Daily Economic Outlook: 7th December, 2015
The industrial production data in German for October is scheduled to release today. The reading will give an indication of the Q4 GDP outlook.

"Following two months of consecutive decline, we forecast an increase of 0.8% m/m in October.

A significant contribution to this pickup is expected to come from a rebound in manufacturing output", states Lloyds Bank.

Last week, the U.S. employment report for November posted better than expected result. The robust employment report along with FOMC members’ recent statements supports the markets expectation of Fed’s first rate hike after June 2006. As the markets are expecting Fed’s rate hike decision next week, market is expected to be silent this week. St. Louis Fed President Bullard is expected to support a rate rise at the December meeting in his today’s comment.

Market Review December 7, 2015

The United States unemployment rate remained unchanged at 5.0% and the economy created 211,000 jobs in November, a healthy result that further increases the likelihood of an interest rate hike by the Federal Reserve later this month. Moreover, in its November 2015 Employment Situation report, released last Friday, the Labour department revised its employment figures for September and October, saying 35,000 more jobs were created than initially estimated. Wages also grew for the month, though at a slower pace than in October. Average hourly earnings climbed 4 cents, equating to a 2.3% annualized gain. The focus of the month is turned now on the FOMC meeting next week with the markets pricing in a 79% chance of a hike.

Elsewhere, Oil price slides after OPEC failed to agree on production cuts. More specifically, the cost of a barrel of US crude oil has fallen by almost 1% to $39.61, below the $40 barrel mark. Furthermore, the Organization of the Petroleum Exporting Countries (OPEC) failed to agree on an oil production ceiling last Friday after a disagreement between Saudi Arabia and Iran meant that the group for the first time in decades did not even mention an output quota, which previously stood at 30 million barrels per day (bpd).

Released during the Asian session this morning, ANZ Job Advertisements rose 1.3% versus the previous of 0.3%, while Japans’ Leading Indicators rose 102.9% as widely expected.

Released during the early European session, German Industrial Production rose just 0.2% missing the estimated 0.8% and causing insignificant impact on the EUR/USD, which is currently trading near the 1.0845 area after reaching as high as the 1.0980 level during the last week. Released from Switzerland during the session, Foreign Currency Reserves came in at 563B compared to the previous of 551B.

The key events for the day would be the Eurogroup Meetings, BOE Governor Carney speech and BOJ Governor Kuroda Speech.

Additional economic releases would be the Sentix Investor Confidence, the United States Labour Market Conditions Index and Consumer Credit.

View our full economic calendar for a daily roundup of major economic events.

Data releases to monitor:
EUR: Sentix Investor Confidence, Eurogroup Meetings.

GBP: BOE Gov Carney speech.

USD: Labor Market Conditions Index, Consumer Credit.

JPY: BOJ Gov Kuroda speech.

NZD: Manufacturing Sales.

Trade Idea of the Day

GBP/AUD

Currently the pair is trading at 2.0595. Traders must monitor the 2.0955 resistance level and the support level 2.0340 for possible breakouts. A possible scenario would be a movement towards the 2.0720 resistance level, where a break may lead to the 2.0825 area. An alternative scenario could be a movement towards the 2.0485 support level, where a break may lead to the 2.0390 area.

VinsonFinancialsFX · December 8, 2015, 4:29am

Financial News December 8, 2015

ECB may easy monetary policy further
Euro area is expected to post a sluggish growth rate in 2016. Rising non-performing loans, higher corporate and private debt, lack of significant economic reforms, and downward trend in housing prices in Italy and France hints weak economic momentum in the euro zone.

The economy is expected to grow at 1.3%, and core inflation rate would be at 1% in 2016, estimates Commerzbank.
Since weaker economic growth rate is foreseen in the euro area next year, the central bank may opt for further monetary easing.

“We envisage a further reduction of the deposit rate by 0.1 percentage points to -0.4%, possibly at the March meeting. In addition, the ECB could again push the earliest date for an end to asset purchases beyond the current date of March 2017”, says Commerzbank in a research note.

Market Review December 8, 2015

The Asian session this morning was rather busy with economic releases from Japan, Australia and China. Released from Japan, Current Account came in at 1.49T versus the estimated 1.53T while Final GDP rose 0.3% beating the estimated 0.1%. Moreover, Bank Lending rose 2.3% compared to the previous of 2.5%, Final GDP Price Index rose 1.8% versus the estimated 2.0% and Economy Watchers Sentiment came in at 46.1 missing the estimated 4.6. USD/JPY is currently trading near the 123.10 area with the next resistance seen at the 123.65 level. Released from Australia, NAB business confidence rose to 5 in November compared to the previous of 3. The Chinese economic data was once again not so encouraging, as Trade Balance came in at 343B versus the estimated 395B and USD-Denominated Trade Balance came in at 54.1B versus the estimated 64.2B.

Elsewhere, Crude Oil plunged to new 6-year lows on Monday, the trading day after OPEC decided to lift their output target, which pushed the price of Oil below the August 24th low. WTI is staying soft below $38 for the moment as markets saw OPEC’s move as effectively abandoning the strategy of limiting productions.

Released during the early European session French Gov Budget Balance came in at -76.2B while French Trade Balance came in at -4.6B versus the estimated -3.3B. EUR/USD is currently trading near the 1.0865 area with the next support seen at the 1.0796 level.

The key events for the day would be the United Kingdom Manufacturing Production and Industrial Production, the Canadian Building Permits and Housing Starts.

Additional economic releases would be the ECOFIN Meetings, NIESR GDP Estimate, JOLTS Job Openings and BOC Gov Poloz speech.

Data releases to monitor:
EUR: Revised GDP, ECOFIN Meetings.

GBP: Halifax HPI, Manufacturing Production, Industrial Production, 30-y Bond Auction, NIESR GDP Estimate.

USD: NFIB Small Business Index, JOLTS Job Openings, IBD/TIPP Economic Optimism.

CAD: Housing Starts, Building Permits, BOC Gov Poloz speech.

Trade Idea of the Day

NZD/JPY

Currently the pair is trading at 81.85. Traders must monitor the 83.35 resistance level and the support level 79.95 for possible breakouts. A possible scenario would be a movement towards the 81.25 support level, where a break may lead to the 80.70 area. An alternative scenario could be a movement towards the 82.05 resistance level, where a break may lead to the 82.65 area.

VinsonFinancialsFX · December 9, 2015, 4:22am

Financial News December 9, 2015

Daily Economic Outlook: 9th December 2015

The Bank of England will draw domestic markets’ attention as November Financial Policy Committee meeting of the Bank is scheduled today. The minutes of the meeting will provide the view of the Bank on risks to the UK’s financial system amid slowdown in emerging markets and current account deficit of the economy, which remains close to a record high.

In euro area, German’s trade balance data for October are scheduled to release. The figures will be watched closely as they will indicate the growth outlook of the economy in Q4.

“Today’s speeches by the ECB Council members Lautenschlaeger, Nowotny and Hansson may shed some light on last week’s surprisingly tepid ECB policy loosening, while the RBNZ are expected to trim the cash rate by 25bp to 2.5% later tonight”, says Lloyds Bank.
Market Review December 9, 2015

Consumer confidence has slipped after two cheerful months, according to the latest Westpac Melbourne Institute sentiment index, as the cooling housing market, talk of a rise in the GST (Goods and Services Tax) and worries about family finances began to display their impact. Westpac Consumer Sentiment index declined -0.8% this month, from 101.7 points in November to 100.8 points, seasonally adjusted. Released also from Australia during the Asian session, Home Loans eased 0.5% versus the estimated -1.0%. AUD/USD is currently trading near the 0.7225 area with the next support seen at the 0.7185 level.

Released from Japan during the Asian session this morning, Core Machinery Orders unexpectedly rose 10.7% in October, posting a second straight month of gains, in a sign of a delayed pickup in business investment. Moreover, Prelim Machine Tool Orders declined -17.9% compared to the previous of -22.9% and BOJ M2 Money Stock rose 3.3% missing the estimated 3.5%. The Japanese Yen seems to be gaining against the US Dollar as the USD/JPY pair fell to the 122.70 area.

Elsewhere, Switzerland’s unemployment rate held steady for yet another month in November. More specifically, Unemployment Rate rose 3.4% as widely expected and in line with the previous data. Released from Germany during the early European session, Trade Balance came in at 20.8B beating the estimated 19.2B. EUR/USD rose to the 1.0915 area after breaking the 1.0900 level.

The key events for the day would be the RBNZ Rate Statement, Official Cash Rate and Press Conference.

Additional economic releases would be the FPC Meeting Minutes and Crude Oil Inventories.

Data releases to monitor:

GBP: FPC Meeting Minutes.

USD: Wholesale Inventories, Crude Oil Inventories, 10-y Bond Auction.

NZD: Official Cash Rate, RBNZ Rate Statement, RBNZ Monetary Policy Statement, RBNZ Press Conference.

Trade Idea of the Day

GBP/USD

Currently the pair is trading at 1.5037. Traders must monitor the 1.5158 resistance level and the support level 1.4894 for possible breakouts. A possible scenario would be a movement towards the 1.5100 resistance level, where a break may lead to the 1.5135 area. An alternative scenario could be a movement towards the 1.4995 support level, where a break may lead to the 1.4950 area.

VinsonFinancialsFX · December 11, 2015, 4:17am

Financial News December 11, 2015

Checking on FED rate hike probabilities
US Federal Reserve will be meeting on December 15th-16th, to decide on whether to hike rates or not. Market pricing of rate hike has somewhat softened after reaching as high as 84%.

However hike expectations over next year for subsequent have firmed somewhat.
Let’s look at the market pricing of hikes over next few meetings.

Current FED interest rate is at 0 - 0.25%.

December, 2015 meeting - Market is attaching 28% probability that rates will remain 0 - 0.25% and 72% probability that rates will move to 0.25-0.5%.
January, 2016 meeting - Market is attaching 23% probability that rates will remain 0 - 0.25% , 65% probability that rates will move to 0.25-0.5% and 12% probability that rates will be at 0.5-0.75%.
March, 2016 meeting - Market is attaching 11% probability that rates will remain 0 - 0.25% , 38% probability that rates will move to 0.25-0.5%, 39% probability that rates will be at 0.5-0.75% and 6% probability that rates will be at 0.75-1%
April, 2016 meeting - Market is attaching 9% probability that rates will remain 0 - 0.25% , 38% probability that rates will move to 0.25-0.5%, 40% probability that rates will be at 0.5-0.75%, 12% probability that rates will be at 0.75-1% and 1% probability that rates will be at 1-1.25%.
June, 2016 meeting - Market is attaching 6% probability that rates will remain 0 - 0.25% , 28% probability that rates will move to 0.25-0.5%, 39% probability that rates will be at 0.5-0.75%, 21% probability that rates will be at 0.75-1% and 5% probability that rates will be at 1-1.25%.

Market Review December 11, 2015

Asian session pasted without any major events and unexpected moves after yesterday central banks day both BOE and SNB behave as forecasted and kept the rates unchanged. Oppose to Fed and ECB monetary policy the BOE showed more calm regarding any changes in monetary policy and reiterated yesterday that it remains in no rush to change interest rates. Furthermore, the UK policymakers said they would not match an expected rate hike by the FED next week, stressing there was “no mechanical link” with its thinking. GBP after the BOE comments weakened against the USD however, analysts commented that GBPUSD pair still looks bullish in the medium term.

SNB also kept the rate unchanged and the official report states that the target range for the three-month Libor remains between –1.25% and –0.25%, and the interest rate on sight deposits with the SNB is unchanged at –0.75%. The negative interest rate and the interest rate differential with other currencies make the Swiss franc less attractive, and continue to help weaken it however analysts say that the CHF is still significantly overvalued. Moreover, the SNB will remain active in the foreign exchange market in order to influence the exchange rate situation, as necessary.

Looking ahead the US Retails Sales will be the highlight of the day where is forecasted to be at 0.2%. Furthermore ECB Targeted LTROmay move the market. In economic releases so far we had the German CPI final at 0.15. From China M2 Money Supply y/y at 13.7% and New Loans at 709 billion.

Data releases to monitor:

GBP: Construction Output m/m, Consumer Inflation Expectations, MPC Member Weale Speaks

EUR: Targeted LTRO, Italian Quarterly Unemployment Rate

USD: Core Retail Sales m/m, Retail Sales m/m, PPI m/m, Core PPI m/m

Trade Idea of the Day

EUR/USD

Currently the pair is trading at 1.0965. Traders must monitor the 1.1096 resistance level and the support level 1.0795 for possible breakouts. A possible scenario would be a movement towards the 1.0940 support level, where a break may lead to 1.0910 level and possible to 1.0860. An alternative scenario could be a movement towards the 1.0980 resistance level, where a break may lead to the 1.1030.

VinsonFinancialsFX · December 14, 2015, 4:37am

Financial News December 14, 2015

EUR/USD likely to be at 0.95 by end-2016
European Central bank’s rhetoric might at the December meeting might come at a long-term cost to EUR , while EUR/USD was forecasted higher last week.

“We continue to forecast EUR/USD at 0.95 by end-2016”, says Barclays in a research note.

The year 2016 looks prepared for higher volatility in EUR/USD. While the Greek crisis has abated, there is a new escalation of tensions around most of highly-indebted EA countries are still a key risk as there is mounting up opposition to rising immigration and fiscal austerity.

After the ECB meeting, the longer term inflation expectations in the market also dropped, with most recent flash estimate of HICP inflation disappointing significantly, which should be confirmed at 0.9% yoy, while previously it was at 1.1% yoy.

Currently EUR is trading at 1.0965 against US dollar.

Market Review December 14, 2015

The Asian session this morning was rather quiet despite the long awaited anticipated event from the FOMC on Wednesday. Released during the session, Japan’s December tankan survey showed big manufacturers index +12 beating the estimated +11, while Tankan Non-Manufacturing Index came in at +25 beating the estimated +23. Moreover, Japanese Revised Industrial Production rose 1.4%, as expected by economists and Tertiary Industry Activity rose 0.9% versus the estimated 0.5%. USD/JPY is currently trading near the 121.30 area with the next support seen at the 120.56 level.

The United States Federal Reserve is expected to start raising interest rates on Wednesday, in the first such move since 2006. The anticipated economic move has been described as “momentous” and a hugely significant milestone of progress in the repairing of the US economy since the damage done by the Great Recession. Furthermore, Janet Yellen, the Fed’s chair, had signalled that the central bank could raise interest rates from their record low of 0.25% in September, however the downturn in the Chinese economy and the resulting turmoil in financial markets, persuaded the Fed to change their mind and keep the current interest rates. The FOMC are due to hold their December policy meeting on Tuesday and Wednesday this week, the scene has been carefully set for the first increase in US interest rates for almost a decade.

Elsewhere, late on Friday, the China Foreign Exchange Trade System (CFETS), a sub-institutional organization of the People’s Bank of China (PBOC), introduced a new exchange rate index that will see the Yuan (CNY), or renminbi, valued against a basket of 13 trade-weighted currencies. Furthermore, it is not clear if the PBOC will ever formally tie the Yuan to this gauge but CFETS did say the basket includes both G3 and Asian currencies. The Chinese government believes that “the bilateral renminbi-USD exchange rate is not considered a good indicator of the international parity of tradable goods”. Introduction of the index would help gauge renminbi’s performance against a basket of trade-weighted currencies as “a basket of currencies can better capture the competitiveness of a country’s goods and services, and better enable the exchange rate to adjust”.

The key events for the day would be the Eurostat Industrial Production, ECB President Draghi speech and MPC Member Shafik speech.

Data releases to monitor:

GBP: MPC Member Shafik speech.

EUR: Industrial Production, ECB President Draghi speech.

Trade Idea of the Day

EUR/GBP

Currently the pair is trading at 0.7229. Traders must monitor the 0.7279 resistance level and the support level 0.7163 for possible breakouts. A possible scenario would be a movement towards the 0.7254 resistance level, where a break may lead to the 0.7275 area. An alternative scenario could be a movement towards the 0.7207 support level, where a break may lead to the 0.7175 area.

VinsonFinancialsFX · December 15, 2015, 4:50am

Financial News December 15, 2015

Fed’s second rate hike likely in April, 2016

The FOMC meeting on policy decission is scheduled tomorrow. The Fed is expected to hike rate for first time after almost 10 years. Looking forward, analysts foresee a series of rate hikes next two years.

Some economic indicators hint the economy will rebound in Q4. Moreover, WTI crude oil is currently trading 10 dollars below FOMC target at USD36 per barrel.Further fall in oil prices will mire the EMs in crisis as corporate debt and bankrupties in the commodity sector. The FOMC is expected to take a cautious monetary majors.

“We expect the second and third hikes to take place in April and September next year, respectively (every third meeting). The fourth hike is likely to come in December. In 2017, we expect a hike every other meeting (March, June, September and December)”, argues Danske Bank.

Market Review December 15, 2015

The Reserve Bank of Australia released during the Asian session this morning its December meeting minutes. In the text, the central bank suggested that the central bank is in no hurry to cut interest rates. Furthermore, RBA said that recent flow of domestic data had generally been positive. In addition, output growth is expected to strengthen gradually over the next two years. Core inflation rates remained stable, but generally below the central bank’s target. The RBA said that the Australian Dollar is adjusting to significant declines in key commodity prices and boosting demand for domestic production. The central bank reiterated that the outlook for inflation might afford “some scope for a further easing of monetary policy”. Moreover, the board will continue to assess the outlook and judge whether or not the current state of monetary policy is most effective for sustaining growth. Overall, the meeting minutes likely further weighed on RBA rate cut bets. The document appeared to justify the central bank’s relatively neutral monetary policy tone. Released also from Australia during the session, House Price Index (HPI) rose 2.0% versus the estimated 2.1% while New Motor Vehicle Sales rose 1.0% compared to the previous -3.7% decline. AUD/USD rose slightly, reaching as high as the 0.7283 level and currently is trading near the 0.7245 area.

Released during the early European session, Switzerland’s Producer Price Index (PPI) rose 0.4% beating the estimated 0.1%.

The economic calendar for the day is rather busy with economic releases from the United Kingdom the United States, New Zealand, Canada and the Eurozone. The key events would be the United Kingdom inflation data, German ZEW Economic Sentiment, Canadian Manufacturing Sales, New Zealand’s GDT Price Index and the United States CPI and Core CPI.

Data releases to monitor:
GBP: CPI, MPC Member Haldane speech, PPI Input, RPI, Core CPI, HPI, PPI Output, BOE Quarterly Bulletin, CB Leading Index.

EUR: German ZEW Economic Sentiment, ZEW Economic Sentiment, Employment Change.

CAD: Manufacturing Sales, BOC Gov Poloz speech.

USD: CPI, Core CPI, Empire State Manufacturing Index, NAHB Housing Market Index, TIC Long-Term Purchases.

NZD: GDT Price Index, Current Account.

Trade Idea of the Day

GBP/AUD

Currently the pair is trading at 2.0903. Traders must monitor the 2.1213 resistance level and the support level 2.0554 for possible breakouts. A possible scenario would be a movement towards the 2.0805 support level, where a break may lead to the 2.0690 area. An alternative scenario could be a movement towards the 2.0962 resistance level, where a break may lead to the 2.1072 area.